Exhibit 10.9(f)
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AMENDMENT NO. 4 TO THE
POWER PURCHASE CONTRACT
between
SOUTHERN CALIFORNIA EDISON COMPANY
and
ZOND SYSTEMS, INC.
(Monolith II)
QFID 6044
1. PARTIES
The Parties to this Amendment No. 4 ("Amendment") to the Power Purchase Contract
("Contract") between Southern California Edison Company and Zond Systems, Inc.
are SOUTHERN CALIFORNIA EDISON COMPANY ("Edison"), a California corporation, and
ZOND WINDSYSTEMS PARTNERS, LTD., SERIES 85-B ("Seller"), a California limited
partnership. Edison and Seller are sometimes referred to herein individually as
a "Party" and jointly as the "Parties."
2. RECITALS
The Parties enter into this Amendment with reference to the following facts,
among others:
2. On June 22, 1984, Edison and Seller or Seller's predecessor in interest
executed the Contract, which, among other things, provides for the sale
to Edison of electrical power generated by a wind turbine project
identified by Edison as QFID 6044 (the "Project").
2.2 The Contract has previously been amended.
2.3 Certain claims related to the Contract have been raised in civil
litigation in California superior court, in regulatory proceedings
pending before the Securities and Exchange Commission and/or the
Federal Energy Regulatory Commission ("FERC"), and/or in proceedings in
the United States Bankruptcy Court involving Enron Corp and/or
affiliates of Enron Corp (collectively, the "Disputes"). The Disputes
concern, among other things, the status of the Project as a qualifying
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facility within the meaning of the Public Utility Regulatory Policies
Act of 1978 ("PURPA") and FERC's regulations implementing PURPA.
2.4 Edison and Seller, acting on behalf of itself and (in its capacity as
Project Manager under the Contract) all others, if any, that hold an
ownership or other interest in the Project, or any portion thereof,
have agreed to resolve the Disputes as they apply to the Contract
pursuant to the terms of a "Master Definitive Agreement," dated January
15, 2003 ("Master Definitive Agreement"), which, concurrently with the
execution of this Amendment, is being executed by Edison, Seller and
other parties and is hereby incorporated herein by this reference. In
the Master Definitive Agreement, Edison and Seller have agreed, among
other things, to execute this Amendment for the purpose of implementing
certain terms and conditions of the Master Definitive Agreement.
3. AGREEMENT
In consideration of the promises, mutual covenants and agreements set forth
herein, and for other good and valuable consideration as set forth herein, the
Parties, upon the occurrence of the Satisfaction Date (as defined below)
pursuant to the terms of the Master Definitive Agreement, hereby amend the
Contract effective as of the Effective Date (as defined below), as follows:
3.1 Waived Qualifying Facility Requirements. Section 4.4.12 of the
Contract is hereby replaced in its entirety with the following new
Section 4.4.12:
"4.4.12 Notwithstanding any other provision of this Contract, effective
on and after the Satisfaction Date, as defined in Section 4 of
Amendment No. 4, the Project shall not be required to satisfy
any ownership or size limitation requirements applicable to
Qualifying Facilities, including, without limitation, 16 U.S.C.
Section 796(17)(A)(ii), 16 U.S.C. Section 796(17)(C)(ii) and 18
C.F.R. Sections 292.204(a)(1) and 292.206 (collectively, the
"Waived QF Requirements"). Notwithstanding the foregoing, and
although the Project will no longer be required to comply with
the Waived QF Requirements and therefore will no longer be
required to be or certify as a Qualifying Facility under the
Public Utility Regulatory Policies Act of 1978 ("PURPA") and the
regulations of the Federal Energy Regulatory Commission ("FERC")
implementing PURPA, the Project will, except for the Waived QF
Requirements, continue to generate power for sale to Edison
under the Contract in the manner required under 16 U.S.C.
Section 796(17)(A)(i), 16 U.S.C. Section 796(17)(B), and 16
U.S.C. Section 796(17)(C)(i) (but not including, in addition to
the Waived QF Requirements, any Qualifying Facility
certification requirements) of PURPA and the FERC regulations
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implementing the foregoing provisions identified in this
sentence, 18 C.F.R. Section 292.204(b), as wind power production
facilities, and further, that with the exception of the Waived
QF Requirements, this Contract shall continue to be administered
by Edison as a Qualifying Facility contract."
3.2 Reduction in Capacity Price. Section 9.1.1.1 of the Contract is
hereby amended to add the following new subsections (c) and (d):
Notwithstanding Section 9.1.1.1 (b) above, effective for
deliveries made beginning at 12:01 a.m. Pacific Time on December
1, 2002 through and including the last day of the Contract Term,
the time-differentiated D variable shall be calculated using an
annual as-available capacity rate of $124/kW-yr in lieu of the
rate that would otherwise apply under Section 9.1.1.1(b)."
