Exhibit 10.13(c)
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LEASE AND ROYALTY AGREEMENT FOR
METEOROLOGICAL RESEARCH SITES AND
THE CONSTRUCTION AND OPERATION OF
WIND ENERGY CONVERSION SYSTEMS
By and Between
"LESSOR"
The ▇▇▇▇ ▇. ▇▇▇▇▇▇ Family Trust
and
"ZOND"
ZOND SYSTEMS, INC.,
a California Corporation
LEASE AND ROYALTY AGREEMENT FOR
METEOROLOGICAL RESEARCH SITES AND
THE CONSTRUCTION AND OPERATION OF
WIND ENERGY CONVERSION SYSTEMS
THIS LEASE AND ROYALTY AGREEMENT FOR METEOROLOGICAL RESEARCH
SITES AND THE CONSTRUCTION AND OPERATION OF WIND ENERGY CONVERSION SYSTEMS
("Agreement") is made and entered into as set forth below by and between THE
▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST (Dated July 27, 1976) hereinafter referred to as
("Lessor") and ZOND SYSTEMS, INC., a California corporation ("Zond").
WHEREAS:
A. Zond is in the business of conducting meteorological
studies, wind resource evaluations and other scientific studies and is also in
the additional business of installing and operating wind energy conversion
systems for the production and transmission of electrical energy for sale to
utilities or other energy users; and
▇. ▇▇▇▇▇▇ is the owner of certain property (which is
described more fully in "Exhibit A" attached) which has the potential for
commercial development of wind energy sites; and
C. Zond desires to undertake meteorological and wind
resource evaluations on the Property to determine the desirability of using the
Property for the installation and operation of wind energy conversion systems.
D. Zond desires to have the right to install, operate and
maintain power transmission lines on the Property.
1. LEASE OF PROPERTY
1.1 Lease Agreement
Lessor hereby leases to Zond and Zond hereby leases from Lessor
upon the terms and conditions stated in this Agreement, that certain real
property as described in Exhibit A, which is attached hereto and incorporated
herein by this reference (the "Property"), together with all rights of ingress
and egress as may be reasonably necessary or desirable to allow Zond to use the
Property for the purposes contemplated by this Agreement.
1.2 Title to Property
Lessor hereby warrants and represents that it has the full and
legal right to enter into this Agreement for the lease of the Property and that
the Property leased to Zond pursuant to this Agreement is free and clear of all
liens and encumbrances, except as shown on the attached Exhibit ▇. ▇▇▇▇▇▇
further agrees to indemnify and hold
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harmless Zond and any of its permitted assigns or successors in interest under
this Agreement from any and all liabilities and claims by any parties resulting
from default under any lien or encumbrance upon the Property as of November 16,
1988.
1.2.1 Claims Against Lessor
Zond agrees to hold Lessor harmless from any and all liabilities
and claims resulting from any of Zond's activities on the property.
1.3 Possession
Possession of the Property shall be deemed delivered to Zond
upon the Effective Date of this Agreement as set forth in Section 10.1.
2. TERM OF AGREEMENT
Subject to the termination provisions as provided in Section 9,
below, the term of this Agreement shall commence upon the Effective Date and
shall continue until (i) the termination of all power purchase agreements which
receive power generated on or transmitted over the Property or (ii) December 31,
2021, whichever is later.
3. USE OF PROPERTY
3.1 Meteorological and Wind Resource Evaluations
The parties hereby agree that Zond has the exclusive right to
erect, maintain, use and operate on the Property anemometers and fabricated
towers composed of combination steel, copper and aluminum, together with all of
the necessary and requisite monitoring devices, fixtures, appurtenances and
facilities, including without limitation, guys, anchors, fences and buildings to
house monitoring instruments and equipment, all of which are hereinafter
referred to as the ("Monitoring Facilities"), for the purpose of monitoring the
wind conditions at the Property. The exact location of the Monitoring Facilities
on the Property shall be determined by Zond. In addition to the installation and
operation of the Monitoring Facilities, Zond shall have the right to conduct
additional meteorological studies and surveys on the Property as it may deem in
its sole discretion to be necessary or desirable including, without limitation,
the right to fly kites and balloons and to operate and/or install other wind
analysis equipment.
Wind Energy Conversion Systems
Zond or any of its permitted assignees or successors in interest
shall also have the right to install and operate on the Property such wind
energy conversion systems in such quantities and at such locations upon the
Property as Zond, in its sole discretion, deems to be necessary or appropriate.
As used herein, the term "wind energy conversion systems": shall include all
equipment or improvements necessary for the conversion of wind energy at the
site into electricity including, without limitation, the actual generating
machines; supporting towers; fixtures; appurtenances and facilities, including
foundations and concrete pads, footings, guy wires, anchors and fences;
maintenance, security, office
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and/or guest facilities; granting of nonexclusive easements of ingress and
egress for construction and maintenance vehicles and easements for any
electrical power transmission lines, including without limitation, installation
easements and corridors providing full and proper legal access; establishing
staging areas for the assembly of the equipment; and required lines and
substation facilities to transfer Power from the generators to the utility power
lines.
