DRAFT
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CALIFORNIA ENERGY COMPANY, INC.
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Indenture
Dated as of July [ ], 1995
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$200,000,000
[ ]% Limited Recourse Senior Secured Notes due 2003
THE BANK OF NEW YORK,
Trustee
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
Section 310 (a)(1). . . . . . . . . . . . . . .. . .609
(a)(2). . . . . . . . . . . . . . . . . . . . .609
(a)(3). . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . Not Applicable
(a)(5). . . . . . . . . . . . . . . . . . . . .609
(b) . . . . . . . . . . . . . . . . . . . 608, 610
Section 311 (a) . . . . . . . . . . . . . . . . . .613
(b) . . . . . . . . . . . . . . . . . . . . . .613
(c) . . . . . . . . . . . . . . . . Not Applicable
Section 312 (a) . . . . . . . . . . . . . . . 701, 702
(b) . . . . . . . . . . . . . . . . . . . . . .702
(c) . . . . . . . . . . . . . . . . . . . . . .702
Section 313 (a) . . . . . . . . . . . . . . . . . .703
(b) . . . . . . . . . . . . . . . . . . . . . .703
(c) . . . . . . . . . . . . . . . . . . . . . .703
(d) . . . . . . . . . . . . . . . . . . . . . .703
Section 314 (a) . . . . . . . . . . . . . . . . . .704
(a)(4). . . . . . . . . . . . . . . . . .704, 1020
(b) . . . . . . . . . . . . . . . . . . 1313
(c)(1). . . . . . . . . . . . . . . . . . . . .102
(c)(2). . . . . . . . . . . . . . . . . . . . .102
(c)(3). . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . 1313
(e) . . . . . . . . . . . . . . . . . . . . . .102
(f) . . . . . . . . . . . . . . . . Not Applicable
Section 315 (a) . . . . . . . . . . . . . . . . . .601
(b) . . . . . . . . . . . . . . . . . . . . . .602
(c) . . . . . . . . . . . . . . . . . . . . . .601
(d) . . . . . . . . . . . . . . . . . . . . . .601
(e) . . . . . . . . . . . . . . . . . . . . . .514
Section 316 (a) (last sentence) . . . . . .101 ("Outstanding")
(a)(1)(A) . . . . . . . . . . . . . . . . 502, 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . .513
(a)(2). . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . 508, 902
(c) . . . . . . . . . . . . . . . . . . . . . .104
Section 317 (a)(1) . . . . . . . . . . . . . . . . .503
(a)(2). . . . . . . . . . . . . . . . . . . . .504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
Section 318 (a) . . . . . . . . . . . . . . . . . .107
(b) . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . .107
___________________
Note: This Cross-Reference Table shall not, for any pur-
pose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS*
Page
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and
Opinions . . . . . . . . . . . . . . . 40
SECTION 103. Form of Documents Delivered to
Trustee. . . . . . . . . . . . . . . . 41
SECTION 104. Acts of Holders; Record Dates. . . . . 42
SECTION 105. Notices, Etc., to Trustee and
Company. . . . . . . . . . . . . . . . 45
SECTION 106. Notice to Holders; Waiver. . . . . . . 45
SECTION 107. Conflict with Trust Indenture
Act. . . . . . . . . . . . . . . . . . 46
SECTION 108. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . 46
SECTION 109. Successors and Assigns . . . . . . . . 46
SECTION 110. Separability Clause. . . . . . . . . . 46
SECTION 111. Benefits of Indenture. . . . . . . . . 47
SECTION 112. Governing Law. . . . . . . . . . . . . 47
SECTION 113. Legal Holidays . . . . . . . . . . . . 47
SECTION 114. Duplicate Originals. . . . . . . . . . 48
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally. . . . . . . . . . . . 48
SECTION 202. Form of Face of Security . . . . . . . 49
SECTION 203. Form of Reverse of Security. . . . . . 51
SECTION 204. Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . 58
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*Note: This table of contents shall not, for any purpose, be
deemed to be a part of the Indenture.
ARTICLE THREE
The Securities
SECTION 301. Title and Terms. . . . . . . . . . . . 59
SECTION 302. Denominations. . . . . . . . . . . . . 59
SECTION 303. Execution, Authentication, De-
livery and Dating. . . . . . . . . . . 60
SECTION 304. Temporary Securities . . . . . . . . . 60
SECTION 305. Registration, Registration of
Transfer and Exchange. . . . . . . . . 61
SECTION 306. Mutilated, Destroyed, Lost and
Stolen Securities. . . . . . . . . . . 63
SECTION 307. Payment of Interest; Interest
Rights Preserved . . . . . . . . . . . 64
SECTION 308. Persons Deemed Owners. . . . . . . . . 65
SECTION 309. Cancellation . . . . . . . . . . . . . 65
SECTION 310. Computation of Interest. . . . . . . . 66
SECTION 311. CUSIP Numbers. . . . . . . . . . . . . 66
SECTION 312. Global Securities. . . . . . . . . . . 66
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . . 69
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . 70
SECTION 502. Acceleration of Maturity; Re-
scission and Annulment . . . . . . . . 73
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by Trust-
ee . . . . . . . . . . . . . . . . . . 75
SECTION 504. Trustee May File Proofs of
Claim. . . . . . . . . . . . . . . . . 76
SECTION 505. Trustee May Enforce Claims With-
out Possession of Securities . . . . . 77
SECTION 506. Application of Money Collected . . . . 77
SECTION 507. Limitation on Suits. . . . . . . . . . 78
SECTION 508. Unconditional Right of Holders
to Receive Principal, Premium
and Interest . . . . . . . . . . . . . 79
SECTION 509. Restoration of Rights and Reme-
dies . . . . . . . . . . . . . . . . . 79
SECTION 510. Rights and Remedies Cumulative . . . . 79
SECTION 511. Delay or Omission Not Waiver . . . . . 80
SECTION 512. Control by Holders . . . . . . . . . . 80
SECTION 513. Waiver Of Past Defaults. . . . . . . . 80
SECTION 514. Undertaking for Costs. . . . . . . . . 81
SECTION 515. Waiver of Stay or Extension
Laws . . . . . . . . . . . . . . . . . 81
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibil-
ities. . . . . . . . . . . . . . . . . 81
SECTION 602. Notice of Defaults; Notice of
Acceleration . . . . . . . . . . . . . 83
SECTION 603. Certain Rights of Trustee. . . . . . . 83
SECTION 604. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . 85
SECTION 605. May Hold Securities. . . . . . . . . . 85
SECTION 606. Money Held in Trust. . . . . . . . . . 85
SECTION 607. Compensation and Reimbursement . . . . 85
SECTION 608. Conflicting Interests. . . . . . . . . 87
SECTION 609. Corporate Trustee Required;
Eligibility. . . . . . . . . . . . . . 87
SECTION 610. Resignation and Removal;
Appointment of Successor . . . . . . . 87
SECTION 611. Acceptance of Appointment by
Successor. . . . . . . . . . . . . . . 89
SECTION 612. Merger, Conversion, Consolida-
tion or Succession to Business . . . . 90
SECTION 613. Preferential Collection of
Claims Against Company . . . . . . . . 90
SECTION 614. Appointment of Authenticating
Agent. . . . . . . . . . . . . . . . . 90
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders . . . . . . . 93
SECTION 702. Preservation of Information;
Communications to Holders. . . . . . . 93
SECTION 703. Reports by Trustee . . . . . . . . . . 94
SECTION 704. Reports by Company . . . . . . . . . . 94
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company and Magma May Consoli-
date, Etc. Only on Certain
Terms. . . . . . . . . . . . . . . . . 95
SECTION 802. Successor Substituted. . . . . . . . . 97
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders . . . . . . . . . . 97
SECTION 902. Supplemental Indentures with
Consent of Holders . . . . . . . . . . 98
SECTION 903. Execution of Supplemental Inden-
tures. . . . . . . . . . . . . . . . 100
SECTION 904. Effect of Supplemental Inden-
tures. . . . . . . . . . . . . . . . 101
SECTION 905. Conformity with Trust Indenture
Act. . . . . . . . . . . . . . . . . 101
SECTION 906. Reference in Securities to Sup-
plemental Indentures . . . . . . . . 101
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium
and Interest . . . . . . . . . . . . . 102
SECTION 1002. Maintenance of Office or Agency. . . . 102
SECTION 1003. Money for Security Payments to
be Held in Trust . . . . . . . . . . . 103
SECTION 1004. Existence. . . . . . . . . . . . . . . 104
SECTION 1005. Maintenance of Properties. . . . . . . 105
SECTION 1006. Payment of Taxes and Other
Claims . . . . . . . . . . . . . . . . 105
SECTION 1007. Maintenance of Insurance . . . . . . . 106
SECTION 1008. Limitation on Debt . . . . . . . . . . 107
SECTION 1009. Limitation on Subsidiary Debt. . . . . 108
SECTION 1010. Limitation on Restricted Pay-
ments. . . . . . . . . . . . . . . . . 109
SECTION 1011. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . 112
SECTION 1012. Limitation on Liens. . . . . . . . . . 113
SECTION 1013. Limitation on Issuance of Capi-
tal Stock of Magma . . . . . . . . . . 115
SECTION 1014. Purchase of Securities Upon a
Change of Control. . . . . . . . . . . 116
SECTION 1015. Limitation on Dividends and
Other Payment Restrictions Af-
fecting Subsidiaries . . . . . . . . . 118
SECTION 1016. Limitation on Dispositions . . . . . . 120
SECTION 1017. Limitation on Certain Sale-Leas-
ebacks . . . . . . . . . . . . . . . . 124
SECTION 1018. Provision of Financial Informa-
tion . . . . . . . . . . . . . . . . . 124
SECTION 1019. Limitation on Sale of Subsidiary
Preferred Stock. . . . . . . . . . . . 125
SECTION 1020. Statement by Officers as to
Default; Compliance Certific-
ates . . . . . . . . . . . . . . . . . 126
SECTION 1021. Waiver of Certain Covenants. . . . . . 127
SECTION 1022. Limitation on Business and New
Magma Project Developments . . . . . . 127
SECTION 1023. Use of Proceeds and Secured
Magma Note . . . . . . . . . . . . . . 129
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Redemption . . . . . . . . . . . . . . 130
SECTION 1102. Applicability of Article . . . . . . . 130
SECTION 1103. Notice to Trustee. . . . . . . . . . . 131
SECTION 1104. Selection by Trustee of Securi-
ties to Be Redeemed. . . . . . . . . . 131
SECTION 1105. Notice of Redemption . . . . . . . . . 131
SECTION 1106. Deposit of Redemption Price. . . . . . 132
SECTION 1107. Securities Payable on Redemption
Date . . . . . . . . . . . . . . . . . 132
SECTION 1108. Securities Redeemed in Part. . . . . . 133
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect De-
feasance or Covenant Defeasance. . . . 134
SECTION 1202. Defeasance and Discharge . . . . . . . 134
SECTION 1203. Covenant Defeasance. . . . . . . . . . 135
SECTION 1204. Conditions to Defeasance or
Covenant Defeasance. . . . . . . . . . 135
SECTION 1205. Deposited Money and U.S. Gov-
ernment Obligations to Be Held
in Trust; Miscellaneous Provi-
sions. . . . . . . . . . . . . . . . . 138
SECTION 1206. Reinstatement. . . . . . . . . . . . . 139
ARTICLE THIRTEEN
Security and Pledge of Collateral
SECTION 1301. Grant of Security Interest . . . . . . 140
SECTION 1302. Delivery of Pledged Shares . . . . . . 141
SECTION 1303. Representations, Warranties and
Covenants. . . . . . . . . . . . . . . 142
SECTION 1304. Pledge Agreement . . . . . . . . . . . 143
SECTION 1305. Further Assurances . . . . . . . . . . 144
SECTION 1306. Dividends; Investments of Col-
lateral; Voting Rights; Release
Upon Discharge or Defeasance . . . . . 144
SECTION 1307. Trustee Appointed Attorney-in-
Fact . . . . . . . . . . . . . . . . . 147
SECTION 1308. Trustee May Perform. . . . . . . . . . 147
SECTION 1309. Trustee's Duties . . . . . . . . . . . 147
SECTION 1310. Remedies upon Event of Default . . . . 148
SECTION 1311. Registration Rights; Private Sales . . 149
SECTION 1312. Application of Proceeds. . . . . . . . 152
SECTION 1313. Continuing Lien. . . . . . . . . . . . 152
SECTION 1314. Certificates and Opinions. . . . . . . 152
ARTICLE FOURTEEN
Limited Recourse Liability of the Company
SECTION 1401. Limited Recourse Liability of
the Company. . . . . . . . . . . . . . 153
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . 155
SIGNATURES AND SEALS. . . . . . . . . . . . . . . . . 155
ACKNOWLEDGEMENTS. . . . . . . . . . . . . . . . . . . 156
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . B-1
INDENTURE, dated as of July [ ], 1995, by and between
California Energy Company, Inc., a corporation duly orga-
nized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office
at 302 South 36th Street, Omaha, Nebraska 68131, and The
Bank of New York, a New York banking corporation, as trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an
issue of its __% Limited Recourse Senior Secured Notes due
2004 (the "Securities") of substantially the tenor and
amount hereinafter set forth, and to provide therefor the
Company has duly authorized the execution and delivery of
this Indenture.
All things necessary to make the Securities, when exe-
cuted by the Company and authenticated and delivered hereun-
der and duly issued by the Company, the valid obligations of
the Company, and to make this Indenture a valid agreement of
the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the pur-
chase of the Securities by the Holders thereof, it is mutu-
ally covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
(a) For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(i) the terms defined in this Article have the
meanings assigned to them in this Article and include
the plural as well as the singular;
(ii) all other terms used herein that are defined
in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(iii) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with GAAP (whether or not such is indicated herein);
(iv) unless the context otherwise requires, any
reference to an "Article" or a "Section" refers to an
Article or Section, as the case may be, of this Inden-
ture;
(v) the words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Inden-
ture as a whole and not to any particular Article,
Section or other subdivision;
(vi) "or" is not exclusive;
(vii) provisions apply to successive events and
transactions; and
(viii) each reference herein to a rule or form of
the Commission shall mean such rule or form and any
rule or form successor thereto, in each case as amended
from time to time.
Whenever this Indenture requires that a particular
ratio or amount be calculated with respect to a specified
period after giving effect to certain transactions or events
on a pro forma basis, such calculation shall be made as if
the transactions or events occurred on the first day of such
period, unless otherwise specified.
"Acquired Debt" means Debt Incurred by a Person prior
to the time (i) such Person becomes a Restricted Subsidiary
of Magma or an Eligible Joint Venture, (ii) such Person
merges with or into a Restricted Subsidiary of Magma or an
Eligible Joint Venture, or (iii) a Restricted Subsidiary of
Magma or an Eligible Joint Venture merges with or into such
Person (in a transaction in which such Person becomes a
Restricted Subsidiary of Magma or an Eligible Joint Ven-
ture), provided that, after giving effect to such transac-
tion, the Non-Recourse Debt of such Person could have been
Incurred pursuant to clause (iii) of Section 1009(b) and all
the other Debt of such Person could have been Incurred by
Magma at the time of such merger or acquisition pursuant to
Section 1008(a), and provided further that such Debt was not
Incurred in connection with, or in contemplation of, such
merger or such Person becoming a Restricted Subsidiary of
Magma or an Eligible Joint Venture.
"Acquisition Debt" means Debt of any Person existing at
the time such Person is merged into Magma or assumed in
connection with the acquisition of Property from any such
Person (other than Property acquired in the ordinary course
of business), including Debt Incurred in connection with, or
in contemplation of, such Person being merged into Magma
(but excluding Debt of such Person that is extinguished,
retired or repaid in connection with such merger or acquisi-
tion).
"Additional Pledged Shares" means any and all shares of
Capital Stock of Magma acquired by the Company or any Sub-
sidiary of the Company after the Issue Date.
"Adjusted Consolidated Net Income" means for any peri-
od, for any Person (the "Referenced Person") the aggregate
Net Income (or loss) of the Referenced Person and its con-
solidated Subsidiaries for such period determined in confor-
mity with GAAP, provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income
(without duplication): (i) the Net Income (or loss) of any
other Person (other than a Subsidiary of the Referenced
Person) in which any third Person has an interest, except to
the extent of the amount of dividends or other distributions
actually paid in cash to the Referenced Person during such
period, or after such period and on or before the date of
determination, by such Person in which the interest is held,
which dividends and distributions shall be included in such
computation, (ii) solely for the purposes of calculating the
amount of Restricted Payments that may be made pursuant to
the provision described in clause (iii) of Section 1010(a)
(and in such case, except to the extent includable pursuant
to clause (i) above), the Net Income (if positive) of any
other Person accrued prior to the date it becomes a Subsid-
iary of the Referenced Person or is merged into or consoli-
dated with the Referenced Person or any of its Subsidiaries
or all or substantially all the Property of such other
Person are acquired by the Referenced Person or any of its
Subsidiaries, (iii) the Net Income (if positive) of any Sub-
sidiary of the Referenced Person to the extent that the
declaration or payment of dividends or similar distributions
by that Subsidiary to such Person or to any other Subsidiary
of such Net Income is not at the time permitted by operation
of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regu-
lation applicable to that Subsidiary, (iv) any gains or
losses (on an after-tax basis) attributable to Asset Sales
(except, solely for the purposes of calculating the amount
of Restricted Payments that may be made pursuant to the
provision described in clause (iii) of Section 1010(a), any
gains or losses of Magma and any of its Restricted Subsid-
iaries from Asset Sales of Capital Stock of Unrestricted
Subsidiaries), (v) the cumulative effect of a change in ac-
counting principles and (vi) any amounts paid or accrued as
dividends on Preferred Stock of any Subsidiary of the Refer-
enced Person that is not held by the Referenced Person or
another Subsidiary thereof. When the "Referenced Person" is
Magma, the foregoing references to "Subsidiaries" shall be
deemed to refer to "Restricted Subsidiaries."
"Affiliate" of any Person means any other Person di-
rectly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled
by" and "under common control with") when used with respect
to any Person means the possession, directly or indirectly,
of the power to direct or cause the direction of the manage-
ment and policies of such Person, whether through the owner-
ship of voting securities, by contract or otherwise. For
the purpose of Section 1011, the term "Affiliate" shall be
deemed to include only Kiewit, any entity directly or indi-
rectly owning beneficially 10% or more of the Voting Stock
of Magma and their respective Affiliates other than the Re-
stricted Subsidiaries and the Eligible Joint Ventures and
the other equity investors in the Restricted Subsidiaries
and the Eligible Joint Ventures (solely on account of their
investments in the Restricted Subsidiaries and the Eligible
Joint Ventures), and for such purpose such term also shall
be deemed to include the Unrestricted Subsidiaries.
"Asset Acquisition" means (i) an investment by Magma,
any of its Subsidiaries or any Joint Venture in any other
Person pursuant to which such Person shall become a direct
or indirect Subsidiary of Magma or a Joint Venture in which
Magma is a participant or shall be merged into or consoli-
dated with Magma, any of its Subsidiaries or any Joint Ven-
ture in which Magma is a participant or (ii) an acquisition
by Magma, any of its Subsidiaries or any Joint Venture in
which Magma is a participant of the Property of any Person
other than Magma, any of its Subsidiaries or any Joint Ven-
ture in which Magma is a participant that constitutes sub-
stantially all of an operating unit or business of such
Person.
"Asset Disposition" means any sale, transfer, convey-
ance, lease or other disposition (including by way of merg-
er, consolidation or sale-leaseback) by Magma, any of its
Restricted Subsidiaries or any Eligible Joint Venture to any
Person (other than to Magma, a Restricted Subsidiary of
Magma or an Eligible Joint Venture and other than in the
ordinary course of business) of any Property of Magma, any
of its Restricted Subsidiaries or any Eligible Joint Venture
other than any shares of Capital Stock of the Unrestricted
Subsidiaries. Notwithstanding the foregoing to the con-
trary, the term "Asset Disposition" shall include the sale,
transfer, conveyance or other disposition of any shares of
Capital Stock of any Unrestricted Subsidiary to the extent
that Magma or any of its Restricted Subsidiaries or any
Eligible Joint Venture made an Investment in such Unrestric-
ted Subsidiary pursuant to clause (vii) of the definition of
"Permitted Payment," and the Company shall cause Magma and
each of Magma's Restricted Subsidiaries and the Eligible
Joint Ventures to apply pursuant to Section 1016 that por-
tion of the Net Cash Proceeds from the sale, transfer,
conveyance or other disposition of such Unrestricted Subsid-
iary that is equal to the portion of the total Investment in
such Unrestricted Subsidiary that is represented by the In-
vestment that was made pursuant to clause (vii) of the defi-
nition of "Permitted Payment." For purposes of this defini-
tion, any disposition in connection with directors' qualify-
ing shares or investments by foreign nationals mandated by
applicable law shall not constitute an Asset Disposition.
In addition, the term "Asset Disposition" shall not include
(i) any sale, transfer, conveyance, lease or other disposi-
tion of the Capital Stock or Property of Restricted Subsid-
iaries or Eligible Joint Ventures pursuant to the terms of
any power sales agreements or steam sales agreements to
which such Restricted Subsidiaries or such Eligible Joint
Ventures are parties on the Issue Date or pursuant to the
terms of any power sales agreements or steam sales agree-
ments, or other agreements or contracts that are related to
the output or product of, or services rendered by, a Permit-
ted Facility as to which such Restricted Subsidiary or such
Eligible Joint Venture is the supplying party, to which such
Restricted Subsidiaries or such Eligible Joint Ventures
become a party after such date if the President or Chief
Financial Officer of the Company determines in good faith
(evidenced by an Officers' Certificate) that such provisions
are customary (or, in the absence of any industry custom,
reasonably necessary) in order to effect such agreements and
are reasonable in light of comparable transactions in the
applicable jurisdiction, (ii) any sale, transfer, convey-
ance, lease or other disposition of Property governed by
Section 801, (iii) any sale, transfer, conveyance, lease or
other disposition of any Cash Equivalents, (iv) any transac-
tion or series of related transactions consisting of the
sale, transfer, conveyance, lease or other disposition of
Capital Stock or Property with a fair market value aggre-
gating less than $5 million and (v) any Permitted Payment or
any Restricted Payment that is permitted to be made pursuant
to Section 1010. The term "Asset Disposition" also shall
not include (i) the grant of or realization upon a Lien
permitted under Section 1012 or the exercise of remedies
thereunder, (ii) a sale-leaseback transaction involving sub-
stantially all the Property constituting a Permitted Facil-
ity pursuant to which a Restricted Subsidiary of Magma or an
Eligible Joint Venture sells the Permitted Facility to a
Person in exchange for the assumption by that Person of the
Debt financing the Permitted Facility, and the Restricted
Subsidiary or the Eligible Joint Venture leases the Permit-
ted Facility from such Person, (iii) dispositions of Capital
Stock, contract rights, development rights and resource data
made in connection with the initial development of Permitted
Facilities, or the formation or capitalization of Restricted
Subsidiaries or Eligible Joint Ventures in respect of the
initial development of Permitted Facilities, in respect of
which only an insubstantial portion of the prospective Con-
struction Financing that would be required to commence com-
mercial operation has been funded or (iv) transactions
determined in good faith by the Chief Financial Officer of
the Company, as evidenced by an Officers' Certificate, made
in order to enhance the repatriation of the Net Cash Pro-
ceeds for a Foreign Asset Disposition or in order to in-
crease the after-tax proceeds thereof available for immedi-
ate distribution to Magma. Any Asset Disposition that
results from the bona fide exercise by any governmental
authority of its claimed or actual power of eminent domain
need not comply with the provisions of clauses (i) and (ii)
of Section 1016(a). Any Asset Disposition that results from
a casualty loss need not comply with the provisions of
clause (i) of Section 1016(a).
"Asset Sale" means the sale or other disposition by
Magma, any of its Subsidiaries or any Joint Venture in which
Magma is a participant (other than to Magma, another Subsid-
iary of Magma or another Joint Venture in which Magma is a
participant) of (i) all or substantially all of the Capital
Stock of any Subsidiary of Magma or any Joint Venture in
which Magma is a participant or (ii) all or substantially
all of the Property that constitutes an operating unit or
business of Magma, any of its Subsidiaries or any Joint
Venture in which Magma is a participant.
"Attributable Value" means, as to a Capitalized Lease
Obligation under which any Person is at the time liable and
at any date as of which the amount thereof is to be deter-
mined, the capitalized amount thereof that would appear on
the face of a balance sheet of such Person in accordance
with GAAP.
"Authenticating Agent" means any Person authorized by
the Trustee pursuant to Section 614 hereof to act on behalf
of the Trustee to authenticate Securities.
"Average Life" means, at any date of determination with
respect to any Debt security or Preferred Stock, the quo-
tient obtained by dividing (i) the sum of the product of (A)
the number of years from such date of determination to the
dates of each successive scheduled principal or involuntary
liquidation value payment of such Debt security or Preferred
Stock, respectively, multiplied by (B) the amount of such
principal or involuntary liquidation value payment by (ii)
the sum of all such principal or involuntary liquidation
value payments.
"Board of Directors" means either the Board of Direc-
tors of the Company or Magma, as the case may be, or any
duly authorized committee of such Boards.
"Board Resolution" means a copy of a resolution certi-
fied by the Secretary or an Assistant Secretary of the
Company or Magma, as the case may be, to have been duly
adopted by their respective Board of Directors (unless the
context specifically requires that such resolution be adopt-
ed by a majority of the Disinterested Directors, in which
case by a majority of such directors) and to be in full
force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means a day that, in the city (or in any
of the cities, if more than one) where amounts are payable
in respect of the Securities, is neither a legal holiday nor
a day on which banking institutions are authorized or re-
quired by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any
and all shares, interests, participations or other equiva-
lents (however designated, whether voting or non-voting) in,
or interests (however designated) in, the equity of such
Person that is outstanding or issued on or after the date of
this Indenture, including, without limitation, all Common
Stock and Preferred Stock and partnership and Joint Venture
interests in such Person.
"Capitalized Lease" means, as applied to any Person,
any lease of any Property of which the discounted present
value of the rental obligations of such Person as lessee, in
conformity with GAAP, is required to be capitalized on the
balance sheet of such Person, and "Capitalized Lease Obliga-
tion" means the rental obligations, as aforesaid, under such
lease.
"Cash Equivalent" means any of the following: (i)
securities issued or directly and fully guaranteed or in-
sured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support
thereof), (ii) time deposits and certificates of deposit of
any commercial bank organized in the United States having
capital and surplus in excess of $500,000,000 or any commer-
cial bank organized under the laws of any other country
having total assets in excess of $500,000,000 with a maturi-
ty date not more than two years from the date of acquisi-
tion, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types descri-
bed in clauses (i) or (v) that were entered into with any
bank meeting the qualifications set forth in clause (ii) or
another financial institution of national reputation, (iv)
direct obligations issued by any state or other jurisdiction
of the United States of America or any other country or any
political subdivision or public instrumentality thereof
maturing, or subject to tender at the option of the holder
thereof, within 90 days after the date of acquisition there-
of and, at the time of acquisition, having a rating of A
from S&P or A-2 from Moody's (or, if at any time neither S&P
nor Moody's may be rating such obligations, then from anoth-
er nationally recognized rating service), (v) commercial
paper issued by (a) the parent corporation of any commercial
bank organized in the United States having capital and
surplus in excess of $500,000,000 or any commercial bank
organized under the laws of any other country having total
assets in excess of $500,000,000 and (b) others having one
of the two highest ratings obtainable from either S&P or
Moody's (or, if at any time neither S&P nor Moody's may be
rating such obligations, then from another nationally recog-
nized rating service) and in each case maturing within one
year after the date of acquisition, (vi) overnight bank
deposits and bankers' acceptances at any commercial bank
organized in the United States having capital and surplus in
excess of $500,000,000 or any commercial bank organized
under the laws of any other country having total assets in
excess of $500,000,000, (vii) deposits available for with-
drawal on demand with any commercial bank organized in the
United States having capital and surplus in excess of $500,-
000,000 or any commercial bank organized under the laws of
any other country having total assets in excess of $500,000-
,000, (viii) investments in money market funds substantially
all of whose assets comprise securities of the types de-
scribed in clauses (i) through (vi) and (ix), and (ix)
auction rate securities or money market preferred stock
having one of the two highest ratings obtainable from either
S&P or Moody's (or, if at any time neither S&P nor Moody's
may be rating such obligations, then from another nationally
recognized rating service).
"Change of Control" means the occurrence of one or more
of the following events:
(i) for so long as at least $25 million principal
amount of the Company's 5% Convertible Subordinated De-
bentures due July 1, 2000 remain outstanding and are
not defeased, (x) a report is filed on Schedule 13D or
14D-1 (or any successor schedule, form or report)
pursuant to the Exchange Act, disclosing that any
person (for the purposes of this provision only, as the
term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act or any successor provision
to either of the foregoing) has become the beneficial
owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promul-
gated under the Exchange Act) of 50% or more of the
then outstanding shares of the Voting Stock of the
Company and (y) such beneficial ownership is acquired
by means of a tender offer in which cash is the sole
consideration paid and the purchase price for each
share tendered is less than the conversion price then
in effect under the Company's 5% Convertible Subordi-
nated Debentures due July 1, 2000; provided that a
person shall not be deemed to be the beneficial owner
of, or to own beneficially, any securities tendered
until such tendered securities are accepted for pur-
chase under the tender offer;
(ii) any "person" (as such term is used in Sec-
tions 13(d) and 14(d) of the Exchange Act), other than
Kiewit, is or becomes the beneficial owner (as defined
in clause (i) above), directly or indirectly, of more
than 35% of the total voting power of the Voting Stock
of the Company (for the purposes of this clause (ii),
any person shall be deemed to beneficially own any
Voting Stock of any corporation (the "specified corpo-
ration") held by any other corporation (the "parent
corporation"), if such person "beneficially owns" (as
so defined), directly or indirectly, more than 35% of
the voting power of the Voting Stock of such parent
corporation) and Kiewit "beneficially owns" (as so de-
fined), directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting
Stock of the Company and does not have the right or
ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of
Directors of the Company;
(iii) during any one-year period, individuals who
at the beginning of such period constituted the Board
of Directors of the Company (together with any new
directors elected by such Board of Directors or nomi-
nated for election by the shareholders of the Company
by a vote of at least a majority of the directors of
the Company then still in office who were either direc-
tors at the beginning of such period or whose election
or nomination for election was previously so approved)
cease for any reason to constitute a majority of the
Board of Directors of the Company then in office,
unless a majority of such new directors were elected or
appointed by Kiewit; or
(iv) the Company or its Restricted Subsidiaries
sell, convey, assign, transfer, lease or otherwise dis-
pose of all or substantially all the Property of the
Company and such Restricted Subsidiaries taken as a
whole;
provided that with respect to the foregoing subparagraphs
(ii), (iii) and (iv), a Change of Control shall not be
deemed to have occurred unless and until a Rating Decline
has occurred as well; or
(v) the Company ceases to beneficially own direct-
ly or indirectly at least a majority of each of the
Capital Stock and the voting power of the Voting Stock
of Magma.
"Closing Date Pledged Shares" means all the issued and
outstanding shares of Capital Stock of Magma as of the Issue
Date.
"Common Stock" means with respect to any Person, Capi-
tal Stock of such Person that does not rank prior, as to the
payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution
or winding up of such Person, to shares of Capital Stock of
any other class of such Person.
"Company" means the Person named as the "Company" in
the first paragraph of this Indenture until a successor
Person shall have become such pursuant to the applicable
provisions of this Indenture and thereafter "Company" shall
mean such successor Person.
"Company Equity Offering" means an underwritten public
offering of Capital Stock (other than Redeemable Capital
Stock) of the Company or a wholly owned Subsidiary of the
Company, other than Magma and its Subsidiaries, pursuant to
a registration statement filed with the Securities and
Exchange Commission in accordance with the Securities Act or
an offering of such Capital Stock exempt from registration
under the Securities Act.
