EXHIBIT 4.19(c)
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(PARTNERSHIP GUARANTORS)
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated
as of October __, 1998 (this "Second Amendment") is by and
between SALTON SEA FUNDING CORPORATION, a Delaware corporation
("Funding Corporation"), as lender, and CALENERGY OPERATING
CORPORATION, a Delaware corporation (formerly known as CalEnergy
Operating Company) ("CEOC"), VULCAN POWER COMPANY, a Nevada
corporation ("VPC"), CONEJO ENERGY COMPANY, a California
corporation ("Conejo"), NIGUEL ENERGY COMPANY, a California
corporation ("Niguel"), SAN FELIPE ENERGY COMPANY, a California
corporation ("San Felipe"), BN GEOTHERMAL INC., a Delaware
corporation ("BNG"), DEL RANCH, L.P., a California limited
partnership ("Del Ranch"), ELMORE, L.P., a California limited
partnership ("Elmore"), LEATHERS, L.P., a California limited
partnership ("Leathers"), VULCAN/BN GEOTHERMAL POWER COMPANY, a
Nevada general partnership ("Vulcan"), CALENERGY MINERALS LLC, a
Delaware limited liability company ("Minerals LLC"), and CE TURBO
LLC, a Delaware limited liability company ("Turbo LLC", and
together with CEOC, VPC, Conejo, Niguel, San Felipe, BNG, Del
Ranch, Elmore, Leathers, Vulcan, and Minerals LLC, the
"Partnership Guarantors") as borrowers.
W I T N E S S E T H:
WHEREAS, Funding Corporation is a corporation
established for the sole purpose of making loans to the
Guarantors of proceeds from the issuance of notes and bonds
(collectively, the "Securities") in its individual capacity as
principal and as agent acting on behalf of the Guarantors
pursuant to the Trust Indenture, dated as of July 21, 1995,
between Funding Corporation and Chase Manhattan Bank and Trust
Company, National Association, a national banking association
organized under the laws of the United States, successor in
interest to Chemical Trust Company of California, as trustee
("Trustee"), as the same may be amended, modified or supplemented
(as so amended, modified or supplemented, including, pursuant to
that certain First Supplemental Indenture dated as of October 18,
1995, that certain Second Supplemental Indenture dated as of June
20, 1996, that certain Third Supplemental Indenture dated as of
July 29, 1996, and that certain Fourth Supplemental Indenture
dated as of even date herewith, the "Indenture"); and
WHEREAS, the principal and interest payments on the
Securities will be serviced by repayment of loans made by Funding
Corporation to the Guarantors and guaranteed by the Guarantors,
subject to the conditions set forth in the Indenture; and
WHEREAS, on July 21, 1995 the Funding Corporation
issued and sold Securities in the aggregate principal amount of
$475,000,000 (the "Initial Securities"); and
WHEREAS, Funding Corporation used a portion of the
proceeds from the sale of the Initial Securities to make a loan
to CEOC and VPC pursuant to that certain Credit Agreement
(Partnership Guarantors) dated as of July 21, 1995 between
Funding Corporation, CEOC and VPC (the "Initial Partnership
Credit Agreement") in the aggregate amount of $75,000,000 (the
"Initial Partnership Project Loan") portions of which were used:
(a) to repay certain non-recourse indebtedness incurred by
CalEnergy in connection with the acquisition of Magma Power
Company; and (b) to pay certain costs of issuing the Initial
Securities; and
WHEREAS, on June 20, 1996 the Funding Corporation
issued and sold Securities in the aggregate principal amount of
$135,000,000 (the "Supplemental Securities"); and
WHEREAS, Funding Corporation used a portion of the
proceeds from the sale of the Supplemental Securities to make a
loan to the Initial Partnership Guarantors and Conejo, Niguel,
San Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan
(collectively, the "Supplemental Partnership Guarantors") in the
aggregate amount of $135,000,000 (the "Supplemental Partnership
Project Loan"), portions of which were used for the following
purposes: (a) approximately $96,000,000 to refinance all existing
project-level indebtedness of the Partnership Project Companies,
(b) approximately $15,000,000 to fund certain capital
improvements to the Partnership Projects and the Salton Sea
Projects, and (c) approximately $23,000,000 to fund a portion of
the purchase price for the acquisition by certain of the
Partnership Guarantors of the 50% interest in each of the
Partnership Projects previously owned by a third party; and
WHEREAS, in connection with the making of the
Supplemental Partnership Project Loan, each Initial Partnership
Guarantor and each Supplemental Partnership Guarantor agreed to
become jointly and severally liable with each other for the
entire amount of the Initial Partnership Project Loan; and
WHEREAS, in order to evidence and implement the making
of the Supplemental Partnership Project Loan and the addition of
the Supplemental Partnership Guarantors as borrowers under the
Initial Partnership Project Loan, Funding Corporation, the
Initial Partnership Guarantors and the Supplemental Partnership
Guarantors entered into that certain Amended and Restated Credit
Agreement (Partnership Guarantors) dated as of June 20, 1996 (the
"Supplemental Partnership Credit Agreement") to amend and restate
the Initial Partnership Credit Agreement (the Initial Partnership
Credit Agreement, as so amended, the "Existing Partnership Credit
Agreement"); and
WHEREAS, Funding Corporation has simultaneously with
the execution and delivery of this Second Amendment issued and
sold Securities in the aggregate principal amount of $285,000,000
(the "New Securities"); and
WHEREAS, Funding Corporation intends to use the
proceeds from the New Securities to make a loan to the
Partnership Guarantors in the amount of $201,728,000 (the
"Additional Partnership Project Loan," and together with the
Initial Partnership Project Loan and the Supplemental Partnership
Project Loan, the "Partnership Project Loan"), portions of which
will be used for the following purposes: (a) approximately
$140,520,000 to finance the construction of an approximately
30,000 metric tonnes/year zinc recovery facility (the "Zinc
Recovery Project") which will extract and process metallic zinc
from the geothermal brine used by the Salton Sea Projects and the
Partnership Projects, to be owned and operated by Minerals LLC,
(b) approximately $36,617,000 to finance an upgrade of the brine
processing facilities at the Vulcan Project and the Del Ranch
Project (the "Region 2 Brine Facilities Construction"),
(c) approximately $7,964,000 to finance the construction of a
turbo expander (the "TurboExpander Project") to be owned by Turbo
LLC which will produce approximately 10MW of electricity from
geothermal energy, and (d) approximately $16,627,000 to fund
certain capital improvements to the Partnership Projects and the
Salton Sea Projects.