POWER TRANSMISSION LINES
Zond or any of its permitted assignees or successors in interest
shall also have the right to install and operate on the Property such power
transmission lines, poles, support structures, anchors and associated roads for
access for installation and maintenance as Zond in its sole discretion deems to
be necessary or appropriate to transmit power from or across the Property.
QUIET POSSESSION
Lessor covenants and agrees that so long as Zond is not in
default under this Agreement, Zond shall at all times have the quiet use and
enjoyment of the Property without suit, trouble or interference of any kind
whatsoever from Lessor. Lessor agrees that it shall not use, or cause to be
used, any portion of the Property for any use which interferes or is
incompatible with Zond's use and specifically agrees that it may not sell,
transfer, assign, encumber the Property or grant licenses, easements or any
other rights to the Property without Zond's prior written consent, which may not
be unreasonably withheld. Lessor further agrees to take any and all actions
necessary or, in Zond's opinion, desirable to protect Zond's or its permitted
assignees' or successors' in interest rights in the Property against claims by
others. Should Lessor become aware of any event or threatened event which could
interfere with its use and enjoyment of the Property, Zond shall be entitled to
perform such acts and make such payments or disbursements which it deems to be
reasonably necessary or desirable to preserve its rights hereunder. Any amounts
paid or damages suffered by Zond arising out of its right under this Section 3.4
may be offset by Zond against any amounts which it owes to Lessor.
4. RENT AND OTHER PAYMENTS BY ZOND
4.1 Amount
Zond agrees to pay Lessor as rent the sum of Three Thousand
Dollars ($3,000.00) per month (the "Minimum Rent"). The Minimum Rent shall be
paid in advance upon execution of this Agreement for the first month ending July
19, 1989, and on the twentieth (20) of each succeeding month thereafter.
4.2 Adjustment for Operation
If during any rental period of the term of this Agreement, the
amount equal to five (5%) of the Gross Operating Proceeds derived from the
Operation of the wind energy conversion systems located on the Property during
such month exceeds the
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"Minimum Rent" for such period, Zond agrees to pay such excess to Lessor as
additional rent. All payments due under this Section 4.2 shall be payable by the
forty-fifth (45) day following the end of each quarter. Upon three days written
notice, Lessor shall have access to the books and records of Zond as is
reasonably necessary to confirm the actual amount of Gross Operating Proceeds
received by Zond for any given period.
4.3 Cost of Living Adjustment
The rental payment specified in Section 4.1 above shall be
adjusted upward beginning on the first day of each year beginning September 20,
1089. The base for computing the adjustment is the Index figure for the third
month next preceding the commencement date (the "index date") as shown in the
Consumer Price Index -- All Items, Los Angeles/Long Beach Metropolitan area,
based on the period of 1967 = 100, as published by the United States Department
of Labor, Bureau of Labor Statistics. The index for the adjustment date shall be
the index for the third month next preceding the adjustment date.
The index for the adjustment date shall be computed as a
percentage of the base figure. For example, assuming the base figure on the
index date is 128.5 and the index figure on the adjustment date is 141.4, the
percentage to be applied is 141.4 divided by 128.5, which equals 1.10, or 110%.
That percentage shall be applied to the unadjusted initial minimum rent required
hereunder to determine the minimum rent to be paid for the period beginning on
the adjustment date and continuing until the next adjustment date.
If it is calculated from a base different from the base period
1967 = 100 used for the base figure above, the base figure used for calculating
the adjustment percentage shall be the first converted under a formula supplied
by the Bureau of Labor Statistics.
If the described Index shall no longer be published, another
generally recognized as authoritative shall be substituted by agreement of the
parties. If they are unable to agree within thirty (30) days after demand by
either party, a substitute index shall, on application of either party, be
selected by the Chief Officer of the San Francisco Regional Office of the Bureau
of Labor Statistics, or his successor.
In no event shall the adjusted basic rent payable hereunder be
less than the minimum rent specified in Section 4.1, notwithstanding the fact
that the Index may, as of some adjustment date, be less than the base.
4.4 Payment of Amounts
All rents due and payable under this Agreement shall be paid to
▇▇▇▇ ▇. ▇▇▇▇▇▇ at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ or as otherwise may de
designated by Lessor pursuant to the provisions of Section 10.5.
4.5 Taxes and Assessments
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Zond agrees to pay all taxes and/or assessments levied by any
governmental agency upon any interest acquired by Zond under this Agreement;
provided, however, that Zond shall, at its sole cost and expense, have the right
at any time to contest any taxes that are to be paid by Zond. If Zond contests
the taxes, the failure on Zond's part to pay the taxes shall not constitute a
default. Lessor shall not be required to join in any proceeding or contest
brought by Zond unless the provisions of any law require that the proceeding or
contest be brought by or in the name of Lessor. Zond, on final determination of
the proceeding or contest, shall immediately pay or discharge any decision or
judgment rendered, together with all costs, charges, interest, and penalties
incidental to the decision or judgment. Zond will request the assessors office
to mail all property, supplemental and personal property tax bills directly to
its corporate offices for processing and payment.