"Company Request" or "Company Order" means a written
request or order signed in the name of the Company by its
Chairman of the Board, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Trustee.
"Consolidated EBITDA" of any Person for any period
means the Adjusted Consolidated Net Income of such Person,
plus, only to the extent deducted in computing Adjusted
Consolidated Net Income and without duplication, (i) income
taxes, excluding income taxes (either positive or negative)
attributable to extraordinary and non-recurring gains or
losses or Asset Sales, all determined on a consolidated
basis for such Person and its consolidated Subsidiaries in
accordance with GAAP, (ii) Consolidated Fixed Charges, (iii)
depreciation and amortization expense, all determined on a
consolidated basis for such Person and its consolidated
Subsidiaries in accordance with GAAP and (iv) all other non-
cash items reducing Adjusted Consolidated Net Income for
such period, all determined on a consolidated basis for such
Person and its consolidated Subsidiaries in accordance with
GAAP, and less all non-cash items increasing Adjusted Con-
solidated Net Income during such period, provided that
depreciation and amortization expense of any Subsidiary of
such Person and any other non-cash item of any Subsidiary of
such Person that reduces Adjusted Consolidated Net Income
shall be excluded (without duplication) in computing Consol-
idated EBITDA, except to the extent that the positive cash
flow associated with such depreciation and amortization ex-
pense and other non-cash items is actually distributed in
cash to such Person during such period, provided further
that as applied to Magma, cash in respect of depreciation
and amortization and other non-cash items of Restricted Sub-
sidiaries and Eligible Joint Ventures may be deemed to have
been distributed or paid to Magma to the extent that such
cash (I) is or was under the exclusive dominion and control
of such Restricted Subsidiary or such Eligible Joint Venture
and is or was free and clear of the Lien of any other Per-
son, (II) is or was immediately available for distribution
and (III) could be or could have been repatriated to the
United States by means that are both lawful and commercially
reasonable, provided that the amount of the cash deemed by
this sentence to have been distributed or paid shall be re-
duced by the amount of tax that would have been payable with
respect to the repatriation thereof, provided further that
any cash that enables the recognition of depreciation and
amortization and other non-cash items pursuant to this
sentence may not be used to enable the recognition of depre-
ciation and amortization and other non-cash items with
respect to any prior or subsequent period, regardless of
whether such cash is distributed to Magma, and provided
further that the recognition of any depreciation and amorti-
zation and other non-cash items as a result of this sentence
shall be determined in good faith by the Chief Financial
Officer of the Company or Magma, as the case may be, as evi-
denced by an Officers' Certificate that shall set forth in
reasonable detail the relevant facts and assumptions sup-
porting such recognition. When the "Person" referred to
above is Magma, the foregoing references to "Subsidiaries"
shall be deemed to refer to "Restricted Subsidiaries."
"Consolidated Fixed Charges" of any Person means, for
any period, the aggregate of (i) Consolidated Interest Ex-
pense, (ii) the interest component of Capitalized Leases,
determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, excluding
any interest component of Capitalized Leases in respect of
that portion of a Capitalized Lease Obligation of a Subsid-
iary that is Non-Recourse to such Person, and (iii) cash and
non-cash dividends due (whether or not declared) on the
Preferred Stock of any Subsidiary of such Person held by any
Person other than such Person and any Redeemable Stock of
such Person or any Subsidiary of such Person. When the
"Person" referred to above is Magma, the foregoing referenc-
es to "Subsidiaries" shall be deemed to refer to "Restricted
Subsidiaries."
"Consolidated Interest Expense" of any Person means,
for any period, the aggregate interest expense in respect of
Debt (including amortization of original issue discount and
non-cash interest payments or accruals) of such Person and
its consolidated Subsidiaries, determined on a consolidated
basis in accordance with GAAP, including all commissions,
discounts, other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements
and Currency Protection Agreements and any amounts paid
during such period in respect of such interest expense,
commissions, discounts, other fees and charges that have
been capitalized, provided that Consolidated Interest Ex-
pense of Magma shall not include any interest expense (in-
cluding all commissions, discounts, other fees and charges
owed with respect to letters of credit and bankers' accep-
tance financing and net costs associated with Interest Rate
Protection Agreements or Currency Protection Agreements) in
respect of that portion of any Debt that is Non-Recourse,
and provided further that Consolidated Interest Expense of
Magma in respect of a Guarantee by Magma of Debt of another
Person shall be equal to the commissions, discounts, other
fees and charges that would be due with respect to a hypo-
thetical letter of credit issued under a bank credit agree-
ment that can be drawn by the beneficiary thereof in the
amount of the Debt so guaranteed if (i) Magma is not actual-
ly making directly or indirectly interest payments on such
Debt and (ii) GAAP does not require Magma on an unconsoli-
dated basis to record such Debt as a liability of Magma.
When the "Person" referred to above is Magma, the foregoing
references to "Subsidiaries" shall be deemed to refer to
"Restricted Subsidiaries."
"Construction Financing" means the debt and/or equity
financing provided (over and above the owners' equity in-
vestment) to permit the acquisition, development, design,
engineering, procurement, construction and equipping of a
Permitted Facility and to enable it to commence commercial
operations, provided that Construction Financing may remain
outstanding after the commencement of commercial operations
of a Permitted Facility, without any increase in the amount
of such financing, and such Construction Financing shall not
cease to be Construction Financing.
"Corporate Trust Office" means the principal office of
the Trustee at which at any particular time its corporate
trust business shall be administered, which address as of
the date of this Indenture is located at 101 Barclay Street,
21st Floor West, New York, NY 10286.
"Currency Protection Agreement" means, with respect to
any Person, any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement intended
to protect such Person against fluctuations in currency
values to or under which such Person is a party or a benefi-
ciary on the date of this Indenture or becomes a party or a
beneficiary thereafter.
"Debt" means, with respect to any Person, at any date
of determination (without duplication), (i) all indebtedness
of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in
respect of letters of credit, bankers' acceptances, surety,
bid, operating and performance bonds, performance guarantees
or other similar instruments or obligations (or reimburse-
ment obligations with respect thereto) (except, in each
case, to the extent incurred in the ordinary course of busi-
ness), (iv) all obligations of such Person to pay the de-
ferred purchase price of property or services, except Trade
Payables, (v) the Attributable Value of all obligations of
such Person as lessee under Capitalized Leases, (vi) all
Debt of others secured by a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person,
provided that, for purposes of determining the amount of any
Debt of the type described in this clause, if recourse with
respect to such Debt is limited to such Property, the amount
of such Debt shall be limited to the lesser of the fair
market value of such Property or the amount of such Debt,
(vii) all Debt of others Guaranteed by such Person to the
extent such Debt is Guaranteed by such Person, (viii) all
Redeemable Stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid
dividends and (ix) to the extent not otherwise included in
this definition, all net obligations of such Person under
Currency Protection Agreements and Interest Rate Protection
Agreements.
For purposes of determining any particular amount of
Debt that is or would be outstanding, Guarantees of, or
obligations with respect to letters of credit or similar in-
struments supporting (to the extent the foregoing consti-
tutes Debt), Debt otherwise included in the determination of
such particular amount shall not be included. For purposes
of determining compliance with this Indenture, in the event
that an item of Debt meets the criteria of more than one of
the types of Debt described in the above clauses, the Compa-
ny, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such
Debt in one of such clauses.
"Default" means any event that is, or after notice or
passage of time, or both, would be, an Event of Default.
"Default Amount" means, the principal amount plus ac-
crued interest.
"Depositary" means the Person designated as Depositary
by the Company pursuant to Section 312 until a successor
depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary
hereunder. For purposes of this Indenture, unless otherwise
specified pursuant to Section 312, any such Depositary
shall, at the time of its designation and at all times
during which it serves as Depositary, be a clearing agency
registered under the Exchange Act and any other applicable
statute or regulation.
"Disinterested Director" means, with respect to any
proposed transaction between the Company, Magma, a Restrict-
ed Subsidiary of Magma or an Eligible Joint Venture, as
applicable, and an Affiliate thereof, a member of the trans-
acting party's Board of Directors who would not be a party
to, or have a financial interest in, such transaction and is
not an officer, director or employee of, and does not have a
financial interest in, such Affiliate. For purposes of this
definition, no person would be deemed not to be a Disinter-
ested Director solely because such person holds Capital
Stock of the Company or Magma, as the case may be.
"Eligible Joint Venture" means a Joint Venture (other
than a Subsidiary) (i) that is or shall be formed with re-
spect to the construction, development, acquisition, servic-
ing, ownership, operation or management of one or more Per-
mitted Facilities and (ii) in which (A) Magma or (B) Magma
and Kiewit, if Kiewit is so designated by the Board of
Directors of the Company or Magma, together, directly or
indirectly, own at least 50% of the Capital Stock therein
(of which Magma must own at least half (in any event not
less than 25% of the total outstanding Capital Stock)) and
(iii) in respect of which Magma alone or in combination with
Kiewit, if Kiewit is so designated by the Board of Directors
of the Company or Magma, directly or indirectly, (a) con-
trols, by voting power, board or management committee mem-
bership, or through the provisions of any applicable part-
nership, shareholder or other similar agreement or under an
operating, maintenance or management agreement or otherwise,
the management and operation of the Joint Venture or any
Permitted Facilities of the Joint Venture or (b) otherwise
has significant influence over the management or operation
of the Joint Venture or any Permitted Facility of the Joint
Venture in all material respects (significant influence in-
cludes, without limitation, the right to control or veto any
material act or decision) in connection with such management
or operation. Any Joint Venture that is an Eligible Joint
Venture pursuant to this definition because of the ownership
of Capital Stock therein by Kiewit shall cease to be an
Eligible Joint Venture if (x) Kiewit disposes of any securi-
ties issued by the Company and, as a result of such disposi-
tion, Kiewit becomes the beneficial owner (as such term is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of less than 25% of the
outstanding shares of Voting Stock of the Company or (y)(I)
as a result of any action other than a disposition of secu-
rities by Kiewit, Kiewit becomes the beneficial owner of
less than 25% of the outstanding shares of Voting Stock of
the Company and (II) thereafter Kiewit disposes of any secu-
rities issued by the Company as a result of which the bene-
ficial ownership by Kiewit of the outstanding Voting Stock
of the Company is further reduced, provided that thereafter
such Joint Venture may become an Eligible Joint Venture if
Kiewit becomes the beneficial owner of at least 25% of the
outstanding shares of Voting Stock of the Company and the
other conditions set forth in this definition are fulfilled.
"Event of Default" shall have the meaning specified in
Section 501.
"Exchange Act" refers to the Securities Exchange Act of
1934 and any statute successor thereto, in each case as
amended from time to time.
"Fixed Charge Ratio" means the ratio, on a pro forma
basis, of (i) the aggregate amount of Consolidated EBITDA of
any Person for the Reference Period immediately prior to the
date of the transaction giving rise to the need to calculate
the Fixed Charge Ratio (the "Transaction Date") to (ii) the
aggregate Consolidated Fixed Charges of such Person during
such Reference Period, provided that for purposes of such
computation, in calculating Consolidated EBITDA and Consoli-
dated Fixed Charges, (1) the Incurrence of the Debt giving
rise to the need to calculate the Fixed Charge Ratio and the
application of the proceeds therefrom (including the retire-
ment or defeasance of Debt) shall be assumed to have oc-
curred on the first day of the Reference Period, (2) Asset
Sales and Asset Acquisitions that occur during the Reference
Period or subsequent to the Reference Period and prior to
the Transaction Date (but including any Asset Acquisition to
be made with the Debt Incurred pursuant to (1) above) and
any related retirement of Debt pursuant to an Offer to Pur-
chase (in the amount of the Excess Proceeds with respect to
which such Offer to Purchase has been made or would be made
on the Transaction Date if the purchase of Securities pursu-
ant to such Offer to Purchase has not occurred on or before
the Transaction Date) shall be assumed to have occurred on
the first day of the Reference Period, (3) the Incurrence of
any Debt during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date and the
application of the proceeds therefrom (including the retire-
ment or defeasance of other Debt) shall be assumed to have
occurred on the first day of such Reference Period, (4)
Consolidated Interest Expense attributable to any Debt
(whether existing or being Incurred) computed on a pro forma
basis and bearing a floating interest rate shall be computed
as if the rate in effect on the date of computation had been
the applicable rate for the entire period unless the obligor
on such Debt is a party to an Interest Rate Protection
Agreement (that shall remain in effect for the twelve month
period after the Transaction Date) that has the effect of
fixing the interest rate on the date of computation, in
which case such rate (whether higher or lower) shall be used
and (5) there shall be excluded from Consolidated Fixed
Charges any Consolidated Fixed Charges related to any amount
of Debt that was outstanding during or subsequent to the
Reference Period but is not outstanding on the Transaction
Date, except for Consolidated Fixed Charges actually in-
curred with respect to Debt borrowed (as adjusted pursuant
to clause (4)) (x) under a revolving credit or similar
arrangement to the extent the commitment thereunder remains
in effect on the Transaction Date or (y) pursuant to the
provision described in clause (iii) of Section 1008(b). For
the purpose of making this computation, Asset Sales and
Asset Acquisitions that have been made by any Person that
has become a Restricted Subsidiary of Magma or an Eligible
Joint Venture or been merged with or into Magma or any Re-
stricted Subsidiary of Magma or an Eligible Joint Venture
during the Reference Period, or subsequent to the Reference
Period and prior to the Transaction Date shall be calculated
on a pro forma basis, as shall be all the transactions
contemplated by the calculations referred to in clauses (1)
through (5) above with respect to the Persons or businesses
that were the subject of such Asset Sales and Asset Acquisi-
tions, assuming such Asset Sales or Asset Acquisitions oc-
curred on the first day of the Reference Period.
"Foreign Asset Disposition" means an Asset Disposition
in respect of the Capital Stock or Property of a Restricted
Subsidiary of Magma or an Eligible Joint Venture to the
extent that the proceeds of such Asset Disposition are re-
ceived by a Person subject in respect of such proceeds to
the tax laws of a jurisdiction other than the United States
of America or any State thereof or the District of Columbia.
"Funding Corporation Securities" means the senior
secured debt securities of Salton Sea Funding Corporation, a
special purpose Delaware corporation and wholly owned sub-
sidiary of Magma, issued under the Indenture dated July [ ],
1995 by and between the Salton Sea Funding Corporation and
Chemical Trust Company of California, as trustee.
"GAAP" means generally accepted accounting principles
in the U.S. as in effect as of the date of this Indenture,
applied on a basis consistent with the principles, methods,
procedures and practices employed in the preparation of
Magma's audited financial statements, including, without
limitation, those set forth in the opinions and pronounce-
ments of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as approved
by a significant segment of the accounting profession.
"Global Security" means a Security evidencing all or a
part of the Securities, issued to the Depositary, or pursu-
ant to the Depositary's instruction, in accordance with
Section 312 and bearing the legend prescribed in Section
312.
"Guarantee" means any obligation, contingent or other-
wise, of any Person directly or indirectly guaranteeing any
Debt of any other Person and, without limiting the generali-
ty of the foregoing, any Debt obligation, direct or indi-
rect, contingent or otherwise, of such Person (i) to pur-
chase or pay (or advance or supply funds for the purchase or
payment of) such Debt of such other Person (whether arising
by virtue of partnership arrangements (other than solely by
reason of being a general partner of a partnership), or by
agreement to keep-well, to purchase assets, goods, securi-
ties or services, or to take-or-pay, or to maintain finan-
cial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of
such Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part),
provided that the term "Guarantee" shall not include en-
dorsements for collection or deposit in the ordinary course
of business or the grant of a Lien in connection with any
Non-Recourse Debt. The term "Guarantee" used as a verb has
a corresponding meaning.
"Holder," "holder of Securities," "Securityholder" and
other similar terms mean the registered holder of any Secu-
rity.
"Incur" means with respect to any Debt, to incur, cre-
ate, issue, assume, Guarantee or otherwise become liable for
or with respect to, or become responsible for, the payment
of, contingently or otherwise, such Debt, provided that
neither the accrual of interest (whether such interest is
payable in cash or kind) nor the accretion of original issue
discount shall be considered an Incurrence of Debt. The
term "Incurrence" has a corresponding meaning.
"Indenture" means this instrument as originally execut-
ed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument and
any such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Interest Rate Protection Agreement" means, with re-
spect to any Person, any interest rate protection agreement,
interest rate future agreement, interest rate option agree-
ment, interest rate swap agreement, interest rate cap agree-
ment, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement intended
to protect such Person against fluctuations in interest
rates to or under which such Person or any of its Subsid-
iaries is a party or a beneficiary on the date of this
Indenture or becomes a party or a beneficiary thereafter.
"Investment" in a Person means any investment in, loan
or advance to, Guarantee on behalf of, directly or indirect-
ly, or other transfer of assets to such Person (other than
sales of products and services in the ordinary course of
business).
"Investment Grade" means with respect to the Securi-
ties, (i) in the case of S&P, a rating of at least BBB-,
(ii) in the case of Moody's, a rating of at least Baa3, and
(iii) in the case of a Rating Agency other than S&P or
Moody's, the equivalent rating, or in each case, any succes-
sor, replacement or equivalent definition as promulgated by
S&P, Moody's or other Rating Agency as the case may be.
"Issue Date" means the date on which the Securities are
first authenticated and delivered under the Indenture.
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether in corporate, partnership
or other legal form.
"Kiewit" means and includes Kiewit Energy Company and
any other Subsidiary of Peter Kiewit Sons', Inc., Kiewit
Construction Group Inc. or Kiewit Diversified Group, Inc.
"Lien" means, with respect to any Property, any mort-
gage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property, but shall not in-
clude any partnership, joint venture, shareholder, voting
trust or other similar governance agreement with respect to
Capital Stock in a Subsidiary or Joint Venture. For purpos-
es of this Indenture, Magma shall be deemed to own subject
to a Lien any Property that it has acquired or holds subject
to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention
agreement relating to such Property.
"Magma" means Magma Power Company, a Nevada corpora-
tion.
"Magma Equity Holders" means, collectively, each Sub-
sidiary of the Company who acquires Additional Pledged
Shares and each Magma Equity Offering Purchaser.
"Magma Equity Offering" means an underwritten public
offering of Capital Stock of Magma (other than Redeemable
Capital Stock) by Magma pursuant to a registration statement
filed with the Securities and Exchange Commission in accor-
dance with the Securities Act or an offering of such Capital
Stock exempt from registration under the Securities Act, in
each case for fair market value; provided that a Magma
Equity Offering shall not include an issuance of Capital
Stock of Magma to the Company or its Subsidiaries for fair
market value.
"Magma Note Recourse Assets" means the Company's inter-
est in the Secured Magma Note and payments thereon.
"Magma Refinancing Debt" means Debt issued in exchange
for, or the proceeds of which are used to refinance (includ-
ing to purchase), outstanding Securities or Debt of Magma
Incurred pursuant to clauses (i), (iv), and (vii) of Section
1008(b) and Debt Incurred pursuant to Section 1008(a) in an
amount (or, if such new Debt provides for an amount less
than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, with an original
issue price) not to exceed the amount so exchanged or refi-
nanced (plus accrued interest and all fees, premiums (in
excess of the accreted value) and expenses related to such
exchange or refinancing), for which purpose the amount so
exchanged or refinanced shall be deemed to equal the lesser
of (x) the principal amount of the Debt so exchanged or
refinanced and (y) if the Debt being exchanged or refinanced
was issued with an original issue discount, the accreted
value thereof (as determined in accordance with GAAP) at the
time of such exchange or refinancing, provided that (A) such
Debt shall be subordinated in right of payment to the Secu-
rities and the Secured Magma Note at least to the same
extent, if any, as the Debt so exchanged or refinanced is
subordinated to the Securities and the Secured Magma Note,
(B) such Debt shall be Non-Recourse if the Debt so exchanged
or refinanced is Non-Recourse, (C) the Average Life of the
new Debt shall be equal to or greater than the Average Life
of the Debt to be exchanged or refinanced and (D) the final
Stated Maturity of the new Debt shall not be sooner than the
earlier of the final Stated Maturity of the Debt to be ex-
changed or refinanced or six months after the final Stated
Maturity of the Securities, provided that if such new Debt
refinances the Securities in part only, the final Stated
Maturity of such new Debt must be at least six months after
the final Stated Maturity of the Securities.
"Moody's" means Moody's Investors Services, Inc.
"Net Cash Proceeds" from an Asset Disposition means
cash payments received (including any cash payments received
by way of a payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when
received (including any cash received upon sale or disposi-
tion of any such note or receivable), excluding any other
consideration received in the form of assumption by the
acquiring Person of Debt or other obligations relating to
the Property disposed of in such Asset Disposition or re-
ceived in any form other than cash) therefrom, in each case,
net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses of any kind (includ-
ing consent and waiver fees and any applicable premiums,
earn-out or working interest payments or payments in lieu or
in termination thereof) incurred, (ii) all federal, state,
provincial, foreign and local taxes and other governmental
charges required to be accrued as a liability under GAAP (a)
as a consequence of such Asset Disposition, (b) as a result
of the repayment of any Debt in any jurisdiction other than
the jurisdiction where the Property disposed of was located
or (c) as a result of any repatriation of any proceeds of
such Asset Disposition, (iii) a reasonable reserve for the
after-tax cost of any indemnification payments (fixed and
contingent) attributable to seller's indemnities to the
purchaser undertaken by Magma, any of its Restricted Subsid-
iaries or any Eligible Joint Venture in connection with such
Asset Disposition (but excluding any payments that by the
terms of the indemnities shall not, under any circumstances,
be made during the term of the Securities), (iv) all pay-
ments made on any Debt that is secured by such Property, in
accordance with the terms of any Lien upon or with respect
to such Property, or that must by its terms or by applicable
law or in order to obtain a required consent or waiver be
repaid out of the proceeds from or in connection with such
Asset Disposition, and (v) all distributions and other
payments made to holders of Capital Stock of Restricted
Subsidiaries or Eligible Joint Ventures (other than Magma or
its Restricted Subsidiaries) as a result of such Asset
Disposition.
"Net Income" of any Person for any period means the net
income (loss) of such Person for such period, determined in
accordance with GAAP, except that extraordinary and non-
recurring gains and losses as determined in accordance with
GAAP shall be excluded.
"Net Worth" of any Person means, as of any date, the
aggregate of capital, surplus and retained earnings (includ-
ing any cumulative currency translation adjustment) of such
Person and its consolidated Subsidiaries as would be shown
on a consolidated balance sheet of such Person and its
consolidated Subsidiaries prepared as of such date in accor-
dance with GAAP. When the "Person" referred to above is the
Company or Magma, the foregoing references to "Subsidiaries"
shall be deemed to refer to "Restricted Subsidiaries", in
the case of Magma, and "Restricted Subsidiaries" as defined
in the Indenture governing the 10 1/4% Senior Discount
Securities due 2004 of the Company, in the case of the
Company.
"Non-Recourse", as applied to any Debt or any sale-
leaseback, means any project financing that is or was In-
curred with respect to the development, acquisition, design,
engineering, procurement, construction, operation, owner-
ship, servicing or management of one Permitted Facility (or
two or more Permitted Facilities that are operated in the
form of a single business and as one technological unit),
provided that such financing is without recourse to Magma,
any Restricted Subsidiary or any Eligible Joint Venture
other than any Restricted Subsidiary or any Eligible Joint
Venture that does not own any Property other than such
Permitted Facility or a direct or indirect interest therein,
provided further that such financing may be secured by a
Lien on only (i) the Property that constitutes such Permit-
ted Facility, (ii) the income from and proceeds of such Per-
mitted Facility, (iii) the Capital Stock of the Restricted
Subsidiary or Eligible Joint Venture that owns the Property
that constitutes such Permitted Facility and (iv) the Capi-
tal Stock of the Restricted Subsidiary or Eligible Joint
Venture obligated with respect to such financing and of any
Subsidiary or Joint Venture (that is a Restricted Subsidiary
or an Eligible Joint Venture) of such Person that owns a
direct or indirect interest in the Permitted Facility, and
provided further that an increase in the amount of Debt with
respect to a Permitted Facility pursuant to the financing
provided pursuant to the terms of this definition (except
for the first refinancing of Construction Financing) may not
be Incurred to fund or enable the funding of any dividend or
other distribution in respect of Capital Stock. The fact
that a portion of financing with respect to a Permitted
Facility is not Non-Recourse shall not prevent other por-
tions of the financing with respect to such Permitted Facil-
ity from constituting Non-Recourse Debt if the foregoing
requirements of this definition are fulfilled with respect
to such other portions. Notwithstanding anything in this
definition to the contrary, (i) Non-Recourse Debt in respect
of any Permitted Facility that uses thermal energy drawn
from a single localized geothermal reservoir may be cross-
collateralized with the Property, income, proceeds and
Capital Stock in respect of any other Permitted Facility
that uses thermal energy drawn from the same localized geo-
thermal reservoir, (ii) Acquired Debt of a Person that was
Incurred with respect to, and that is jointly secured by,
two or more Permitted Facilities (all of which need not use
thermal energy drawn from the same localized geothermal
reservoir) (and other Property related to such Permitted
Facilities) shall be deemed to be Non-Recourse if, upon such
Person, becoming a Restricted Subsidiary or an Eligible
Joint Venture, such Acquired Debt would fulfill the require-
ments of the first sentence of this definition if such
Permitted Facilities constituted a single Permitted Facility
and (iii) for the purpose of this Indenture, (a) the Permit-
ted Facilities that jointly secure a single Non-Recourse
Debt pursuant to clause (i) of this sentence shall be deemed
to be a single Permitted Facility and (b) the Permitted
Facilities that jointly secure a single Acquired Debt shall
be deemed to be a single Permitted Facility.
"Obligations" means (a) the full and punctual payment
of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company
under this Indenture and the Securities and (b) the full and
punctual payment and performance of all other obligations of
the Company under this Indenture and the Securities.
"Offer to Purchase" means, as appropriate, a Change of
Control Offer pursuant to Section 1014 or an Excess Proceeds
Offer pursuant to Section 1016.
"Officers' Certificate" means a certificate signed by
the Chairman of the Board of Directors, the President or any
Vice President and by the Chief Financial Officer, the Trea-
surer, an Assistant Treasurer, the Controller, the Assistant
Controller, the Secretary or any Assistant Secretary of the
Company or Magma, as the case may be, and delivered to the
Trustee. Each such certificate shall comply with Section
314 of the Trust Indenture Act and include the statements
provided for in this Indenture if and to the extent required
thereby.
"Opinion of Counsel" means an opinion in writing signed
by legal counsel who may be an employee of or counsel to the
Company or Magma or who may be other counsel satisfactory to
the Trustee. Each such opinion shall comply with Section
314 of the Trust Indenture Act and include the statements
provided for in this Indenture, if and to the extent re-
quired thereby.
"Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities
theretofore authenticated and delivered under this Inden-
ture, except:
(i) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Securities that have come due or that are to
be called for redemption, for whose payment or redemp-
tion money in the necessary amount has been theretofore
irrevocably deposited with the Trustee or any Paying
Agent (other than the Company, a Subsidiary or Affili-
ate of the Company) in trust for the Holders of such
Securities; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision for giving such
notice within 10 days of such date of determination,
satisfactory to the Trustee, has been made;
(iii) Securities that have been paid pursuant to
Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securi-
ties in respect of which there shall have been present-
ed to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose
hands such Securities are valid obligations of the
Company; and
(iv) Securities as to which Defeasance has been
effected pursuant to Section 1202;
provided that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities
have given, made or taken any request, demand, authoriza-
tion, direction, notice, consent, waiver or other action
hereunder as of any date, Securities owned by the Company or
any other obligor upon the Securities or any Affiliate or
Subsidiary of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in
relying upon any such request, demand, authorization, direc-
tion, notice, consent, waiver or other action, only Securi-
ties which the Trustee actually knows to be so owned shall
be so disregarded, Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company or any other obligor
upon the Securities or any Subsidiary of the Company or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the
Company to pay the principal of (and premium, if any) or
interest on any Securities on behalf of the Company.
"Permitted Facility" means (i) an electric power or
thermal energy generation or cogeneration facility or relat-
ed facilities (including residual waste management and
facilities that use thermal energy from a cogeneration
facility), and its or their related electric power transmis-
sion, fuel supply and fuel transportation facilities, to-
gether with its or their related power supply, thermal
energy and fuel contracts and other facilities, services or
goods that are ancillary, incidental, necessary or reason-
ably related to the marketing, development, construction,
management, servicing, ownership or operation of the forego-
ing, owned by a utility or otherwise, as well as other
contractual arrangements with customers, suppliers and
contractors or (ii) any infrastructure facilities related to
(A) the treatment of water for municipal and other uses, (B)
the treatment and/or management of waste water, (C) the
treatment, management and/or remediation of waste, pollution
and/or potential pollutants and (D) any other process or
environmental purpose.
"Permitted Funding Company Loans" means (a) Debt of a
Restricted Subsidiary, all the Capital Stock of which is
owned, directly or indirectly, by Magma and that
(x) does not own any direct or indirect interest in a Per-
mitted Facility and (y) is not directly or indirectly obli-
gated on any Debt owed to any Person other than Magma, a Re-
stricted Subsidiary or an Eligible Joint Venture (a "Funding
Company"), owed to a Restricted Subsidiary or an Eligible
Joint Venture that is not directly or indirectly obligated
on any Debt owed to any Person other than Magma, a Restrict-
ed Subsidiary or an Eligible Joint Venture (except to the
extent that it has pledged the Capital Stock of its Subsid-
iaries and Joint Ventures to secure Non-Recourse Debt) (a
"Holding Company"), provided that such Debt (i) does not
require that interest be paid in cash at any time sooner
than six months after the final Stated Maturity of the
Securities, (ii) does not require any payment of principal
at any time sooner than six months after the final Stated
Maturity of the Securities, (iii) is subordinated in right
of payment to all other Debt of such Restricted Subsidiary
other than Debt Incurred pursuant to clause (vii) of Section
1009(b), all of which shall be pari passu and (iv) is evi-
denced by a subordinated note in the form attached to this
Indenture as Exhibit A and that shall not contain or be
governed by any contractual provisions other than those set
forth in Exhibit A, and (b) Debt of a Holding Company to a
Funding Company.
"Permitted Investment" means any Investment that is
made directly or indirectly by Magma and its Restricted Sub-
sidiaries in (i) a Restricted Subsidiary or Eligible Joint
Venture (excluding for the purpose of this clause (i) any
Construction Financing) that, directly or indirectly, is or
shall be engaged in the construction, development, acqui-
sition, operation, servicing, ownership or management of a
Permitted Facility or in any other Person as a result of
which such other Person becomes such a Restricted Subsidiary
or an Eligible Joint Venture, provided that at the time that
any of the foregoing Investments is proposed to be made, no
Event of Default or event that, after giving notice or lapse
of time or both, would become an Event of Default, shall
have occurred and be continuing, (ii) Construction Financing
provided by Magma (A) to any of its Restricted Subsidiaries
(other than an Eligible Joint Venture) up to 100% of the
Construction Financing required by such Restricted Subsid-
iary and (B) to any Eligible Joint Venture a portion of the
Construction Financing required by such Eligible Joint
Venture that does not exceed the ratio of the Capital Stock
in such Eligible Joint Venture that is owned directly or
indirectly by Magma to the total amount of the Capital Stock
in such Eligible Joint Venture that is owned directly and
indirectly by Magma and Kiewit together (provided that Magma
may provide such Construction Financing to such Eligible
Joint Venture only if Kiewit provides the balance of such
Construction Financing or otherwise causes it to be provid-
ed), if, in either case, (x) the aggregate proceeds of all
the Construction Financing provided is not more than 85% of
the sum of the aggregate proceeds of all the Construction
Financing and the aggregate owners' equity investment in
such Restricted Subsidiary or such Eligible Joint Venture,
as the case may be, (y) Magma receives a pledge or assign-
ment of all the Capital Stock of such Restricted Subsidiary
or such Eligible Joint Venture, as the case may be, that is
owned by non-governmental Person (other than Magma, its Sub-
sidiaries or the Eligible Joint Ventures) that is permitted
to be pledged for such purpose under applicable law and (z)
neither Magma nor Kiewit reduces its beneficial ownership in
such Restricted Subsidiary or such Eligible Joint Venture,
as the case may be, prior to the repayment in full of Magm-
a's portion of the Construction Financing, (iii) any Cash
Equivalents, (iv) prepaid expenses, negotiable instruments
held for collection and lease, utility and workers' compen-
sation, performance and other similar deposits in the ordi-
nary course of business consistent with past practice, (v)
loans and advances to employees made in the ordinary course
of business and consistent with past practice, (vi) Debt
incurred pursuant to Currency Protection Agreements and
Interest Rate Protection Agreements as otherwise permitted
by this Indenture, (vii) bonds, notes, debentures or other
debt securities and instruments received as a result of
Asset Dispositions to the extent permitted by Section 1016
and Section 1022, (viii) any Lien permitted under Section
1012, and (ix) bank deposits and other Investments (to the
extent they do not constitute Cash Equivalents) required by
lenders in connection with any Non-Recourse Debt, provided
that the President or the Chief Financial Officer of the
Company determines in good faith, as evidenced by an Office-
rs' Certificate, that such bank deposits or Investments are
required to effect such financings and are not materially
more restrictive, taken as a whole, than comparable require-
ments in comparable financings in the applicable jurisdic-
tion.