WHEREAS, in connection with the making of the
Additional Partnership Project Loan, each Partnership Guarantor
(including Minerals LLC and Turbo LLC) has agreed to become
jointly and severally liable with each other Partnership
Guarantor for the entire amount of the Initial Partnership
Project Loan and the Supplemental Partnership Project Loan; and
WHEREAS, in order to evidence and implement the making
of the Additional Partnership Project Loan and the addition of
Minerals LLC and Turbo LLC as borrowers under the Initial
Partnership Project Loan and the Supplemental Partnership Project
Loan, the parties hereto have agreed to amend and restate the
Existing Partnership Credit Agreement as set forth herein.
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants hereinafter contained, the
parties hereto formally covenant, agree and bind themselves as
follows:
ARTICLE 1.
DEFINITIONS AND AMENDMENT
Section 1.1. Definitions.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in Exhibit A to the Indenture,
which Exhibit A is hereby incorporated by this reference.
Section 1.2. Second Amendment and Restatement.
From and after the date hereof, the terms of the Existing
Partnership Credit Agreement shall be amended to read in their
entirety as set forth in this Second Amendment and the terms of
this Second Amendment shall govern and control the rights and
obligations of the parties in and with respect to the Partnership
Project Loan, notwithstanding any conflict between the terms of
this Second Amendment and the terms of the Existing Partnership
Credit Agreement. As amended and restated by this Second
Amendment, the Existing Partnership Credit Agreement shall be
referred to herein as the "Agreement."
ARTICLE 2.
DESCRIPTION OF THE LOAN
Section 2.1. Acknowledgments of the Partnership Guarantors;
Partnership Project Loan.
The Partnership Guarantors hereby acknowledge and agree that:
(a) The Partnership Guarantors are indebted to
Funding Corporation for all principal, interest, and other
amounts currently outstanding on the Initial Partnership Project
Loan and the Supplemental Partnership Project Loan;
(b) Pursuant to this Agreement, Funding
Corporation does hereby lend to the Partnership Guarantors and
the Partnership Guarantors do hereby borrow from Funding
Corporation the principal amount of the Additional Partnership
Project Loan;
(c) The Partnership Project Loan shall be
evidenced by a promissory note or notes issued by the Partnership
Guarantors in favor of Funding Corporation (collectively, the
"Partnership Project Note"); and
(d) If proceeds from the issuance of any
Additional Securities are loaned to the Partnership Guarantors,
the outstanding principal balance on the Partnership Project Loan
shall be increased by the amount of such proceeds and the
Partnership Project Loan shall include the loan to the
Partnership Guarantors of such proceeds, as evidenced by a
promissory note issued by the Partnership Guarantors.
Section 2.2. Term of This Agreement.
This Agreement shall remain in full force and effect from the
date hereof until payment in full of all amounts due under this
Agreement.
Section 2.3. Interest.
Interest hereunder shall be paid in arrears on each May 30th
and November 30th commencing on November 30, 1998 until all
principal hereunder is paid in full. Interest shall be computed
on the basis of a three hundred sixty (360) day year, consisting
of twelve (12) thirty (30) day months and at the applicable rate
per annum specified on Schedule 1 hereto. Principal shall be
payable hereunder in an amount and on the dates set forth on
Schedule 1 hereto.
Section 2.4. Repayment.
The Partnership Guarantors shall repay the Partnership Project
Loan in installments to Funding Corporation on the dates, at the
times and in the amounts set forth on Schedule 1 attached hereto
(as the same may be modified pursuant to Section 8.3 of the
Indenture).
Section 2.5. Prepayment.
(a) Optional Prepayment
. The Partnership Guarantors shall have the optional right to
prepay the Partnership Project Loan in such amounts and at such
times as may be appropriate to permit Funding Corporation to (i)
redeem the Securities pursuant to the optional redemption
provisions set forth in Section 3.1 of the Indenture and Sections
2(i) and 2(j) of the Fourth Supplemental Indenture, dated as of
even date herewith (the "Fourth Supplemental Indenture"), between
the Funding Corporation and the Trustee, or (ii) defease the
Securities pursuant to the optional defeasance provisions set
forth in Section 10.1 of the Indenture.
(b) Mandatory Prepayment. The Partnership
Guarantors shall be required to prepay principal, and to pay
accrued interest on such prepaid principal, on the Partnership
Project Loan in such amounts and at such times as may be required
(i) to permit the Funding Corporation to redeem the Securities
pursuant to the mandatory redemption provisions set forth in
Section 3.3 of the Indenture and (ii) to permit the Funding
Corporation to redeem the New Securities pursuant to the
mandatory redemption provisions set forth in Sections 2(l) and
2(m) of the Fourth Supplemental Indenture, in each case as such
provisions apply specifically to the Partnership Guarantors, the
Partnership Projects and/or the Partnership Project Documents.
Section 2.6. Obligations of the Partnership Guarantors
Hereunder Unconditional.
The obligations of the Partnership Guarantors to make the
payments required in Sections 2.3 and 2.4 hereof shall be
absolute and unconditional; and the Partnership Guarantors shall
not discontinue such payments for any cause, including, without
limiting the generality of the foregoing, any acts or
circumstances that may constitute failure of consideration,
eviction or constructive eviction from the Partnership Projects,
destruction of or damage to the Partnership Projects, including
commercial frustration of purpose, or change in the tax or other
laws or administrative rulings of or administrative actions by
the United States of America or the State of California or any
political subdivision of either. The Partnership Guarantors may,
however, at their own cost and expense and in their own name or
in the name of Funding Corporation, prosecute or defend any
action or proceeding or take any other action involving third
persons which the Partnership Guarantors deem reasonably
necessary in order to secure or protect their rights with respect
to the Partnership Projects.
Section 2.7. General Terms of Payment.
(a) All sums payable to Funding Corporation
hereunder shall be deemed paid to the extent the Depositary Agent
shall apply amounts held by the Depositary Agent in accordance
with the Depositary Agreement to the payment of principal of or
interest on the Partnership Project Loan and the Securities in
accordance with the Depositary Agreement.
(b) Whenever any payment hereunder shall be due,
or any calculation shall be made, on a day which is not a
Business Day, the date for payment or calculation, as the case
may be, shall be extended to the next succeeding Business Day,
and any interest on any payment shall be payable for such
extended time at the specified rate.
(c) If no due date is specified for the payment
of any amount payable by the Partnership Guarantors hereunder,
such amount shall be due and payable not later than ten (10) days
after receipt of written demand by Funding Corporation to the
Partnership Guarantors for payment thereof.
Section 2.8. Security.
The obligations of the Partnership Guarantors hereunder shall
be secured as set forth herein and under the Security Documents.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
The Partnership Guarantors represent and warrant to
Funding Corporation as follows:
Section 3.1. Organization, Power and Status of the Partnership
Guarantors.