4.6 Payment of Utility Charges
Zond shall pay and hold Lessor and the property of Lessor free
and harmless from all charges for the furnishing of gas, water, electricity,
telephone service and other public utilities to said premises, if necessary,
during the term of this Lease, or any extensions hereof associated with Zond's
development of the Property.
5. ENCUMBRANCE OF LEASEHOLD ESTATE
5.1 Zond's Right to Encumber
Zond may, at any time and from time to time during the term of
this Agreement, encumber, mortgage or hypothecate to any person or entity
(herein, the "Mortgagee") by deed of trust or mortgage or other security
instrument all or any part of its interests under this Agreement, including
without limitation any or all improvements located on the Property and owned by
Zond or any of its affiliates, for any purpose, without the consent of Lessor.
5.2 Certain Rights of Mortgagee
Should Zond incur any encumbrance in accordance with Section 5.1
of this Agreement, the Lessor and Zond hereby expressly stipulate and agree
between themselves and on behalf of, and for the benefit of, the Mortgagee as
follows:
5.2.1 Modification of Agreement
They will not modify this Agreement or allow this
Agreement to be modified in any way nor cancel the Agreement without the written
consent of the Mortgagee.
5.2.2 Right to Cure Defaults
If Lessor shall become entitled to serve a notice of
election on Zond to end the term of this Agreement upon the occurrence of a
default by Zond hereunder (a "Default"), Lessor shall, before serving such
notice on Zond, give to the
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Mortgagee a further notice that such specified Default remains unremedied and
that Lessor is entitled to serve notice of election on Zond to end the term of
this Agreement, and such Mortgagee shall have the right to remedy any Default
within a period of thirty (30) days after the service of such notice on such
Mortgagee.
In case of the occurrence of a Default if, within thirty
(30) days after the further notice referred to above is given by Lessor to the
Mortgagee, such Mortgagee shall:
(i) Notify Lessor of its election to proceed
with due diligence promptly to exercise its rights under the Mortgage to acquire
possession of the Property or to foreclose the Mortgage or otherwise to
foreclose or acquire Zond's interest in the Property; and
(ii) Deliver to Lessor an instrument in
writing duly executed and acknowledged wherein such Mortgagee agrees that:
(1) During the period that such
Mortgagee or its nominee or a receiver appointed upon application of such
Mortgagee shall be in possession of the Property and/or during the pendency of
any such foreclosure or other proceedings and until the interest of Zond shall
be acquired by such Mortgagee or other person, firm or corporation, as the case
may be, it will pay or cause to be paid to Lessor all amounts which become due
under this Agreement; and
(2) If delivery of possession of the
Property shall be made to such Mortgagee or its nominee or such receiver,
whether voluntarily or pursuant to any foreclosure or other proceedings or
otherwise, such Mortgagee shall, promptly following such delivery of possession,
perform or cause such nominee to perform, as the case may be, the covenants and
agreements herein contained on Zond's part to be performed and observed as Zond
shall have failed to perform to the date of delivery of possession to the extent
that under the Mortgage and the law of the State of California amounts expended
in performance or observance of such covenants and agreements can be added to
the debt and be secured by the Mortgage, and to perform all other covenants and
agreements Zond shall have failed to perform promptly after acquisition of
Zond's interests under this Agreement;
then Lessor shall postpone the service of notice of election on Zond to end the
term of this Agreement for such period or periods of time as may be necessary
for such Mortgagee, with the exercise of due diligence, to foreclose or acquire
Zond's interest under this Agreement and to perform or cause to be performed all
of the covenants and agreements to be performed and observed by Zond. Nothing
herein contained shall be deemed to require the Mortgagee to continue with any
foreclosure or other proceedings or, in the event such Mortgagee or its nominee
or such receiver shall acquire possession of Zond's interests hereunder, to
continue such possession, if the Default is remedied. If prior to any sale
pursuant to any proceeding brought to foreclose the Mortgage, or if prior to the
date on which Zond's interests under this Agreement shall otherwise be
foreclosed or acquired, the Default in respect of which Lessor shall have given
a notice shall have
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been remedied and possession of the Property shall have been restored to Zond,
then the obligation of the Mortgagee pursuant to the instrument referred to in
paragraph (ii) of this Section shall be null and void and of no further effect.
Nothing herein contained shall affect the right of Lessor, upon the subsequent
occurrence of any Default, to exercise any right remedy herein reserved to
Lessor.