"Permitted Joint Venture" means a Joint Venture (i)
that is or shall be formed with respect to the construction,
development, acquisition, servicing, ownership, operation or
management of one or more Permitted Facilities and (ii) in
which (A) Magma or (B) Magma and Kiewit, if Kiewit is so
designated by the Board of Directors of the Company or
Magma, together, directly or indirectly, own at least 70% of
the Capital Stock therein (of which the Company must own at
least half (in any event not less than 35% of the total out-
standing Capital Stock)), provided that if applicable non-
U.S. law restricts the amount of Capital Stock that Magma
may own, Magma must own at least 70% of the amount of Capi-
tal Stock that it may own pursuant to such law, which in any
event must be not less than 35% of the total outstanding
Capital Stock therein and (iii) in respect of which Magma
alone or in combination with Kiewit, if Kiewit is so desig-
nated by the Board of Directors of the Company or Magma, di-
rectly or indirectly, (a) controls, by voting power, board
or management committee membership, or through the provi-
sions of any applicable partnership, shareholder or other
similar agreement or under an operating, maintenance or
management agreement or otherwise, the management and opera-
tion of the Joint Venture or any Permitted Facilities of the
Joint Venture or (b) otherwise has significant influence
over the management or operation of the Joint Venture or any
Permitted Facility of the Joint Venture in all material
respects (significant influence includes, without limita-
tion, the right to control or veto any material act or
decision) in connection with such management or operation.
Any Joint Venture that is a Permitted Joint Venture pursuant
to this definition because of the ownership of Capital Stock
therein by Kiewit shall cease to be a Permitted Joint Ven-
ture if (x) Kiewit disposes of any securities issued by the
Company and, as a result of such disposition, Kiewit becomes
the beneficial owner (as such term is defined under Rule
13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of less than 25% of the outstanding shares
of Voting Stock of the Company or (y)(I) as a result of any
action other than a disposition of securities by Kiewit,
Kiewit becomes the beneficial owner of less than 25% of the
outstanding shares of Voting Stock of the Company and (II)
thereafter Kiewit disposes of any securities issued by the
Company as a result of which the beneficial ownership by
Kiewit of the outstanding Voting Stock of the Company is
further reduced, provided that thereafter such Joint Venture
may become a Permitted Joint Venture if Kiewit becomes the
beneficial owner of at least 25% of the outstanding shares
of Voting Stock of the Company and the other conditions set
forth in this definition are fulfilled.
"Permitted Payments" means, with respect to Magma, any
of its Restricted Subsidiaries or any Eligible Joint Ven-
ture, (i) any dividend on shares of Capital Stock of Magma
payable (or to the extent paid) solely in Capital Stock
(other than Redeemable Stock) or in options, warrants or
other rights to purchase Capital Stock (other than Redeem-
able Stock) of Magma and any distribution of Capital Stock
(other than Redeemable Capital Stock) of Magma in respect of
the exercise of any right to convert or exchange any instru-
ment (whether Debt or equity and including Redeemable Capi-
tal Stock) into Capital Stock (other than Redeemable Capital
Stock) of Magma, (ii) the purchase or other acquisition or
retirement for value of any shares of Magma's Capital Stock,
or any option, warrant or other right to purchase shares of
Magma's Capital Stock with additional shares of, or out of
the proceeds of a substantially contemporaneous issuance of,
Capital Stock other than Redeemable Stock, (iii) any defea-
sance, redemption, purchase or other acquisition for value
of any Debt that by its terms ranks subordinate in right of
payment to the Securities or the Secured Magma Note with the
proceeds from the issuance of (x) Debt that is subordinate
to the Securities or the Secured Magma Note at least to the
extent and in the manner as the Debt to be defeased, re-
deemed, purchased or otherwise acquired is subordinate in
right of payment to the Securities or the Secured Magma
Note, provided that such subordinated Debt provides for no
mandatory payments of principal by way of sinking fund,
mandatory redemption or otherwise (including defeasance) by
Magma (including, without limitation, at the option of the
holder thereof other than an option given to a holder pursu-
ant to a "change of control" or an "asset disposition" cove-
nant that is no more favorable to the holders of such Debt
than comparable covenants for the Debt being defeased,
redeemed, purchased or acquired or, if none, Sections 1016
and Section 1014 and such Debt is not in an amount (net of
any original issue discount) greater than, any Stated Matu-
rity of the Debt being replaced and the proceeds of such
subordinated Debt are utilized for such purpose within 45
days of issuance or (y) Capital Stock (other than Redeemable
Stock), (iv) Restricted Payments in an amount not to exceed
$50 million in the aggregate provided that no payment may be
made pursuant to this clause (iv) if an Event of Default, or
an event that, after giving notice or lapse of time or both,
would become an Event of Default, has occurred and is con-
tinuing, (v) any payment or Investment required by applica-
ble law in order to conduct business operations in the ordi-
nary course, (vi) a Permitted Investment, (vii) Investments
in Unrestricted Subsidiaries and other Persons, other than
the Company, that are not Restricted Subsidiaries or Eligi-
ble Joint Ventures in an amount not to exceed $50 million in
the aggregate, provided that no payment or Investment may be
made pursuant to this clause (vii) to a Subsidiary or Eligi-
ble Joint Venture of the Company unless such payment or
Investment is used for the construction, development, acqui-
sition, servicing, ownership, operation or management of one
or more Permitted Facilities, and provided further that no
payment or Investment may be made pursuant to this clause
(vii) if an Event of Default, or an event that, after giving
notice or lapse of time or both, would become an Event of
Default, has occurred and is continuing and (viii) one or
more dividends or other distributions to the Company of up
to an aggregate amount of $50 million payable out of cash or
Cash Equivalents held by Magma or its Subsidiaries on the
Issue Date and paid by Magma to the Company within one year
after the Issue Date. Notwithstanding the foregoing, the
amount of Investments that may be made pursuant to clauses
(iv) or (vii), as the case may be, may be increased by the
net reduction in Investments of the type made previously
pursuant to clauses (iv) or (vii), as the case may be, that
result from payments of interest on Debt, dividends, or
repayment of loans or advances, the proceeds of the sale or
disposition of the Investment or other return of the amount
of the original Investment to Magma, its Restricted Subsid-
iaries or the Eligible Joint Venture that made the original
Investment from the Person in which such Investment was made
or any distribution or payment of such Investment to the
extent that such distribution or payment constituted either
a Restricted Payment or a Permitted Payment, provided that
(x) the aggregate amount of such payments shall not exceed
the amount of the original Investment by Magma, such Re-
stricted Subsidiary or Eligible Joint Venture that reduced
the amount available pursuant to clause (iv) or clause
(vii), as the case may be, for making Restricted Payments
and (y) such payments may be added pursuant to this proviso
only to the extent such payments are not included in the
calculation of Adjusted Consolidated Net Income.
"Permitted Working Capital Facilities" means one or
more loan or credit agreements providing for the extension
of credit to Magma for Magma's working capital purposes,
which credit agreements shall be ranked pari passu with or
subordinate to the Secured Magma Note in right of payment
and may be secured or unsecured.
"Person" means an individual, a corporation, a part-
nership, an association, a trust or any other entity or
organization, including a government or political subdivi-
sion or an agency or instrumentality thereof.
"Pledged Shares" means collectively, the Closing Date
Pledged Shares, Additional Pledged Shares and Magma Equity
Offering Pledged Shares.
"Preferred Stock" means, with respect to any Person,
any and all shares, interests, participations or other
equivalents (however designated, whether voting or non-
voting) or preferred or preference stock of such Person that
is outstanding or issued on or after the Issue Date.
"Property" of any Person means all types of real, per-
sonal, tangible or mixed property owned by such Person
whether or not included in the most recent consolidated
balance sheet of such Person under GAAP.
"Purchase Date" means, as appropriate, the Change of
Control Purchase Date under Section 1014 or the Excess Pro-
ceeds Purchase Date under Section 1016.
"Purchase Money Debt" means Debt representing, or In-
curred to finance, the cost of acquiring any Property, pro-
vided that (i) any Lien securing such Debt does not extend
to or cover any other Property other than the Property being
acquired and (ii) such Debt is incurred, and any Lien with
respect thereto is granted, within 180 days of the acquisi-
tion of such Property.
"Rating Agencies" means (i) S&P and (ii) Moody's or
(iii) if S&P or Moody's or both do not make a rating of the
Securities publicly available, a nationally recognized secu-
rities rating agency or agencies, as the case may be, se-
lected by the Company, which shall be substituted for S&P,
Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of
the following categories: BB, B, CCC, CC, C and D (or
equivalent successor categories), (ii) with respect to
Moody's, any of the following categories: Ba, B, Caa, Ca, C
and D (or equivalent successor categories) and (iii) the
equivalent of any such category of S&P or Moody's used by
another Rating Agency. In determining whether the rating of
the Securities has decreased by one or more gradations,
gradations within Rating Categories (+ and - for S&P, 1, 2
and 3 for Moody's or the equivalent gradations for another
Rating Agency) shall be taken into account (e.g., with
respect to S&P, a decline in a rating from BB+ to BB, as
well as from BB- to B+, shall constitute a decrease of one
gradation).
"Rating Decline" means the occurrence of the following
on, or within 90 days after, the earlier of (i) the occur-
rence of a Change of Control and (ii) the date of public
notice of the occurrence of a Change of Control or of the
public notice of the intention of the Company to effect a
Change of Control (the "Rating Date") which period shall be
extended so long as the rating of the Securities is under
publicly announced consideration for possible downgrading by
any of the Rating Agencies): (a) in the event that the
Securities are rated by either Rating Agency on the Rating
Date as Investment Grade, the rating of the Securities by
both such Rating Agencies shall be reduced below Investment
Grade, or (b) in the event the Securities are rated below
Investment Grade by both such Rating Agencies on the Rating
Date, the rating of the Securities by either Rating Agency
shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between
Rating Categories).
"Redeemable Stock" means any class or series of Capital
Stock of any Person that by its terms or otherwise is (i)
required to be redeemed prior to the Stated Maturity of the
Securities or the Secured Magma Note, (ii) redeemable at the
option of the holder of such class or series of Capital
Stock at any time prior to the Stated Maturity of the Secu-
rities or the Secured Magma Note or (iii) convertible into
or exchangeable for Capital Stock referred to in clause (i)
or (ii) above or Debt having a scheduled maturity prior to
the Stated Maturity of the Securities or the Secured Magma
Note, provided that any Capital Stock that would not consti-
tute Redeemable Stock but for provisions thereof giving
holders thereof the right to require the Company or Magma to
purchase or redeem such Capital Stock upon the occurrence of
an "asset sale" or a "change of control" occurring prior to
the Stated Maturity of the Securities or the Secured Magma
Note shall not constitute Redeemable Stock if the "asset
sale" or "change of control" provision applicable to such
Capital Stock is no more favorable to the holders of such
Capital Stock than the provisions contained in Sections 1014
and 1016 and such Capital Stock specifically provides that
the Company or Magma shall not purchase or redeem any such
Capital Stock pursuant to such covenants prior to the Compa-
ny's purchase of Securities required to be purchased by the
Company under Sections 1014 and 1016.
"Redemption Date" when used with respect to any Securi-
ty to be redeemed, means the date fixed for redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Secu-
rity to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.
"Reference Period" means the four most recently com-
pleted fiscal quarters for which financial information is
available preceding the date of a transaction giving rise to
the need to make a financial calculation.
"Regular Record Date", for the interest payable on any
Interest Payment Date means the June [ ] or December [ ]
(whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the
Trustee, means the chairman or any vice chairman of the
board of directors, the chairman or any vice-chairman of the
executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president,
the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller or
any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of Magma's Capital Stock, provid-
ed that a dividend or other distribution consisting of the
Capital Stock of an Unrestricted Subsidiary shall not con-
stitute a Restricted Payment except to the extent of the
portion thereof that is equal to the portion of the total
Investment in such Unrestricted Subsidiary that is repre-
sented by the Investment that was made pursuant to clause
(vii) of the definition of "Permitted Payment," (ii) any
payment on account of the purchase, redemption, retirement
or acquisition for value of Magma's Capital Stock, (iii) any
defeasance, redemption, purchase or other acquisition or
retirement for value prior to the scheduled maturity of any
Debt ranked subordinate in right of payment to the Securi-
ties other than repayment of Debt of Magma to a Restricted
Subsidiary or an Eligible Joint Venture, (iv) any Investment
made in a Person (other than Magma or any Restricted Subsid-
iary or any Eligible Joint Venture) and (v) designating a
Restricted Subsidiary as an Unrestricted Subsidiary (the Re-
stricted Payment made upon such a designation to be deter-
mined as the fair market value of the Capital Stock of such
Restricted Subsidiary owned directly or indirectly by Magma
at the time of the designation, but in no event less than
the amount of the Investment made in such Restricted Subsid-
iary directly or indirectly by Magma). Notwithstanding the
foregoing, "Restricted Payment" shall not include (i) any
Permitted Payment, except that any payment made pursuant to
clauses (iv) and (v) of the definition of "Permitted Pay-
ment" shall be counted in the calculation set forth in
clause (iii) of Section 1010(a) and (ii) payments to Magma
pursuant to the Secured Magma Note.
"Restricted Subsidiary" means any Subsidiary of Magma
that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation.
"Secured Magma Note" means the secured note in the form
attached hereto as Exhibit B.
"Secured Magma Note Collateral" means, whether now
owned or hereafter acquired, all shares of capital stock of
the [Desert Valley Company and Imperial Magma] owned by
Magma, together with all stock certificates, options or
rights of any nature whatsoever which may be issued or
granted by such Persons to Magma and all "proceeds" (as such
term is defined in Section 9-306(1) of the Uniform Commer-
cial Code from time to time in effect in the State of New
York) thereof.
"Securities" means securities designated in the first
paragraph of the "Recitals of the Company".
"Securities Act" means the Securities Act of 1933 and
any statute successor thereto, in each case as amended from
time to time.
"Senior Debt" means the principal of and interest on
all Debt of the Company or Magma, as the case may be, wheth-
er created, Incurred or assumed before, on or after the
Issue Date (other than the Securities), provided that Senior
Debt shall not include (i) Debt that, when Incurred and
without respect to any election under Section 1111(b) of
Title 11, United States Code, was without recourse to the
Company or Magma, as the case may be, (ii) Debt of the
Company or Magma, as the case may be, to any Affiliate and
(iii) any Debt of the Company or Magma, as the case may be,
that, by the terms of the instrument creating or evidencing
the same, is specifically designated as being junior in
right of payment to the Securities or the Secured Magma Note
or any other Debt of the Company or Magma, as the case may
be.
"Significant Equity Investment" means an investment in
common stock, preferred stock or partnership interests which
is more than $100,000 but shall expressly exclude any such
equity interests acquired by any such entity solely in ex-
change for services.
"Significant Subsidiary" means a Restricted Subsidiary
that is a "significant subsidiary" as defined in Rule 1-
02(w) of Regulation S-X under the Securities Act and the
Exchange Act.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Sec-
tion 307.
"Stated Maturity" means, with respect to any debt secu-
rity or any installment of interest thereon, the date speci-
fied in such debt security as the fixed date on which any
principal of such debt security or any such installment of
interest is due and payable.
"Subsidiary" means, with respect to any Person includ-
ing, without limitation, Magma and its Subsidiaries, (i) any
corporation or other entity of which such Person owns, di-
rectly or indirectly, a majority of the Capital Stock or
other ownership interests and has ordinary voting power to
elect a majority of the board of directors or other persons
performing similar functions, and (ii) with respect to Magma
and, as appropriate, its Subsidiaries, any Permitted Joint
Venture, provided that in respect of any Subsidiary that is
not a Permitted Joint Venture, Magma must exercise control
over such Subsidiary and its Property to the same extent as
a Permitted Joint Venture.
"Subsidiary Refinancing Debt" means Debt issued in ex-
change for, or the proceeds of which are used to refinance
(including to purchase), outstanding Debt of a Restricted
Subsidiary or an Eligible Joint Venture, including, without
limitation, Construction Financing, in an amount (or, if
such new Debt provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration thereof, with an original issue price) not to
exceed the amount so exchanged or refinanced (plus accrued
interest or dividends and all fees, premiums (in excess of
accreted value) and expenses related to such exchange or
refinancing), for which purpose the amount so exchanged or
refinanced shall not exceed, in the case of Debt, to the
lesser of (x) the principal amount of the Debt so exchanged
or refinanced and (y) if the Debt being exchanged or refi-
nanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with
GAAP) at the time of such exchange or refinancing, and, in
the case of an equity investment made in lieu or as part of
Construction Financing Debt, in an amount not to exceed the
capital and surplus shown on the balance sheet of such Re-
stricted Subsidiary or Eligible Joint Venture, provided that
(A) such Debt shall be Non-Recourse if the Debt so exchanged
or refinanced is Non-Recourse and (B) the Average Life of
the new Debt shall be equal to or greater than the Average
Life of the Debt to be exchanged or refinanced, provided
further that upon the first refinancing of any Construction
Financing of a Restricted Subsidiary or an Eligible Joint
Venture, (i) the amount of the Subsidiary Refinancing Debt
issued in exchange for or to refinance such Construction Fi-
nancing shall not be limited by this provision and (ii) the
Subsidiary Refinancing Debt issued in exchange for or to
refinance such Construction Financing shall not be subject
to the provisions of the foregoing clause (B) of this provi-
sion.
"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obli-
gation to trade creditors Incurred, created, assumed or
Guaranteed by such Person or any of its Subsidiaries or
Joint Ventures arising in the ordinary course of business.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this Indenture until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this Indenture was
executed; provided that in the event the Trust Indenture Act
of 1939 is amended after such date, "Trust Indenture Act"
shall mean, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary of Magma
that becomes an Unrestricted Subsidiary in accordance with
the requirements set forth in the next sentence. Magma may
designate any Restricted Subsidiary as an Unrestricted Sub-
sidiary if (a) such designation is in compliance with Sec-
tion 1010(a) and (b) after giving effect to such designa-
tion, such Subsidiary does not own, directly or indirectly,
a majority of the Capital Stock or the Voting Stock of any
other Restricted Subsidiary unless such other Restricted
Subsidiary is designated as an Unrestricted Subsidiary at
the same time. Any such designation shall be effected by
Magma filing with the Trustee an Officers' Certificate
certifying that such designation complies with the require-
ments of the immediately preceding sentence. No Debt or
other obligation of an Unrestricted Subsidiary may be with
recourse to Magma, any of its Restricted Subsidiaries, any
Eligible Joint Venture or any of their respective Property.
An Unrestricted Subsidiary may be designated as a Restricted
Subsidiary if, (i) all the Debt of such Unrestricted Subsid-
iary could be Incurred under Section 1009, and (ii) any por-
tion of such Debt that could not be Incurred thereunder,
could be Incurred by Magma under Section 1008(a).
"U.S. Government Obligations" means securities that are
(i) direct obligations of the U.S. for the payment of which
its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency
or instrumentality of the U.S., the payment of which is
unconditionally guaranteed as a full faith and credit obli-
gation by the U.S., that, in either case are not callable or
redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Govern-
ment Obligations or a specific payment of interest on or
principal of any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by
such depository receipt.
"Vice President", when used with respect to the Company
or the Trustee, means any vice president, whether or not
designated by a number or a word or words added before or
after the title "vice president".
"Voting Stock" means, with respect to any Person,
Capital Stock of any class or kind ordinarily having the
power to vote for the election of directors (or persons
fulfilling similar responsibilities) of such Person.
(b) Other definitions:
Defined Term Defined in Section
Act 104
Available Restricted Payment Amount 1010
Change of Control Offer 1014(b)
Change of Control Purchase Date 1014(b)
Collateral 1301(b)
Covenant Defeasance 1203
Default Amount 502
Defaulted Interest 307
Defeasance 1202
Event of Default 501
Excess Proceeds 1016(a)
Excess Proceeds Offer 1016(a)
Excess Proceeds Purchase Date 1016(e)
Ineligible Investment 1022
Magma Equity Offering Pledged Shares 1013
Magma Equity Offering Purchaser 1013
Notice of Default 501(5)
Pledge Agreement 1304(a)
Record Expiration Date 104
Restricted Payment Recourse Amount 1010
Security Register 305
Security Registrar 305
Surviving Entity 801
10% Limit 1022
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be
given in the form of an Officers' Certificate, if to be
given by an officer of the Company, or an Opinion of Coun-
sel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other re-
quirement set forth in this Indenture.
Every certificate or opinion with respect to com-
pliance with a condition or covenant provided for in this
Indenture shall include
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condi-
tion and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the state-
ments or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investi-
gation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
Section 103. Form of Documents Delivered to Trustee.
If several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other mat-
ters, and any such Person may certify or give an opinion as
to such matters in one or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or repre-
sentations with respect to the matters upon which his cer-
tificate or opinion is based are erroneous. Any such cer-
tificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the
Company stating that the information with respect to such
factual matters is in the possession of the Company, unless
such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representa-
tions with respect to such matters are erroneous.
If any Person is required to make, give or execute two
or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Inden-
ture, they may, but need not, be consolidated and form one
instrument.
Section 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by
this Indenture to be given or taken by Holders may be embod-
ied in and evidenced by one or more instruments of substan-
tially similar tenor signed by such Holders in person or by
an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered
to the Trustee and, if it is hereby expressly required, to
the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instru-
ment or instruments. Proof of execution of any such instru-
ment or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section 104.
The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of
a witness of such execution or by a certificate of a notary
public or other officer authorized by law to take acknowl-
edgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution
thereof. If such execution is by a signer acting in a
capacity other than his individual capacity, such certifi-
cate or affidavit shall also constitute sufficient proof of
his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner
that the Trustee deems sufficient.
The ownership of Securities shall be proved by the
Security Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities
entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided
or permitted by this Indenture to be given or taken by Hold-
ers of Securities, provided that the Company may not set a
record date for, and the provisions of this paragraph shall
not apply with respect to, the giving or making of any no-
tice, declaration, request or direction referred to in the
next paragraph. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such
record date, and no other Holders, shall be entitled to take
the relevant actions whether or not such Holders remain
Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the
applicable Record Expiration Date by Holders of the requi-
site principal amount of Outstanding Securities on such
record date; and provided further that for the purpose of
determining whether Holders of the requisite principal
amount of such Securities have taken such action, no Securi-
ty shall be deemed to have been Outstanding on such record
date unless it is also Outstanding on the date such action
is to become effective. Nothing in this paragraph shall
prevent the Company from setting a new record date for any
action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previ-
ously set shall automatically and with no action by any
Person be cancelled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action
taken by Holders of the requisite principal amount of Out-
standing Securities on the date such action is taken.
Promptly after any record date is set pursuant to this para-
graph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the
applicable Record Expiration Date to be given to the Trustee
in writing and to each Holder of Securities in the manner
set forth in Section 106.
The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities
entitled to join in the giving or making of (i) any Notice
of Default, (ii) any declaration of acceleration referred to
in Section 502, (iii) any request to institute proceedings
referred to in Section 507(2) or (iv) any direction referred
to in Section 512. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities on
such record date, and no other Holders, shall be entitled to
join in such notice, declaration, request or direction,
whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective here-
under unless taken on or prior to the applicable Record
Expiration Date by Holders of the requisite principal amount
of Outstanding Securities on such record date; and provided
further that for the purpose of determining whether Holders
of the requisite principal amount of such Securities have
taken such action, no Security shall be deemed to have been
Outstanding on such record date unless it is also Outstand-
ing on the date such action is to become effective. Nothing
in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action (whereupon the
record date previously set shall automatically and without
any action by any Person be cancelled and of no effect), nor
shall anything in this paragraph be construed to render
ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the mat-
ter(s) to be submitted for potential action by Holders and
the applicable Record Expiration Date to be given to the
Company in writing and to each Holder of Securities in the
manner set forth in Section 106.
With respect to any record date set pursuant to this
Section 104, the party hereto that sets such record date may
designate any day as the "Record Expiration Date" and from
time to time may change the Record Expiration Date to any
earlier or later day, provided that no such change shall be
effective unless notice of the proposed new Record Expira-
tion Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in
Section 106, on or before the existing Record Expiration
Date. If a Record Expiration Date is not designated with
respect to any record date set pursuant to this Section 104,
the party hereto that set such record date shall be deemed
to have initially designated the 180th day after such record
date as the Record Expiration Date with respect thereto,
subject to its right to change the Record Expiration Date as
provided in this paragraph. Notwithstanding the foregoing,
no Record Expiration Date shall be later than the 180th day
after the applicable record date.
Without limiting the foregoing, a Holder entitled here-
under to take any action hereunder with regard to any par-
ticular Security may do so with regard to all or any part of
the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal
amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided
or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder if made, given,
furnished or filed in writing and mailed, first-class post-
age prepaid, to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Trustee Administration,
or
(b) the Company by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-
class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first para-
graph of this Indenture, Attention: General Counsel, or at
any other address previously furnished in writing to the
Trustee by the Company.
Section Notice to Holders; Waiver.
When this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the
Security Register, not later than the latest date (if any),
and not earlier than the earliest date (if any), prescribed
for the giving of such notice. Neither the failure to mail
or give such notice as otherwise provided herein, nor any
defect in any notice so mailed or given to any particular
Holder shall affect the sufficiency of such notice with
respect to other Holders. When this Indenture provides for
notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent
of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be imprac-
ticable to give such notice by mail, then such notification
as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose
hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act that is required
under such Act to be part of and govern this Indenture, the
latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein, the Cross-
Reference Table and the Table of Contents are for conve-
nience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Secu-
rities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby, it being intended that all of the provisions hereof
shall be enforceable to the full extent permitted by law.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express
or implied, shall give to any Person other than the parties
hereto and their successors hereunder and the Holders of
Securities, any benefit or any legal or equitable right,
remedy or claim under this Indenture. This Indenture may
not be used to interpret another indenture, loan agreement
or debt agreement (other than the Secured Magma Note and
ancillary documents thereto) of the Company or any of its
Subsidiaries. No such other indenture or loan or debt
agreement may be utilized to interpret this Indenture.
Section 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, BUT OTHERWISE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS. THE COMPANY HEREBY IRREVOCABLY SUBMITS
TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE
CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEED-
ING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE
SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RE-
SPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURIS-
DICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVE-
NIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
TRUSTEE OR ANY HOLDER OF THE SECURITIES TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PRO-
CEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section 113. Legal Holidays.
If any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Busi-
ness Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest or prin-
cipal (and premium, if any) need not be made on such date
but may be made on the next succeeding Business Day with the
same force and effect (including with respect to the accrual
of interest) as if made on the Interest Payment Date, Re-
demption Date or Purchase Date, or at the Stated Maturity.
Section 114. Duplicate Originals.
All parties may sign any number of copies or counter-
parts of this Indenture. Each signed copy or counterpart
shall be an original, but all of them together shall repre-
sent the same agreement.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities and the Trustee's certificates of au-
thentication shall be in substantially the forms set forth
in this Article Two, with such appropriate insertions, omis-
sions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consis-
tently herewith, be determined by the officers executing
such Securities, as evidenced by their execution thereof.
The definitive Securities shall be printed, lithograp-
hed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any
other manner permitted by the rules of any securities ex-
change on which the Securities may be listed, all as deter-
mined by the officers executing such Securities, as evi-
denced by their execution of such Securities.
Section 202. Form of Face of Security.
[If the Security is a permanent Global Security, insert
a legend relating to limitations on the transferability of
the permanent Global Security in such form as may be re-
quired by the Depositary and in accordance with this Inden-
ture.]
CALIFORNIA ENERGY COMPANY, INC.
% Limited Recourse Senior Secured Notes due 2003.
No. _________ $
CUSIP No.
California Energy Company, Inc., a corporation duly
organized and existing under the laws of the State of Dela-
ware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ________-
_________, or registered assigns, the principal sum of
___________________ Dollars on [ ], 2003 and to pay
interest thereon from [ ], 1995 or from the most
recent Interest Payment Date to which interest has been paid
or duly provided for, semi-annually on June [ ], and Decem-
ber [ ], in each year, commencing December [ ], 1995 at
the rate of [ ]% per annum, until the principal hereof is
paid or duly provided for, provided that any principal and
premium, if any, and any such installment of interest, that
is overdue shall bear interest at the rate of [ ]% per
annum (to the extent that the payment of such interest shall
be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for, and such interest
shall be payable on demand. The interest so payable, and
punctually paid or duly provided for, on any Interest Pay-
ment Date shall, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of busi-
ness on the Regular Record Date for such interest, which
shall be the [ ] or [ ] (whether or not a Business
Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of busi-
ness on a Special Record Date for the payment of such de-
faulted interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securi-
ties may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Inden-
ture.
Payment of the principal of (and premium, if any) and
any interest on this Security shall be made at the office or
agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, or at such addi-
tional offices or agencies as the Company from time to time
may designate for such purpose, in such coin or currency of
the United States of America as at the time of payment is
legal tender for payment of public and private debts, pro-
vided that payment of the principal of (and premium, if any,
on) this Security shall be made only upon presentation and
surrender hereof at any such office or agency and, at the
option of the Company, payment of interest may be made by
check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if
set forth at this place.
Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse
hereof by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instru-
ment to be duly executed under its corporate seal.
CALIFORNIA ENERGY COMPANY, INC.
[Seal]
By:
------------------------------
Title:
Attest:
- -----------------------------
Title:
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
Securities of the Company designated as its [ ]% Limited
Recourse Senior Secured Notes due 2003 (herein called the
"Securities"), limited in aggregate principal amount of
$200,000,000, issued and to be issued under an Indenture,
dated as of [ ], 1995 (herein called the "Indenture",
which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York,
as Trustee (herein called the "Trustee" which term includes
any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respec-
tive rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered.
The Securities are limited recourse senior secured
obligations of the Company which are secured by a pledge of
the Collateral. The security interest in the Collateral
granted by the Company or the Magma Equity Holders, if any,
is a first priority security interest and is for the benefit
of the Holders of the Securities. The Holders of the Secu-
rities have no recourse to any assets of the Company, other
than the Collateral, the Magma Note Recourse Assets and
general assets of the Company in an amount equal to the Re-
stricted Payment Recourse Amount.
The Securities are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail, at any time
on or after [ ], 2000 and prior to maturity, as a
whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period
commencing on or after [ ] of the years indicated,
Redemption
Year Price
2000. . . . . . . . . . . . . . . [ ]%
2001. . . . . . . . . . . . . . . [ ]%
2002 and thereafter . . . . . . . [ ]%
together in the case of any such redemption with accrued
interest, if any, to the Redemption Date, but interest in-
stallments whose Stated Maturity is on or prior to such
Redemption Date shall be payable to the Holders of such
Securities, or one or more predecessor Securities, of record
at the close of business on the relevant Record Dates re-
ferred to on the face hereof, all as provided in the Inden-
ture.