(a) CEOC and BNG are corporations duly organized,
validly existing and in good standing under the laws of the State
of Delaware, (b) VPC is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada, (c) Conejo, Niguel and San Felipe are corporations duly
organized, validly existing and in good standing under the laws
of the State of California, (d) Del Ranch, Elmore and Leathers
are limited partnerships, duly organized, validly existing and in
good standing under the laws of the State of California, (e)
Vulcan is a general partnership, duly organized, validly existing
and in good standing under the laws of the State of Nevada, (f)
Minerals LLC and Turbo LLC are limited liability companies, duly
organized, validly existing and in good standing under the laws
of the State of Delaware, and (g) each of the Partnership
Guarantors is duly qualified in the State of California and is
duly authorized to do business in each other jurisdiction where
the nature of its activities makes such qualification necessary.
Each of the Partnership Guarantors has all requisite power and
authority to carry on its business as now being conducted and as
proposed to be conducted.
Section 3.2. Authorization; Enforceability; Execution and
Delivery.
(a) Each of the Partnership Guarantors has all
necessary power and authority to execute, deliver and perform its
obligations under this Agreement, the Partnership Project Note
and each other Financing Document to which it is a party.
(b) All action on the part of each of the
Partnership Guarantors that is required for the authorization,
execution, delivery and performance of this Agreement, the
Partnership Project Note and each other Financing Document to
which such Partnership Guarantor is a party have been duly and
effectively taken; and the execution, delivery and performance of
this Agreement, the Partnership Project Note and each such other
Financing Document to which any of the Partnership Guarantors is
a party does not require the approval or consent of any holder or
trustee of any Debt or other material obligations of the
Partnership Guarantors which has not been obtained.
(c) This Agreement, the Partnership Project Note
and each other Financing Document to which any of the Partnership
Guarantors is a party have been duly authorized, executed and
delivered by the Partnership Guarantors. Each of this Agreement,
the Partnership Project Note and each other Financing Document to
which any of the Partnership Guarantors is a party constitutes a
legal, valid and binding obligation of such Partnership Guarantor
enforceable against such Partnership Guarantor in accordance with
the terms hereof and thereof, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, and subject to general
principles of equity.
Section 3.3. No Conflicts; Laws and Contracts; No Default;
Representations and Warranties.
(a) Neither the execution, delivery and
performance of this Agreement, the Partnership Project Note or
any other Financing Document to which any of the Partnership
Guarantors is a party, nor the consummation of any of the
transactions contemplated hereby or thereby (i) contravenes any
provision of Law applicable to any of the Partnership Guarantors
or any of the Collateral, except any contravention which,
individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, (ii) conflicts
or is inconsistent with or constitutes a default under the
articles of incorporation, by-laws, certificate of formation,
limited liability company operating agreement, or partnership
agreement of any of the Partnership Guarantors, or of any other
terms of any Partnership Project Document, Financing Document or
any other agreement or instrument to which the Partnership
Guarantors may be subject except any such conflict,
inconsistency, default or violation which, individually or in the
aggregate, could not reasonably be expected to result in a
Material Adverse Effect or (iii) results in the creation or
imposition of (or the obligation to create or impose) any Liens
(other than Permitted Liens) on the Partnership Collateral.
(b) Each of the Partnership Guarantors is in
compliance with any and all Laws applicable to it, except any
such noncompliance which, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse
Effect.
Section 3.4. Litigation.
There are no claims, actions, suits, investigations or
proceedings at law or in equity (including any Environmental
Claims) or by or before any arbitrator or Governmental Authority
now pending against any of the Partnership Guarantors or, to the
best knowledge of any of the Partnership Guarantors after due
inquiry, threatened against any of the Partnership Guarantors or
any property or other assets or rights of the Partnership
Guarantors that could reasonably be expected to result in a
Material Adverse Effect.
Section 3.5. Environmental Matters.
To the best knowledge of the Partnership Guarantors after due
inquiry, the Partnership Projects are in compliance with all
existing applicable Environmental Laws and there are no facts,
circumstances or conditions under any existing Environmental Law
which could, individually or in the aggregate with all other
circumstances or conditions, reasonably be expected to result in
a Material Adverse Effect.
Section 3.6. Employee Benefit Plans.
Each Plan (including without limitation each Plan of a Commonly
Controlled Entity) as to which the Partnership Guarantors may
have any liability complies with all applicable requirements of
Law and regulations, and (i) no "reportable event" (as defined in
Section 4043 of ERISA (other than an event not subject to the
notice requirement of the PBGC)) has occurred with respect to any
such Plan, (ii) there has been no withdrawal from any
Multiemployer Plan or steps taken to do so that have resulted or
could reasonably be expected to result in material liability for
the Partnership Guarantors, (iii) no Plan has been terminated or
has commenced to be terminated which could reasonably be expected
to result in material liability for the Partnership Guarantors,
(iv) no contribution failure has occurred with respect to any
Plan sufficient to give rise to a lien under Section 302(f) of
ERISA or Section 412 of the Code and (v) no condition exists or
event or transaction has occurred with respect to any Plan that,
in each case, could reasonably be expected to result in a
Material Adverse Effect.
Section 3.7. Business of the Partnership Guarantors.
Except as otherwise permitted in this Agreement and the other
Financing Documents, none of the Partnership Guarantors is
engaged in any business other than the development, acquisition,
construction, operation and financing of the Projects and
transactions related thereto or as permitted under Section 4.7
hereof.
Section 3.8. Valid Title.
Each of the Partnership Guarantors has valid legal title to all
of its assets.
Section 3.9. Security Interests.
The security interests to be transferred to and/or to be
created in favor of Funding Corporation hereunder and under the
Security Documents will be, to the extent provided herein and
therein, valid and perfected first priority security interests in
and liens on the collateral described therein.
Section 3.10. Utility Regulation.
None of the Partnership Guarantors is subject to regulation by
any Governmental Authority under PUHCA as a "public utility
company" or an "affiliate," or "subsidiary company" of a
"registered holding company" or a company subject to registration
under PUHCA.
Section 3.11. Qualifying Facility.
The Partnership Projects (other than the Zinc Recovery Project
and the TurboExpander Project) are Qualifying Facilities. The
TurboExpander Project is (a) a Qualifying Facility or (b) an
Eligible Facility owned by an Exempt Wholesale Generator.
Section 3.12. Investment Company Act.
None of the Partnership Guarantors is, and following the
execution of the Partnership Project Note, will be, an
"investment company" or, to its knowledge, an entity "controlled"
by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
Section 3.13. No Defaults.
None of the Partnership Guarantors is in default under any
Project Documents or other material project contract which could
reasonably be expected to result in a Material Adverse Effect.
To the best of the Partnership Guarantors' knowledge, no material
default exists by any other party to the Project Documents or
other material project contracts.