5.2.3 New Lease Agreement
In case of the termination of this Agreement by reason
of the happening of any Default, Lessor shall give prompt notice thereof to the
Mortgagee. Lessor shall, on written request of the Mortgagee, made at any time
within sixty (60) days after the giving of such Notice by Lessor, enter into a
new lease with such Mortgagee, or its designee, within twenty (20) days after
receipt of such request, which new lease shall be effective as of the date of
such termination of this Agreement for the remainder of the term of this
Agreement, upon the same terms, covenants, conditions and agreements as herein
contained; provided that the Mortgagee shall (i) contemporaneously with the
delivery of such request pay to Lessor the amounts which Lessor has specified as
due in any notice to such Mortgagee, (ii) pay to Lessor at the time of the
execution and delivery of such new lease any and all amounts which would have
been due hereunder from the date of termination of this Agreement (had this
Agreement not been terminated) to and including the date of the execution and
delivery of such new lease, together with all expenses, including reasonable
attorney's fees, incurred by Lessor in connection with the execution and
delivery of such new lease, less the net amount of all sums received by Lessor
from any occupants of any part or parts of the Property up to the date of
commencement of such new lease, and (iii) on or prior to the execution and
delivery of such lease agree in writing that promptly following the delivery of
such new lease, such Mortgagee or its designee will perform or cause to be
performed all of the other covenants and agreements herein contained on Zond's
part to be performed to the extent that Zond shall have failed to perform the
same prior to the date of delivery of such new lease and to the extent such
covenants and agreements are susceptible of performance by Mortgagee. Nothing
herein contained shall be deemed to impose any obligation on the part of Lessor
to deliver physical possession of the Property to such Mortgagee or its designee
unless Lessor at the time of the execution and delivery of such new lease shall
have obtained physical possession thereof; provided however, that Mortgagee
shall not be obligated to pay to Lessor those amounts due under subsection (ii)
above for that period during which physical possession is not delivered to
Mortgagee.
5.3 Subrogation
No default predicated on the giving of any notice to Zond shall
be effective unless like notice in writing shall have been given to the
Mortgagee. The Mortgagee shall have and be subrogated to any and all rights of
Zond with respect to the remedying of any default hereunder by Zond. Zond
irrevocably authorizes and directs Lessor to accept, and Lessor shall accept,
performance by the Mortgagee of any of the covenants or agreements on Zond's
part to be performed hereunder with the same force and effect as though
performed by Zond.
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5.4 Rights of Lessor
(a) Lessor shall have the right to grant easements on any
portions of the Property unsuitable for wind development provided such easements
do not interfere with the current or future development of the Property by Zond
its successors or assigns and provided further that Lessor acquires written
consent from Zond which consent shall not be unreasonably withheld.
(b) Lessor shall have the right to subdivide portions of the
Property which are unsuitable for wind development provided such subdivision is
compatible, does not negatively impact wind development and does not interfere
with the current or future development of the Property by Zond its successors or
assigns and provided, further that Lessor acquires written consent from Zond
which consent shall not be unreasonably withheld.
(c) Lessor shall have the right to grant cattle grazing
right on the Property to third parties provided such grazing of cattle does not
interfere with Zond's activities on the Property.
6. INDEMNIFICATION AND INSURANCE
6.1 Indemnification
Zond agrees to indemnify, defend (upon request by the Lessor)
and hold harmless the Lessor, its agents, officers and employees, and each of
them, from any and all losses, costs, expenses, claims, liabilities, actions, or
damages, including liability for injuries to person or persons, or damage to
property of third persons arising out of or in any way- connected with the
operation of Zond's business on the Property during the term of this Agreement
or the construction or removal by or at the request of Zond of any of Zond's
facilities or improvements on the Property during the term of this Agreement.
This indemnification provision shall not apply to claims, liabilities, actions
or other damages caused by any negligent, reckless or deliberate act or omission
on the part of Lessor or its agents, officers or employees.
6.2 Insurance
Zond agrees to maintain liability insurance covering its
activities on the Property and to name Lessor as an additional insured. Such
coverage shall have a minimum combined occurrence and annual limitation of $5
Million. Zond agrees to supply Lessor with such certificates and other evidence
of this insurance as Lessor may reasonably request.
7. CONDEMNATION
7.1 Entire Premises
Should title or possession of the whole of the Property be taken
by duly constituted authority in condemnation proceedings under the exercise of
the right of
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eminent domain, or should a partial taking render the remaining portion of the
Property wholly unsusceptible for Zond's use, then this Agreement shall
terminate upon the vesting of title or taking of possession.
7.2 Awards and Damages
All payments made on account of any taking by eminent domain
shall be made to Lessor, except that Zond shall be entitled to any award made
specifically for the reasonable removal and relocation costs of any removable
property that Zond has the right to remove, or for loss and damage to any such
property that Zond elects or is required not to remove, and/or for loss of use
of the Property by Zond. It is agreed that Zond shall have the right to
participate in any settlement proceedings.