Notwithstanding the foregoing, at any time, or from
time to time, on or prior to [ ], 1998, the Company may,
at its option, use all or a portion of the net cash proceeds
of one or more Company Equity Offerings, within 90 days of
such offering, to redeem up to an aggregate of 35% of the
principal amount of the Securities originally issued (taken
together with any Securities redeemed pursuant to a Magma
Equity Offering), at a Redemption Price equal to [ ]% of
the principal amount thereof plus accrued interest to the
redemption date, provided that immediately following such
redemption, at least $130 million principal amount of Secu-
rities remain outstanding.
In the event of a Magma Equity Offering, the Company
shall within 60 days of such offering use all of the net
cash proceeds therefrom to redeem up to an aggregate of 35%
of the principal amount of the Securities originally issued
(taken together with any Securities redeemed pursuant to a
Company Equity Offering), at a Redemption Price equal to
[ ]% of the principal amount thereof plus accrued interest
to the redemption date, provided that immediately following
such redemption, at least $130 million principal amount of
Securities remain outstanding.
The Trustee shall select the Securities or portions
thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable.
The Securities do not have the benefit of any sinking
fund obligations.
Upon the occurrence of a Change of Control, the Company
shall be required to make an Offer to Purchase all or a
specified portion of the Securities at a Purchase Price in
cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to such Purchase Date.
If Magma, any of its Restricted Subsidiaries or any Eligible
Joint Ventures consummate an Asset Disposition, under cer-
tain circumstances, the Company shall be required to make an
Offer to Purchase up to all or a specified portion of the
Securities at a Purchase Price in cash equal to 100% of the
principal amount thereof on any Purchase Date plus accrued
and unpaid interest, if any, to such Purchase Date, in an
amount equal to any Net Cash Proceeds from such an Asset
Disposition that are not used to reinvest in the business of
Magma, any of its Restricted Subsidiaries or any Eligible
Joint Venture and/or repay in a permanent reduction of Debt
of Magma, any of its Restricted Subsidiaries or any Eligible
Joint Venture. Holders of Securities shall receive notice
of any such Offer to Purchase from the Company prior to the
related Purchase Date and may elect to have such Securities
purchased by completing the form entitled "Option of Holder
to Elect Purchase" appearing on the reverse side of the
Security.
In the event of redemption, or purchase pursuant to an
Offer to Purchase, of this Security in part only, a new
Security or Securities for the portion hereof not redeemed
or purchased shall be issued in the name of the Holder
hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any
time of the entire Debt of this Security or certain restric-
tive covenants and Events of Default with respect to this
Security, including, without limitation, covenants relating
to Offers to Purchase, in each case upon compliance with
certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing,
there may be declared due and payable the Default Amount of
the Securities, in the manner and with the effect provided
in the Indenture. The Default Amount in respect of this
Security as of any particular date shall equal 100% of the
principal amount of this Security plus accrued and unpaid
interest, if any, to such date.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities under the Indenture at any
time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities
at the time Outstanding, on behalf of the Holders of all the
Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under
the Indenture and their consequences. In addition, without
the consent of any Holder of a Security, the Indenture and
the Securities may be amended and supplemented to cure any
ambiguity or inconsistency, make other changes that shall
not adversely affect the rights of the Holders or certain
other matters specified in the Indenture. Any such consent
or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registra-
tion of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the
right to institute any proceeding with respect to the Inden-
ture or for the appointment of a receiver, or trustee or for
any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities, the Holders
of not less than 25% in principal amount of the Securities
at the time Outstanding shall have made written request to
the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reason-
able indemnity, and the Trustee shall not have received from
the Holders of a majority in principal amount of Securities
at the time Outstanding a direction inconsistent with such
request and shall have failed to institute any such proceed-
ing for 60 days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to cer-
tain suits described in the Indenture, including any suit
instituted by the Holder of this Security for the enforce-
ment of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates ex-
pressed herein (or, in the case of redemption, on or after
the Redemption Date or, in the case of any purchase of this
Security required to be made pursuant to an Offer to Pur-
chase, on or after the Purchase Date).
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair
the obligation of the Company, which is absolute and uncon-
ditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place, manner and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security
is registrable in the Security Register, upon surrender of
this Security for registration of transfer at the office or
agency of the Company in the Borough of Manhattan, The City
of New York, (which initially shall be the principal corpo-
rate trust office of the Trustee), duly endorsed by, or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly autho-
rized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate
principal amount, shall be issued to the designated trans-
feree or transferees.
The Securities are issuable only in registered form
without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Secu-
rities of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registra-
tion of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other gov-
ernmental charge payable in connection therewith.
A director, officer, employee, stockholder or incor-
porator of the Company shall not have any liability for any
obligations of the Company under this Security or the Inden-
ture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by
accepting this Security waives and releases all such liabil-
ity. Such waiver and release are part of the consideration
for the issuance of this Security.
Prior to due presentment of this Security for regis-
tration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose
name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and nei-
ther the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on this Security shall be computed on the
basis of a 360-day year of 12 30-day months.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
The Indenture and this Security shall be governed by
and construed in accordance with the laws of the State of
New York, as applied to contracts made and performed under
the laws of the State of New York, without regard to princi-
ples of conflicts of law.
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I)
or (we) assign and transfer this Security to
- -------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------
- -------------------------------------------------------------
- -------------------------------------------------------------
- -------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint -------------------------------------
agent to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Dated: Your Signature: --------------------------
(sign exactly as name appears on
the other side of this Security)
Signature Guarantee: -----------------------------------------
(Signature must be guaranteed by a fi-
nancial institution that is a member of
the Securities Transfer Agent Medallion
Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York
Stock Exchange, Inc. Medallion Signature
Program ("MSP") or such other signature
guarantee program as may be determined
by the Security Registrar in addition
to, or in substitution for, STAMP, SEMP
or MSP, all in accordance with the Secu-
rities Exchange Act of 1934, as amend-
ed.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in
its entirety by the Company pursuant to Section 1014 or 1016
of the Indenture, check the box: [ ]
If you want to elect to have only a part of the princi-
pal amount at Stated Maturity of this Security purchased by
the Company pursuant to Section 1014 or 1016 of the Inden-
ture, state the portion of such amount: $________
Dated:
Your Signature: ---------------------------------
(sign exactly as name appears
on the other side of this
Security)
Signature Guarantee: --------------------------------------
(Signature must be guaranteed by a fi-
nancial institution that is a member of
the Securities Transfer Agent Medallion
Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York
Stock Exchange, Inc. Medallion Signature
Program ("MSP") or such other signature
guarantee program as may be determined
by the Security Registrar in addition
to, or in substitution for, STAMP, SEMP
or MSP, all in accordance with the Secu-
rities Exchange Act of 1934, as amend-
ed.)
Section 204. Form of Trustee's Certificate of Authentication.
Dated:
This is one of the Securities referred to in the within-
mentioned Indenture.
THE BANK OF NEW YORK,
As Trustee
By _______________________________
Authorized Signatory
ARTICLE THREE
The Securities
Section 301. Title and Terms.
The aggregate principal amount of Securities that
may be authenticated and delivered under this Indenture
is limited to $200,000,000, except for Securities authen-
ticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 306, 906 or 1108 or in
connection with an Offer to Purchase pursuant to Section
1014 or 1016.
The Securities shall be known and designated as the
"[ ]% Limited Recourse Senior Secured Notes due 2003" of
the Company. Their Stated Maturity shall be [ ],
2003 and they shall bear interest at the rate of [ ]%
per annum, from [ ], 1995 or from the most recent
Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, payable semi-
annually on [ ] and [ ], commencing
[ ], 1995 until the principal thereof is paid or
made available for payment.
The principal of (and premium, if any) and interest
on the Securities shall be payable at the office or
agency of the Company in the Borough of Manhattan, The
City of New York maintained for such purpose and at any
other office or agency maintained by the Company for such
purpose; provided that (except as may be provided in any
representation letter or agreement with a "clearing"
agency registered under the Exchange Act), payment of the
principal of (and premium, if any, on) the Securities
shall be made only upon presentation and surrender there-
of at any such office or agency and at the option of the
Company payment of interest may be made by check mailed
to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Section 302. Denominations.
The Securities shall be issuable only in registered
form without coupons and only in denominations of $1,000
principal amount and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and
Dating.
The Securities shall be executed on behalf of the
Company by its Chairman of the Board, its President or
one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signa-
tures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwith-
standing that such individuals or any of them have ceased
to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices
at the date of such Securities.
At any time and from time to time after the execu-
tion and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee
for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall
authenticate and make available for delivery such Securi-
ties as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authen-
tication.
No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of
authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and
such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities,
the Company may execute, and upon Company Order the
Trustee shall authenticate and make available for deliv-
ery, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of
the definitive Securities in lieu of which they are
issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers exe-
cuting such Securities may determine, as evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company
shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive
Securities, the temporary Securities shall be exchange-
able for definitive Securities upon surrender of the
temporary Securities at any office or agency of the
Company designated pursuant to Section 1002 without
charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities, the Company shall
execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like prin-
cipal amount of definitive Securities of authorized
denominations and of a like tenor. Until so exchanged,
the temporary Securities shall in all respects be enti-
tled to the same benefits under this Indenture as defini-
tive Securities.
Section 305. Registration, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register
maintained in such office and in any other office or
agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regula-
tions as it may prescribe, the Company shall provide for
the registration of Securities and of transfers of Secu-
rities. The Trustee is hereby appointed "Security Regis-
trar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any
Security at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, the Company
shall execute, and the Trustee shall authenticate and
make available for delivery, in the name of the desig-
nated transferee or transferees, one or more new Securi-
ties of any authorized denominations and of a like aggre-
gate principal amount and tenor.
At the option of the Holder, Securities may be ex-
changed for other Securities of any authorized denomi-
nations and of a like aggregate principal amount and
tenor, upon surrender of the Securities to be exchanged
at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and make available for
delivery, the Securities that the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as
the Securities surrendered upon such registration of
transfer or exchange.
Every Security presented or surrendered for regis-
tration of transfer or for exchange shall (if so required
by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar
duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration
of transfer or exchange of Securities, but the Company
may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in
connection with any registration of transfer or exchange
of Securities, other than exchanges pursuant to Section
304, 906 or 1108 or in accordance with any Offer to
Purchase pursuant to Section 1014 or 1016, and in any
such case not involving any transfer.
Neither the Trustee, the Security Registrar nor the
Company shall be required (i) to issue, register the
transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securi-
ties selected for redemption under Section 1104 and
ending at the close of business on the day of such mail-
ing or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being
redeemed in part.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange
therefor a new Security of like tenor and principal
amount and bearing a number not contemporaneously out-
standing.
If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the de-
struction, loss or theft of any Security and (b) such
security or indemnity as may be required by them to save
each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and make available
for delivery, in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and princi-
pal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section 306, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Security issued pursuant to this Section
306 in lieu of any destroyed, lost or stolen Security
shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and
all other Securities duly issued hereunder.
The provisions of this Section 306 are exclusive and
shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Pre-
served.
Interest on any Security that is payable and is
punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Person in whose name
that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security that is payable but is
not punctually paid or duly provided for on any Interest
Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the rele-
vant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in
clause (a) or (b) below:
(a) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities)
are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Compa-
ny shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment and at the same time
the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided
in this clause. Thereupon the Trustee shall fix a Spe-
cial Record Date for the payment of such Defaulted Inter-
est that shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promp-
tly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be given
to each Holder in the manner specified in Section 106 not
less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so
given, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respec-
tive Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon regis-
tration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by
such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registra-
tion of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sec-
tion 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit
against any Offer to Purchase pursuant to Section 1014 or
1016 shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be prompt-
ly cancelled by it. The Company may at any time deliver
to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company
may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as
provided in this Section 309, except as expressly per-
mitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a
Company Order; provided that the Trustee shall not be re-
quired to destroy cancelled Securities.
Section 310. Computation of Interest.
Interest on the Securities shall be computed on the
basis of a 360-day year of 12 30-day months.
Section 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUS-
IP" numbers (if then generally in use), and, if so, the
Trustee shall use CUSIP numbers in notices of redemption
or repurchase as a convenience to Holders; provided that
any such notice may state that no representation is made
as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed
only on the other identification numbers printed on the
Securities, and any such redemption or repurchase shall
not be affected by any defect in or omission of such
numbers.
Section 312. Global Securities.
(a) The Company designates The Depository Trust
Company as the initial Depositary hereunder. The Company
shall execute and the Trustee shall, in accordance with
this Article Three, authenticate, one or more Global
Securities that (i) shall represent, and shall be denomi-
nated in an amount equal to, the aggregate principal
amount of all of the Securities to be represented by such
Global Securities to be issued hereunder, (ii) shall be
registered in the name of the Depositary for such Global
Security or its nominee, (iii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's
instructions, (iv) shall be substantially in the form of
Security specified pursuant to Article Two, with such
changes therein as may be necessary to reflect that each
Global Security is a global security, and (v) shall bear
a legend substantially to the following effect: "This
Security is issued in global form and registered in the
name of the Depositary or a nominee thereof. Unless and
until it is exchanged in whole or in part for Securities
in definitive form in accordance with the terms hereof
and of the Indenture referred to on the reverse hereof,
this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary, or by a
nominee of the Depositary to the Depositary or another
nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of
such successor Depositary. Unless this certificate is
presented by an authorized representative of the Deposi-
tary to the Company or its agent for registration of
transfer, exchange or payment, and any certificate issued
is registered in the name of the Depositary or its nomi-
nee and any payment is made to the Depositary or its
nominee, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since
the registered owner hereof has an interest herein."
(b) Notwithstanding any other provisions of this
Section 312 or of Section 305, unless and until a Global
Security is exchanged in whole or in part for Securities
in definitive form, a Global Security may be transferred,
in whole, but not in part, and in the manner provided in
this Section 312, only by the Depositary to a nominee of
such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor
Depositary selected or approved by the Company or to a
nominee of such successor Depositary or in the manner
specified in Section 312(c).
(c) If at any time the Depositary for the Securi-
ties represented by one or more Global Securities noti-
fies the Company that it is unwilling or unable to con-
tinue as Depositary of the Securities or if at any time
the Depositary shall no longer be eligible as provided in
the second sentence of the definition of "Depositary" and
a successor Depositary is not appointed by the Company
within 90 days after the Company receives such notice or
becomes aware of such condition, as the case may be, the
Company shall promptly execute, and the Trustee shall
promptly authenticate and make available for delivery,
Securities in definitive form without coupons, in autho-
rized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security or
Securities then outstanding in exchange for such Global
Security or Securities, and this Section 312 shall no
longer be applicable to the Securities. In addition, the
Company may at any time and in its sole discretion deter-
mine that the Securities shall no longer be represented
by Global Securities. In such event the Company shall
promptly execute, and the Trustee, upon receipt of a
Company Order evidencing such determination by the Compa-
ny, shall promptly authenticate and make available for
delivery, Securities in definitive form without coupons,
in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Global Secu-
rity or Securities then outstanding in exchange for such
Global Security or Securities and this Section 312 shall
no longer be applicable to the Securities. Upon the ex-
change of the Global Securities for such Securities in
definitive form without coupons, in authorized denomina-
tions, such Global Securities shall be cancelled by the
Trustee. Such Securities in definitive form issued in
exchange for the Global Securities pursuant to this
Section 312(c) shall be registered in such names and in
such authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee
shall make such Securities available for delivery to the
Persons in whose names such Securities are so registered.
(d) Notwithstanding any other provision hereof to
the contrary, so long as the Securities outstanding are
represented by one or more Global Securities, the Company
shall pay or cause to be paid the principal of, and
interest on, such Global Securities to the Depositary or
its nominee of the holder by wire transfer of immediately
available funds on the date such payments are due.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
(a) Subject to clause (b) of this Section 401, this
Indenture shall cease to be of further effect and the
Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfac-
tion and discharge of this Indenture, when
(i) no Securities remain Outstanding;
(ii) the Company has paid or caused to be paid
all other sums payable hereunder by the Company; and
(iii) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Inden-
ture have been complied with.
(b) If within 123 days prior to the date that no
Securities shall remain Outstanding, the Company has
redeemed or repurchased any Securities, then this Inden-
ture shall cease to be of further effect following the
123rd day after the latest Redemption Date or Repurchase
Date; provided, however, that the conditions set forth in
Section 104(a)(i)-(iii) have been satisfied.
(c) Notwithstanding the satisfaction and discharge
of this Indenture pursuant to this Article Four, (i) the
obligations of the Company to the Trustee under Sections
607 and 1311, (ii) the obligations of the Company to any
Authenticating Agent under Section 614 and (iii) if the
Company shall have effected a Defeasance pursuant to
Article Twelve, the provisions hereof specified in Sec-
tion 1202 shall survive until otherwise terminated or
discharged hereunder.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", whenever used herein, means any
one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursu-
ant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or gov-
ernmental body):
(a) default in the payment of the principal of (or
premium, if any, on) any Security at its maturity (wheth-
er at final Stated Maturity or upon repurchase, accelera-
tion, redemption or otherwise); or
(b) default in the payment of any interest upon any
Security when it becomes due and payable, and continuance
of such default for a period of 30 days; or
(c) (i) default in the purchase of Securities, on
the applicable Purchase Date, required to be purchased by
the Company pursuant to an Offer to Purchase under Sec-
tion 1014 or Section 1016 as to which an offer has been
mailed to Holders or the failure to make such offer as
required hereunder, (ii) failure of the Company to comply
with Article Thirteen other than a failure that would not
have an adverse effect on the Holders of the Securities
or (iii) failure of the Trustee to have a perfected
security interest in the Collateral other than a failure
to have a perfected security interest in non-material
Collateral of a Magma Equity Offering Purchaser which
failure would not have a material adverse effect on the
interest of the Holders of the Securities;
(d) default in the performance, or breach, of any
covenant, representation, agreement or warranty of the
Company in this Indenture and the Securities (or of any
Magma Equity Holder in a Pledge Agreement, as a result of
any action or inaction by the Company or any of its
Subsidiaries) (other than a covenant, representation,
agreement or warranty a default in whose performance or
whose breach is elsewhere in this Section 501 specifical-
ly dealt with), and continuance of such default or breach
for a period of 30 days after there has been given to the
Company (and the defaulting Magma Equity Holder in the
case of a default under a Pledge Agreement) by the Trust-
ee or to the Company and the Trustee (and the defaulting
Magma Equity Holder in the case of a default under a
Pledge Agreement, as a result of any action or inaction
by the Company or any of its Subsidiaries) by the Holders
of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder (and under
the Pledge Agreement in the case of a default under a
Pledge Agreement); or
(e) a default or defaults under any bond, deben-
ture, note or other evidence of Debt by the Company or
Magma or any of their Significant Subsidiaries (or under
any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evi-
denced any Debt by the Company or Magma or any of their
Significant Subsidiaries) (other than Non-Recourse Debt
of such Significant Subsidiaries) if either (i) such
default results from failure to pay principal of such
Debt in excess of $25 million when due after any applica-
ble grace period or (ii) as a result of such default, the
maturity of such Debt has been accelerated prior to its
scheduled maturity and such default has not been cured
within the applicable grace period, and such acceleration
has not been rescinded, and the principal amount of such
Debt, together with the principal amount of any other
Debt of the Company and Magma and their Significant Sub-
sidiaries (not including Non-Recourse Debt of such Sig-
nificant Subsidiaries) that is in default as to prin-
cipal, or the maturity of which has been accelerated,
aggregates $25 million or more; or
(f) the entry by a court of one or more judgments
or orders against the Company or Magma or any of their
Significant Subsidiaries for the payment of money that in
aggregate exceeds $25 million (excluding the amount
thereof covered by insurance or by a bond written by a
Person other than an Affiliate of the Company), which
judgments or orders have not been vacated, discharged or
satisfied or stayed pending appeal within 60 days from
the entry thereof, provided that such a judgment or order
shall not be an Event of Default if such judgment or
order does not require any payment by the Company or
Magma or any of their Significant Subsidiaries, except to
the extent that such judgment is only against Property
that secures Non-Recourse Debt that is otherwise permit-
ted under this Indenture, and Magma could, at the expira-
tion of the applicable 60 day period, after giving effect
to such judgement or order and the consequences thereof,
Incur at least $1 of Debt under the provisions described
in Section 1008(a); or
(g) the entry by a court having jurisdiction in the
premises of (i) a decree or order for relief in respect
of the Company or Magma or any of their Significant Sub-
sidiaries in an involuntary case or proceeding under the
Federal bankruptcy laws, as now or hereafter constituted,
or any other applicable Federal, state, or foreign bank-
ruptcy, insolvency, or other similar law or (ii) a decree
or order adjudging the Company or Magma or any of their
Significant Subsidiaries a bankrupt or insolvent, or
approving as properly filed a petition seeking reorgani-
zation, arrangement, adjustment or composition of or in
respect of the Company or Magma or any of their Signifi-
cant Subsidiaries under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency, or
similar law, or appointing a custodian, receiver, liq-
uidator, assignee, trustee, sequestrator or other similar
official of the Company or Magma or any of their Signifi-
cant Subsidiaries or of any substantial part of the Prop-
erty or assets of the Company or Magma or any of their
Significant Subsidiaries, or ordering the winding up or
liquidation of the affairs of the Company or Magma or any
of their Significant Subsidiaries, and the continuance of
any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60
consecutive days; or
(h) (i) the commencement by the Company or Magma or
any of their Significant Subsidiaries of a voluntary case
or proceeding under the Federal bankruptcy laws, as now
or hereafter constituted, or any other applicable Feder-
al, state, or foreign bankruptcy, insolvency or other
similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or (ii) the consent
by the Company or Magma or any of their Significant Sub-
sidiaries to the entry of a decree or order for relief in
respect of the Company or Magma or any of their Signif-
icant Subsidiaries in an involuntary case or proceeding
under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or
foreign bankruptcy, insolvency, or other similar law or
to the commencement of any bankruptcy or insolvency case
or proceeding against the Company or Magma or any of
their Significant Subsidiaries, or (iii) the filing by
the Company or Magma or any of their Significant Sub-
sidiaries of a petition or answer or consent seeking
reorganization or relief under the Federal bankruptcy
laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insol-
vency or other similar law, or (iv) the consent by the
Company or Magma or any of their Significant Subsidiaries
to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquida-
tor, assignee, trustee, sequestrator or similar official
of the Company or Magma or any of their Significant Sub-
sidiaries or of any substantial part of the Property or
assets of the Company or Magma or any of their Signifi-
cant Subsidiaries, or the making by the Company or Magma
or any of their Significant Subsidiaries of an assignment
for the benefit of creditors, or (v) the admission by the
Company or Magma or any of their Significant Subsidiaries
in writing of its inability to pay its debts generally as
they become due, or (vi) the taking of corporate action
by the Company or Magma or any of their Significant Sub-
sidiaries in furtherance of any such action.
Section 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default (other than an Event of
Default specified in Section 501(g) or (h)) occurs and is
continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the Default Amount
of all the Securities to be due and payable immediately
by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such
Default Amount shall become immediately due and payable.
If an Event of Default specified in Section 501(g) or (h)
occurs, the Default Amount of the Securities then Out-
standing shall ipso facto become immediately due and
payable without any declaration or other Act on the part
of the Trustee or any Holder.
At any time after such a declaration of acceleration
has been made and before a judgment or decree for payment
of the money due has been obtained by the Trustee as
hereinafter in this Article Five provided, the Holders of
a majority in principal amount of the Outstanding Securi-
ties, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its conse-
quences if
(a) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(i) all overdue interest on all Securities
(without duplication of any amount thereof paid or de-
posited pursuant to clause (ii) or (iii) below),
(ii) the Default Amount of (and premium, if
any, on) any Securities that have become due otherwise
than by such declaration of acceleration (including any
Securities required to have been purchased on any Pur-
chase Date pursuant to an Offer to Purchase made by the
Company) and, to the extent that payment of such interest
is lawful, interest thereon at the rate provided by the
Securities (without duplication of any amount thereof
paid or deposited pursuant to clause (i) above or clause
(iii) below),
(iii) to the extent that payment of such inter-
est is lawful, interest upon overdue interest at the rate
provided by the Securities (without duplication of any
amount thereof paid or deposited pursuant to clause (i)
or (ii) above), and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(b) all Events of Default have been cured or waived
as provided in Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest
on any Security when such interest becomes due and pay-
able and such default continues for a period of 30 days,
or
(b) default is made in the payment of the principal
of (or premium, if any, on) any Security at the final
Stated Maturity thereof or, with respect to any Security
required to have been purchased pursuant to an Offer to
Purchase made by the Company, at the Purchase Date there-
of,
the Company shall, upon demand of the Trustee, pay to it,
for the benefit of the Holders of such Securities, the
whole amount then due and payable on such Securities for
principal (premiums, if any) and interest, and, to the
extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (premium,
if any) and interest, and on any overdue interest, at the
rate provided by the Securities, and, in addition there-
to, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial
proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company
or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner
provided by law out of the Property of the Company or any
other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any
other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the
Company (or a Magma Equity Holder or any other obligor
upon the Securities), its Property or assets or its
creditors, the Trustee (irrespective of whether the
principal (premium, if any) or interest of the Securities
then shall be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the
Trustee has made any demand on the Company for the pay-
ment of overdue principal (premium, if any) or interest)
shall be entitled and empowered, by intervention in such
proceeding or otherwise, to file such proofs of claim and
other papers or documents and to take any and all actions
authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee (including any
claim for reasonable compensation, expenses, disburse-
ments and advances of the Trustee, its agents or counsel)
allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any
moneys or other property payable or deliverable on any
such claims and to distribute the same; and any custodi-
an, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding
is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607. To the
extent that payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any amounts due the Trustee under Section
607 hereof out of the estate in any such proceeding shall
be denied for any reason, payment of the same shall be
secured by a Lien and shall be paid out of any and all
distributions, dividends, money, securities and other
properties that the Holders of the Securities may be
entitled to receive in such proceedings whether in liqui-
dation or under any plan of reorganization or arrangement
or otherwise.
No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding; provided
that the Trustee may, on behalf of the Holders, vote for
the election of a trustee in bankruptcy or similar offi-
cial and be a member of a creditors or other similar
committee.
Section 505. Trustee May Enforce Claims Without Posses-
sion of Securities.
All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities
or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trust-
ee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judg-
ment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this
Article Five shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of
the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of
the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully
paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607; and
SECOND: To the payment of the amounts then
due and unpaid on the Securities in respect of which or
for the benefit of which such money has been collected,
ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securi-
ties in respect of principal (and premium, if any) and
interest; and
THIRD: To whosoever may be lawfully entitled
thereto, the remainder, if any.
Section 507. Limitation on Suits.
No Holder of any Security shall have any right to
institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder,
unless
(a) such Holder has previously given written notice
to the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal
amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(e) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount
of the Outstanding Securities;
it being understood and intended that no one or more
Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain
priority or preference over any other Holders or to
enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable
benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.
Notwithstanding any other provision in this Inden-
ture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive full
payment of the principal of (and premium, if any) and
(subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security
(or, in the case of redemption on the Redemption Date or
in the case of an Offer to Purchase made by the Company
and accepted as to such Security, on the Purchase Date)
in accordance with the terms of this Indenture and the
Securities and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired
without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any pro-
ceeding to enforce any right or remedy under this Inden-
ture and such proceeding has been discontinued or aban-
doned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be re-
stored severally and respectively to their former posi-
tions hereunder and thereafter all rights and remedies of
the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to
the Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereun-
der or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or
remedy hereunder or otherwise shall not prevent the
concurrent assertion or employment of any other appropri-
ate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder
of any Security to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of De-
fault or an acquiescence therein. Every right and remedy
given by this Article Five or by law to the Trustee or to
the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any
trust or power conferred on the Trustee, provided that
(a) such direction shall not be in conflict with
any rule of law or with this Indenture, and
(b) the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction.
Section 513. Waiver Of Past Defaults.
The Holders of not less than a majority in principal
amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past default
hereunder and its consequences, except a default
(a) in the payment of the principal of (or premium,
if any) or interest on any Security (including any Secu-
rity that is required to have been purchased pursuant to
an Offer to Purchase that has been made by the Company),
or
(b) in respect of a covenant or provision hereof
that under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subse-
quent or other default or impair any right consequent
thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it
as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party liti-
gant, in the manner and to the extent provided in the
Trust Indenture Act.
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension
law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it shall
not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no
such law had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act. Whether
or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall
be subject to the provisions of this Section 601.
(b) Except during the continuance of an Event of
Default,
(i) the Trustee undertakes to perform such
duties and only such duties as are specifically set forth
in this Indenture, and no implied covenants or obliga-
tions shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Inden-
ture; but in the case of any such certificates or opin-
ions that by any provision hereof are specifically re-
quired to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture
but need not confirm the accuracy of any calculations
contained therein.
(c) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(d) No provision of this Indenture shall be con-
strued to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or
its own willful misconduct, except that
(i) this subsection (d) shall not be construed
to limit the effect of subsections (b) or (c) of this
Section 601;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with re-
spect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Hold-
ers of a majority in principal amount of the Outstanding
Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(iv) no provision of this Indenture shall re-
quire the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the perfor-
mance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reason-
able grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 602. Notice of Defaults; Notice of Acceleration.
Within 90 days after the occurrence of any Default
or Event of Default, the Trustee shall transmit by mail
to all Holders, as their names and addresses appear in
the Security Register, notice of such Default or Event of
Default known to the Trustee, unless such Default or
Event of Default shall have been cured or waived; provid-
ed that, except in the case of a default in any payment
of the principal of (or premium, if any) or interest on
any Security and any payment required in connection with
a Change of Control or an Asset Disposition, the Trustee
shall be protected in withholding such notice if and so
long as the board of directors, the executive committee
or a trust committee of directors or Responsible Officers
of the Trustee in good faith determine that the withhold-
ing of such notice is in the interest of the Holders; and
provided further that in the case of any Default or Event
of Default of the character specified in Section 501(e),
no such notice to Holders shall be given until at least
30 days after the occurrence thereof.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, deben-
ture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, order, demand or direction of the
Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order and any resolution
of the Board of Directors of the Company may be suffi-
ciently evidenced by a Board Resolution;
(c) whenever in the administration of this Inden-
ture the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such re-
quest or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investi-
gation, it shall be entitled (subject to reasonable
confidentiality arrangements as may be proposed by the
Company) to examine the books, records and premises of
the Company, personally or by agent or attorneys;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(h) the Trustee shall not be liable for any action
taken, suffered or omitted by it and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
Section 604. Not Responsible for Recitals or Issuance
of Securities.
The recitals contained herein and in the Securities,
except the Trustee's certificates of authentication,
shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities.
The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds
thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company
with the same rights it would have if it were not Trust-
ee, Authenticating Agent, Paying Agent, Security Regis-
trar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability
for interest on any money received by it hereunder except
as otherwise agreed in writing with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(a) to pay to the Trustee from time to time
such compensation as the Company and the Trustee shall
from time to time agree in writing for all services ren-
dered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compen-
sation of a trustee of an express trust);
(b) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred
or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and
counsel) except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith;
and
(c) to indemnify each of the Trustee or any
predecessor Trustee, in its individual capacity and each
of its officers, directors, agents and counsel for, and
to hold it harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than
taxes based on the income of the Trustee) incurred with-
out negligence or bad faith on such Person's part, aris-
ing out of or in connection with the acceptance or admin-
istration of this Indenture or the performance of any of
its powers and duties hereunder, including the costs and
expenses of defending itself against any claim or liabil-
ity in connection with the exercise or performance of any
of its powers or duties hereunder and complying with any
process served upon the Trustee or any such other Person
hereunder.