Section 3.14. Governmental Approvals.
All Governmental Approvals which are required to be obtained
by, in the name of or on behalf of any of the Partnership
Guarantors or, to the knowledge of any of the Partnership
Guarantors, any other party to any Financing Document, in
connection with (a) the issuance of the Partnership Project Note
and (b) the execution, delivery and performance by the
Partnership Guarantors and any other party to any Financing
Document of the Financing Documents, have been duly obtained or
made, are validly issued and are in full force and effect.
Section 3.15. Margin Stock.
None of the Partnership Guarantors is engaged, directly or
indirectly, principally, or as one of its important activities,
in the business of extending, or arranging for the extension of,
credit for the purposes of purchasing or carrying any margin
stock, within the meaning of Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System. No part of the
proceeds of any loan made under this Agreement will be used for
"purchasing" or "carrying" any "margin stock" as so defined, or
for extending credit to others for the purpose of purchasing or
carrying margin stock, or for any purpose which would violate, or
cause a violation of, any such regulation.
Section 3.16. Taxes.
The Partnership Guarantors have filed all federal and state tax
returns, to date, required to be filed by applicable laws and
have paid all federal and state taxes due under such tax returns
except to the extent that such taxes are being contested in good
faith and by appropriate proceedings and adequate reserves, bonds
or other security have been established with respect thereto.
Section 3.17. Ownership of Partnership Guarantors.
As of the date of this Agreement, (a) Magma and Funding
Corporation are the sole shareholders of CEOC and VPC, (b) CEOC
and Conejo are the sole general partners of Del Ranch, and Magma
and Conejo are the sole limited partners of Del Ranch, (c) CEOC
and Niguel are the sole general partners of Elmore, and Magma and
Niguel are the sole limited partners of Elmore, (d) CEOC and San
Felipe are the sole general partners of Leathers, and Magma and
San Felipe are the sole limited partners of Leathers, (e) VPC and
BNG are the sole general partners of Vulcan, (f) CEOC is the sole
shareholder of each of Conejo, Niguel, and San Felipe, (g) VPC is
the sole shareholder of BNG, (h) SSMC and Magma are the sole
members of Minerals LLC, and (i) CESS and Magma are the sole
members of Turbo LLC.
Section 3.18. Disclosure.
Each of the Series D and E Preliminary Offering Circular and
the Series D and E Final Offering Circular as of its date did
not, and the Series D and E Final Offering Circular (as the same
may have been amended or supplemented) as of the date of the
issuance of the Series D and E Securities did not, contain any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Each of the Series F Preliminary Offering Circular and the Series
F Final Offering Circular as of its date did not, and the Series
F Final Offering Circular (as the same may have been amended or
supplemented) as of the date of the issuance and delivery of the
New Securities will not, contain any untrue statement of a
material fact with respect to the Partnership Guarantors or omit
to state any material fact necessary to make the statements made
therein with respect to the Partnership Guarantors, in the light
of the circumstances under which they were made, not misleading.
ARTICLE 4.
COVENANTS AND AGREEMENTS OF THE PARTNERSHIP GUARANTORS
Each Partnership Guarantor hereby covenants and agrees
that from the date of this Agreement, it shall faithfully observe
and fulfill, and shall cause to be fulfilled and observed, each
of the following covenants that is applicable to such Partnership
Guarantor until all amounts due under the Securities and the
Indenture shall have been repaid.
Section 4.1. Reporting Requirements.
Each of the Partnership Guarantors shall provide to Funding
Corporation (a) unaudited quarterly reports for the first three
quarters of each fiscal year containing condensed financial
information within forty-five (45) days of the end of each
quarter and audited annual reports within ninety (90) days of the
end of each fiscal year, (b) all other information in respect of
the Partnership Guarantors requested by Funding Corporation to
enable Funding Corporation to meet its obligations under the
Indenture, (c) copies of material notices delivered in connection
with any Partnership Project Documents, and (d) written notice of
any Credit Agreement Default or Event of Default under this
Agreement or any event or condition that could reasonably be
expected to result in a Material Adverse Effect.
Section 4.2. Sale of Assets.
Except as contemplated by the Partnership Project Documents,
none of the Partnership Guarantors shall sell, lease (as lessor)
or transfer (as transferor) any property or assets material to
the operation of the Partnership Projects except in the ordinary
course of business to the extent that such property is no longer
useful or necessary in connection with the operation of the
Partnership Projects; provided, however, without limiting the
generality of the foregoing, that the Partnership Guarantors
shall be allowed to lend useful spare parts to the Salton Sea
Guarantors for use in the Salton Sea Projects or to other
Permitted Facilities financed with Permitted Debt for use in such
Permitted Facilities.
Section 4.3. Sale of Partnership Interests.
Neither CEOC nor VPC shall sell, transfer or convey any of
their partnership interests in the Partnership Project Companies.
Section 4.4. Insurance.
Except as set forth below, the Partnership Project Companies
shall maintain or cause to be maintained (a) on the date hereof
the insurance in effect with respect to the Partnership Projects
on the date hereof and (b) insurance as is generally carried by
companies engaged in similar businesses and owning similar
properties in the same general areas and financed in a similar
manner. The Partnership Project Companies have business
interruption insurance, casualty insurance, including flood and
earthquake coverage, and primary and excess liability insurance,
as well as customary worker's compensation and automobile
insurance. The Partnership Project Companies shall not reduce or
cancel such insurance coverages (or permit any such coverages to
be reduced or canceled) if the Insurance Consultant determines
that (i) such reduction or cancellation would not be reasonable
under the circumstances and (ii) the insurance coverages sought
to be reduced or canceled are available on commercially
reasonable terms or that another level of coverage greater than
that proposed by the Partnership Project Companies is available
on commercially reasonable terms (in which case such coverage may
be reduced to such greater available levels).
Section 4.5. QF Status.
The Partnership Project Companies shall operate and maintain
the Partnership Projects (other than the Zinc Recovery Project
and the TurboExpander Project) as Qualifying Facilities unless
the failure to do so operate and maintain such Projects as
Qualifying Facilities would not cause or result in (a) a breach
of the power purchase agreements that the Partnership Project
Companies are party to or (b) an adverse effect on the revenues
to be received under such power purchase agreements. The
Partnership Guarantors shall operate and maintain the
TurboExpander Project as a Qualifying Facility or as an Eligible
Facility owned by one or more Exempt Wholesale Generators unless
the failure to so maintain or operate the TurboExpander Project
could not reasonably be expected to have a Material Adverse
Effect.
Section 4.6. Governmental Approvals; Title.