8. CERTAIN RIGHTS OF ZOND
8.1 Right of First Refusal
If at any time during the term of this Agreement, Lessor desires
to transfer or assign. its ownership, interest or rights to the Property, Zond
shall have a right of first refusal with regard thereto.
8.2 Procedural Provisions
In the event that Zond's rights under Section 8.1 are
applicable, Lessor shall give Zond prompt written notice of the price and all of
the terms, conditions and provisions contained in such offers. Zond shall
thereafter have the right within a period of thirty (30) days from and after the
giving of such notice to notify Lessor of its intent to exercise its rights
within the thirty (30) day period, Lessor shall be free to proceed under the
terms and conditions as set forth in its notice to Zond. In the event that such
terms or conditions are revised, Lessor must again comply with the notice and
acceptance provision of this Section 8.2.
9. TERMINATION
9.1 Default
Each of the following events shall constitute an event of
default by the parties and, at the option of the non-defaulting party, a breach
of this Agreement terminating the Agreement.
9.1.1 Payments. The failure or omission by either
party to pay any amounts required to be paid under the terms, of
this Agreement on or before the amounts are due;
9.1.2 Breach. The failure or omission by either party
to observe, keep or perform any of the other terms, agreements
or conditions set forth in this Agreement.
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9.1.3 Abandonment. Zond's permanent abandonment or
surrender of all of the Property.
9.2 Notice and Right to Cure
As a condition to pursuing any remedy for an alleged default by
a party, including termination of the Agreement, the non-defaulting party shall,
before pursuing any remedy, give notice of default to the defaulting party and
to any Lender as set forth under Section 10.5. The defaulting party shall have
thirty (30) days after service of notice to make good the default or breach, be
it the payment or expenditure of money or the performance of any matter required
under this Agreement, or if such default or breach cannot be cured in 30 days
must commence to be cured within 30 days and thereafter diligently pursue to
completion the performance of any matter required under this Agreement.
9.3 Surrender of Property
On the last day of the term of this Agreement, or any extension
thereof, or on the sooner termination of this Agreement, Zond agrees to
peaceably and quietly leave, surrender and return to the Lessor the Property.
Zond shall have sixty (60) days from the Termination Date to remove any and all
equipment, improvements, fixtures or other property owned or installed by it or
by its affiliates. Failure to remove any items shall be deemed to be an
abandonment of such items to the Lessor.
9.4 Quitclaims
Upon the termination of this Agreement or surrender of the
Property to Lessor, Zond shall quitclaim all of its interest in the Property
back to Lessor.
10. MISCELLANEOUS PROVISIONS
10.1 Effective Date
The Effective Date of this Agreement shall be _________________,
1989.
10.2 Force Majeure - Delays
Except as otherwise expressly provided in this Agreement, should
the performance of any act required by this Lease to be performed by either
Lessor or Zond be prevented or delayed by reason of any acts of God, strike,
lock-out, labor trouble, inability to secure materials, restrictive governmental
laws or regulations, or any other cause not the fault of the party required to
perform the act, the time for performance of the act will be extended for a
period equivalent to the period of delay and performance of the act during the
period of delay will be excused.
10.3 Assignment and Sublease
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Zond shall at all times have the right to sell, assign,
transfer, sublease, or grant easements to any or all of its rights and interests
under this Agreement without Lessor's consent; provided, however, that the term
of any such transfer shall not extend beyond the term of this Agreement and that
any and all such transfers shall be expressly made subject to all of the terms,
covenants and conditions of this Agreement. No such sale, assignment, transfer,
sublease or easement shall relieve Zond of its obligations under this Agreement
except with the written consent of Lessor, which consent shall not be
unreasonably withheld.
10.4 Actions by Zond
Whenever, under the terms of this Agreement, any action is
required or permitted to be taken by Zond, such action may be taken and
performed by any authorized officer, director or other representative of Zond.
10.5 Notices
Any notice required or permitted to be given pursuant to this
Agreement shall be conclusively deemed to have been received by a party on the
day it is personally delivered to such party, or if sent by registered or
certified mail, return receipt requested, on the third business day after the
day on which mailed and, if given to Zond, addressed to Zond at the address set
forth on the signature page of this Agreement or if given to Lessor, addressed
to Lessor at the address set forth on the signature page of this Agreement.
Either party may designate an alternate address by written notice given in
accordance with this Section 10.5.
10.6 Waiver
No waiver of any right under this Agreement shall be effective
for any purpose unless in writing, signed by the party hereto possessing the
right, nor shall any such waiver be construed to be a waiver of any subsequent
right, term or provisions of this Agreement.
10.7 Successors and Assigns
All of the terms and provisions of this Agreement shall be
deemed to be covenants running with the Property and shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and permitted
assigns of the parties hereto.