The Trustee shall have a Lien prior to the Securi-
ties with respect to all Property and funds held or
collected by the Trustee hereunder for any amount owing
to it pursuant to this Section 607, except with respect
to funds held in trust for the benefit of the Holders of
particular Securities.
When the Trustee incurs expenses or renders services
in connection with an Event of Default specified in
Section 501(g) or Section 501(h), the expenses (including
the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to consti-
tute expenses of administration under any applicable
Federal or state bankruptcy, insolvency or other similar
law.
The Company's obligations under this Section 607 and
any Lien arising hereunder shall survive the resignation
or removal of the Trustee, the discharge of the Company's
obligations pursuant to Article Twelve, any rejection or
termination of the Indenture under any Federal or state
bankruptcy, insolvency or other similar law or any other
termination of this Indenture.
Section 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and
this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that
shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000 and its Corporate
Trust Office in the Borough of Manhattan, The City of New
York and shall be subject to supervision or examination
by Federal or state authority. If such Person publishes
reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining
authority, then for the purposes of this Section 609 and
to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set
forth in its most recent report of condition so publish-
ed. If at any time the Trustee shall cease to be eligi-
ble in accordance with the provisions of this Section
609, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article Six.
Section 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this
Article Six shall become effective until the acceptance
of appointment by the successor Trustee in accordance
with the applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving
written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee in accordance with
the applicable requirements of Section 611 shall not have
been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act
of the Holders of a majority in principal amount of the
Outstanding Securities, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 608 after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible
under Section 609 and shall fail to resign after written
request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquida-
tion,
then, in any such case, (i) the Company by a Board Reso-
lution may remove the Trustee, or (ii) subject to Section
514, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of him-
self and all others similarly situated, petition any
court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur
in the office of Trustee for any cause, the Company, by a
Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacan-
cy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Out-
standing Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section
611, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no suc-
cessor Trustee shall have been so appointed by the Compa-
ny or the Holders and accepted appointment in accordance
with the applicable requirements of Section 611, any
Holder who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all
others similarly situated, petition any court of compe-
tent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give written notice of each
resignation and each removal of the Trustee and each
appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall in-
clude the name of the successor Trustee and the address
of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such ap-
pointment, and thereupon the resignation or removal of
the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but,
on request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of any amounts then
due under Section 607, execute and deliver an instrument
transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee
hereunder, subject, nevertheless, to its Lien, if any,
provided for in Section 607. Upon request of any such
successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor
Trustee shall be qualified and eligible under this Art-
icle.
Section 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all
the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such
corporation shall be otherwise qualified and eligible
under this Article Six, without the execution or filing
of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolida-
tion to such authenticating Trustee may adopt such au-
thentication and deliver the Securities so authenticated
with the same effect as if such successor Trustee had
itself authenticated such Securities.
Section 613. Preferential Collection
of Claims Against Company.
If and when the Trustee shall be or become a credi-
tor of the Company (or any other obligor upon the Securi-
ties), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may from time to time appoint an Authen-
ticating Agent or Agents that shall be authorized to act
on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registra-
tion of transfer or partial redemption or partial pur-
chase or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating
Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company
and shall at all times be a corporation organized and
doing business under the laws of the United States of
America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less
than $50,000,000 and subject to supervision or examina-
tion by Federal or state authority. If such Authenticat-
ing Agent publishes reports of condition at least annual-
ly, pursuant to law or to the requirements of said super-
vising or examining authority, then for the purposes of
this Section 614, the combined capital and surplus of
such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 614, such
Authenticating Agent shall resign immediately in the
manner and with the effect specified in this Section 614.
Any corporation into which an Authenticating Agent
may be merged or converted or with which it may be con-
solidated, or any corporation resulting from any merger,
conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to
the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenti-
cating Agent, provided such corporation shall be other-
wise eligible under this Section, without the execution
or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent. In case any
Securities shall have been authenticated, but not deliv-
ered, by the Authenticating Agent then in office, any
successor by merger, conversion or consolidation to such
Authenticating Agent may adopt such authentication and
deliver the Securities so authenticated with the same
effect as if such successor Authenticating Agent had
itself authenticated such Securities.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the
Company. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accor-
dance with the provisions of this Section 614, the Trust-
ee may appoint a successor Authenticating Agent that
shall be acceptable to the Company and shall give notice
of such appointment in the manner provided in Section
106, to all Holders as their names and addresses appear
in the Security Register. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of
its predecessor hereunder, with like effect as if origi-
nally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible
under the provisions of this Section 614.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section.
If an appointment is made pursuant to this Section
614, the Securities may have endorsed thereon, in lieu of
the Trustee's certificate of authentication, an alterna-
tive certificate of authentication in the following form:
This is one of the Securities described in the
within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
as Trustee
By:-------------------------,
As Authenticating Agent
By: ------------------------,
Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company shall furnish or cause to be furnished
to the Trustee
(a) semi-annually, not more than 15 days after each
Regular Record Date, in such form as the Trustee may
reasonably require, of the names and addresses of the
Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request
in writing, within 30 days after the receipt by the
Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received
by the Trustee in its capacity as Security Registrar.
Section 702. Preservation of Information; Communica-
tions to Holders.
(a) The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and address-
es of Holders contained in the most recent list furnished
to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy
any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture
or under the Securities, and the corresponding rights and
duties of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of any
disclosure of information as to the names and addresses
of Holders made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) Within 60 days after [May 15] of each year com-
mencing with the [May 15] following the Issue Date, the
Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act in the
manner provided pursuant thereto.
(b) A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which the Securities are
listed, with the Commission and with the Company. The
Company shall promptly notify the Trustee in writing when
the Securities are listed on any stock exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof,
as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such
Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so
required to be filed with the Commission.
Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute construc-
tive notice of any information contained therein or
determinable from information contained therein, includ-
ing the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely
exclusively on Officer's Certificates).
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company and Magma May Consolidate, Etc.
Only on Certain Terms.
The Company shall not, and shall not permit Magma
to, in any transaction or series of transactions, consol-
idate with or merge into any other Person, or sell, con-
vey, assign, transfer, lease or otherwise dispose of all
or substantially all of its Property and assets to any
other Person, unless:
(a) either (i) the Company or Magma, as the case
may be, shall be the continuing corporation or (ii) the
corporation (if other than the Company or Magma, as the
case may be) formed by such consolidation or into which
the Company or Magma, as the case may be, is merged, or
the Person that acquires, by sale, assignment, convey-
ance, transfer, lease or disposition, all or substantial-
ly all of the Property and assets of the Company or
Magma, as the case may be (such corporation or Person,
the "Surviving Entity"), shall be a corporation organized
and validly existing under the laws of the United States
of America, any political subdivision thereof or any
state thereof or the District of Columbia, and shall
expressly assume, by a supplemental indenture, the due
and punctual payment of the principal of (and premium, if
any) and interest on all the Securities and the perfor-
mance of the Company's covenants and obligations under
this Indenture and the Securities, or shall expressly
assume in writing the obligations of Magma under the
Secured Magma Note, as the case may be;
(b) immediately before and immediately after giving
effect to such transaction or series of transactions on a
pro forma basis (including, without limitation, any Debt
Incurred or anticipated to be Incurred in connection with
or in respect of such transaction or series of trans-
actions), no Default or Event of Default shall have
occurred and be continuing or would result therefrom;
(c) immediately after giving effect to any such
transaction or series of transactions on a pro forma
basis (including, without limitation, any Debt Incurred
or anticipated to be Incurred in connection with or in
respect of such transaction or series of transactions) as
if such transaction or series of transactions had oc-
curred on the first day of the determination period,
Magma (or the Surviving Entity if Magma is not contin-
uing) would be permitted to Incur $1.00 of additional
Debt pursuant to Section 1008(a); and
(d) immediately after giving effect to such trans-
action or series of transactions on a pro forma basis
(including, without limitation, any Debt Incurred or
anticipated to be Incurred in connection with or in
respect of such transaction or series of transactions)
(without giving effect to the fees and expenses incurred
in respect of such transaction), the Company or Magma, as
the case may be, (or the Surviving Entity if the Company
is not continuing) shall have a Net Worth equal to or
greater than the Net Worth of the Company or Magma, as
the case may be, immediately prior to such transaction.
In connection with any consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposi-
tion contemplated by the foregoing provisions of this
Section 801, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reason-
ably satisfactory to the Trustee, an Officers' Certifi-
cate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance, assignment,
transfer, lease or other disposition and the indenture
supplemental hereto in respect thereof (to the extent
required under clause (a) of this Section 801) comply
with the requirements of this Indenture. Each such
Officers' Certificate shall set forth the ability to
Incur Debt in accordance with clause (c) of Section 801.
None of Magma, any of its Restricted Subsidiaries or
any Eligible Joint Ventures may merge with or into, or be
consolidated with, an Unrestricted Subsidiary of Magma,
except to the extent that such Unrestricted Subsidiary
has been designated a Restricted Subsidiary as provided
in this Indenture in advance of or in connection with
such merger.
For all purposes of this Indenture and the Securi-
ties (including this Section 801 and Sections 1008, 1009
and 1012), Subsidiaries of any Surviving Entity shall,
upon such transaction or series of transactions, become
Restricted Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to this Indenture and all Debt, and all
Liens on Property or assets, of the Surviving Entity and
its Subsidiaries that was not Debt, or were not Liens on
Property or assets, of the Company and its Subsidiaries
immediately prior to such transaction or series of trans-
actions shall be deemed to have been Incurred upon such
transaction or series of transactions.
Notwithstanding the foregoing, this Section 801
shall not restrict the Company from engaging in any of
the transactions contemplated hereby if Magma expressly
assumes in writing all the obligations of the Company
under this Indenture and the Securities.
Section 802. Successor Substituted.
Upon any transaction or series of transactions that
are of the type described in, and are effected in accor-
dance with, Section 801, the Surviving Entity shall
succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Inden-
ture or Magma under the Secured Magma Note, as the case
may be, with the same effect as if such Surviving Entity
had been named as the Company herein or Magma under the
Secured Magma Note, as the case may be; and when a Sur-
viving Person duly assumes all of the obligations and
covenants of the Company pursuant to this Indenture and
the Securities, except in the case of a lease, the prede-
cessor Person shall be relieved of all obligations under
this Indenture and Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures without Consent of
Holders.
Without the consent of any Holders, the Company,
when authorized by a Board Resolution, may, and subject
to Section 903, the Trustee, at any time and from time to
time, shall, enter into one or more indentures supplemen-
tal hereto, in form satisfactory to the Trustee, for any
of the following purposes:
(a) to evidence the succession of another Person to
the Company and the assumption by any such successor of
the covenants of the Company herein and in the Securi-
ties; or
(b) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or
power herein conferred upon the Company; or
(c) to add additional Events of Default; or
(d) to provide for uncertificated Securities in
addition to or in place of the certificated Securities;
or
(e) to change or eliminate any of the provisions of
this Indenture, provided that any such change or elimina-
tion shall become effective only when there is not Out-
standing any Security created prior to the execution of
such supplemental indenture that is entitled to the bene-
fit of such provision; or
(f) to evidence and provide for the acceptance of
appointment under this Indenture by a successor Trustee;
or
(g) to secure the Securities pursuant to the re-
quirements of Section 1012 or otherwise; or
(h) to cure any ambiguity, to correct or supplement
any provision herein that may be defective or inconsis-
tent with any other provision herein, or to make any
other provisions with respect to matters or questions
arising under this Indenture, provided that such actions
pursuant to this clause (h) shall not adversely affect
the interests of the Holders; or
(i) to comply with any requirements of the Com-
mission in order to effect and maintain the qualification
of this Indenture under the Trust Indenture Act.
Section 902. Supplemental Indentures with Consent of
Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securi-
ties, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board
Resolution, may, and (subject to Section 903) the Trustee
shall, enter into an indenture or indentures supplemental
hereto, in form satisfactory to the Trustee, for the
purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided that no such
supplemental indenture shall, without the consent of the
Holder of each Outstanding Security,
(a) change the Stated Maturity of the principal of
or any installment of interest on, any Security, or
reduce the principal amount thereof at or the rate of
interest thereon or any premium payable thereon, reduce
the rate or extend the time of payment of any cash inter-
est thereon, reduce any amount payable on redemption or
purchase thereof, or reduce the Default Amount that would
be due and payable on acceleration of the Stated Maturity
thereof pursuant to Section 502, or change the place of
payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity
thereof, or
(b) reduce the percentage in principal amount of
the Outstanding Securities, the consent of whose Holders
is required for any such supplemental indenture, or the
consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) pro-
vided for in this Indenture, or
(c) modify the obligations of the Company to make
Offers to Purchase from the Excess Proceeds of Asset
Dispositions or upon a Change of Control or to modify the
definitions related thereto, or
(d) subordinate a right of payment, or otherwise
subordinate, the Securities to any other indebtedness, or
(e) modify any of the provisions of this Section
902, Section 513 or Section 1020, except to increase any
such percentage or to provide that certain other provi-
sions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding
Security affected thereby, or
(f) alter the redemption provisions of Article
Eleven, or
(g) make any change in Article Thirteen and Section
1013 that adversely affects such Holder.
Notwithstanding the foregoing, the Company shall not
make any changes in, or grant waivers of the terms of,
the Secured Magma Note without the consent of the Holders
of the required percentage of the Securities to a corre-
sponding change in the Indenture or the Securities.
It shall not be necessary for any Act of Holders
under this Section 902 to approve the particular form of
any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance there-
of.
After a supplemental indenture under this Section
902 becomes effective, the Company shall mail to the
Holders affected thereby a notice briefly describing the
supplemental indenture. Any failure of the Company to
mail such notice, or any default therein, shall not,
however, in any way impair or affect the validity of any
such supplemental indenture.
In connection with any supplemental indenture or
waiver under this Article Nine, the Company may, but
shall not be obligated to, offer to any Holder who con-
sents to such supplemental indenture, or to all Holders,
consideration for such Holder's consent to such supple-
mental indenture.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article Nine or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Trustee's own
rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article Nine, this Indenture shall be modified
in accordance therewith, and such supplemental indenture
shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound
thereby, unless it makes a change described in any of
clauses (a) through (g) of Section 902, in which case,
the supplemental indenture shall bind only each Holder of
a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evi-
dences the same Debt as the consenting Holder's Security;
provided that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal
and premium of and interest on a Security, on or after
the respective dates set for such amounts to become due
and payable, or to bring suit for the enforcement of any
such payment on or after such respective dates.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article Nine shall conform to the requirements of
the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this
Article Nine may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities so modi-
fied as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be pre-
pared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding
Securities. Any failure to make the appropriate notation
on a new Security shall not affect the validity of such
Security.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Inter-
est.
The Company shall duly and punctually pay the prin-
cipal of (and premium, if any) and interest on the Secu-
rities in accordance with the terms of the Securities and
this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhat-
tan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities and this
Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Compa-
ny hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
In the event any such notice or demands are so made or
served on the Trustee, the Trustee shall promptly forward
copies thereof to the Company.
The Company may also from time to time designate
one or more other offices or agencies (in or outside the
Borough of Manhattan, The City of New York) where the
Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such
designations; provided that no such designation or re-
scission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York, for such purposes.
The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any
change in the location of any such other office or agen-
cy. The Company hereby initially designates the Corpo-
rate Trust Office of the Trustee as such office of the
Company.
Section 1003. Money for Security Payments to be Held in
Trust.
If the Company shall at any time act as its own
Paying Agent, it shall, on or before each due date of the
principal of (and premium, if any) or interest on any of
the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient
to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Per-
sons or otherwise disposed of as herein provided and
shall promptly notify the Trustee of its action or fail-
ure so to act.
Whenever the Company shall have one or more Paying
Agents, it shall, prior to each due date of the principal
of (and premium, if any) or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming
due, such sum to be held as provided by the Trust Inden-
ture Act, and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of its
action or failure so to act.
The Company shall cause each Paying Agent other
than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section
1003, that such Paying Agent shall (i) comply with the
provisions of the Trust Indenture Act applicable to it as
Paying Agent, (ii) give the Trustee notice of any default
by the Company (or other obligor upon the Securities) in
the making of any payment of principal of (and premium,
if any) or interest in respect of the Securities and
(iii) during the continuance of any default by the Compa-
ny (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon
the written request of the Trustee, forthwith pay to the
Trustee all sums held in trust by such Paying Agent as
such.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Inden-
ture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or
interest on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money shall thereupon
cease; provided that the Trustee or such Paying Agent,
before being required to make any such repayment, may at
the expense of the Company cause to be published once, in
a newspaper published in the English language, custom-
arily published on each Business Day and of general
circulation in The City of New York, or mail to such
Holder, or both, notice that such money remains unclaimed
and that, after a date specified therein, which shall not
be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining shall
be repaid to the Company.
Section 1004. Existence.
Subject to Article Eight, the Company shall and
shall cause Magma to do or cause to be done all things
necessary to preserve and keep in full force and effect
their corporate existence, rights (charter and statutory)
and material franchises; provided that the Company and
Magma shall not be required to preserve any such right or
franchise if the Board of Directors of the Company in
good faith shall determine that the preservation thereof
is no longer desirable in the conduct of the business of
the Company or Magma, as the case may be, and that the
loss thereof does not materially adversely affect the
Holders.
Section 1005. Maintenance of Properties.
The Company shall cause all material properties used
or useful in the conduct of the Company's and Magma's
businesses or the business of any of Magma's Restricted
Subsidiaries and any Eligible Joint Venture to be main-
tained and kept in good condition, repair and working
order and supplied with all necessary equipment and shall
cause to be made all necessary repairs, renewals, re-
placements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that
the business carried on in connection therewith may be
properly and advantageously conducted at all times;
provided that nothing in this Section 1005 shall prevent
the Company or Magma, as the case may be, from discon-
tinuing the operation or maintenance of any of such
material properties or, subject to the provisions of
Section 1016, disposing of any of them if such discon-
tinuance or disposal is, as determined by the Company or
Magma, respectively, in good faith, desirable in the con-
duct of its respective business or the business of any of
Magma's Restricted Subsidiary and does not materially ad-
versely affect the Holders, provided that the Restricted
Subsidiaries and the Eligible Joint Ventures of Magma
shall not be required to comply with the forgoing provi-
sions of this Section 1005 if they are prevented or
restricted in doing so by the terms of any loan or fi-
nancing agreement, any charter document, partnership or
joint venture agreement or any other agreement or instru-
ment, all of which are expressly acknowledged to take
precedence over the terms hereof.
Section 1006. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be
paid or discharged, before the same shall become delin-
quent, (a) all taxes, assessments and governmental charg-
es levied or imposed upon the Company or Magma or any of
Magma's Restricted Subsidiaries or upon the income,
profits or property of the Company or Magma or any of
Magma's Restricted Subsidiaries, and (b) all lawful
claims for labor, materials and supplies that, if unpaid,
might by law become a Lien upon the property of the
Company or Magma or any of Magma's Restricted Subsidiar-
ies; provided that the Company shall not be required to
pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good
faith by appropriate proceedings and for which disputed
amounts adequate reserves have been accrued to the extent
required by GAAP.
Section 1007. Maintenance of Insurance.
The Company shall and shall cause Magma, Magma's Re-
stricted Subsidiaries and the Eligible Joint Ventures to,
keep at all times all of their Properties that are of an
insurable nature insured against loss or damage with
insurers believed by the Company or Magma to be responsi-
ble to the extent that Property of similar character is
usually so insured by Persons similarly situated and
owning like Properties in accordance with good business
practice. The Company shall and shall cause Magma,
Magma's Restricted Subsidiaries and the Eligible Joint
Ventures to use the proceeds from any such insurance
policy to repair, replace or otherwise restore all mate-
rial Properties to which such proceeds relate, provided
that the Company or Magma, as the case may be, shall not
be required to repair, replace or otherwise restore any
such material Property if the Company or Magma, respec-
tively, in good faith determines that such inaction is
desirable in the conduct of the business of the Company
or Magma, respectively, or any of Magma's Restricted
Subsidiaries and does not materially adversely affect the
Holders, and provided further that the Company, Magma
(only in respect of agreements governing its Non-Recourse
Debt), the Restricted Subsidiaries and the Eligible Joint
Ventures of Magma shall not be required to apply insur-
ance proceeds to repair, replace or restore any material
Property if they are prevented or restricted in doing so
by the terms of any loan or financing agreement, any
charter document, partnership or joint venture agreement
or any other agreement or instrument, all of which are
expressly acknowledged to take precedence over the terms
hereof.
The Company and Magma may, and may permit Magma's
Restricted Subsidiaries and the Eligible Joint Ventures
to, adopt such other plan or method of protection, in
lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or
reserve to be held and applied to make good losses from
casualties, or otherwise, conforming to the system of
self-insurance maintained by Persons similarly situated
and owning like Properties and which does not materially
adversely affect the Holders, as may be determined by the
Company or Magma, respectively, in good faith.
Section 1008. Limitation on Debt.
(a) The Company shall not permit Magma to Incur any
Debt, including Acquisition Debt, unless, after giving
effect to the Incurrence of such Debt and the receipt and
application of the proceeds therefrom, the Fixed Charge
Ratio of Magma would be equal to or greater than 2.0 to
1.
(b) Notwithstanding the provisions of Section
1008(a), Magma may Incur each and all of the following:
(i) Magma Refinancing Debt, (ii) Debt of Magma to any of
its Restricted Subsidiaries or any Eligible Joint Venture
that is expressly subordinated in right of payment to the
Securities, provided that any transfer of such Debt by a
Restricted Subsidiary of Magma or an Eligible Joint
Venture (other than to another Restricted Subsidiary of
Magma or another Eligible Joint Venture), or any transfer
of Magma's ownership interest, or a portion thereof, in
such Restricted Subsidiary or such Eligible Joint Venture
or the interest, or a portion thereof, of Kiewit in a
Permitted Joint Venture or an Eligible Joint Venture
(which transfer has the effect of causing such Restricted
Subsidiary or such Eligible Joint Venture to cease to be
a Restricted Subsidiary or an Eligible Joint Venture, as
the case may be), shall be deemed to be an Incurrence of
Debt that is subject to the provisions of this Section
1008 other than this clause (ii), (iii) Debt in an aggre-
gate principal amount not to exceed $50 million outstand-
ing at any one time may be issued under or in respect of
Permitted Working Capital Facilities, (iv) Non-Recourse
Debt Incurred in respect of a Permitted Facility in which
Magma has a direct or indirect interest, provided that in
the case of any Non-Recourse Debt Incurred by Magma, such
Debt is expressly subordinated to the Secured Magma Note,
and the final Stated Maturity of such Non-Recourse Debt
shall not be sooner than the Stated Maturity of the
Securities and the Secured Magma Note, (v) Debt in re-
spect of Currency Protection Agreements or Interest Rate
Protection Agreements, (vi) Purchase Money Debt, provided
that the amount of such Debt (net of any original issue
discount) does not exceed 90% of the fair market value of
the Property acquired, (vii) the Securities and other
Debt outstanding as of the Issue Date (other than Debt to
the extent that it is extinguished, retired, defeased or
repaid in connection with the original issuance of the
Securities), including Debt that is Incurred in respect
of interest or discount on such Debt (or Redeemable Stock
issued as dividends in respect of Redeemable Stock)
pursuant to the terms of the agreement or instrument that
governs such Debt (or such Redeemable Stock) as in effect
on the Issue Date, (viii) the Secured Magma Note and (ix)
Debt in an aggregate principal amount not to exceed $50
million outstanding at any one time.
Section 1009. Limitation on Subsidiary Debt.
(a) The Company shall not permit any Restricted
Subsidiaries of Magma or any Eligible Joint Venture, to
Incur any Debt.
(b) Notwithstanding the provisions of Section
1009(a), each and all of the following Debt may be In-
curred by a Restricted Subsidiary or an Eligible Joint
Venture: (i) Debt outstanding as of the Issue Date, (ii)
Debt owed by a Restricted Subsidiary or an Eligible Joint
Venture to Magma or another Restricted Subsidiary of
Magma or another Eligible Joint Venture that either
directly or indirectly owns all or a portion of Magma's
interest in, or directly or indirectly is owned by, such
Restricted Subsidiary or such Eligible Joint Venture, as
the case may be, and that does not own any Permitted
Facility or a direct or indirect interest therein, other
than the Permitted Facility or any other Permitted Facil-
ity that is located on the same localized geothermal
reservoir or a direct or indirect interest therein owned
by such Restricted Subsidiary or Eligible Joint Venture,
(iii) Non-Recourse Debt Incurred in respect of a Permit-
ted Facility in which such Restricted Subsidiary or such
Eligible Joint Venture has a direct or indirect interest
(which may include Construction Financing provided by
Magma to the extent permitted under Section 1010 as a
"Permitted Investment"), (iv) Subsidiary Refinancing
Debt, (v) Acquired Debt, (vi) Debt in respect of Currency
Protection Agreements or Interest Rate Protection Agree-
ments and (vii) Permitted Funding Company Loans.
Section 1010. Limitation on Restricted Payments.
(a) The Company shall not permit Magma or any of
Magma's Restricted Subsidiaries or any Eligible Joint
Venture to, directly or indirectly, make any Restricted
Payment unless at the time of such Restricted Payment and
after giving effect thereto (i) no Event of Default and
no event that, after the giving of notice or lapse of
time or both, would become an Event of Default, has oc-
curred and is continuing, (ii) Magma could Incur at least
$1 of Debt under Section 1008(a) and (iii) the aggregate
amount of all Restricted Payments made by Magma, its
Restricted Subsidiaries and the Eligible Joint Ventures
(the amount so made, if other than in cash, to be deter-
mined in good faith by the Chief Financial Officer of the
Company, as evidenced by an Officers' Certificate, or, if
more than $15 million, by the Board of Directors of the
Company, as evidenced by a Board Resolution) after the
Issue Date, is less than the sum (without duplication) of
(1) 50% of the Adjusted Consolidated Net Income of Magma
for the period (taken as one accounting period) beginning
on the first day of the first fiscal quarter that begins
after the Issue Date and ending on the last day of the
fiscal quarter immediately prior to the date of such
calculation, provided that if throughout any fiscal
quarter within such period the Ratings Categories appli-
cable to the Securities are rated Investment Grade by S&P
and Moody's (or if both do not make a rating of the Secu-
rities publicly available, an equivalent Rating Category
is made publicly available by another Rating Agency),
then 75% (instead of 50%) of the Adjusted Consolidated
Net Income (if more than zero) with respect to such
fiscal quarter shall be included pursuant to this clause
(1), and provided further that if Adjusted Consolidated
Net Income for such period is less than zero, then minus
100% of the amount of such net loss, plus (2) 100% of the
aggregate net cash proceeds received by Magma from and
after the Issue Date from (A) the issuance and sale
(other than to a Restricted Subsidiary or an Eligible
Joint Venture) of its Capital Stock (excluding Redeemable
Stock, but including Capital Stock other than Redeemable
Stock issued upon conversion of, or in exchange for
Redeemable Stock or securities other than its Capital
Stock), (B) the issuance and sale or the exercise of war-
rants, options and rights to purchase its Capital Stock
(other than Redeemable Stock), (C) the issuance and sale
of convertible Debt upon the conversion of such convert-
ible Debt into Capital Stock (other than Redeemable
Stock), but excluding the net proceeds from the issuance,
sale, exchange, conversion or other disposition of its
Capital Stock (I) that is convertible (whether at the
option of Magma or the holder thereof or upon the happen-
ing of any event) into (x) any security other than its
Capital Stock or (y) its Redeemable Stock or (II) that is
Capital Stock referred to in clauses (ii) and (iii) of
the definition of "Permitted Payment" and (D) the Company
in the form of a capital contribution or other equity
advance but only to the extent that such capital contri-
bution or other equity advance increases the shareholde-
rs' equity account on Magma's balance sheet, plus (3) the
net reduction in Investments of the types specified in
clauses (iv) and (v) of the definition of "Restricted
Payment" that result from payments of interest on Debt,
dividends, or repayment of loans or advances, the pro-
ceeds of the sale or disposition of the Investment or
other return of the amount of the original Investment to
Magma, the Restricted Subsidiary or the Eligible Joint
Venture that made the original Investment from the Person
in which such Investment was made, provided that (x) the
aggregate amount of such payments shall not exceed the
amount of the original Investment by Magma or such Re-
stricted Subsidiary that reduced the amount available
pursuant to this clause (iii) for making Restricted Pay-
ments and (y) such payments may be added pursuant to this
clause (3) only to the extent such payments are not
included in the calculation of Adjusted Consolidated Net
Income, provided further that if Investments of the types
specified in clauses (iv) and (v) of the definition of
"Restricted Payment" have been made in any Person and
such Person thereafter becomes a Restricted Subsidiary or
an Eligible Joint Venture, then the aggregate amount of
such Investments (to the extent that they have reduced
the amount available pursuant to this clause (iii) for
making Restricted Payments), net of the amounts previous-
ly added pursuant to this clause (3), may be added to the
amount available for making Restricted Payments (such
aggregate available amount, the "Available Restricted
Payment Amount"). The foregoing clause (iii) shall not
prevent the payment of any dividend within 60 days after
the date of its declaration if such dividend could have
been made on the date of its declaration without viola-
tion of the provisions of this Section 1010(a). Notwith-
standing the foregoing, the Company may permit Magma, its
Restricted Subsidiaries and the Eligible Joint Ventures
to make any Restricted Payments so long as the Company
receives 100% of the amount of such Restricted Payment;
provided, however, that, subject to the following two
sentences, the Holders of the Securities shall have
recourse to a portion of the general assets of the Compa-
ny in an amount equal to the aggregate amount of any
Restricted Payments to the Company, which together with
the aggregate amount of all other Restricted Payments
made by Magma, its Restricted Subsidiaries and the Eligi-
ble Joint Ventures (such amount to be determined in
accordance with clause (iii) above), exceeds the Avail-
able Restricted Payment Amount (the "Restricted Payment
Recourse Amount"). At the Company's option, either (1)
the Available Restricted Payment Amount shall be increa-
sed or (2) the Restricted Payment Recourse Amount shall
be reduced, in either case, by an amount equal to the
amount of any (A) repayment by the Company to Magma or
its Restricted Subsidiaries or Eligible Joint Ventures of
any loans or advances made to the Company by the entity
that receives such repayment and (B) capital contribu-
tions or other equity advances by the Company to Magma or
its wholly owned Restricted Subsidiaries, but only to the
extent that such capital contribution or other equity
advance increases the shareholders' equity account on
Magma's or such wholly owned Restricted Subsidiary's
balance sheet, provided that the aggregate amount of such
increases and reductions shall not exceed the aggregate
amount of Restricted Payments that constituted or in-
creased the Restricted Payment Recourse Amount pursuant
to the immediately preceding sentence. The amount of any
increase in the Available Restricted Payment Amount or
reduction in the Restricted Payment Recourse Amount made
pursuant to the immediately preceding sentence shall not
also be used to increase the Available Restricted Payment
Amount pursuant to the calculation set forth in clause
(iii) above.
(b) None of Magma or any of its Restricted Subsid-
iaries or any Eligible Joint Venture shall be deemed to
have made an Investment at the time that a Person that is
a Restricted Subsidiary of Magma or an Eligible Joint
Venture ceases to be a Restricted Subsidiary or an Eligi-
ble Joint Venture (other than as a result of being desig-
nated as an Unrestricted Subsidiary), although any subse-
quent Investment made by Magma, its Restricted Subsid-
iaries and the Eligible Joint Ventures in such Person
shall be Investments that shall be subject to the forego-
ing paragraph unless and until such time as such Person
becomes a Restricted Subsidiary or an Eligible Joint
Venture. Notwithstanding the foregoing, (i) the designa-
tion of a Restricted Subsidiary as an Unrestricted Sub-
sidiary, in the manner provided in the definition of
"Unrestricted Subsidiary," shall be an Investment that
shall be subject to the foregoing paragraph and (ii) the
transfer of Magma's interest (or any portion thereof) in
an entity that has been deemed to be an Eligible Joint
Venture, directly or indirectly, to an Unrestricted Sub-
sidiary shall be an Investment (to the extent of the
interest transferred) that shall be subject to the fore-
going paragraph.