Promptly after the Satisfaction Date, as defined in Section 4 of
Amendment No. 4, any capacity payments previously made by Edison
to Seller for deliveries made on and after December 1, 2002
which were based upon the capacity price in effect prior to the
occurrence of the Satisfaction Date shall be recalculated using
the capacity price as revised pursuant to the foregoing Section
9.1.1.1(c). The difference (without interest) between the
capacity payment(s) actually made for such deliveries and the
payments that would have been made using the adjusted capacity
price specified in Section 9.1.1.1(c) shall be applied as a
credit to Edison against the next payment due to Seller for both
Energy and capacity pursuant to the Contract; provided, however,
that if the amount of such credit to Edison exceeds the full
amount owing for the first payment due to Seller after the
Satisfaction Date, Edison shall take a credit equal to the full
amount owing for the first payment due Seller after the
Satisfaction Date, and shall apply the remaining balance of the
credit as an offset to each successive payment due to Seller by
Edison thereafter in the same manner until the credit is fully
utilized (all such offsets accruing as of the Satisfaction
Date). If the credit owed Edison by Seller has not been fully
utilized by the conclusion of three successive billing cycles
after the Satisfaction Date, then Edison may, at its option,
invoice Seller for the remaining, unutilized portion of the
credit, which invoice shall be paid by Seller within ten (10)
days of receipt."
3.3 Energy Pricing. New Sections 9.3.1 through 9.3.5 are added to the
Contract as follows:
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"9.3.1 In the event that the Commission changes the applicable rate for
Energy (including, but not limited to, changes to the
Commission-approved SRAC rate) that is generally applicable,
during any part of the remaining term of the Contract, to those
entities owning renewable Qualifying Facilities that signed a
Renewable Agreement (as defined below) and is applicable under
this Contract, then, on the date on which such change becomes
effective, and continuing until such time as such rate is no
longer applicable pursuant to the terms of this Contract, as
amended, the Energy rate for power purchases made pursuant to
the Contract shall, without further action by the Parties or
otherwise, be the revised rate adopted by the Commission."
"9.3.2 Nothing herein shall preclude any Party from seeking rehearing
or other appropriate review of any Commission order(s) or
decision(s) effecting a change in rate(s) for Energy sales under
the Contract or from fully participating in any Commission
proceedings pertaining to such change or proposed change."
"9.3.3 Notwithstanding the provisions of Sections 9.3.1 and 9.3.2
above, nothing in those sections shall be construed as modifying
or diminishing any rights or obligations of the Parties under
the Energy rate provisions of the Parties' Renewable Agreement,
including, but not limited to, the provisions therein applicable
to the Fixed Rate associated with the Fixed Rate Period (as
those terms are defined in the Renewable Agreement), nor shall
anything in Sections 9.3.1 and 9.3.2 be construed as conferring
upon the Commission any rate setting authority that it does not
already possess with respect to the Contract, as amended
pursuant to the Renewable Agreement."
"9.3.4 The term SRAC' as used herein shall have the same meaning as in
Section 4.35 of the Master Definitive Agreement (as defined in
Amendment No. 4 to this Contract) and the term "Renewable
Agreement' shall have the same meaning as in Section 2.3 of the
Master Definitive Agreement."
4. EFFECTIVE DATE; SATISFACTION DATE
Upon the occurrence of the Satisfaction Date, this Amendment shall become
effective as of the Effective Date. "Satisfaction Date" shall have the same
meaning as that term has in Article 6 of the Master Definitive Agreement and
"Effective Date" shall have the same meaning as in Section 5.1 of the Master
Definitive Agreement.
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5. OTHER TERMS AND CONDITIONS
5 None of the provisions of this Amendment, including this paragraph,
shall be considered waived by either Party except when such waiver is
given in writing. The failure of either Party to insist in any one or
more instances upon strict performance of any of the provisions of this
Amendment or to take advantage of any of its rights hereunder shall not
be construed as a waiver of any such provisions or the relinquishment
of any such rights for the future, but the same shall continue and
remain in full force and effect.
5.2 This Amendment shall not be amended or modified except by a writing
signed by both Parties.
5.3 This Amendment shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns.
5.4 This Amendment is the result of negotiation and each Party has
participated in its preparation. Accordingly, any rules of construction
to the effect that an ambiguity is to be resolved against the drafting
party shall not be employed in the interpretation of this Amendment.
5.5 This Amendment shall be interpreted and governed under the laws of the
State of California (without giving effect to choice of laws provisions
that might apply the law of a different jurisdiction).
5.6 Except as expressly amended hereby, all the terms, definitions and
conditions contained in the Contract, as amended, shall remain in full
force and effect, and shall apply to this Amendment as though
incorporated herein.
5.7 Each Party represents and warrants that the person who signs below on
behalf of such Party has received all requisite authorizations required
to execute this Amendment on behalf of such Party and to bind such
Party to the Amendment. Without in any way limiting the foregoing,
Seller represents and warrants that it has sufficient authority to
execute this Amendment on behalf of itself and all other parties, if
any, that hold an ownership or other interest in the Project, or any
portion thereof, and that this Amendment will represent a binding
obligation upon the Project and all of its owners in accordance with
its terms.
5.8 This Amendment is and shall remain confidential pursuant to the
confidentiality terms of Section 17.1 of the Master Definitive
Agreement.
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5.9 This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original document and which together shall
constitute a single instrument.
ZOND WINDSYSTEMS PARTNERS, LTD., SERIES 85-B,
a California limited partnership
By: Zond Windsystems Management IV LLC,
Its general partner
By: /s/ Eric D. Gadd
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(print) Eric D. Gadd
Its President & CEO
January 15, 2003
SOUTHERN CALIFORNIA EDISON COMPANY,
a California corporation
By /s/ Alan J. Fohrer
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Alan J. Fohrer
Its Chief Executive Officer
January 15 , 2003