10.8 Lessor's Joinder
Lessor agrees that within ten (10) days after receipt of written
notice request by Zond it shall:
(a) join in all grants for rights-of-way and easements for
electric and other public utilities and facilities and any other electric
power purpose including any
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power transmission line as Zond shall deem necessary or desirable for its
development and use of the Property; and
(b) join with Zond in requesting any and all zoning changes
or other land use permits and/or approvals necessary for Zond's development and
use of the Property as contemplated by this Agreement.
(c) such actions shall be taken at Zond's sole cost and
expense.
10.9 Further Assurances
The parties agree to perform all such acts (including without
limitation executing and delivering instruments and documents) as reasonably may
be necessary to fully effectuate the intent and each and all of the purposes of
this Agreement, including consents to any assignments, transfers, subleases, or
easements permitted under Section 10.3. Lessor expressly agrees that it will
from time to time enter into so-called "non-disturbance" agreements with any
Mortgagee (as defined in Section 5) or any persons or entities obtaining rights
to the Property pursuant to Section 10.3 which requests such an agreement. Such
"non-disturbance" agreement may provide that the Lessor shall recognize the
rights of the requesting party and not disturb their possession of the Property
so long as they are not in default of any of the provisions of this Agreement.
Zond and Lessor further agree that they shall, at any time and from time to time
during the term of this Agreement and upon not less than ten (10) days prior
request by the other party, execute, acknowledge and deliver to the requesting
party a statement in writing certifying that this Agreement is unmodified and in
full force and effect (or if there have been any modifications that the same is
in full force and effect as modified and stating the modifications). The
statement shall also state the dates on which the rent and other charges have
been paid and that there are no defaults existing or that defaults exist and the
nature of such defaults. It is intended that these statements may be relied upon
any prospective encumbrancer or assignee of the Property to all or any parts of
Zond's or Lessor's interest under this Lease. A party's failure to execute,
acknowledge and deliver on request the certified statement within the specified
time shall constitute acknowledgement by such party to all persons entitled to
rely on the statement that this Agreement is unmodified and in full force and
effect and that the rent and other charges have been duly and fully paid to the
date immediately preceding the date of notice of such request and shall
constitute a waiver, with respect to all persons entitled to rely on the
statement, of any defaults that may exist before the date of the notice.
10.10 Construction of Agreement
10.10.1 Governing Law. The terms and provisions of this
Agreement shall be construed in accordance with the laws of the State of
California.
10.10.2 Interpretation. The parties agree that the terms
and provisions of this Agreement embody their mutual intent and that such terms
and conditions are not to be construed more liberally in favor, nor more
strictly against, either party.
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10.10.3 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.
10.10.4 Headings and References. The headings contained
in this Agreement are for purposes of reference and convenience only and shall
not limit or otherwise affect in any way the meaning of this Agreement. Unless
otherwise indicated, all references to Sections are to Sections in this
Agreement.
10.10.5 Number and Gender. Where appropriate, words in
the singular include the plural, and vice versa, words in the neuter gender
include the masculine and feminine genders, and vice versa, and words in the
masculine gender include the feminine gender, and vice versa.
10.11 Recordation
The parties agree that this Agreement shall not be recorded.
However, the parties further agree to execute and to the recording by Zond of
the Memorandum of Lease which is attached as Exhibit B and incorporated herein
by this reference.
10.12 Attorneys' Fees
If either party brings any action or proceeding for the
enforcement, protection, or establishment of any right or remedy under this
Agreement or for the interpretation of this Agreement, the prevailing party
shall be entitled to recover its reasonable attorneys' fees and costs in
connection with such action or proceeding, whether or not taxable, as awarded by
the trier of fact in such action or proceeding.
10.12.1 Arbitration. Any controversy or claim arising
out of or relating to this Agreement or breach thereof which cannot be resolved
shall be arbitrated by the American Arbitration Association under its
Construction Industry Rules, at the office nearest to the Property subject to
this Agreement.
10.13 Counterparts
This Agreement may be executed and recorded in counterparts,
each of which shall be deemed an original and all of which, when taken together,
shall constitute one and the same.
10.14 Entire Agreement
The provisions of this Agreement and the attached Exhibits
constitute the entire understanding and agreement between the parties and may
not be altered or amended except by an instrument in writing signed by the
parties. This Agreement supercedes and cancels any previous agreements written
or verbal, including, without
14
limitation, the lease entered into the 20th of September, 1983, between the ▇▇▇▇
▇. ▇▇▇▇▇▇ Family Trust and Wind Power Systems, Inc., a California Corporation.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as
set forth below. The parties signing below represent and warrant that they are
duly authorized to execute this Agreement on behalf of their respective
companies and that this Agreement will be a valid and binding agreement,
enforceable against their respective companies in accordance with its terms.
"LESSOR"
▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
July 26, 1989 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- --------------------------------
Date ▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
"LESSEE"
ZOND SYSTEMS, INC.,
a California corporation
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12/29/89 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------- --------------------------------
Date ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Vice Pres.