Section 1011. Limitation on Transactions with
Affiliates.
The Company shall not permit Magma or any of Magma's
Restricted Subsidiaries or any Eligible Joint Venture to,
directly or indirectly, conduct any business or enter
into or permit to exist any transaction or series of
related transactions (including, but not limited to, the
purchase, sale or exchange of Property, the making of any
Investment, the giving of any Guarantee or the rendering
of any service) with any Affiliate of Magma, such Re-
stricted Subsidiary or such Eligible Joint Venture, as
the case may be, unless (i) such business, transaction or
series of related transactions is in the best interest of
Magma, such Restricted Subsidiary or such Eligible Joint
Venture, (ii) such business, transaction or series of
related transactions is on terms no less favorable to
Magma, such Restricted Subsidiary or such Eligible Joint
Venture than those that could be obtained in a comparable
arm's length transaction with a Person that is not such
an Affiliate and (iii) with respect to such business,
transaction or series of related transactions that has a
fair market value or involves aggregate payments equal
to, or in excess of, $10 million, such business, transac-
tion or series of transactions is approved by a majority
of the Board of Directors of the Company (including a
majority of the Disinterested Directors of the Company),
which approval is set forth in a Board Resolution deliv-
ered to the Trustee certifying that, in good faith, the
Board of Directors of the Company believes that such
business, transaction or series of transactions complies
with clauses (i) and (ii) above.
In addition to the foregoing, without complying with
clause (iii) above, the Company may provide to Magma, its
Restricted Subsidiaries or any Eligible Joint Venture (i)
general corporate administrative and management services,
including, without limitation, procurement, construction,
engineering, construction administration, legal, account-
ing, financial, money management, risk management, per-
sonnel, administration and business planning services and
(ii) operating and management services, in each case, as
may be required by Magma, its Restricted Subsidiaries or
the Eligible Joint Ventures from time to time, provided
that such services are furnished (x) in the ordinary
course of business and (y) consistent with past business
practices.
Section 1012. Limitation on Liens.
The Company shall not permit Magma to Incur any Debt
that is secured, directly or indirectly, with, and the
Company shall not permit Magma or any of Magma's Restr-
icted Subsidiaries or any Eligible Joint Venture to grant
a Lien on the Property of Magma, its Restricted Subsid-
iaries or any Eligible Joint Venture now owned or hereaf-
ter acquired unless contemporaneous therewith or prior
thereto the Securities are equally and ratably secured
except for (i) any such Debt secured by Liens existing on
the Property of any entity at the time such Property is
acquired by Magma, any of its Restricted Subsidiaries or
any Eligible Joint Venture, whether by merger, consolida-
tion, purchase of such Property or otherwise, provided
that such Liens (x) are not created, incurred or assumed
in contemplation of such Property being acquired by
Magma, any of its Restricted Subsidiaries or any Eligible
Joint Venture and (y) do not extend to any other Property
of Magma, any of its Restricted Subsidiaries or any
Eligible Joint Venture, (ii) any other Debt that is
required by the terms thereof to be equally and ratably
secured as a result of the Incurrence of Debt that is
permitted to be secured pursuant to another clause of
this Section 1012, (iii) Liens that are granted in good
faith to secure Debt (A) contemplated by clause (iv) of
Section 1008(b) or (B) contemplated by clauses (ii),
(iii) and (vi) of Section 1009(b), provided that, in the
case of Debt owed to a Person other than Magma or a Re-
stricted Subsidiary, the President or Chief Financial
Officer of the Company determines in good faith, as evi-
denced by an Officers' Certificate, that such Liens are
required in order to effect such financing and are not
materially more restrictive, taken as a whole, than
Liens, taken as a whole, customarily accepted (or in the
absence of industry custom, reasonably acceptable) in
comparable financings or comparable transactions in the
applicable jurisdiction, (iv) Liens existing on the Issue
Date, (v) Liens incurred to secure Debt incurred by Magma
as permitted by clause (vi) of Section 1008(b), provided
that such Liens may not cover any Property other than
that being purchased, (vi) Liens on any Property of Magma
securing Permitted Working Capital Facilities, Guarantees
thereof and any Interest Rate Protection Agreements or
Currency Protection Agreements, provided that such Liens
may not extend to the Capital Stock owned by Magma in any
Subsidiary of Magma or any Joint Venture, (vii) Liens in
respect of extensions, renewals, refundings or refinanci-
ngs of any Debt secured by the Liens referred to in the
foregoing clauses, provided that the Liens in connection
with such renewal, extension, refunding or refinancing
shall be limited to all or part of the specific property
that was subject to the original Lien, (viii) Liens
incurred to secure obligations in respect of letters of
credit, bankers' acceptances, surety, bid, operating and
performance bonds, performance guarantees or other simi-
lar instruments or obligations (or reimbursement obliga-
tions with respect thereto)(in each case, to the extent
incurred in the ordinary course of business), (ix) any
Lien arising by reason of (A) any judgment, decree or
order of any court, so long as such Lien is being con-
tested in good faith and is appropriately bonded, and any
appropriate legal proceedings that may have been duly
initiated for the review of such judgment, decree or
order have not been finally terminated or the period
within which such proceedings may be initiated has not
expired, (B) taxes, duties, assessments, imposts or other
governmental charges that are not yet delinquent or are
being contested in good faith, (C) security for payment
of worker's compensation or other insurance, (D) security
for the performance of tenders, contracts (other than
contracts for the payment of money) or leases, (E) depos-
its to secure public or statutory obligations, or to
secure permitted contracts for the purchase or sale of
any currency entered into in the ordinary course of
business, (F) the operation of law in favor of carriers,
warehousemen, landlords, mechanics, materialmen, labor-
ers, employees or suppliers, incurred in the ordinary
course of business for sums that are not yet delinquent
or are being contested in good faith by negotiations or
by appropriate proceedings that suspend the collection
thereof, (G) easements, rights-of-way, zoning and similar
covenants and restrictions and other similar encumbrances
or title defects that do not in the aggregate materially
interfere with the ordinary conduct of the business of
Magma, any of its Restricted Subsidiaries or any Eligible
Joint Venture or (H) leases and subleases of real proper-
ty that do not interfere with the ordinary conduct of the
business of Magma, any of its Restricted Subsidiaries or
any Eligible Joint Venture and that are made on customary
and usual terms applicable to similar properties, (x)
Liens, in addition to the foregoing, that secure obliga-
tions not in excess of $5 million in the aggregate, (xi)
Liens granted in connection with the issuance of the
Funding Corporation Securities, including, but not limit-
ed to, the Lien on all of the Capital Stock of Salton Sea
Funding Corporation, or (xii) Liens to secure the Secured
Magma Note. The Company shall not grant a Lien on (i)
any Capital Stock of Magma, except for the Lien securing
the Securities or (ii) the Magma Note Recourse Assets.
Section 1013. Limitation on Issuance of Capital Stock of
Magma
The Company will not permit Magma to issue to any
Person, create, assume or otherwise cause or suffer to
exist any Capital Stock unless (a)(i) such Capital Stock
is issued in a Magma Equity Offering, (ii) all of the net
proceeds therefrom are used to redeem the Securities in
accordance with Section 1101(c), (iii) (x) the use of all
of the net proceeds from such sale of Magma Capital Stock
to redeem the Securities shall not cause the aggregate
principal amount of the Securities redeemed with the net
proceeds of all sales of Magma Capital Stock, together
with the aggregate principal amount of the Securities
redeemed with the net proceeds of all Company Equity
Offerings, to exceed 35% of the principal amount of the
Securities originally issued and (y) immediately follow-
ing each such redemption, at least $130 million principal
amount of the Securities remains outstanding and (iv) if
any "person" or "group" (as such terms are used in Sec-
tion 13(d) of the Exchange Act) would acquire in such
Magma Equity Offering 10% or more of the Capital Stock of
Magma, the Company shall, as a condition to delivering
such shares of Capital Stock to such person or group, re-
quire such person or group (a "Magma Equity Offering Pur-
chaser") to pledge such Capital Stock (the "Magma Equity
Offering Pledged Shares") to secure the Securities in
accordance with Article Thirteen or (b) Magma issues such
Capital Stock to the Company or a Subsidiary of the
Company for fair market value and such Capital Stock is
pledged to secure the Securities in accordance with
Article Thirteen. For purposes of clause (a)(iv) above,
the Company is entitled to rely on an Officers' Certifi-
cate or an affidavit in the case of an individual of the
purchasing "person" or "group", as the case may be, (as
such term is used in Section 13(d) of the Exchange Act)
in determining whether such person or group, as the case
may be, is a Magma Equity Offering Purchaser.
Section 1014. Purchase of Securities Upon a Change of
Control.
(a) Upon the occurrence of a Change of Control,
each Holder of the Securities shall have the right to
require that the Company repurchase such Holder's Securi-
ties at a purchase price in cash equal to 101% of the
principal amount thereof on the date of purchase plus ac-
crued interest, if any, to the date of purchase.
(b) Within 30 days following a Change of Control,
the Company shall mail a notice to each Holder, with a
copy to the Trustee, stating (i) that a Change of Control
has occurred and that such Holder has the right to re-
quire the Company to purchase such Holder's Securities at
the purchase price described in Section 1014(a) (the
"Change of Control Offer"), (ii) the circumstances and
relevant facts regarding such Change of Control (includ-
ing information with respect to pro forma historical
income, cash flow and capitalization after giving effect
to such Change of Control), (iii) the purchase date
(which shall be not earlier than 30 days nor later than
60 days from the date such notice is mailed) (the "Change
of Control Purchase Date"), (iv) that interest on any
Security not tendered or purchased shall continue to ac-
crue, (v) any Security properly tendered pursuant to the
Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date (assuming
sufficient moneys for the purchase thereof are deposited
with the Trustee), (vi) that Holders electing to have a
Security purchased pursuant to a Change of Control Offer
shall be required to surrender the Security, with the
form entitled "Option of Holder To Elect Purchase" on the
reverse of the Security completed, to the paying agent at
the address specified in the notice prior to the close of
business on the fifth Business Day prior to the Change of
Control Purchase Date, (vii) that a Holder shall be enti-
tled to withdraw such Holder's election if the Paying
Agent receives, not later than the close of business on
the third Business Day (or such shorter periods as may be
required by applicable law) preceding the Change of
Control Purchase Date, a facsimile transmission or letter
setting forth the name of the Holder, the principal
amount of Securities the Holder delivered for purchase,
and a statement that such Holder is withdrawing his
election to have such Securities purchased and (viii)
that Holders that elect to have their Securities pur-
chased only in part shall be issued new Securities having
a principal amount equal to the portion of the Securities
that were surrendered but not tendered and purchased.
On the Change of Control Purchase Date, the Company
shall (i) accept for payment all Securities or portions
thereof tendered pursuant to the Change of Control Offer,
(ii) deposit with the Trustee money sufficient to pay the
purchase price of all Securities or portions thereof so
tendered for purchase and (iii) deliver or cause to be
delivered to the Trustee the Securities properly tendered
together with an Officers' Certificate identifying the
Securities or portions thereof tendered to the Company
for purchase. The Trustee shall promptly mail, to the
Holders of the Securities properly tendered and purchas-
ed, payment in an amount equal to the purchase price, and
promptly authenticate and mail to each Holder a new
Security having a principal amount equal to any portion
of such Holder's Securities that were surrendered but not
tendered and purchased. The Company shall publicly an-
nounce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Pur-
chase Date.
If the Company is prohibited by applicable law from
making the Change of Control Offer or purchasing Securi-
ties thereunder, the Company need not make a Change of
Control Offer pursuant to this Section 1014 for so long
as such prohibition is in effect.
The Company shall comply with all applicable tender
offer rules, including, without limitation, Rule 14e-1
under the Exchange Act, in connection with a Change of
Control Offer.
Section 1015. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
The Company shall not permit Magma or any of Magma's
Restricted Subsidiaries or any Eligible Joint Venture to,
create or cause to become, or as a result of the acqui-
sition of any Person or Property, or upon any Person
becoming a Restricted Subsidiary or an Eligible Joint
Venture, remain subject to, any consensual encumbrance or
consensual restriction of any kind on the ability of any
Restricted Subsidiary or any Eligible Joint Venture to
(a) pay dividends or make any other distributions permit-
ted by applicable law on any Capital Stock of such Res-
tricted Subsidiary or such Eligible Joint Venture owned
by Magma, any other Restricted Subsidiary or any other
Eligible Joint Venture, (b) make payments in respect of
any Debt owed to Magma, any other Restricted Subsidiary
of Magma or any Eligible Joint Venture, (c) make loans or
advances to Magma or to any other Restricted Subsidiary
of Magma or any other Eligible Joint Venture that is
directly or indirectly owned by such Restricted Subsid-
iary or such Eligible Joint Venture or (d) transfer any
of its Property to Magma or to any other Restricted Sub-
sidiary or any other Eligible Joint Venture that directly
or indirectly owns or is owned by such Restricted Subsid-
iary or such Eligible Joint Venture, other than those
encumbrances and restrictions created or existing (i) on
the Issue Date, (ii) pursuant to this Indenture, (iii) in
connection with the Incurrence of any Debt permitted
under the provisions described in clause (iii) of Section
1009(b), provided that, in the case of Debt owed to
Persons other than Magma, its Restricted Subsidiaries and
any Eligible Joint Venture, the President or the Chief
Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that
such encumbrances or restrictions are required to effect
such financing and are not materially more restrictive,
taken as a whole, on the ability of the applicable Res-
tricted Subsidiary or the applicable Eligible Joint
Venture to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through
(d) of this Section 1015 than encumbrances and restric-
tions, taken as a whole, customarily accepted (or, in the
absence of any industry custom, reasonably acceptable) in
comparable financings or comparable transactions in the
applicable jurisdiction, (iv) in connection with the
execution and delivery of an electric power or thermal
energy purchase contract, or other contract related to
the output or product of, or services rendered by a
Permitted Facility, to which such Restricted Subsidiary
or such Eligible Joint Venture is the supplying party or
other contracts with customers, suppliers and contractors
to which such Restricted Subsidiary or such Eligible
Joint Venture is a party and where such Restricted Sub-
sidiary or such Eligible Joint Venture is engaged, di-
rectly or indirectly, in the development, design, engi-
neering, procurement, construction, acquisition, owner-
ship, management or operation of such Permitted Facility,
provided that the President or the Chief Financial Offi-
cer of the Company determines in good faith, as evidenced
by an Officers' Certificate, that such encumbrances or
restrictions are required to effect such contracts and
are not materially more restrictive, taken as a whole, on
the ability of the applicable Restricted Subsidiary or
the applicable Eligible Joint Venture to make the pay-
ments, distributions, loans, advances or transfers re-
ferred to in clauses (a) through (d) of this Section 1015
than encumbrances and restrictions, taken as a whole,
customarily accepted (or, in the absence of any industry
custom, reasonably acceptable) in comparable financings
or comparable transactions in the applicable jurisdic-
tion, (v) in connection with any Acquired Debt, provided
that such encumbrance or restriction was not incurred in
contemplation of such Person becoming a Restricted Sub-
sidiary or an Eligible Joint Venture and provided further
that such encumbrance or restriction does not extend to
any other Property of such Person at the time it became a
Restricted Subsidiary or an Eligible Joint Venture, (vi)
in connection with the Incurrence of any Debt permitted
under clause (iv) of Section 1009(b), provided that, in
the case of Debt owed to Persons other than Magma and its
Restricted Subsidiaries, the President or the Chief
Financial Officer of the Company determines in good
faith, as evidenced by an Officers' Certificate, that
such encumbrances or restrictions taken as a whole are
not materially more restrictive than the encumbrances and
restrictions applicable to the Debt and/or equity being
exchanged or refinanced, (vii) customary non-assignment
provisions in leases or other contracts entered into in
the ordinary course of business of Magma, any Restricted
Subsidiary or any Eligible Joint Venture, (viii) any
restrictions imposed pursuant to an agreement entered
into for the sale or disposition of all or substantially
all of the Capital Stock or Property of any Restricted
Subsidiary or Joint Venture that apply pending the clos-
ing of such sale or disposition, (ix) in connection with
Liens on the Property of such Restricted Subsidiary or
such Eligible Joint Venture that are permitted by Section
1012 but only with respect to transfers referred to in
clause (d) of this Section 1015 or (x) in connection with
the Incurrence of any Debt permitted under clause (ii) of
Section 1009(b).
Section 1016. Limitation on Dispositions.
(a) Subject to the provisions of Article Eight, the
Company shall not permit Magma, any of Magma's Restricted
Subsidiaries or any Eligible Joint Venture to make, any
Asset Disposition unless (i) Magma, the Restricted Sub-
sidiary or the Eligible Joint Venture, as the case may
be, receives consideration at the time of each such Asset
Disposition at least equal to the fair market value of
the Property or securities sold or otherwise disposed of
(to be determined in good faith by the Chief Financial
Officer of the Company, as evidenced by an Officers' Cer-
tificate, or, if more than $15 million, by the Board of
Directors of the Company, as evidenced by a Board Resolu-
tion), (ii) at least 85% of such consideration is re-
ceived in cash or Cash Equivalents or, if less than 85%,
the remainder of such consideration consists of Property
related to the business of Magma as described in the
first sentence of Section 1022, and (iii) unless other-
wise required under the terms of Senior Debt, at Magma's
election, the Net Cash Proceeds are either (A) invested
in the business of Magma, any of its Restricted Subsid-
iaries or any Eligible Joint Venture or (B) applied to
the payment of any Debt of Magma or any of its Restricted
Subsidiaries or any Eligible Joint Venture (or as other-
wise required under the terms of such Debt), provided
that, no such payment of Debt (x) under Permitted Working
Capital Facilities or any other revolving credit agree-
ment shall count for this purpose unless the related loan
commitment, standby facility or the like shall be perma-
nently reduced by an amount equal to the principal amount
so repaid and (y) owed to Magma, a Restricted Subsidiary
thereof or an Eligible Joint Venture shall count for this
purpose, provided further that such investment or such
payment, as the case may be, must be made within 365 days
from the later of the date of such Asset Disposition or
the receipt by Magma, such Restricted Subsidiary or such
Eligible Joint Venture of the Net Cash Proceeds related
thereto. Any Net Cash Proceeds from Asset Dispositions
that are not applied as provided in clause (A) or (B) of
the preceding sentence shall constitute "Excess Proceed-
s." Excess Proceeds shall be applied, as described
below, to make an offer (an "Excess Proceeds Offer") to
purchase Securities at a purchase price equal to 100% of
the principal amount thereof, plus accrued interest, if
any, to the date of purchase.
(b) Notwithstanding the provisions of Section
1016(a), Magma, its Restricted Subsidiaries and the
Eligible Joint Ventures may exchange with other Persons
(i) Property that constitutes a Restricted Subsidiary or
an Eligible Joint Venture for Property that constitutes a
Restricted Subsidiary or an Eligible Joint Venture, (ii)
Property that constitutes a Restricted Subsidiary or an
Eligible Joint Venture for Property that does not consti-
tute a Restricted Subsidiary or an Eligible Joint Ven-
ture, (iii) Property that does not constitute a Restrict-
ed Subsidiary or an Eligible Joint Venture for Property
that does not constitute a Restricted Subsidiary or an
Eligible Joint Venture and (iv) Property that does not
constitute a Restricted Subsidiary or an Eligible Joint
Venture for Property that constitutes a Restricted Sub-
sidiary or an Eligible Joint Venture, provided that in
each case the fair market value of the Property received
is at least equal to the fair market value of the Proper-
ty exchanged as determined in good faith by the Chief
Financial Officer of the Company, as evidenced by an
Officers' Certificate, or, if more than $25 million, by
the Board of Directors of the Company, as evidenced by a
Board Resolution, provided further that the Investment in
the Property received in the exchanges described in
clauses (ii) and (iii) of the prior sentence shall be
subject to Section 1010.
(c) To the extent that any or all of the Net Cash
Proceeds of any Foreign Asset Disposition are prohibited
from (or delayed in) being repatriated to the United
States by applicable local law, the portion of such Net
Cash Proceeds so affected shall not be required to be
applied at the time provided above but may be retained by
any Restricted Subsidiary or any Eligible Joint Venture
so long, but only so long, as the applicable local law
does not permit (or delays) repatriation to the United
States. If such Net Cash Proceeds are transferred by the
Restricted Subsidiary or Eligible Joint Venture that con-
ducted the Foreign Asset Disposition to another Restrict-
ed Subsidiary or Eligible Joint Venture, the Restricted
Subsidiary or Eligible Joint Venture receiving such Net
Cash Proceeds must not be directly or indirectly obligat-
ed on any Debt owed to any Person other than Magma. The
Company shall take or cause Magma or such Restricted Sub-
sidiary or such Eligible Joint Venture to take all ac-
tions required by the applicable local law to permit such
repatriation promptly. Once repatriation of any of such
Net Cash Proceeds is permitted under the applicable local
law, repatriation shall be effected immediately and the
repatriated Net Cash Proceeds shall be applied in the
manner set forth in this Section 1016(c) as if such Asset
Disposition had occurred on the date of such repatria-
tion. In addition, if the Chief Financial Officer of the
Company determines, in good faith, as evidenced by an
Officers' Certificate, that repatriation of any or all of
the Net Cash Proceeds of any Foreign Asset Disposition
would have a material adverse tax consequence to Magma,
the Net Cash Proceeds so affected may be retained outside
of the United States by the applicable Restricted Subsid-
iary or the applicable Eligible Joint Venture for so long
as such material adverse tax consequence would continue.
Notwithstanding the foregoing provisions of this para-
graph to the contrary, if applicable local law prohibits
(or delays) the repatriation of Net Cash Proceeds of a
Foreign Asset Disposition but such local law does not
prohibit the application of such Net Cash Proceeds pursu-
ant to the first sentence of this Section 1016(a), Magma
may apply such Net Cash Proceeds pursuant to such provi-
sion.
(d) If the Securities tendered pursuant to an
Excess Proceeds Offer have an aggregate purchase price
that is less than the Excess Proceeds available for the
purchase of the Securities, Magma may use the remaining
Excess Proceeds for general corporate purposes without
regard to the provisions of this Section 1016(d). The
Company shall not be required to make an Excess Proceeds
Offer pursuant to this Section 1016 if the Excess Pro-
ceeds available therefor are less than $10 million,
provided that the lesser amounts of such Excess Proceeds
shall be carried forward and cumulated for each 36 con-
secutive month period for purposes of determining whether
an Excess Proceeds Offer is required with respect to any
Excess Proceeds of any subsequent Asset Dispositions.
Any such lesser amounts so carried forward and cumulated
need not be segregated or reserved and may be used for
general corporate purposes, provided that such use shall
not reduce the amount of cumulated Excess Proceeds or
relieve the Company of its obligation hereunder to make
an Excess Proceeds Offer with respect thereto.
(e) The Company shall make an Excess Proceeds Offer
by mailing to each Holder, with a copy to the Trustee,
within 30 days after the receipt of Excess Proceeds that
cause the cumulated Excess Proceeds to exceed $10 mil-
lion, a written notice that shall specify the purchase
date, which shall not be less than 30 days nor more than
60 days after the date of such notice (the "Excess Pro-
ceeds Purchase Date"), that shall contain certain infor-
mation concerning the business of the Company and Magma
that the Company believes in good faith shall enable the
Holders to make an informed decision and that shall
contain information concerning the procedures applicable
to the Excess Proceeds Offer (including, without limita-
tion, the right of withdrawal) and the effect of such
Excess Proceeds Offer on the Securities tendered. Hold-
ers that elect to have their Securities purchased shall
be required to surrender such Securities at least one
Business Day prior to the Excess Proceeds Purchase Date.
If at the expiration of the Excess Proceeds Offer period
the aggregate purchase price of the Securities properly
tendered by Holders pursuant to the Excess Proceeds Offer
exceeds the amount of such Excess Proceeds, the Securi-
ties or portions of Securities to be accepted for pur-
chase shall be selected by the Trustee in such manner as
the Trustee deems to be fair and appropriate in the
circumstances.
If the Company is prohibited by applicable law from
making the Excess Proceeds Offer or purchasing Securities
thereunder, the Company need not make an Excess Proceeds
Offer pursuant to this Section 1016 for so long as such
prohibition is in effect.
The Company shall comply with all applicable tender
offer rules, including, without limitation, Rule 14e-1
under the Exchange Act, in connection with an Excess
Proceeds Offer.
Section 1017. Limitation on Certain Sale-Leasebacks.
The Company shall not permit Magma, or any of Magm-
a's Restricted Subsidiaries or any Eligible Joint Venture
to, Incur or otherwise become obligated with respect to
any sale-leaseback (other than a sale-leaseback with
respect to a Permitted Facility that is Non-Recourse) un-
less, (i) (a) if effected by Magma, Magma would be per-
mitted to Incur such obligation under Section 1008 or (b)
if effected by a Restricted Subsidiary or an Eligible
Joint Venture, such Restricted Subsidiary or such Eligi-
ble Joint Venture would be permitted to Incur such obli-
gation under Section 1009(b), assuming for the purpose of
this Section 1017 and Section 1008 and 1009 that (x) the
obligation created by such sale-leaseback is a Capital-
ized Lease and (y) the Capitalized Lease Obligation with
respect thereto is the Attributable Value thereof, (ii)
Magma, such Restricted Subsidiary or such Eligible Joint
Venture is permitted to grant a Lien with respect to the
property that is the subject of such sale-leaseback under
Section 1012, (iii) the proceeds of such sale-leaseback
are at least equal to the fair market value of the prop-
erty sold (determined in good faith by the Company as
evidenced by an Officers' Certificate delivered to the
Trustee in respect of a transaction involving less than
$25 million, or, if equal to or in excess of $25 million,
by the Board of Directors of the Company, as evidenced by
a Board Resolution) and (iv) the Net Cash Proceeds of the
sale-leaseback are applied pursuant to Section 1016.
Section 1018. Provision of Financial Information.
Whether or not the Company is subject to Section
13(a) or 15(d) of the Exchange Act, or any successor
provision thereto, the Company shall file with the Com-
mission the annual reports, quarterly reports and other
documents that the Company would have been required to
file with the Commission pursuant to such Section 13(a)
or 15(d) or any successor provision thereto if the Compa-
ny were subject thereto, such documents to be filed with
the Commission on or prior to the respective dates by
which the Company would have been required to file them.
The Company shall also in any event (a) within 15 days of
each such date (i) transmit by mail to all Holders, as
their names and addresses appear in the Security Regis-
ter, without cost to such Holders, and (ii) file with the
Trustee copies of the annual reports, quarterly reports
and other documents (without exhibits) which the Company
would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act or
any successor provisions thereto if the Company were
subject thereto and (b) if filing such documents by the
Company with the Commission is not permitted under the
Exchange Act, promptly upon written request, supply
copies of such documents (without exhibits) to any pro-
spective Holder.
Section 1019. Limitation on Sale of Subsidiary Preferred
Stock.
The Company shall not permit any of Magma's Restric-
ted Subsidiaries or any Eligible Joint Venture to create,
assume or otherwise cause or suffer to exist any Pre-
ferred Stock except: (i) Preferred Stock outstanding on
the date of this Indenture, including Preferred Stock
issued as dividends in respect of such Preferred Stock
pursuant to the terms of the agreement or instrument that
governs such Preferred Stock as in effect on the Issue
Date, (ii) Preferred Stock held by Magma, a Restricted
Subsidiary of Magma or an Eligible Joint Venture, (iii)
Preferred Stock issued by a Person prior to the time (a)
such Person becomes a Restricted Subsidiary or an Eligi-
ble Joint Venture, (b) such Person merges with or into
another Restricted Subsidiary or another Eligible Joint
Venture or (c) a Restricted Subsidiary or an Eligible
Joint Venture merges with or into such Person (in a
transaction in which such Person becomes a Restricted
Subsidiary or an Eligible Joint Venture), provided that
such Preferred Stock was not issued in anticipation of
such Person becoming a Restricted Subsidiary or an Eligi-
ble Joint Venture or of such merger, (iv) Preferred Stock
issued or agreed to be issued by a Restricted Subsidiary
or an Eligible Joint Venture in connection with the
financing of the construction, design, engineering,
procurement, equipping, developing, operation, ownership,
management, servicing or acquisition of a Permitted
Facility or the retirement of Debt or Preferred Stock
secured by such Permitted Facility or in order to enhance
the repatriation of equity, advances or income or the
increase of after-tax funds available for distribution to
the owners of such Permitted Facility, (v) Preferred
Stock issued or agreed to be issued by a Restricted
Subsidiary or an Eligible Joint Venture in satisfaction
of legal requirements applicable to a Permitted Facility
or to maintain the ordinary course of conduct of such Re-
stricted Subsidiary's or such Eligible Joint Venture's
business in the applicable jurisdiction and (vi) Pre-
ferred Stock that is exchanged for, or the proceeds of
which are used to refinance, any Preferred Stock permit-
ted to be outstanding pursuant to clauses (i) through (v)
hereof (or any extension, renewal or refinancing there-
of), having a liquidation preference not to exceed the
liquidation preference of the Preferred Stock so exchan-
ged or refinanced and having a redemption period no
shorter than the redemption period of the Preferred Stock
so exchanged or refinanced.
Section 1020. Statement by Officers as to Default;
Compliance Certificates.
(a) The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year, an
Officers' Certificate stating that a review of the activ-
ities of the Company, Magma, Magma's Restricted Subsid-
iaries and the Eligible Joint Ventures (signed by a
signatory prescribed under the Trust Indenture Act)
during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to deter-
mining whether the Company has kept, observed, performed
and fulfilled its obligations under this Indenture and
whether the Restricted Subsidiaries and the Eligible
Joint Ventures are in compliance with all covenants of
this Indenture applicable to them and further stating, as
to each such Officer signing such certificate, that to
the best of his knowledge each has kept, observed, per-
formed and fulfilled each and every covenant contained in
this Indenture and is not in default (without regard to
notice requirements or periods of grace) in the perfor-
mance or observance of any of the terms, provisions, and
conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge and what
action each is taking or proposes to take with respect
thereto).
(b) The Company shall, so long as any of the Secu-
rities are outstanding, deliver to the Trustee, forthwith
upon any Officer becoming aware of (i) any Default or
Event of Default or (ii) any event of default under any
other mortgage, indenture or instrument referred to in
Section 501(f), an Officers' Certificate specifying such
Default, Event of Default or other event of default and
what action the Company is taking or proposes to take
with respect thereto.
Section 1021. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Sec-
tion 801, provided pursuant to Section 901(b) and set
forth in Sections 1004 to 1012, inclusive, Section 1015
and Sections 1017 through 1019, inclusive, and Section
1022 if before the time for such compliance the Holders
of at least a majority in principal amount of the Out-
standing Securities shall, by Act of such Holders, either
waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condi-
tion except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of
any such covenant or condition shall remain in full force
and effect.
Section 1022. Limitation on Business and New
Magma Project Developments.