Each of the Partnership Guarantors shall at all times (a)
obtain and maintain in full force and effect all material
Governmental Approvals and other consents and approvals required
at any time in connection with its business and (b) preserve and
maintain good and valid title to its properties and assets
(subject to no liens other than Permitted Liens), except in each
case where the failure to do so in clause (a) or (b) could not
reasonably be expected to have a Material Adverse Effect.
Section 4.7. Nature of Business.
None of the Partnership Guarantors shall engage in any business
other than their existing businesses and, in the case of the
Partnership Project Companies, the development, acquisition,
construction, operation and financing of the Partnership Projects
as contemplated by the Transaction Documents; provided, however,
that (a) CEOC shall be permitted to enter into agreements to
provide operating and maintenance services, administrative
services, technical services or related services for Permitted
Facilities owned in whole or in part by CalEnergy (directly or
indirectly) and located in Imperial County, California and (b)
the Partnership Guarantors may engage in Permitted Facilities at
the SSKGRA (i)(A) for which Permitted Debt may be incurred and
(B) if the Independent Engineer certifies that such other
projects could not reasonably be expected to have an adverse
impact on the geothermal resources for the Salton Sea Projects or
the Partnership Projects or (ii) if Funding Corporation and the
Guarantors take such action as the Rating Agencies require to
confirm the Investment Grade Rating of the Securities.
Section 4.8. Compliance With Laws.
Each of the Partnership Guarantors shall comply with all
applicable laws, except where non-compliance could not reasonably
be expected to have a Material Adverse Effect.
Section 4.9. Prohibition on Fundamental Changes.
None of the Partnership Guarantors shall enter into any
transaction of merger or consolidation, change its form of
organization or its business, liquidate or dissolve itself (or
suffer any liquidation or dissolution); provided, however, that
any Guarantor shall be able to merge with or into any other
Guarantor so long as no Default or Event of Default exists or
shall occur as a result thereof and in the event that any of the
Partnership Guarantors is not the surviving entity (i) the
surviving entity shall, simultaneously with such merger, assume
all the obligations of such Partnership Guarantor under this
Agreement and under the other Financing Documents to which such
Partnership Guarantor was a party, (ii) Funding Corporation shall
have received appropriate amendments to this Agreement and the
other Financing Documents to which such Partnership Guarantor was
a party, all financing statements necessary to preserve its
valid, perfected, first priority security interest in the
Partnership Collateral, each in form and substance reasonably
satisfactory to Funding Corporation, (iii) after giving effect to
such merger, the merger shall not result in a Material Adverse
Effect and (iv) after giving effect to such merger, no Credit
Agreement Event of Default or Event of Default shall have
occurred or be continuing. None of the Partnership Guarantors
shall purchase or otherwise acquire all or substantially all of
the assets of any other Person, except for the purchase or
acquisition by the Partnership Guarantors of the partnership
interests or assets of the Partnership Projects not currently
owned by the Partnership Guarantors; provided, however, that the
Partnership Guarantors may engage in Permitted Facilities at the
SSKGRA (a) for which Permitted Debt may be incurred or (b) if the
Independent Engineer certifies that such other projects could not
reasonably be expected to have an adverse impact on the
geothermal resources for the Salton Sea Projects or the
Partnership Projects or (c) if Funding Corporation and the
Guarantors take such action as the Rating Agencies require to
confirm the Investment Grade Rating of the Securities.
Section 4.10. Revenue Fund.
Each of the Partnership Guarantors shall take all actions as
may be necessary to cause revenues of the Partnership Guarantors
to be deposited in the Revenue Fund, the Zinc Construction Fund
or the Region 2/Turbo Construction Fund, as applicable, in each
case in accordance with the terms of the Depositary Agreement.
Section 4.11. Transactions With Affiliates.
None of the Partnership Guarantors shall enter into any
transaction or agreement with any Affiliate of the Partnership
Guarantors other than (a) as contemplated under the Transaction
Documents or (b) transactions in the ordinary course of business
and on terms no less favorable to the Partnership Guarantors than
the Partnership Guarantors would obtain in an arms length
transaction with a Person that is not an Affiliate of the
Partnership Guarantors.
Section 4.12. Restricted Payments.
The Partnership Guarantors shall not make any Restricted
Payments except (a) as permitted under the Depositary Agreement
or as contemplated in the Offering Circular to occur on the
Closing Date and (b) in respect of Operating and Maintenance
Costs.
Section 4.13. Exercise of Rights Under Partnership Project
Documents.
None of the Partnership Guarantors shall exercise, or fail to
exercise, their rights under the partnership agreements of each
of the Partnership Project Companies (other than Minerals LLC and
Turbo LLC) or any of the Partnership Project Documents in a
manner which could reasonably be expected to result in a Material
Adverse Effect.
Section 4.14. Amendments to Contracts.
Neither CEOC nor VPC shall terminate, amend, replace or modify
(other than immaterial amendments or modifications as certified
by the Partnership Gurantors) the partnership agreement of any of
the Partnership Project Companies or the Partnership Project
Documents to which it is a party unless such termination,
amendment, replacement or modification (a) could not reasonably
be expected to have a Material Adverse Effect or (b) is required
under applicable law or to maintain the Qualifying Facility
status of a Project. In addition, none of the Partnership
Guarantors shall terminate, amend, replace or modify (other than
immaterial amendments or modifications as certified by the
Partnership Guarantors) any of the Partnership Project Documents
to which it is a party (other than a Permitted Power Contract Buy-
Out) unless (i)(A) such Partnership Guarantor certifies that such
termination, amendment, replacement or modification could not
reasonably be expected to have a Material Adverse Effect and (B)
in the case of any amendment, termination or modification of any
Power Purchase Agreement which affects the revenues derived by
any of the Partnership Guarantors, the Independent Engineer
certifies that such amendment, termination or modification could
not reasonably be expected to have a Material Adverse Effect, (b)
the Partnership Guarantors provide a letter from the Rating
Agencies confirming that such amendment, termination or
modification shall not result in a Rating Downgrade, or (c) such
amendment, termination or modification is required under
applicable law or to maintain the Qualifying Facility status of a
Project.
Section 4.15. Limitations on Debt/Liens.
The Partnership Guarantors shall not create or incur or suffer
to exist any Debt except Permitted Guarantor Debt. The
Partnership Guarantors shall not grant, create, incur or suffer
to exist any Liens upon any of their properties, except for
Permitted Liens.
Section 4.16. Books and Records.
The Partnership Guarantors shall maintain their books and
records and give the Funding Corporation, the Trustee, the
Collateral Agent and the Independent Engineer inspection rights.
Section 4.17. Additional Project Documents.