16
PROPERTY DESCRIPTION
Exhibit A
to the Lease and Royalty Agreement
17
EXHIBIT "A"
Legal Description of Leased Premises
PARCEL 1: Assessor's Parcel Number ▇▇▇-▇▇▇-▇▇
Approximately 141.34 acres consisting of:
All that portion of the Northeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area, County of ▇▇▇▇, State of California, as per the official plat thereof on
file in the office of the Surveyor General, lying southwesterly of the Southern
Pacific Railroad Right of Way.
All that portion of the Southeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area, County of ▇▇▇▇, State of California, as per the official plat thereof on
file in the office of the Surveyor General.
EXCEPTING THEREFROM ALL OF THE FOLLOWING:
All that portion of the Southeast quarter of Section 34, lying
within the Southern Pacific Railroad Right of Way, being 100 feet in width, as
same now exists.
All that portion of the Southeast quarter of Section 34,
conveyed to Southern Pacific Railroad Company, a corporation, by deed recorded
in Book 52, page 73 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the Mojave-Bakersfield Railroad Company, by deed recorded May 11,
1914 in Book 291, page 187 of deeds, and by deed recorded June 13, 1914 in Book
291, page 421 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the Southern Pacific Railroad Company by deed recorded December 28,
1900 in Book 110, page 264 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the State of California, for public highway purposes, by deed
recorded August 1, 1936 in Book 657, page 10 and Book 643, page 472 both of
official records.
All that portion of the Southeast quarter of said Section 34,
conveyed to the State of California for public highway purposes by deed recorded
March 4, 1939 in Book 846, page 202 of official records.
All that portion of the Southeast quarter of said Section 34,
conveyed to the State of California for freeway purposes, recorded May 15, 1978
in Book 4160, page 906 of official records.
All that portion of the Southeast quarter lying northeasterly of
State Highway 58.
18
PARCEL 2: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 8.6 ACRES CONSISTING OF:
All that portion of the Northeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area of the County of ▇▇▇▇, State of California, as per the official plat
thereof on file in the office of the Surveyor General, lying ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇;
EXCEPTING THEREFROM THE FOLLOWING:
All that portion of the Northeast quarter of said Section 34,
lying southwesterly of the Southern Pacific Railroad.
All that portion of the Northeast quarter of said Section 34,
lying within the Southern Pacific Railroad Right of Way being 100 feet in width,
as same now exists.
All that portion of the Northeast quarter of said Section 34,
conveyed to Southern Pacific Railroad Company, a corporation, by deed recorded
in Book 52, page 73 of deeds.
All that portion of the Northeast quarter of said Section 34,
conveyed to the State of California for public highway purposes, in deeds
recorded August 1, 1936 in Book 657, page 10 and Book 643, page 472 both of
official records.
All that portion of the Northeast quarter of said Section 34,
conveyed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux, by deed recorded September 15, 1953 in Book
2157, page 19 of official records.
All that portion of the Northeast quarter of said Section 34,
conveyed to the State of California for freeway purposes, by deed recorded May
15, 1968 in Book 4160, page 906 of official records.
PARCEL 3: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 160 ACRES CONSISTING OF:
The Southwest quarter of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34
East, Mount Diablo Meridian, in the unincorporated area of the County of ▇▇▇▇,
State of California, as per the official plat thereof on file in the office of
the Surveyor General.
EXCEPT all coal and other minerals in and under said land as
reserved in the patent from the United States of America, recorded January 19,
1932 in Book 363, page 468 of official records.
PARCEL 4: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 16.47 ACRES CONSISTING OF:
That portion of the Northeast quarter of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated area of the
County of
19
▇▇▇▇, State of California, as per the official plat thereof on file in
the office of the Surveyor General, lying southwesterly of County Road ▇▇. ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇; Excepting the 4.38 acres of
Assessor's Parcel Number ▇▇▇-▇▇▇-▇▇
[Map]
20
MEMORANDUM OF LEASE
Exhibit B
to the Lease and Royalty Agreement
21
EXHIBIT "B'
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Resource Administrator
Zond Systems, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------------------
(Space above this line for Recorder's use only)
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is made and entered into by and between
▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST (referred to herein as "Lessor") and ZOND SYSTEMS,
INC., a California corporation ("Zond").
WHEREAS:
A. The parties have entered into a Lease and Royalty
Agreement for Meteorological Research Sites and the Construction and Operation
of Wind Energy Conversion Systems (the "Lease") which by its terms leases to
Zond certain land which is more particularly described in Exhibit A attached
hereto and incorporated by this reference (the "Property"); and
B. The parties desire to enter into this Memorandum of
Lease which is to be recorded in order that third parties may have notice of the
interest of the Lessor and Zond in the Property and of the existence of the
Lease.
NOW, THEREFORE, in consideration of the rents and covenants
provided in the Lease to be paid and performed by Zond, Lessor hereby leases to
Zond the Property on the terms and conditions set forth in the Lease. All of the
terms, conditions, provisions and covenants of the Lease are hereby incorporated
into this Memorandum of Lease by reference as though fully set forth herein, and
the Lease and this Memorandum of Lease shall be deemed to constitute a single
instrument or document. Should there by any inconsistency between the terms of
this Memorandum of Lease and the Lease, the terms of the Lease shall prevail.
22
IN WITNESS WHEREOF, the parties have executed this Memorandum of
Lease as of the dates set forth below.
"LESSOR"
▇▇▇▇ ▇. ▇▇▇▇▇▇ FAMILY TRUST
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
July 25, 1989 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- --------------------------------
Date ▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
"ZOND"
ZOND SYSTEMS, INC.,
a California corporation
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
July 26, 1989 By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------- ----------------------------
Date
Title Sr. Vice President
--------------------------
23
PROPERTY DESCRIPTION
Exhibit A
to the Memorandum of Lease
24
EXHIBIT "A"
Legal Description of Leased Premises
PARCEL 1: Assessor's Parcel Number ▇▇▇-▇▇▇-▇▇
Approximately 141.34 acres consisting of:.'
All that portion of the Northeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area, County of ▇▇▇▇, State of California, as per the official plat thereof on
file in the office of the Surveyor General, lying southwesterly of the Southern
Pacific Railroad Right of Way.
All that portion of the Southeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area, County of ▇▇▇▇, State of California, as per the official plat thereof on
file in the office of the Surveyor General.
EXCEPTING THEREFROM ALL OF THE FOLLOWING:
All that portion of the Southeast quarter of Section 34, lying
within the Southern Pacific Railroad Right of Way, being 100 feet in width, as
same now exists.
All that portion of the Southeast quarter of Section 34,
conveyed to Southern Pacific Railroad Company, a corporation, by deed recorded
in Book 52, page 73 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the Mojave-Bakersfield Railroad Company, by deed recorded May 11,
1914 in Book 291, page 187 of deeds, and by deed recorded June 13, 1914 in Book
291, page 421 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the Southern Pacific Railroad Company by deed recorded December 28,
1900 in Book 110, page 264 of deeds.
All that portion of the Southeast quarter of Section 34,
conveyed to the State of California, for public highway purposes, by deed
recorded August 1, 1936 in Book 657, page 10 and Book 643, page 472 both of
official records.
All that portion of the Southeast quarter of said Section 34,
conveyed to the State of California for public highway purposes by deed recorded
March 4, 1939 in Book 846, page 202 of official records.
All that portion of the Southeast quarter of said Section 34,
conveyed to the State of California for freeway purposes, recorded May 15, 1978
in Book 4160, page 906 of official records.
All that portion of the Southeast quarter lying northeasterly of
State Highway 58.
25
PARCEL 2: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 8.6 ACRES CONSISTING OF:
All that portion of the Northeast quarter of Section ▇▇,
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated
area of the County of ▇▇▇▇, State of California, as per the official plat
thereof on file in the office of the Surveyor General, lying ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇;
EXCEPTING THEREFROM THE FOLLOWING:
All that portion of the Northeast quarter of said Section 34,
lying southwesterly of the Southern Pacific Railroad.
All that portion of the Northeast quarter of said Section 34,
lying within the Southern Pacific Railroad Right of Way being 100 feet in width,
as same now exists.
All that portion of the Northeast quarter of acid Section 34,
conveyed to Southern Pacific Railroad Company, a corporation, by deed recorded
in Book 52, page 73 of deeds.
All that portion of the Northeast quarter of said Section 34,
conveyed to the State of California for public highway purposes, in deeds
recorded August 1, 1936 in Book 657, page 10 and Book 643, page 472 both of
official records.
All that portion of the Northeast quarter of said Section 34,
conveyed to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, et ux, by deed recorded September 15, 1953 in Book
2157, page 19 of official records.
All that portion of the Northeast quarter of said Section 34,
conveyed to the State of California for freeway Purposes, by deed recorded May
15, 1968 in Book 4160, page 906 of official records.
PARCEL 3: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 160 ACRES CONSISTING OF:
The Southwest quarter of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 34
East, Mount Diablo Meridian, in the unincorporated area of the County of ▇▇▇▇,
State of California, as per the official plat thereof on file in the office of
the Surveyor General:
EXCEPT all coal and other minerals in and under said land as
reserved in the patent from the United States of America, recorded January 19,
1932 in Book 363, page 468 of official records.
PARCEL 4: ASSESSOR'S PARCEL NUMBER ▇▇▇-▇▇▇-▇▇
APPROXIMATELY 16.47 ACRES CONSISTING OF:
That portion of the Northeast quarter of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇ 34 East, Mount Diablo Meridian, in the unincorporated area of the
County of
26
▇▇▇▇, State of California, as per the official plat thereof on file in
the office of the Surveyor General, lying southwesterly of County Road ▇▇. ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇; Excepting the 4.38 acres of
Assessor's Parcel Number ▇▇▇-▇▇▇-▇▇.
27