The Company shall cause Magma, Magma's Restricted
Subsidiaries and the Eligible Joint Ventures to, engage
only in (i) the ownership, design, engineering, procure-
ment, construction, development, acquisition, operation,
servicing, management or disposition of Permitted Facili-
ties, (ii) the ownership, creation, development, acquisi-
tion, servicing, management or disposition of Restricted
Subsidiaries and Joint Ventures that own, construct,
develop, design, engineer, procure, acquire, operate,
service, manage or dispose of Permitted Facilities, (iii)
obtaining, arranging or providing financing incident to
any of the foregoing and (iv) other related activities
incident to any of the foregoing. The Company shall not
permit Magma, any of Magma's Restricted Subsidiaries or
any Eligible Joint Venture to make any Investment or
otherwise acquire any Property that is not directly
related to the business of Magma as described in the pre-
ceding sentence (collectively, the "Ineligible Invest-
ments") other than as a part of an Investment or an
acquisition of Property that is predominantly and direct-
ly related to the business of Magma as described above,
and if the aggregate fair market value of such Ineligible
Investments in the aggregate exceeds 10% (the "10% Lim-
it") of the total assets of Magma and its consolidated
Restricted Subsidiaries (as determined in accordance with
GAAP) as determined in good faith by the Chief Financial
Officer of the Company, as evidenced by an Officers' Cer-
tificate, Magma, its Restricted Subsidiaries and the
Eligible Joint Ventures must cease acquiring any addi-
tional Ineligible Investments and, within 18 months of
the acquisition that caused the Ineligible Assets to
exceed the 10% Limit, must return to compliance with the
10% Limit by disposing of Ineligible Assets or otherwise,
provided that such 18-month period may be extended up to
an additional six months if, despite Magma's active ef-
forts during such 18-month period to dispose of such
Ineligible Investments or to otherwise come into compli-
ance with such 10% Limit, Magma is unable to do so be-
cause of regulatory restrictions or delays or adverse
market conditions.
The Company will not permit Magma or any of its Re-
stricted Subsidiaries or any Eligible Joint Ventures to
make any Significant Equity Investment in connection with
the development of any new electric power or thermal
energy generation facility or infrastructure facility
constituting a Permitted Facility (other than any Permit-
ted Facility presently owned by Magma or one of its
Restricted Subsidiaries or an Eligible Joint Venture or
under construction by Magma or one of its Restricted
Subsidiaries or an Eligible Joint Venture) at any time
that the Company owns or controls a majority of the
voting power of the Voting Stock or other Capital Stock
of Magma; provided, however, that the forgoing restric-
tion shall not apply (i) if Magma has debt securities
outstanding at the time of such investment which have an
Investment Grade rating or (ii) to any such Significant
Equity Investment to the extent that the source of funds
therefor is attributable to an equity investment in Magma
or its Restricted Subsidiary or Eligible Joint Venture,
as applicable, made by the Company or another entity
other than Magma or any Subsidiary of Magma or any Eligi-
ble Joint Venture.
Section 1023. Use of Proceeds and Secured Magma Note.
(a) The Company shall loan all of the proceeds from
the sale of the Securities to Magma immediately after
receipt thereof in exchange for which Magma shall make
and deliver the Secured Magma Note to the Company. The
Company shall immediately thereafter cause Magma to use
all of the proceeds of such loan to repay a portion of
the funds borrowed from the Company under the Credit
Agreement, dated as of February 24, 1995, by and between
CE Acquisition Company, Inc. and the Company, and the
Company simultaneously therewith shall use such funds to
repay a portion of the funds borrowed under the Non-
Recourse Credit Agreement, dated as of February 24, 1995,
by and among the Company, certain banks and other finan-
cial institutions and Credit Suisse, New York Branch, as
Agent.
(b) The Company shall apply and use all payments
received under the Secured Magma Note to pay the princi-
pal of (and premium, if any) and interest on the Securi-
ties.
(c) The Company shall accelerate the maturity of
the Secured Magma Note, if and only if, it is directed to
do so by the Trustee or the Holders of a majority in
principal amount of the Outstanding Securities.
(d) The Company shall not (i) consent to any sell,
assignment, transfer, exchange or other disposition of,
or any grant of any option with respect to the Secured
Magma Note Collateral or (ii) consent to the creation or
incurrence of or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any
of the Secured Magma Note Collateral (or any part there-
of), or any interest therein that would materially ad-
versely effect the Holders.
(e) The Company shall not modify or consent to a
modification of, consent to any waiver of the terms of or
acquiesce in any nonperformance by Magma of its obliga-
tions under the terms of the Secured Magma Note (except
as expressly provided therein), unless, to the satisfac-
tion of the Trustee, Magma shall expressly assume in
writing all of the obligations of the Company under this
Indenture and the Securities.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Redemption.
(a) The Securities may be redeemed at the election
of the Company, in the amounts, at any time on or after
[ ], 2000, at the Redemption Prices specified in
the form of Security hereinbefore set forth (together
with any applicable accrued and unpaid interest to the
Redemption Date) and subject to the conditions specified
in the form of Security hereinbefore set forth.
(b) Notwithstanding the foregoing, at any time, or
from time to time, on or prior to [ ], 1998, the
Company may, at its option, use all or a portion of the
net cash proceeds of one or more Company Equity Offer-
ings, within 90 days of such offering, to redeem up to an
aggregate of 35% of the principal amount of the Securi-
ties originally issued (taken together with any Securi-
ties redeemed pursuant to the provisions of Section
1101(c) following a Magma Equity Offering), at a Redemp-
tion Price equal to [ ]% of the principal amount thereof
plus accrued interest to the redemption date, provided
that immediately following such redemption, at least $130
million principal amount of the Securities remain out-
standing.
(c) The Company shall within 60 days of a Magma
Equity Offering use all of the net cash proceeds from
such offering to redeem up to an aggregate of 35% of the
principal amount of the Securities originally issued
(taken together with any Securities redeemed pursuant to
the provisions of Section 1101(b) following a Company
Equity Offering), at a Redemption Price equal to [ ]% of
the principal amount thereof plus accrued interest to the
redemption date, provided that immediately following such
redemption, at least $130 million principal amount of the
Securities remain outstanding.
Section 1102. Applicability of Article.
Redemption of Securities, as permitted or required
by this Indenture and the provisions of the Securities,
shall be made in accordance with such provisions and this
Article Eleven.
Section 1103. Notice to Trustee.
The election of the Company to redeem any Securities
pursuant to Section 1101(a) or (b) or commence a Magma
Equity Offering shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company
pursuant to Section 1101(a) and in the case of any re-
demption pursuant to Sections 1101(b) and (c), the Compa-
ny shall, at least 60 days for a redemption pursuant to
Section 1101(a) and at least 45 days for a redemption
pursuant to Section 1101(b) or (c) prior to the Redemp-
tion Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee
of such Redemption Date and of the principal amount of
Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be
Redeemed.
If less than all the outstanding Securities are to
be redeemed pursuant to Section 1101, the Securities or
portions of Securities to be redeemed or accepted shall
be selected by the Trustee pro rata, by lot or otherwise
in such manner as the Trustee deems to be fair and rea-
sonable, provided that the Trustee shall redeem Securi-
ties only in denominations of $1,000 principal amount and
integral multiples thereof.
The Trustee shall promptly notify the Company and
each Security Registrar in writing of the Securities
selected for redemption and, in the case of any Securi-
ties selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture and or the Secu-
rities, unless the context otherwise requires, all provi-
sions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal
amount of such Securities that has been or is to be re-
deemed.
Section 1105. Notice of Redemption.
Notice of redemption shall be given as provided in
Section 106 not less than 30 nor more than 60 days for a
redemption pursuant to Section 1101(a) and not later than
30 days for a redemption pursuant to Section 1101(b) or
(c) prior to the Redemption Date, to each Holder of Secu-
rities to be redeemed.
All notices of redemption shall identify the Securi-
ties to be redeemed (including CUSIP Numbers) state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities are
to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the partic-
ular Securities to be redeemed,
(d) that on the Redemption Date the Redemption
Price shall become due and payable upon each such secu-
rity to be redeemed and that, unless the Company shall
default in the payment of the Redemption Price and any
applicable accrued interest, and
(e) the name of the Paying Agent or Agents and the
place or places where such Securities are to be surren-
dered for payment of the Redemption Price.
Notice of redemption of Securities shall be given by
the Company or, at the Company's request, by the Trustee
in the name and at the expense of the Company and shall
be irrevocable.
Section 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or if
the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest
Payment Date) any applicable accrued and unpaid interest
on, all the Securities that are to be redeemed on that
date.
Section 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless
the Company shall default in the payment of the Redemp-
tion Price and any applicable accrued and unpaid inter-
est) such Securities shall not bear interest. Upon sur-
render of any such Security for redemption in accordance
with said notice, such Security shall be paid by the
Company at the Redemption Price, together with any appli-
cable accrued and unpaid interest to the Redemption Date;
provided that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close
of business on the relevant Record Dates according to
their terms and the provisions of Section 307.
If any Security called for redemption in accordance
with Section 1101 shall not be so paid upon surrender
thereof for redemption, the unpaid Redemption Price
thereof shall, until paid, bear interest from the Re-
demption Date at the rate or manner provided by the
Security.
Section 1108. Securities Redeemed in Part.
Any Security that is to be redeemed only in part
shall be surrendered at an office or agency of the Compa-
ny designated for that purpose pursuant to Section 1002
(with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and make available for
delivery to the Holder of such Security without service
charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unre-
deemed portion of the principal amount of the Security so
surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
Section 1201. Company's Option to Effect Defeasance or
Covenant Defeasance.
The Company may elect, at its option at any time, to
have Section 1202 or Section 1203 applied to the Out-
standing Securities (as a whole and not in part) upon
compliance with the conditions set forth below in this
Article Twelve. Any such election shall be evidenced by
a Board Resolution.
Section 1202. Defeasance and Discharge.
Upon the Company's exercise of its option to have
this Section 1202 applied to the Outstanding Securities
(as a whole and not in part), the Company shall be deemed
to have been discharged from its obligations with respect
to such Securities as provided in this Section 1202 on
the date after the conditions set forth in Section 1204
are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Company
shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are con-
cerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same),
subject to the following which shall survive until other-
wise terminated or discharged hereunder: (a) the rights
of Holders of such Securities to receive, solely from the
trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securi-
ties when payments are due, (b) the Company's obligations
with respect to such Securities under Sections 304, 305,
306, 1002, 1003 and 1004 (only with respect to the corpo-
rate existence and rights of the Company), (c) the
rights, powers, trusts, duties and immunities of the
Trustee under this Indenture, (d) Article Eleven, (e) t-
his Article Twelve and (f) Article Thirteen. Subject to
compliance with this Article Twelve, the Company may
exercise its option to have this Section 1202 applied to
the Outstanding Securities (as a whole and not in part)
notwithstanding the prior exercise of its option to have
Section 1203 applied to such Securities.
Section 1203. Covenant Defeasance.
Upon the Company's exercise of its option to have
this Section applied to the Outstanding Securities (as a
whole and not in part), (a) the Company, Magma, Magma's
Restricted Subsidiaries and the Eligible Joint Ventures
shall be released from their obligations under Section
801(c), Sections 1005 through 1019, inclusive, Section
1022, any covenant provided pursuant to Section 901(b),
and, upon satisfaction of the conditions set forth in
Section 1306(e), Article Thirteen and (b) the occurrence
of any event specified in Section 501(a) (solely with re-
spect to Offers to Purchase), Section 501(c), Section
501(d) (with respect to any of Section 801(c) and Sec-
tions 1005 through 1019, inclusive, Section 1022, and any
such covenants provided pursuant to Section 901(b)),
Section 501(e) or Section 501(f) shall be deemed not to
be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on
and after the date the conditions set forth in Section
1204 are satisfied (hereinafter called "Covenant Defea-
sance"). For this purpose, such Covenant Defeasance
means that, with respect to such Securities, the Company,
Magma, Magma's Restricted Subsidiaries and the Eligible
Joint Ventures may omit to comply with and shall have no
liability in respect of any term, condition or limitation
set forth in any such specified Section (to the extent so
specified in the case of Sections 501(a) and 501(d)),
whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision
herein or in any other document; but the remainder of
this Indenture and such Securities shall be unaffected
thereby.
Section 1204. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to the appli-
cation of Section 1202 or Section 1203 to the Outstanding
Securities:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another
trustee that satisfies the requirements contemplated by
Section 609 and agrees to comply with the provisions of
this Article Twelve applicable to it) as trust funds in
trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated
solely to the benefits of the Holders of such Securities,
(i) money in an amount, or (ii) U.S. Government Obliga-
tions that through the scheduled payment of principal and
interest in respect thereof in accordance with their
terms shall provide, not later than one day before the
due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge, the prin-
cipal of (premium, if any) and any installment of accrued
interest on such Securities on the respective Stated
Maturities thereof or, if the Company makes arrangements
satisfactory to the Trustee for the redemption of the
Securities prior to their Stated Maturity, on any earlier
Redemption Date, in accordance with the terms of this In-
denture and such Securities.
(b) In the event of an election to have Section
1202 apply to the Outstanding Securities, the Company
shall have delivered to the Trustee (i) either (1) an
Opinion of Counsel to the effect that Holders shall not
recognize income, gain or loss for Federal income tax
purposes as a result of such deposit, defeasance and
discharge and shall be subject to Federal income tax on
the same amount and in the same manner and at the same
times as would have been the case if such deposit, defea-
sance and discharge had not occurred and the Company had
paid or redeemed such Securities on the applicable dates,
which Opinion of Counsel must be based upon a ruling of
the Internal Revenue Service to the same effect or a
change in applicable Federal income tax law or related
Treasury regulations after the date of the Indenture or
(2) a ruling directed to the Trustee or the Company re-
ceived from the Internal Revenue Service to the same
effect as the aforementioned Opinion of Counsel, (ii) an
Opinion of Counsel to the effect that the creation of the
defeasance trust does not violate the Investment Company
Act of 1940 and (iii) an Opinion of Counsel, delivered
after the passage of 123 days following the deposit of
moneys and/or U.S. Government Obligations as provided in
Section 1204(a), to the effect that such deposit does not
constitute a payment voidable under any applicable bank-
ruptcy, insolvency, reorganization or similar laws af-
fecting creditors' rights generally, including, but not
limited to, Section 544, 547 or 548 of the U.S. Bank-
ruptcy Code or Article 2, Section 15 or Article 10 of the
New York Debtor and Creditor Law, as they may be amended
from time to time.
(c) In the event of an election to have Section
1203 apply to the Outstanding Securities, the Company
shall have delivered to the Trustee (i) an Opinion of
Counsel to the effect that the Holders of such Outstand-
ing Securities shall not recognize income, gain or loss
for Federal income tax purposes as a result of the depos-
it and Covenant Defeasance to be effected with respect to
such Securities and shall be subject to Federal income
tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and
Covenant Defeasance were not to occur and the Company had
paid or redeemed such Securities on the applicable dates,
(ii) an Opinion of Counsel to the effect that the cre-
ation of the defeasance trust does not violate the In-
vestment Company Act of 1940 and (iii) an Opinion of
Counsel, delivered after the passage of 123 days follow-
ing the deposit of moneys and/or U.S. Government Obliga-
tions as provided in Section 1204(a), to the effect that
such deposit does not constitute a payment voidable under
any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, in-
cluding, but not limited to, Section 544, 547 or 548 of
the U.S. Bankruptcy Code or Article 2, Section 15 or
Article 10 of the New York Debtor and Creditor Law, as
they may be amended from time to time.
(d) (i) Immediately after giving effect to such
deposit, on a pro forma basis no Default or Event of De-
fault or event that after the giving of notice or lapse
of time or both would become an Event of Default, with
respect to the Outstanding Securities shall have occurred
and be continuing on the date of such deposit or (ii) no
Default or Event of Default under Section 501(g) or (h)
shall have occurred and be continuing at any time during
the period ending on the 123rd day after the date of such
deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such
period).
(e) Such Defeasance or Covenant Defeasance shall
not cause the Trustee to have a conflicting interest
within the meaning of the Trust Indenture Act (assuming
all Securities are in default within the meaning of such
Act).
(f) Such Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a
default under, any other agreement or instrument to which
the Company is a party or by which it is bound.
(g) Such Defeasance or Covenant Defeasance shall
not result in the trust arising from such deposit consti-
tuting an investment company within the meaning of the
Investment Company Act of 1940, as amended, unless such
trust shall be registered under such Act or exempt from
registration thereunder.
(h) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent with respect to
such Defeasance or Covenant Defeasance have been complied
with.
(i) If the Securities are listed on a national
securities exchange, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the
Securities shall not be delisted as a result of such
deposit, defeasance and discharge.
Section 1205. Deposited Money and U.S. Government Obli-
gations to Be Held in Trust; Miscellaneous
Provisions.
Subject to the provisions of the last paragraph of
Section 1003, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes
of this Section 1205 and Section 1206, the Trustee and
any such other trustee are referred to collectively as
the "Trustee") pursuant to Section 1204 or otherwise in
respect of the Outstanding Securities shall be held in
trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent
(other than the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in
respect of principal and any premium and interest, but
money so held in trust need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or as-
sessed against the U.S. Government Obligations deposited
pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee
or other charge that by law is for the account of the
Holders of Outstanding Securities.
Anything in this Article Twelve to the contrary not-
withstanding, the Trustee shall deliver or pay to the
Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in
Section 1204 that, in the opinion of a nationally recog-
nized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee,
are in excess of the amount thereof that would then be
required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to
the Outstanding Securities.
Section 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money in accordance with this Article Twelve
with respect to any Securities by reason of any order or
judgment of any court or governmental authority enjoin-
ing, restraining or otherwise prohibiting such applica-
tion, then the obligations under this Indenture and such
Securities from which the Company has been discharged or
released pursuant to Section 1202 or 1203 shall be re-
vived and reinstated as though no deposit had occurred
pursuant to this Article Twelve with respect to such
Securities, until such time as the Trustee or Paying
Agent is permitted to apply all money held in trust
pursuant to Section 1205 with respect to such Securities
in accordance with this Article Twelve; provided that if
the Company makes any payment of principal of or any
premium or interest on any such Security following such
reinstatement of its obligations, the Company shall be
subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held
in trust.
ARTICLE THIRTEEN
Security and Pledge of Collateral
Section 1301. Grant of Security Interest.
(a) To secure the full and punctual payment when
due and the full and punctual performance of the Obliga-
tions, the Company hereby grants to the Trustee, for the
benefit of the Trustee and the Holders and shall cause
each of its Subsidiaries to grant to the Trustee, a first
priority security interest in all its right, title and
interest in and to (i) all of the Closing Date Pledged
Shares and Additional Pledged Shares, (ii) all dividends,
cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect
of or in exchange for such pledged shares, and any ac-
count or Cash Equivalent in which any of such property is
deposited or invested, including any earnings thereon,
(iii) any and all proceeds of all of the foregoing and
(iv) all certificates, instruments, documents or writings
representing or evidencing any and all of the foregoing.
(b) The Company shall, as a condition to delivering
Magma Equity Offering Pledged Shares to a Magma Equity
Offering Purchaser, require the Magma Equity Offering
Purchaser in accordance with Section 1013 to grant to the
Trustee, for the benefit of the Trustee and the Holders,
a first priority security interest in all its right,
title and interest in and to (i) all of the Magma Equity
Offering Pledged Shares, (ii) all dividends, cash, in-
struments and other property from time to time received,
receivable or otherwise distributed in respect of or in
exchange for the Magma Equity Offering Pledged Shares,
and any account or Cash Equivalent in which any of such
property is deposited or invested, including any earnings
thereon, (iii) any and all proceeds of all of the forego-
ing and (iv) all certificates, instruments, documents or
writings representing or evidencing any and all of the
foregoing (such rights, titles and interests in and to
the assets in clauses (a) and (b) of this Section 1301,
collectively, the "Collateral").
Section 1302. Delivery of Pledged Shares.
(a) The Company shall deliver and shall cause each
of its Subsidiaries to deliver to the Trustee on the
Issue Date all certificates or instruments representing
or evidencing all Closing Date Pledged Shares and such
shares shall be held by or on behalf of the Trustee
pursuant hereto and shall be in suitable form for trans-
fer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in
form and substance satisfactory to the Trustee.
(b) The Company shall deliver to the Trustee on each
date the Company acquires Additional Pledged Shares (i)
all certificates or instruments representing or evidenc-
ing such Additional Pledged Shares acquired on such date
and such shares shall be held by or on behalf of the
Trustee pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Trustee and
(ii) an Opinion of Counsel to the effect that the Trustee
shall have a valid and perfected security interest in
such Additional Pledged Shares to secure the Obligations
of the Company under the Indenture and that under the
Uniform Commercial Code as in effect on such date in the
State of New York, no interest of any creditor of the
Company is equal or prior to the security interest of the
Trustee in such Additional Pledged Shares.
(c) The Company shall cause to be delivered to the
Trustee on each date a Subsidiary of the Company acquires
Additional Pledged Shares all certificates or instruments
representing or evidencing such Additional Pledged Shares
acquired on such date and such shares shall be held by
or on behalf of the Trustee pursuant hereto and the
Pledge Agreement and shall be in suitable form for trans-
fer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in
form and substance satisfactory to the Trustee.
(d) The Company shall, as a condition to delivering
Magma Equity Offering Pledged Shares to a Magma Equity
Offering Purchaser, require the Magma Equity Offering
Purchaser to deliver to the Trustee on each date of
acquisition of Magma Equity Offering Pledged Shares all
certificates or instruments representing or evidencing
such Magma Equity Offering Pledged Shares; such shares
shall be held by or on behalf of the Trustee pursuant
hereto and the Pledge Agreement. All certificates or in-
struments representing or evidencing Magma Equity Offer-
ing Pledged Shares shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed in-
struments of transfer or assignment in blank, all in form
and substance satisfactory to the Trustee.
(e) The Trustee shall have the right, at any time,
in its discretion and without notice to the Company, to
transfer to or to register in the name of the Trustee or
any of its nominees any or all of the Collateral. In
addition, the Trustee shall have the right at any time to
exchange certificates or instruments representing or
evidencing Pledged Shares for certificates or instruments
of different denominations.
Section 1303. Representations, Warranties and Covenants.
(a) The Company hereby represents and warrants on
the date of the Issue Date and on each date of acqui-
sition by the Company of any Additional Pledged Shares
and shall cause each Magma Equity Holder to represent and
warrant on each date of acquisition of Pledged Shares
(except in the case of clause (iii) of this Section 1303
to which the Company will represent and warrant on such
date) as follows:
(i) It is the record and beneficial owner of,
and has good and valid title to, the Pledged Shares
pledged on such date free and clear of any Lien, except
for the Lien created by this Indenture or the Pledge
Agreement, as the case may be.
(ii) It has full corporate or other power, au-
thority and legal right to pledge all the Collateral
pledged on such date and all other Collateral pledged by
it pursuant to this Indenture or the Pledge Agreement, as
the case may be.
(iii) The Pledged Shares pledged on such date
have been duly authorized and validly issued and are
fully paid and nonassessable.
(iv) The pledge in accordance with the terms
of this Indenture or the Pledge Agreement, as the case
may be, of the Collateral pledged on such date secures
payment of the Obligations and creates a valid and per-
fected first priority Lien on the Collateral, enforceable
as such against all creditors of the Company or the Magma
Equity Holder, as the case may be, and any Persons pur-
porting to purchase any Pledged Shares from the Company
or the Magma Equity Holder, as the case may be.
(b) The Company shall not and shall cause each of
its Subsidiaries to agree not to, and shall, as a condi-
tion to delivering Magma Equity Offering Pledged Shares
to a Magma Equity Offering Purchaser, require the Magma
Equity Offering Purchaser to agree not to, directly or
indirectly, create, incur, assume or suffer to exist any
Lien on the Collateral, except such Liens that are per-
mitted under Section 1012.
Section 1304. Pledge Agreement
(a) The Company shall cause each of its Subsidiar-
ies on each date such Subsidiary acquires Additional
Pledged Shares, and shall, as a condition to delivering
Magma Equity Offering Pledged Shares to a Magma Equity
Offering Purchaser, require the Magma Equity Offering
Purchaser on each date of acquisition of Magma Equity
Offering Pledged Shares, to enter into an agreement, in
the form and substance satisfactory to the Trustee (each
a "Pledge Agreement"), to grant to the Trustee, for the
benefit of the Trustee and the Holders, the security
interest required under Section 1301(a) and (b), respec-
tively.
(b) Each Pledge Agreement shall, among other
things, (i) contain all of the terms of this Indenture
relating to the security and pledge of the Collateral for
the benefit of the Trustee and the Holders, including
without limitation, the representations, warranties,
covenants, agreements and remedies contained in this
Article Thirteen, (ii) provide for an Opinion of Counsel
to be delivered to the Trustee on the day of execution of
the Pledge Agreement to the effect that the Trustee shall
have a valid and perfected security interest in such
pledged shares to secure the Obligations of the Company
under the Indenture and that under the Uniform Commercial
Code as in effect on the date of such Pledge Agreement in
the State of New York, no interest of any creditor of the
Magma Equity Holder is equal or prior to the security
interest of the Trustee in such pledged shares and (iii)
in the case of a Pledge Agreement entered into pursuant
to clause (a) of this Section 1304, provide that follow-
ing the sale, transfer, conveyance or other disposition
by a Magma Equity Offering Purchaser (other than to a
Subsidiary or Affiliate) of Capital Stock of Magma that
would result in such Magma Equity Offering Purchaser
owning less than 10% of the Capital Stock of Magma, the
Lien on the remaining Capital Stock of Magma owned by
such Magma Equity Offering Purchaser shall terminate and
such Collateral shall be released without any further
action on the part of the Trustee or any other Person.
Section 1305. Further Assurances.
The Company agrees that, at any time and from time
to time, at the expense of the Company, the Company shall
promptly execute and deliver and shall cause each of its
Subsidiaries to execute and deliver, and shall, as a
condition to delivering Magma Equity Offering Pledged
Shares to a Magma Equity Offering Purchaser, require the
Magma Equity Offering Purchaser to agree to execute and
deliver, all further instruments and documents and take
all further action that may be necessary or that the
Trustee may reasonably request in order to perfect and
protect any Lien granted or purported to be granted
hereby or under the Pledge Agreements or to enable the
Trustee to exercise and enforce its rights and remedies
hereunder and under the Pledge Agreements with respect to
any Collateral.
Section 1306. Dividends; Investments of Collateral;
Voting Rights; Release Upon Discharge or
Defeasance.
(a) The Company shall and shall cause Magma and
each of its Subsidiaries to, and shall, as a condition to
delivering Magma Equity Offering Pledged Shares to a
Magma Equity Offering Purchaser, require the Magma Equity
Offering Purchaser to promptly deliver to the Trustee all
non-cash dividends and other non-cash distributions paid
in respect of the Pledged Shares. All such dividends and
other distributions shall be held by the Trustee as
Collateral and shall, if received by the Company or any
Magma Equity Holder, be received in trust for the benefit
of the Trustee, be segregated from the other property or
funds of the Company and each Magma Equity Holder and be
forthwith delivered to the Trustee as Collateral in the
same form as so received (with any necessary endorse-
ment).
(b) As long as no Default shall have occurred and
be continuing, (i) the Company and each Magma Equity
Holder shall be entitled to exercise any and all voting
and other consensual rights relating to their Pledged
Shares or any part thereof for any purpose, provided,
however, that no vote shall be cast, and no consent,
waiver or ratification given or action taken, which would
be inconsistent with or violate any provision of this
Indenture, the Securities, the Secured Magma Note or
Pledge Agreements and (ii) the Company and each Magma
Equity Holder take and receive and may invest, loan or
otherwise use or dispose of cash dividends and other cash
distributions paid in respect of the Pledged Shares.
(c) Upon the occurrence and during the continuance
of a Default (i) all rights of the Company and each Magma
Equity Holder to exercise the voting and other consensual
rights that they would otherwise be entitled to exercise
pursuant to Section 1306(b) shall cease and all such
rights shall thereupon be vested in the Trustee who shall
thereupon have the sole right to exercise such voting and
other consensual rights and (ii) all cash dividends and
other cash distributions payable in respect of the
Pledged Shares shall be promptly delivered to the Trustee
and held as additional collateral for the benefit of the
Holders. All such dividends and other distributions
shall, if received by the Company or any Magma Equity
Holder, be received in trust for the benefit of the
Trustee, be segregated from the other property or funds
of the Company and each Magma Equity Holder and be forth-
with delivered to the Trustee as additional collateral in
the same form as so received (with any necessary endorse-
ment). Any cash dividends or distributions delivered to
or otherwise held by the Trustee pursuant to this Section
1306, and any other cash constituting additional col-
lateral delivered to the Trustee, shall be invested by
the Trustee in Cash Equivalents, as specifically directed
in writing by the Company.
(d) In order to permit the Trustee to exercise the
voting and other consensual rights which it may be enti-
tled to exercise pursuant to Section 1306(c)(i), and to
receive all dividends and distributions which it may be
entitled to receive under Section 1306(a) and (c)(ii),
the Company shall and shall cause each of its Subsidiar-
ies to, and shall, as a condition to delivering Magma
Equity Offering Pledged Shares to a Magma Equity Offering
Purchaser, require the Magma Equity Offering Purchaser
to, upon written notice from the Trustee, from time to
time execute and deliver to the Trustee such instruments
as the Trustee may reasonably request.
(e) The Lien granted pursuant to this Indenture and
each Pledge Agreement with respect to all of the Collat-
eral shall terminate and all such Collateral shall be
released without any further action on the part of the
Trustee or any other Person on the day the conditions in
Article Four or Twelve, respectively are satisfied. Upon
the release of any Collateral, the Trustee shall execute
and deliver to the Company and each Magma Equity Holder,
as the case may be, an instrument or instruments acknowl-
edging the release of such Collateral from this Indenture
or the Pledge Agreements, as the case may be, and the
discharge of the Lien on such Collateral created by this
Article Thirteen or the Pledge Agreements, as the case
may be, and will duly assign, transfer and deliver to the
Company and each Magma Equity Holder, as the case may be,
(without recourse and without any representation or
warranty) such Collateral. [Notwithstanding the forego-
ing, as long as no Default shall have occurred and be
continuing, the Lien on the cash dividends and other cash
distributions paid in respect of (i) the Closing Date
Pledged Shares and the Additional Pledged Shares which
have been invested in Permitted Investments (as defined
in the Indenture governing the 10 1/4% Senior Discount
Securities due 2004 of the Company) (other than in Cash
Equivalents), loaned or otherwise used by the Company or
its Subsidiaries and (ii) the Magma Offering Pledged
Shares shall be released without any further action on
the part of the Trustee or any other Person.]
Section 1307. Trustee Appointed Attorney-in-Fact.
The Company hereby appoints and shall cause
each of its Subsidiaries to appoint, and shall, as a
condition to delivering Magma Equity Offering Pledged
Shares to a Magma Equity Offering Purchaser, require the
Magma Equity Offering Purchaser to appoint the Trustee as
the Company's and the Magma Equity Holder's attorney-in-
fact, with full authority in the place and stead of the
Company and the Magma Equity Holder and in the name of
the Company and the Magma Equity Holder or otherwise,
from time to time in the Trustee's discretion, to take
any action and to execute any instrument which the Trust-
ee may deem necessary or advisable in order to accomplish
the purposes of this Article Thirteen, including to re-
ceive, endorse and collect all instruments made payable
to the Company or each Magma Equity Holder representing
any dividend, interest payment or other distribution in
respect to the Collateral or pay part thereof and to give
full discharge for the same. This power, being coupled
with an interest, is in the case of the Company and shall
be in the case of each Magma Equity Holder irrevocable.
Section 1308. Trustee May Perform.
If the Company fails to perform any agreement con-
tained in this Article Thirteen, the Trustee may, but
shall not be obligated to, itself perform, or cause
performance of, such agreement, and the expenses of the
Trustee incurred in connection therewith shall be payable
by the Company under Section 607.
Section 1309. Trustee's Duties.
The powers conferred on the Trustee under this Arti-
cle Thirteen are solely to protect its interest in the
Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of
any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Trustee
shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any
Collateral.
Section 1310. Remedies upon Event of Default.