The Partnership Guarantors shall perform and observe their
respective covenants and obligations under all of the Partnership
Project Documents in all material respects except where the
failure to do so could not reasonably be expected to result in a
Material Adverse Effect. The Partnership Project Companies shall
not enter into any Additional Project Document if entering into
such document could reasonably be expected to result in a
Material Adverse Effect.
Section 4.18. Maintenance of Existence.
The Partnership Guarantors shall at all times preserve and
maintain in full force and effect (a) their existence as limited
partnerships, limited liability companies, corporations or a
general partnership, as applicable, in good standing under the
laws of the State of California, Nevada or Delaware, as
applicable, (b) their qualification to do business in each
jurisdiction in which the character of the properties owned or
leased by them or in which the transaction of their business as
conducted or proposed to be conducted makes such qualification
necessary, and (c) all of their powers, rights, privileges and
franchises which are necessary for the ownership and operation of
their respective businesses.
Section 4.19. Taxes.
The Partnership Guarantors shall pay and discharge all taxes,
assessments and governmental charges upon them, their income and
their properties prior to the date on which penalties are
attached thereto, unless and to the extent only that (a) such
taxes, assessments and governmental charges shall be contested in
good faith and by appropriate proceedings, and (b) adequate
reserves, bonds or other security are established with respect
thereto.
Section 4.20. Additional Documents; Filings and Recordings.
The Partnership Guarantors shall execute and deliver, as
requested by Funding Corporation, such other documents as shall
reasonably be necessary or advisable in order to effect or
protect the rights and remedies of Funding Corporation granted or
provided for by this Agreement or the other Financing Documents
to which the Partnership Guarantors are party and to consummate
the transactions contemplated therein. The Partnership
Guarantors shall, at their own expense, take all reasonable
actions (a) that are requested by Funding Corporation or (b) that
an Authorized Officer of the Partnership Guarantors has actual
knowledge are necessary as a legal matter, to establish, maintain
and perfect the first priority security interests of Funding
Corporation. Without limiting the generality of the foregoing,
the Partnership Guarantors shall execute or cause to be executed
and shall file or cause to be filed such Financing Statements,
continuation statements, and fixture filings and such mortgages,
or deeds of trust in all places necessary or advisable (in the
opinion of counsel for Funding Corporation) to establish,
maintain and perfect such security interests.
Section 4.21. Information and Access to Independent Engineer.
The Partnership Guarantors shall provide the Independent
Engineer with information regarding the Zinc Recovery Project,
the Region 2 Brine Facilities Construction and the TurboExpander
Project which is reasonably requested by the Independent
Engineer. The Partnership Project Companies shall provide the
Independent Engineer with access to the Zinc Recovery Project,
the Region 2 Brine Facilities Construction and the TurboExpander
Project as reasonably requested by the Independent Engineer.
ARTICLE 5.
DEFAULT AND REMEDIES
Section 5.1. Events of Default.
Each of the following events and occurrences shall constitute a
Credit Agreement Event of Default under this Agreement:
(a) the failure by the Partnership Guarantors to
pay or cause to be paid any principal of, premium, if any, or
interest, fees or any other obligations on the Partnership
Project Note for fifteen (15) or more days after the same becomes
due and payable, whether by scheduled maturity or required
prepayment or by acceleration or otherwise, after application by
the Trustee, in accordance with the provisions of the Indenture,
of any amounts in Funding Corporation's account in the Debt
Service Reserve Fund (as defined in the Depositary Agreement) and
amounts otherwise advanced by other Guarantors for the benefit of
the Partnership Guarantors.
(b) any representation or warranty made by the
Partnership Guarantors under this Agreement shall prove to have
been untrue or misleading in any material respect as of the time
made, confirmed or furnished and the fact, event or circumstance
that gave rise to such inaccuracy could reasonably be expected to
result in a Material Adverse Effect and such fact, event or
circumstance shall continue to be uncured for thirty (30) or more
days from the date an Authorized Officer of the Partnership
Guarantors has actual knowledge thereof; provided, however, that
if the Partnership Guarantors commence efforts to cure such fact,
event or circumstance within such thirty (30) day period, the
Partnership Guarantors may continue to effect such cure and such
misrepresentation shall not be deemed a Credit Agreement Event of
Default for an additional sixty (60) days so long as the
Partnership Guarantors are diligently pursuing such cure;
(c) the failure by any of the Partnership
Guarantors to perform or observe any covenant contained in
Sections 4.2, 4.4, 4.7, 4.9, 4.12, 4.13, 4.14, 4.16, or 4.19
hereof, if any, and such failure shall continue uncured for
thirty (30) or more days after an Authorized Officer of such
Partnership Guarantor obtains actual knowledge of such failure;
(d) the failure by any of the Partnership
Guarantors to perform or observe any of the other covenants
contained in this Agreement or in the other Financing Documents
the Partnership Guarantors are party to (other than such failures
described in Sections 5.1(c) above) and such failure shall
continue uncured for sixty (60) or more days after an Authorized
Officer of the Partnership Guarantors has actual knowledge of
such failure; provided, however, that if the Partnership
Guarantors commence efforts to cure such default within such
sixty (60) day period, the Partnership Guarantors may continue to
effect such cure of the default and such default shall not be
deemed a Credit Agreement Event of Default for an additional
thirty (30) days so long as the Partnership Guarantors are
diligently pursuing such cure;
(e) any of the Partnership Guarantors:
(1) does not pay its Debts as they
become due or admits in writing its inability to pay its Debts or
makes a general assignment for the benefit of creditors; or
(2) commences any case, proceeding or
other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under
any applicable liquidation, conservatorship, bankruptcy,
moratorium, arrangement, adjustment, insolvency, reorganization
or similar laws affecting the rights or remedies of creditors
generally, as in effect from time to time (collectively, "Debtor
Relief Law"); or
(3) in any involuntary case, proceeding
or other action commenced against it which seeks to have an order
for relief (injunctive or otherwise) entered against it, as
debtor, or seeks reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its Debts under
any Debtor Relief Law, (A) fails to obtain a dismissal of such
case, proceeding or other action within sixty (60) days of its
commencement, or (B) converts the case from one chapter of the
Bankruptcy Reform Act of 1978, as amended, to another chapter, or
(C) is the subject of an order for relief; or
(4) has a trustee, receiver, custodian
or other official appointed for or take possession of all or any
part of its property or has any court take jurisdiction of any of
its property, which action remains undismissed for a period of
sixty (60) days;
(f) the entry of one or more final and non-
appealable judgment or judgments for the payment of money in
excess of Ten Million Dollars ($10 Million) (exclusive of
judgment amounts fully covered by insurance or indemnity) against
the Partnership Guarantors, which remain unpaid or unstayed for a
period of ninety (90) or more consecutive days;
(g) an event of default under any Permitted
Guarantor Debt of the Partnership Guarantors in excess of Ten
Million Dollars ($10 Million) occurs and such debt becomes due
and payable prior to its stated maturity;
(h) the Partnership Guarantors fail to perform
any of their respective payment obligations under the Partnership
Guarantee for fifteen (15) or more days after the same becomes
due and payable;
(i) any Governmental Approval required for the
operation of a Project owned by the Partnership Project Companies
is revoked, terminated, withdrawn or ceases to be in full force
and effect if such revocation, termination, withdrawal or
cessation could reasonably be expected to have a Material Adverse
Effect and such revocation, termination, withdrawal or cessation
is not cured for sixty (60) days following the occurrence
thereof;
(j) any Partnership Project Document ceases to be
valid and binding and in full force and effect other than as a
result of an amendment, termination or Permitted Power Contract
Buy-Out permitted under this Agreement, and any such event
results in a Material Adverse Effect; provided, however, that no
such event shall be a Credit Agreement Event of Default if within
one hundred eighty (180) days from the occurrence of any such
event, the Partnership Guarantors (1) cause the third party to
resume performance or cure such misrepresentation or (2) enter
into an Additional Project Document in replacement thereof, as
permitted under this Agreement;
(k) the failure of any of the Partnership
Guarantors to perform or observe any of its covenants or
obligations contained in any of the Partnership Project Documents
to which it is a party if such failure shall result in the
termination of such Partnership Project Document or otherwise
result in a Material Adverse Effect; provided, however that such
event shall not be a Credit Agreement Event of Default if within
one hundred eighty (180) days from the occurrence of any such
event, the Partnership Guarantors enter into an Additional
Project Document in replacement thereof as permitted under this
Agreement;
(l) any of the Partnership Security Documents
ceases to be effective or any Lien granted therein ceases to be a
valid and perfected Lien in favor of the Collateral Agent on the
Collateral described therein with the priority purported to be
created thereby; provided, however, that the Partnership
Guarantors shall have ten (10) days to cure any such impairment
or cessation or to furnish to the Trustee, the Collateral Agent
or the Depositary Agent all documents or instruments required to
cure any such cessation; or
(m) an Event of Default under Section 6.1 (c),
(d), (e), (f), (g), (h), (i), (j), (k) or (l) of the Indenture
occurs.
Section 5.2. Consequences of Event of Default.
If one or more Credit Agreement Events of Default under this
Agreement have occurred and are continuing, then:
(a) in the case of a Credit Agreement Event of
Default under Section 5.1(e) hereof, the entire outstanding
principal amount of the Partnership Project Note, all interest
accrued and unpaid thereon, and all premium and other amounts
payable under the Partnership Project Note and this Agreement, if
any, shall automatically become due and payable, without
presentment, demand, protest or notice of any kind; or
(b) in the case of a Credit Agreement Event of
Default under:
(1) Sections 5.1(a) or (h) hereof, upon the written
and unrescinded direction of the Holders of no less than thirty
three and one-third percent (33 1/3%) in aggregate principal
amount of the Outstanding Securities, Funding Corporation shall
declare the outstanding principal amount of the Partnership
Project Note to be accelerated and due and payable and all
interest accrued and unpaid thereon, and all premium and other
amounts payable under this Agreement, if any to be due and
payable, and
(2) Sections 5.1(b), (c), (d), (f), (g), (i), (j),
(k), (l) and (m) hereof, upon the written and unrescinded
direction of the Holders of no less than fifty percent (50%) in
aggregate principal amount of the Outstanding Securities, Funding
Corporation shall declare the outstanding principal amount of the
Partnership Project Note to be accelerated and due and payable
and all interest accrued and unpaid thereon, and all premium and
other amounts payable under this Agreement, if any to be due and
payable.
Section 5.3. Continuing Lien.
(a) The liens and security interests granted in
this Agreement, the other Financing Documents to which the
Partnership Guarantors are party and the Security Documents to
which the Partnership Guarantors are party secure all
indebtedness and all obligations of the Partnership Guarantors
owed to Funding Corporation in connection with the Partnership
Project Loan of whatever kind or character, whether now owing,
hereafter arising or hereafter to be performed.
(b) Notwithstanding anything to the contrary in
this Agreement, the other Financing Documents to which the
Partnership Guarantors are party or the Security Documents to
which the Partnership Guarantors are party, if at the time the
principal balance of the Securities is fully paid (the "Pay-off
Date"), any other amounts owed by the Partnership Guarantors
hereunder remain to be paid, Funding Corporation shall not be
obligated to release any collateral remaining subject to the
Security Documents, and such collateral shall continue to secure
the payment of such amounts remaining as of the Pay-off Date.
Section 5.4. Defense of Actions.
Upon the occurrence of a Credit Agreement Event of Default,
Funding Corporation may (but shall not be obligated to) commence,
appear in or defend any action or proceeding purporting to affect
the Partnership Project Loan, the Partnership Projects or the
respective rights and obligations of Funding Corporation and any
other person pursuant to this Agreement, any other Financing
Document to which the Partnership Guarantors are party or any
Security Document to which the Partnership Guarantors are party.
Funding Corporation may (but shall not be obligated to) pay all
necessary expenses, including reasonable attorneys' fees and
expenses, incurred in connection with such proceedings or
actions, which expenses the Partnership Guarantors hereby agree
to repay to Funding Corporation promptly upon demand.
ARTICLE 6.
GENERAL TERMS AND CONDITIONS
Section 6.1. Notices.
All notices, requests, complaints, demands, communications or
other papers shall be sufficiently given and shall be deemed
given when delivered or mailed by registered or certified mail,
postage prepaid, or sent by telegram or telex, addressed to the
parties as follows:
If to the Partnership Guarantors: CalEnergy Operating
Corporation
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Vulcan Power Company
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
Attention: General Counsel
Conejo Energy Company
302 South 36th Street, Suite 400-G
Omaha, Nebraska 68131
Attention: General Counsel
Niguel Energy Company
302 South 36th Street, Suite 400-H
Omaha, Nebraska 68131
Attention: General Counsel
San Felipe Energy Company
302 South 36th Street, Suite 400-I
Omaha, Nebraska 68131
Attention: General Counsel
BN Geothermal Inc.
302 South 36th Street, Suite 400-J
Omaha, Nebraska 68131
Attention: General Counsel
Del Ranch, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Elmore, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Leathers, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Vulcan/BN Geothermal Power
Company
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
Attention: General Counsel
CalEnergy Minerals LLC
302 South 36th Street, Suite 400-L
Omaha, Nebraska 68131
Attention: General Counsel
CE Turbo LLC
302 South 36th Street, Suite 400-M
Omaha, Nebraska 68131
Attention: General Counsel
If to Funding Corporation: Salton Sea Funding Corporation
302 South 36th Street, Suite 400-A
Omaha, Nebraska 68131
Attention: Chief Financial
Officer
If to Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: Corporate Utilities
Department
If to S & P: Standard & Poor's Corporation
25 Broadway
New York, New York 10004
Attention: Corporate Finance
Department
Electric Utilities Group
The above parties may, by notice given hereunder, designate any
further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 6.2. Amendments and Waivers.
This Agreement may only be amended by a document signed by
Funding Corporation and the Partnership Guarantors. No waiver of
any provision of this Agreement nor consent by Funding
Corporation to any departure by the Partnership Guarantors
therefrom shall in any event be effective unless the same shall
be in writing and signed by Funding Corporation. Any such waiver
or consent shall be effective only in the specific instance and
for the specific purpose for which given. No failure on the part
of Funding Corporation to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof (except as
provided above) nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or
the exercise of any other right. This Agreement shall be binding
upon the Partnership Guarantors, its successors and any permitted
assigns.
Section 6.3. Election of Remedies.
The remedies herein provided are cumulative and not exclusive
of any remedies provided by law. Funding Corporation shall have
all of the rights and remedies granted in the Financing Documents
and available at law or in equity, and these same rights and
remedies may be pursued separately, successively or concurrently
against the Partnership Guarantors, or any collateral under the
Financing Documents, at the sole discretion of Funding
Corporation.
Section 6.4. Severability.
Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization, without
invalidating the remaining provisions hereof or affecting the
validity, enforceability or legality of such provision in any
other jurisdiction.
Section 6.5. Third-Party Beneficiaries; Prior Agreements.
It is intended that the Trustee, the Collateral Agent and the
Depositary Agent be, and the Trustee, the Collateral Agent and
the Depositary Agent are hereby made, third-party beneficiaries
of this Agreement. This Agreement is for the sole benefit of
Funding Corporation, the Trustee, the Holders and the Partnership
Guarantors and is not for the benefit of any other third party.
Notwithstanding the two preceding sentences, no Holder shall have
any right to pursue any remedy hereunder except through the
Trustee as permitted under Sections 6.5 and 6.6 of the Indenture.
This Agreement supersedes all prior agreements among the parties
with respect to the matters addressed herein.
Section 6.6. Partnership Guarantors in Control.
In no event shall Funding Corporation's or the Trustee's rights
and interests under this Agreement and the other Financing
Documents be construed to give Funding Corporation or the
Trustee, or be deemed to indicate that Funding Corporation or the
Trustee has, control of the business, management or properties of
the Partnership Guarantors or power over the daily management
functions and operating decisions made by the Partnership
Guarantors.
Section 6.7. Number and Gender.
Whenever used herein, the singular number shall include the
plural and the plural the singular, and the use of any gender
shall be applicable to all genders.
Section 6.8. Captions.
The captions, headings, table of contents and arrangements used
in this Agreement are for convenience only and do not and shall
not be deemed to affect, limit, amplify or modify the terms and
provisions hereof.
Section 6.9. Applicable Law and Jurisdiction.
This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of
California.
Section 6.10. Consent.
Whenever the consent or approval of Funding Corporation or the
Partnership Guarantors is required herein, such consent or
approval shall not be unreasonably withheld or delayed.
Section 6.11. No Recourse.
Funding Corporation agrees that no general partner (except
CEOC, VPC, Conejo, Niguel, San Felipe and BNG), limited partner
(except Conejo, Niguel and San Felipe), member, officer,
director, employee or shareholder of the Partnership Guarantors
or any Affiliate of any such party (collectively, the
"Nonrecourse Parties") shall be personally liable under this
Agreement for the payment of any sums now or hereafter owing
Funding Corporation under the terms of, or for the performance of
any obligation contained in, this Agreement. Funding Corporation
agrees that its rights shall be limited to proceeding against the
Partnership Guarantors and the security provided or intended to
be provided pursuant to the Security Documents and that it shall
have no right to proceed against the Nonrecourse Parties for (a)
the satisfaction of any monetary obligation of, or enforcement of
any monetary claim against, the Partnership Guarantors, (b) the
performance of any obligation, covenant or agreement arising
under this Agreement, or (c) any deficiency judgment remaining
after foreclosure of any property securing the obligations
hereunder.
Section 6.12. Counterparts.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Section 6.13. Successors and Assigns.
All the covenants, promises and agreements in this Agreement
contained by or on behalf of the Partnership Guarantors, or by or
on behalf of Funding Corporation, shall bind and inure to the
benefit of their respective successors and assigns, whether so
expressed or not.
Section 6.14. Joint and Several Obligations.
The obligations of the Partnership Guarantors are joint and
several.
Section 6.15. Maximum Interest Rate.
Notwithstanding any provision to the contrary contained herein
or in the Partnership Project Note, at no time shall the
Partnership Guarantors be obligated or required to pay interest
on the principal balance due hereunder or thereunder at a rate
which could be in excess of the maximum interest rate permitted
by law to be contracted or agreed to be paid. If by the terms
hereof or of the Partnership Project Note, the Partnership
Guarantors are at any time required or obligated to pay interest
in excess of such maximum rate, then the rate of interest
applicable hereunder shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at
such maximum rate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above
written.
PARTNERSHIP GUARANTORS:
CALENERGY OPERATING CORPORATION,
a Delaware corporation
By:/s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
VULCAN POWER COMPANY,
a Nevada corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
CONEJO ENERGY COMPANY,
a California corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
NIGUEL ENERGY COMPANY,
a California corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
SAN FELIPE ENERGY COMPANY,
a California corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
BN GEOTHERMAL INC.,
a Delaware corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
DEL RANCH, L.P.,
a California limited partnership
By: CalEnergy Operating Corporation,
a Delaware corporation, its general partner
By:/s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
ELMORE, L.P.,
a California limited partnership
By: CalEnergy Operating Corporation,
a Delaware corporation, its general partner
By:/s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
LEATHERS, L.P.,
a California limited partnership
By: CalEnergy Operating Corporation,
a Delaware corporation, its general partner
By:/s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
VULCAN/BN GEOTHERMAL POWER COMPANY,
a Nevada general partnership
By: Vulcan Power Company,
a Nevada corporation, its general partner
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
CALENERGY MINERALS LLC,
a Delaware limited liability company
By:
Salton Sea Minerals Corp.,
a Delaware corporation, its manager
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
CE TURBO LLC,
a Delaware limited liability company
By: Magma Power Company,
a Nevada corporation, its manager
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President
FUNDING CORPORATION:
SALTON SEA FUNDING CORPORATION,
a Delaware corporation
By: /s/ Steven A. McArthur
Name: Steven A. McArthur
Title: Executive Vice President