If an Event of Default shall have occurred and be
continuing, the Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies
provided for herein, or otherwise available to it, all
the rights and remedies provided a secured party upon the
default of a debtor under the Uniform Commercial Code at
that time or any other applicable law and the Trustee may
also, without demand of performance or other demand,
defense, presentment, protest, advertisement or notice of
any kind, except as specified below, collect, receive,
appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, assign, give an
option or options to purchase or otherwise dispose of and
deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broke-
r's board or at any of the Trustee's offices or else-
where, for cash, on credit or for future delivery, upon
such terms as the Trustee may determine to be commercial-
ly reasonable, and the Trustee or any Holder may be the
purchaser of any or all of the Collateral so sold and
thereafter hold the same, absolutely, free from any right
or claim of whatsoever kind. The Company agrees and
shall cause each of its Subsidiaries to agree, and shall,
as a condition to delivering Magma Equity Offering
Pledged Shares to a Magma Equity Offering Purchaser,
require the Magma Equity Holder to agree that, to the
extent notice of sale shall be required by law, at least
10 day's notice to the Company or such Magma Equity
Holder, as the case may be, of the time and place of any
public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The
Trustee shall not be obligated to make any sale of Col-
lateral regardless of notice of sale having been given.
The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
The Trustee shall incur no liability as a result of the
sale of the Collateral, or any part thereof, at any
private sale, conducted in a commercially reasonable
manner. The Company hereby waives and agrees to cause
each of its Subsidiaries to waive, and shall, as a condi-
tion to delivering Magma Equity Offering Pledged Shares
to a Magma Equity Offering Purchaser, require the Magma
Equity Offering Purchaser to waive any claims against the
Trustee arising by reason of the fact that the price at
which any Collateral may have been sold at such a private
sale was less than the price which might have been ob-
tained at a public sale, even if the Trustee accepts the
first offer received and does not offer such Collateral
to more than one offeree.
Section 1311. Registration Rights; Private Sales.
(a) If the Trustee shall determine to exercise its
right to sell any or all of the Pledged Shares pursuant
to Section 1310 after the occurrence and during the
continuance of an Event of Default, and if in the opinion
of the Trustee it is necessary or advisable to have the
Pledged Shares, or that portion thereof to be sold,
registered under the provisions of the Securities Act,
the Company will cause Magma to (i) execute and deliver,
and cause the directors and officers of Magma to execute
and deliver, all such instruments and documents, and do
or cause to be done all such other acts as may be, in the
opinion of the Trustee, necessary or advisable to regis-
ter the Pledged Shares, or that portion thereof to be
sold, under the provisions of the Securities Act, (ii)
cause the registration statement relating thereto to
become effective and to remain effective for a period of
one year from the date of the first public offering of
the Pledged Shares, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Trustee,
are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission
applicable thereto. The Company agrees to cause Magma to
comply with the provisions of the securities or "Blue
Sky" laws of any and all jurisdictions which the Trustee
shall designate and to make available to its security
holders as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provi-
sions of Section 11(a) of the Securities Act.
(b) The Company recognizes and shall advise each
Magma Equity Holder that, by reason of certain prohibi-
tions contained in the Securities Act and applicable
state securities laws, the Trustee may be compelled, with
respect to any sale of all or any part of the Collateral,
to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account,
for investment, and not with a view to the distribution
or resale thereof. The Company acknowledges and agrees
and shall cause each of its Subsidiaries to acknowledge
and agree, and shall, as a condition to delivering Magma
Equity Offering Pledged Shares to a Magma Equity Offering
Purchaser, require the Magma Equity Offering Purchaser to
acknowledge and agree that any such sale may result in
prices and other terms less favorable to the seller than
if such sale were a public sale without such restrictions
and, notwithstanding such circumstances, agrees that any
such sale shall be deemed to have been made in a commer-
cially reasonable manner. The Trustee shall be under no
obligation to delay the sale of any of the Pledged Shares
for the period of time necessary to permit the Company to
register such securities for public sale under the Secu-
rities Act, or under applicable state securities laws,
even if the Company would agree to do so.
(c) The Company agrees and shall cause each of its
Subsidiaries to agree and shall, as a condition to deliv-
ering Magma Equity Offering Pledged Shares to a Magma
Equity Offering Purchaser, require the Magma Equity
Offering Purchaser to agree to do all such other acts as
may be reasonably necessary to make any sale or sales of
all or any portion of the Pledged Shares pursuant to this
Indenture valid and binding and in compliance with the
Certificates of Incorporation and By-Laws of Magma, and
all laws, treaties, rules or regulations or determina-
tions of an arbitrator or a court or other governmental
authority. The Company authorizes the Trustee to dis-
close information regarding Magma in the Trustee's pos-
session to a potential buyer of the Pledged Shares in a
foreclosure sale, provided that such buyer agrees in
writing in a manner reasonably acceptable to the Company
to keep any non-public information confidential. The
Company further agrees and shall cause each of its Sub-
sidiaries to agree, and shall, as a condition to deliv-
ering Magma Equity Offering Pledged Shares to a Magma
Equity Offering Purchaser, require the Magma Equity
Holder to agree that a breach of any of the covenants
contained in this Section 1311 will cause irreparable
injury to the Trustee, that the Trustee has no adequate
remedy at law in respect of such breach and, as a conse-
quence, that each and every covenant contained in this
Section 1311 shall be specifically enforceable against
the Company and each Magma Equity Holder, and the Company
hereby waives and agrees and shall cause each of its
Subsidiaries to waive and agree, and shall, as a condi-
tion to delivering Magma Equity Offering Pledged Shares
to a Magma Equity Offering Purchaser, require the Magma
Equity Holder to waive and agree not to assert any de-
fenses against an action for specific performance of such
covenants except for a defense that no Event of Default
has occurred and is continuing or prior payment or prior
performance.
(d) The Company shall pay all expenses incurred in
connection with any registration statement filed pursuant
to this Section 1311, including (i) all registration and
filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws, (iii) printing expenses,
(iv) the fees and expenses incurred in connection with
the listing of the Pledged Shares, (v) fees and disburse-
ments of counsel for the Company and customary fees and
expenses for independent certified public accountants
retained by the Company (including the expenses relating
to the preparation and delivery of any comfort letters
requested by the Trustee) and (vi) fees and expenses of
counsel for the Trustee.
(e) The Company will, and hereby does indemnify, to
the extent permitted by applicable law, the Trustee, its
officers and directors and each Person, if any, who
controls such the Trustee within the meaning of Section
15 of the Securities Act, as amended from time to time,
against all losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses (under the
Securities Act or common law or otherwise), joint or
several, caused by any untrue statement or alleged untrue
statement of a material fact contained in any registra-
tion statement filed pursuant to this Section 1311 or any
related prospectus (and as amended or supplemented if the
Company shall have furnished any amendments or supple-
ments thereto) or any preliminary prospectus or caused by
any omission or alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities (or
proceedings in respect thereof) or expenses are caused by
any untrue statement or alleged untrue statement con-
tained in or by any omission or alleged omission from
information furnished in writing to the Company by such
holder expressly for use therein.
(f) The grant of the registration rights in this
Section 1311 does not compel the Trustee to conduct a
public sale of the Pledged Shares upon foreclosure.
Section 1312. Application of Proceeds.
Upon the occurrence and during the continuing of an
Event of Default and after the acceleration of the Secu-
rities pursuant to Section 502 (so long as such accelera-
tion has not been rescinded), any cash held by the Trust-
ee as Collateral and all cash proceeds received by the
Trustee in respect of any sale of, collection from, or
other realization upon, all or any part of the Collater-
al, shall be applied by the Trustee first to pay the
reasonable expenses incurred in connection with the sale
of, collection from, or other realization on such Collat-
eral, including the holding of such Collateral, preparing
such Collateral for sale, lease or the like, and the
reasonable attorneys' fees and legal expenses of the
Trustee or the Holders incurred therewith and thereafter
in the manner specified in Section 506.
Section 1313. Continuing Lien.
Except as provided in Section 1302 and 1306, this
Indenture shall create a continuing Lien on the Collater-
al that shall (a) remain in full force and effect until
payment in full of the Securities, (b) be binding upon
the Company and its respective successors and assigns and
(c) inure to the benefit of the Trustee and its succes-
sors, transferees and assigns.
Section 1314. Certificates and Opinions.
The Company shall comply with:
(a) Section 314(b) of the Trust Indenture Act,
relating to Opinions of Counsel regarding the Lien of
this Indenture; and
(b) Section 314(d) of the Trust Indenture Act,
relating to, among other matters, the release of Collat-
eral from the Lien of this Indenture and Officers' Cer-
tificates or other documents regarding fair value of the
Collateral, to the extent such provisions are applicable.
Any certificate or opinion required by Section 314(d) of
the Trust Indenture Act may be executed and delivered by
an Officer of the Company to the extent permitted by
Section 314(d) of the Trust Indenture Act.
ARTICLE FOURTEEN
Limited Recourse Liability of the Company
Section 1401. Limited Recourse Liability of the Company.
Satisfaction of the obligations of the Company to
perform and observe and make good the obligations con-
tained in this Indenture and the Securities, for the
payment of the principal of or premium, if any, or inter-
est on any Securities, or any part thereof, or for any
claim based thereon or otherwise in respect thereof or
related thereto, shall be had solely from the Collateral,
the Magma Note Recourse Assets and the general assets of
the Company up to an amount equal to the Restricted
Payment Recourse Amount. The Holders will have no other
recourse to the general assets of the Company. The
liability of the Company under this Indenture, for the
payment of the principal of or premium, if any, or inter-
est on any Securities, or any part thereof, or for any
claim based thereon or otherwise in respect thereof is
limited and no recourse shall be had in the event of any
non-performance by the Company of any such obligations to
(a) any assets or properties of the Company other than
the Company's interest in the Collateral, the Magma Note
Recourse Assets and the general assets of the Company up
to an amount equal to the Restricted Payment Recourse
Amount or (b) any of the officers, directors, employees,
or stockholders of the Company or any Affiliate of the
Company and no judgment for any deficiency upon the
obligations of the Company under this Indenture, for the
payment of the principal of or premium, if any, or inter-
est on any Securities, or any part thereof, or for any
claim based thereon or otherwise in respect thereof or
related thereto, shall be obtainable by the Holders or
the Trustee or any Affiliate of the Company or any incor-
porator, stockholder, officer, employee, or director,
past, present or future of the Company or any Affiliate
of the Company.
Nothing contained in this Section 1401 shall be con-
strued (a) as preventing the Trustee, the Holders and any
Person acting on behalf of the Trustee or the Holders
from naming the Company in any action or proceeding
brought by the Trustee, the Holders and any Person acting
on behalf of the Trustee or the Holders to enforce and to
realize upon the Collateral, the Magma Note Recourse
Assets and the general assets of the Company up to an
amount equal to the Restricted Payment Recourse Amount
and (b) as modifying, qualifying or affecting in any
manner whatsoever the interests created by this Indenture
or the enforcement thereof by the Holders or the Trustee.
----------------
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall to-
gether constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, all
as of the day and year first above written.
CALIFORNIA ENERGY COMPANY,
INC.
By:-------------------------------
Attest: Name:
Title:
- -------------------------
THE BANK OF NEW YORK, as Trustee
By:------------------------------
Attest: Name:
Title:
- -------------------------
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , 1995, before me personally came
, to me known, who, being by me duly sworn, did
depose and say that he is of California Energy
Company, Inc., one of the corporations described in and that
executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
--------------------------------------------
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the day of , 19 , before me personally
came , to me known, who, being by
me duly sworn, did depose and say that [he -- she] is
of The Bank of New York, one of the corpora-
tions described in and that executed the foregoing instru-
ment; that [he -- she] knows the seal of said corporation;
that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that [he -- she] signed
[his -- her] name thereto by like authority.
----------------------------------------
EXHIBIT A
PROMISSORY NOTE
Date of Issue: as of ____________
FOR VALUE RECEIVED, the undersigned, [Borrower], a
______________________ corporation ("Borrower"), hereby
promises to pay to the order of [Lender], a ___________
corporation ("Lender"), $ __________ (the "Principal") and
any interest accrued thereon, upon demand by the Lender at
any time six months subsequent to the date on which the [ ]%
Limited Recourse Senior Secured Notes due 2003 (the "Notes")
of California Energy Company, Inc. that were issued pursuant
to an Indenture dated as of July [ ], 1995 between California
Energy Company, Inc. and The Bank of New York shall have been
repaid in full or such earlier date as may be permitted under
the terms of such Indenture.
Section 1. Accrual and Payment of Interest
under this Promissory Note
(a) The Principal shall accrue interest from the date
hereof at an annual rate (computed on the basis of a 360 day
year) of ___% which, to the extent permitted by applicable
law, shall be compounded semi-annually on each _____ and
______ and added to the Principal hereof.
Section 2. Subordination
Payment of Principal of and interest on this Promissory
Note shall be subordinated to the fullest extent permitted by
applicable law to the prior payment in full of the principal
of (premium, if any) and interest on any other indebtedness
for money borrowed of the Borrower, to the extent that the
same is thus due and owing whether at its stated maturity,
upon acceleration or otherwise.
Section 3. Notices
All notices required or permitted hereunder shall be
given by telex where appropriate and confirmed in writing or
by prepaid registered mail to the addresses of the parties
set forth in this Section 3 or to such other address as
either party shall duly specify by written notice to the
other.
If to Borrower to:
_______________________
_______________________
_______________________
_______________________
If to Lender to:
_______________________
_______________________
_______________________
_______________________
Section 4. No Waiver
No failure or delay of either party hereto to exercise
any power under this Promissory Note or to insist upon strict
compliance by either party hereto of any obligations hereun-
der shall constitute a waiver of either party's rights to
demand exact compliance with the terms hereof.
Section 5. Governing Law
This Promissory Note is made under and in accordance
with the laws of the ________________, and the rights of the
parties in the construction and effect of each and every
provision hereof shall be subject to the exclusive juris-
diction of and shall be construed and regulated according to
the laws of _____________________.
[Borrower]
By ______________________
Name:
Title:
EXHIBIT B
SECURED NOTE DUE 2003
$200,000,000 July __, 1995
Magma Power Company, a corporation duly organized
and existing under the laws of the State of Nevada (herein
called "Issuer", which term includes any successor Person as
hereinafter provided), for value received, hereby promises to
pay to the order of California Energy Company, Inc., a corpo-
ration duly organized and existing under the laws of the
State of Delaware (such corporation and any subsequent holder
of this Note being herein referred to as the "Holder"),
having its principal office at 302 South 36th Street, Suite
400, Omaha, Nebraska 68131, the principal sum of Two Hundred
Million Dollars ($200,000,000) on [ ], 2003 (the
"Maturity Date") in accordance with the provisions hereof,
with interest on such principal sum from time to time out-
standing, computed from the date hereof, in semi-annual
installments of interest on June [ ] and December [ ] of
each year, commencing initially on December [ ], 1995, at a
rate of [ ]% per annum on the unpaid balance hereof, until
the principal hereof is paid in full or duly provided for.
This Note is entered into in connection with that certain
Indenture, dated as of July [ ], 1995 (the "Indenture"),
between the Holder and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee"). Capitalized
terms used but not otherwise defined herein shall have mean-
ing ascribed to them in the Indenture.
1. Payment of Principal, Premium (if any) and In-
terest.
Payments of principal, premium, if any, and inter-
est on this Note shall be made at the address of the Holder
set forth above, or at such other address as the Holder may
designate in writing. Interest will be computed on the basis
of a 360-day year of twelve 30-day months. Principal and
interest shall be paid in money of the United States that at
the time of payment is legal tender for public and private
debts. Any principal and interest on this Note, that is
overdue shall bear interest at the rate of [ ]% per annum
(to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due
until they are paid or duly provided for, and such interest
shall be payable on demand.
2. Prepayment.
(a) Subject to the provisions in this Section 2,
this Note shall be prepaid in connection with any redemption,
Change of Control Offer or Excess Proceeds Offer of or relat-
ing to the [ ]% Limited Recourse Senior Secured Notes due
2003 (the "Securities") of the Holder issued pursuant to the
Indenture. Each such prepayment of this Note shall be made
three days prior to the time that payment is required to be
made to the Trustee under the Indenture in respect of any
redemption of the Securities pursuant to Article Eleven,
Change of Control Offer pursuant to Section 1014 of the
Indenture or Excess Proceeds Offer pursuant to Section 1016
of the Indenture. Any such prepayment of this Note in the
case of a redemption, Change of Control Offer or Excess Pro-
ceeds Offer shall be in an amount equal to the principal
amount of the Securities to be redeemed or repurchased, as
the case may be; plus accrued interest on the amount prepaid
through the Redemption Date, Change of Control Purchase Date
or Excess Proceeds Purchase Date, as the case may be, of the
Securities; and a prepayment premium if and to the extent
that a premium is required to be paid in connection with the
redemption or repurchase, as the case may be, of the Securi-
ties. Any amounts paid as such prepayment premium shall not
reduce the principal amount of this Note. After the condi-
tions to defeasance in Article Twelve of the Indenture or
discharge in Article Four of the Indenture are satisfied, the
Holder may extinguish or accelerate, in whole or in part,
this Note or the Holder and the Issuer may amend this Note,
in such manner as they agree.
(b) Except as set forth in subparagraphs (a) above
and (c) below, this Note may not be prepaid in whole or in
part.
(c) Notwithstanding the foregoing provisions of
this Section 2, the principal amount of this Note shall be
reduced (and to such extent shall be deemed satisfied) by the
principal amount of any Securities purchased or otherwise
acquired by or on behalf of the Holder other than pursuant to
the redemption or repurchase provisions of the Securities and
surrendered to the Trustee for cancellation in accordance
with the provisions of the Securities. The same Securities
shall reduce the principal amount of this Note only once.
3. Defaults.
"Default Event", whenever used herein, means any
one of the following events (whatever the reason for such
Default Event and whether it shall be voluntary or involun-
tary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of the principal of (or
premium, if any, on) the Note at its maturity (whether the
Maturity Date or upon mandatory prepayment, acceleration or
otherwise), and continuance of such default for a period of
30 days; or
(b) default in the payment of interest when it be-
comes due and payable, and continuance of such default for a
period of 30 days; or
(c) failure of the Holder to have a perfected
security interest in the Secured Magma Note Collateral (as
defined in the Pledge Agreement, dated July __, 1995 (the
"Pledge Agreement"), by and between the Issuer and the Hold-
er), and continuance of such failure for a period of 30 days;
or
(d) default in the performance, or breach, of any
covenant, agreement or warranty of the Issuer in this Note
(other than a covenant, agreement or warranty a default in
whose performance or whose breach is elsewhere in this Sec-
tion 3 specifically dealt with), and continuance of such de-
fault or breach for a period of 30 days after there has been
given to the Issuer by the Holder a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
or
(e) default or defaults under any bond, debenture,
note or other evidence of Debt by the Issuer or any Signifi-
cant Subsidiary of Issuer (or under any mortgage, indenture
or instrument under which there may be issued or by which
there may be secured or evidenced any Debt by the Issuer or
any such Significant Subsidiary) (other than Non-Recourse
Debt of Significant Subsidiaries of the Issuer) if either (i)
such default results from failure to pay principal of such
Debt in excess of $25 million when due after any applicable
grace period or (ii) as a result of such default, the maturi-
ty of such Debt has been accelerated prior to its scheduled
maturity and such default has not been cured within the
applicable grace period, and such acceleration has not been
rescinded, and the principal amount of such Debt, together
with the principal amount of any other Debt of the Issuer and
its Significant Subsidiaries (not including Non-Recourse Debt
of the Significant Subsidiaries of the Issuer) that is in de-
fault as to principal, or the maturity of which has been
accelerated, aggregates $25 million or more; or
(f) the entry by a court of one or more judgments
or orders against the Issuer or any Significant Subsidiary of
the Issuer for the payment of money that in aggregate exceeds
$25 million (excluding the amount thereof covered by insur-
ance or by a bond written by a Person other than an Affiliate
of the Issuer), which judgments or orders have not been
vacated, discharged or satisfied or stayed pending appeal
within 60 days from the entry thereof, provided that such a
judgment or order shall not be a Default Event hereunder if
such judgment or order does not require any payment by the
Issuer or any Significant Subsidiary of the Issuer, except to
the extent that such judgment is only against Property that
secures Non-Recourse Debt that is otherwise permitted under
the Indenture, and the Issuer could, at the expiration of the
applicable 60 day period, after giving effect to such judge-
ment or order and the consequences thereof, Incur at least $1
of Debt under the provisions described in Section 1008(a) of
the Indenture; or
(g) the entry by a court having jurisdiction in
the premises of (i) a decree or order for relief in respect
of the Issuer or any Significant Subsidiary of the Issuer in
an involuntary case or proceeding under the Federal bank-
ruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency,
or other similar law or (ii) a decree or order adjudging the
Issuer or any Significant Subsidiary of the Issuer a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or compo-
sition of or in respect of the Issuer or any Significant
Subsidiary of the Issuer under the Federal bankruptcy laws,
as now or hereafter constituted, or any other applicable
Federal, State or foreign bankruptcy, insolvency, or similar
law, or appointing a custodian, receiver, liquidator, assign-
ee, trustee, sequestrator or other similar official of the
Issuer or any Significant Subsidiary of the Issuer or of any
substantial part of the Property or assets of the Issuer or
any Significant Subsidiary of the Issuer, or ordering the
winding up or liquidation of the affairs of the Issuer or any
Significant Subsidiary of the Issuer, and the continuance of
any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecu-
tive days;
(h) (i) the commencement by the Issuer or any Sig-
nificant Subsidiary of the Issuer of a voluntary case or pro-
ceeding under the Federal bankruptcy laws, as now or hereaf-
ter constituted, or any other applicable federal, state, or
foreign bankruptcy, insolvency or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or
insolvent, or (ii) the consent by the Issuer or any Signif-
icant Subsidiary of the Issuer to the entry of a decree or
order for relief in respect of the Issuer or any Significant
Subsidiary of the Issuer in an involuntary case or proceeding
under the Federal bankruptcy laws, as now or hereafter con-
stituted, or any other applicable federal, state, or foreign
bankruptcy, insolvency, or other similar law or to the com-
mencement of any bankruptcy or insolvency case or proceeding
against the Issuer or any Significant Subsidiary of the
Issuer, or (iii) the filing by the Issuer or any Significant
Subsidiary of the Issuer of a petition or answer or consent
seeking reorganization or relief under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applica-
ble Federal, state or foreign bankruptcy, insolvency or other
similar law, or (iv) the consent by the Issuer or any Signif-
icant Subsidiary of the Issuer to the filing of such petition
or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Issuer or any Significant Subsidiary
of the Issuer or of any substantial part of the Property or
assets of the Issuer or any Significant Subsidiary of the
Issuer, or the making by the Issuer or any Significant Sub-
sidiary of the Issuer of an assignment for the benefit of
creditors, or (v) the admission by the Issuer or any Signifi-
cant Subsidiary of the Issuer in writing of its inability to
pay its debts generally as they become due, or (vi) the
taking of corporate action by the Issuer or any Significant
Subsidiary of the Issuer in furtherance of any such action;
or
(i) Payment of the Securities is accelerated and
not rescinded pursuant to Section 502 of the Indenture.
4. Acceleration of Maturity.
If a Default Event (other than Default Event speci-
fied in Section 3(g) or (h) hereof) occurs and is continuing,
then and in every such case, the Holder, if directed by the
Trustee or the holders of a majority in principal amount of
the Outstanding Securities, shall declare the entire unpaid
principal amount of this Note and all accrued interest there-
on and all other sums due under this Note to be due and pay-
able immediately by a notice in writing to the Issuer, and
upon any such declaration such amounts shall become immedi-
ately due and payable. The Holder may not accelerate unless
so directed. If a Default Event specified in Section 3(g) or
(h) hereof occurs, the entire unpaid principal amount of this
Note and all accrued interest thereon shall ipso facto become
immediately due and payable without any declaration or other
Act on the part of the Holder.
At any time after such a declaration of accelera-
tion has been made and before a judgment or decree for pay-
ment of the money due has been obtained by the Holder, the
Holder, if directed by the Trustee or the holders of a major-
ity in principal amount of the Outstanding Securities, may by
written notice to the Issuer rescind and annul such declara-
tion and its consequences if:
(a) the Issuer has paid or deposited with the
Holder a sum sufficient to pay:
(i) all overdue interest on the Notes (with-
out duplication of any amount thereof paid or deposited
pursuant to clause (ii) or (iii) below),
(ii) all prepayments that have become due
under Section 2 hereof and, to the extent that payment of
such interest is lawful, interest thereon at the rate provid-
ed in Section 1 hereof (without duplication of any amount
thereof paid or deposited pursuant to clause (i) above or
clause (iii) below),
(iii) to the extent that payment of such
interest is lawful, interest upon overdue interest at the
rate provided in Section 1 hereof (without duplication of any
amount thereof paid or deposited pursuant to clause (i) or
(ii) above),
(iv) all sums paid or advanced by the Holder
in connection with the enforcement (whether through negotia-
tions, legal proceedings or otherwise) of this Note and the
reasonable compensation, expenses, disbursements and advances
of the Holder, its agents and counsel;
and
(b) all Default Events have been cured or waived.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
5. Covenants.
The Issuer shall, and (to the extent applicable)
shall cause its Restricted Subsidiaries and the Eligible
Joint Ventures to, observe and perform each of the covenants
contained in Section 801, 802, 1004, 1005, 1006, 1007, 1008,
1009, 1010, 1011, 1012, 1013, 1015, 1016, 1017, 1019, 1020,
1022 and 1023 of the Indenture (as the same may be amended,
modified or supplemented from time to time with or without
the consent of the Issuer, all of which provisions, together
with all definitions in the Indenture applicable to such
provisions are incorporated by reference as if set forth
herein in their entirety), to the extent that such covenants
expressly reference Magma (or its Restricted Subsidiaries or
the Eligible Joint Ventures) and require the Holder to cause
Magma (or its Restricted Subsidiaries or the Eligible Joint
Ventures) or Subsidiaries of the Company to take (or refrain
from taking) the actions specified therein, as though Magma
were directly bound by such covenants; all determinations
required to be made in such covenants by the Company, its
Board of Directors or its officers shall be made by the Issu-
er, its Board of Directors or its officers and references to
the Indenture in such covenants shall, where applicable, mean
this Note.
6. Security.
To secure the full and punctual payment when due
and the full and punctual performance of the obligations of
the Issuer hereunder, the Issuer shall grant to the Holder a
security interest in all its right, title and interest in and
to the Secured Magma Note Collateral.
7. Payment of Principal, Premium and Interest.
The Issuer shall duly and punctually pay the prin-
cipal of (and premium, if any) and interest on this Note in
accordance with the terms of this Note.
8. Presentment, Demands and Waivers.
The Issuer hereby waives presentment and demand for
payment, notice of dishonor, protest and notice of protest of
this Note and agrees to pay all costs of collection when
incurred, including reasonable attorneys' fees, which costs
may be added to the amount due under this Note and be receiv-
able therewith and to perform and comply with each of the
terms, covenants and provisions contained in this Note on the
part of the Issuer to be observed or performed and no alter-
ation, amendment or waiver of any provision of this Note .
Except as provided herein, no extension of time for payment
of this Note, or any installment hereof and no alteration or
amendment of any provision of this Note, shall release,
discharge, modify, change or affect the liability of the
Issuer under this Note. No failure or delay of the Holder
hereto to exercise any power under this Note or to insist
upon strict compliance by the Issuer of any obligations here-
under shall constitute a waiver of the Holder's rights to
demand exact compliance with the terms hereof. The rights
and remedies of the Holder provided under this Note and the
Pledge Agreement are cumulative, may be exercised singly or
concurrently and are cumulative to, and not exclusive of any
rights or remedies provided by law or otherwise available.
9. Notices.
All notices required or permitted hereunder shall
be given by telex where appropriate and confirmed in writing
or by prepaid registered mail to the addresses of the parties
set forth in this Section 26 or to such other address as
either party shall duly specify by written notice to the
other.
If to Issuer to:
302 South 36th Street
Suite 400
Omaha, Nebraska 68131
Attention: Chief Financial Officer
Telecopier: (402) 345-9318
If to Holder to:
302 South 36th Street
Suite 400
Omaha, Nebraska 68131
Attention: Chief Financial Officer
Telecopier: (402) 345-9318
10. Effect of Headings.
The Section headings herein are for convenience
only and shall not affect the construction hereof.
11. Successors and Assigns.
All covenants and agreements in this Note by the
Issuer shall bind its successors and assigns, whether so ex-
pressed or not.
12. Separability Clause.
In case any provision in this Note shall be inval-
id, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any
way be affected or impaired thereby, it being intended that
all of the provisions hereof shall be enforceable to the full
extent permitted by law.
13. Third Party Beneficiaries.
The Issuer acknowledges that the Trustee and the
holders of the Securities are express beneficiaries of this
Note. Nothing in this Note, express or implied, shall give
to any Person other than the Holder, the Trustee and the
holders of the Securities and their successors, any benefit
or any legal or equitable right, remedy or claim under this
Note. Notwithstanding the foregoing, no holder of the Secu-
rities shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Note, or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder has previously given writ-
ten notice to the Trustee of a continuing Default Event,
(ii) the holders of a majority in principal amount of the
Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Default
Event in its own name as Trustee under the Indenture and
(iii) after a reasonable period of time the Trustee has
failed to act; provided, that it is understood and intended
that no one or more holders of the Securities shall have any
right in any manner whatever by virtue of, or by availing of,
any provision of this Note to affect, disturb or prejudice
the rights of any other holders of the Securities, or to
obtain or to seek to obtain priority or preference over any
other holders of the Securities or to enforce any right under
this Note, except in the manner herein provided and for the
equal and ratable benefit of all the holders of the Securi-
ties. This Note may not be used to interpret another note,
indenture, loan agreement (other than the Pledge Agreement)
or debt agreement of the Issuer or any of its Subsidiaries.
Except for the Indenture and the Pledge Agreement, no other
note, indenture or loan or debt agreement may be utilized to
interpret this Note.
14. Limited Recourse.
No director, officer, employee, stockholder or
incorporator of the Issuer shall have any liabilities for any
obligations of the Issuer under this Note or for any claim
based on, in respect of or by reason of such obligations or
their creation.
15. Governing Law.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED UNDER
THE LAWS OF THE STATE OF NEW YORK, (WITHOUT REGARD TO PRINCI-
PLES OF CONFLICTS OF LAWS) AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS. THE
ISSUER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS NOTE, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION
OF THE AFORESAID COURTS. THE ISSUER IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT THAT IT MAY EFFECTIVELY DO SO UNDER APPLI-
CABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE HOLDER TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE ISSUER IN ANY
OTHER JURISDICTION.
16. Amendment, Modification and Waivers.
No amendment or waiver of any provision of this
Note, nor consent to any departure by the Issuer therefrom,
shall in any event be effective unless the same shall be in
writing and signed by the Issuer and the Holder and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; pro-
vided, however, that no amendment, waiver or consent with
respect to this Note shall be effective without the prior
consent of, as applicable and if required, the Trustee or
Holders of the required percentage of the Securities to a
corresponding change in the Indenture or the Securities
unless, to the satisfaction of the Trustee, Magma shall
expressly assume in writing all obligations of the Company
under the Indenture and the Securities in accordance with the
terms of the Indenture.
17. Costs and Expenses and Indemnification.
The Issuer agrees:
(a) To reimburse the Holder upon its request for
all reasonable expenses, disbursements and advances incurred
or made by the Holder in connection with the enforcement
(whether through negotiations, legal proceedings or other-
wise) of this Note and the Pledge Agreement (including the
reasonable compensation, expenses, disbursements and advances
of its agents and counsel).
(b) To indemnify the Holder in its individual
capacity and each of its officers, directors, agents and
counsel for, and to hold it harmless against, any loss,
damage, claim, liability or expense incurred without negli-
gence or bad faith on such Person's part, arising out of or
in connection with any investigative, administrative or
judicial proceeding relating to or arising out of this Note
or the Pledge Agreement or any of the transactions contem-
plated hereby or thereby.
18. Terminology.
Whenever used herein, the singular number shall
include the plural, the plural the singular, and the words
"Holder" and "Issuer" shall include their respective succes-
sors and assigns.
IN WITNESS WHEREOF, the Issuer has duly executed
this Note as of the day and year first above written.
MAGMA POWER COMPANY
_____________________________
By:
Title:
[Seal]
Attest:
_________________________
By:
Title: