EXHIBIT 4.1(C)
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE dated as of June 20, 1996 (this
"Supplemental Indenture") by and between SALTON SEA FUNDING CORPORATION, a
Delaware corporation (the "Funding Corporation"), and CHEMICAL TRUST COMPANY
OF CALIFORNIA, a California corporation, as Trustee (together with its
successors in such capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, the Funding Corporation and the Trustee have entered into
that certain Trust Indenture dated as of July 21, 1995 (as amended, modified
or supplemented by that certain First Supplemental Indenture dated as of
October 18, 1995 and this Supplemental Indenture and as subsequently amended,
modified or supplemented, the "Indenture") by and between the Funding
Corporation and the Trustee;
WHEREAS, the Funding Corporation has been formed for the sole
purpose of issuing securities under the Indenture, as principal and as agent
for the Guarantors (as defined in the Indenture) and for entering into those
transactions incidental thereto;
WHEREAS, the Indenture provides that the terms thereof may be
amended or supplemented from time to time by the Funding Corporation and the
Trustee, without the consent of the Holders (as defined in the Indenture),
pursuant to a supplemental indenture, for one or more of the purposes set
forth in Section 8.1 of the Indenture, which purposes include, without
limitation, to provide for the issuance of Additional Securities (as defined
in the Indenture) on the conditions set forth in Article 2 of the Indenture;
WHEREAS, the Funding Corporation has determined to issue $70,000,000
principal amount of 7.02% Series D Senior Secured Notes due 2000 (the "Series
D Securities") and $65,000,000 principal amount of 8.30% Series E Senior
Secured Bonds due 2011 (the "Series E Securities" and
together with the Series D Securities, the "Series D and E Securities");
WHEREAS, the proceeds derived by the Funding Corporation from the
issuance of the Series D and E Securities will be loaned by the Funding
Corporation to the Partnership Guarantors (as defined in the Indenture) and
used by (i) CalEnergy Operating Company and Vulcan Power Company to acquire
interests in Del Ranch, L.P., Elmore, L.P., Leathers, L.P. and Vulcan/BN
Geothermal Power Company, (ii) Del Ranch, L.P., Elmore, L.P., and Leathers,
L.P. to repay existing Debt and (iii) Del Ranch, L.P., Elmore, L.P., Leathers,
L.P., Vulcan/BN Geothermal Power Company, Salton Sea Power Generation L.P.,
Salton Sea Brine Processing L.P., and Fish Lake Power Company to finance the
making of certain capital improvements to the Partnership Projects and Salton
Sea Projects (as defined in the Indenture); and
WHEREAS, the execution and delivery of the Series D and E Securities
and this Supplemental Indenture have been duly authorized and all things
necessary to make the Series D and E Securities, when executed by the Funding
Corporation and authenticated by the Trustee, valid and binding legal
obligations of the Funding Corporation and to make this Supplemental Indenture
a valid and binding agreement have been done.
NOW, THEREFORE, for and in consideration of the premises and of the
covenants herein contained and of the purchase of the Series D and E
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the benefit of the parties hereto and the equal and proportionate benefit of
all Holders of the Securities, as follows:
1. Definitions. Capitalized terms used in this Supplemental Indenture
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Indenture.
2. Series D and E Securities.
(a) The Series D and E Securities to be issued under this
Supplemental Indenture and the Indenture are
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hereby created. The Funding Corporation may issue the Series D and E
Securities, in the respective forms of Exhibits A-1 and A-2 hereto, upon the
execution of this Supplemental Indenture, and the Trustee shall, at the Funding
Corporation's written request, authenticate the Series D and E Securities and
deliver them as specified in the request.
(b) The Series D Securities shall be dated June 20, 1996, shall be
issued in the aggregate principal amount of $70,000,000, shall have a final
maturity date of May 30, 2000 and bear interest at a rate per annum of 7.02%;
the Series E Securities shall be dated June 20, 1996, shall be issued in the
aggregate principal amount of $65,000,000, shall have a final maturity date of
May 30, 2011 and bear interest at a rate per annum of 8.30%; provided that,
pursuant to the terms and provisions of the Series D and E Registration Rights
Agreement, the interest rate of the Series D and E Securities shall be
increased by one half of one percent (0.50%) per annum from and after the date
that an "Illiquidity Event" (as defined in the Series D and E Registration
Rights Agreement) occurs, and shall accrue to but not including the date on
which such Illiquidity Event shall cease to exist. Notwithstanding that an
Illiquidity Event may cease to exist, if a Registration Statement (as defined
in the Series D and E Registration Rights Agreement) has not become effective
within two years after the initial issuance of the Series D and E Securities,
such increased interest rate shall become permanent, pursuant to the terms and
provisions of the Series D and E Registration Rights Agreement. Notice of the
occurrence and cessation of any Illiquidity Event and the date, if any, that a
Registration Statement is declared effective shall be set forth in an
Officer's Certificate of the Funding Corporation delivered to the Trustee and
the Depositary Agent within ten Business Days after the Funding Corporation
has obtained knowledge of such event. If an Illiquidity Event occurs
subsequent to any Record Date, the Person entitled to receive the increased
amount of interest payable as a result of such Illiquidity Event shall receive
such additional interest on the Interest Payment Date relating to the next
subsequent Record Date. Series D and E Securities subsequently issued pursuant
to Sec-
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tion 2.5(c) of the Indenture shall be dated as of the date of authentication
thereof.
(c) The principal of, premium (if any) and interest on, the Series D
and E Securities shall be payable in any coin or currency of the United States
of America which, at the respective dates of payment thereof, is legal tender
for the payment of public and private debts. Payment of principal and interest
on the Series D and E Securities shall be made (i) by check or draft mailed on
the Scheduled Payment Date to the registered owner as of the close of business
on the Record Date immediately preceding the Scheduled Payment Date, at his
address as it appears on the registration books of the Trustee or (ii) by wire
transfer to such registered owner as of the close of business on such Record
Date upon written notice of such wire transfer address in the continental
United States given not less than fifteen (15) days prior to such Record Date;
provided, however, that if and to the extent that there shall be a default in
the payment of the interest or principal due on such Scheduled Payment Date,
such defaulted interest and/or principal shall be paid to the Holder in whose
name any such Security is registered at the close of business on the day
determined by the Trustee as provided in Section 2.4 of the Indenture.
(d) Interest on the Series D and E Securities shall be paid in
arrears on each May 30th and November 30th commencing November 30, 1996 and
concluding on the Final Maturity Date for the Series D and E Securities.
Interest on the Series D and E Securities shall be computed upon the basis of
a 360-day year, consisting of twelve (12) thirty (30) day months.
(e) Principal on the Securities shall be paid in an amount, and on
the Scheduled Payment Dates, as set forth with respect to the Series D and E
Securities on Schedule I hereto.
(f) The aggregate principal amount of the Series D Securities that
may be issued, authenticated and delivered under the Indenture is $70,000,000
and the aggregate principal amount of the Series E Securities that may be
issued, authenticated and delivered under the
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Indenture is $65,000,000 (except for Securities issued, authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of,
other Series D or E Securities).
(g) The Record Date for the determination of Holders for whom
principal and interest is payable shall be as provided in Section 2.4 of the
Indenture.
(h) Series D and E Securities may be surrendered for registration of
transfer or exchange as provided in Section 2.5 of the Indenture. Notices and
demands to or upon the Funding Corporation in respect of the Series D and E
Securities may be served as provided in Section 13.6 of the Indenture.
(i) The Series E Securities may be redeemed, pro-rata, at the
election of the Funding Corporation, as a whole or in part, at any time on any
Business Day, at the option of the Funding Corporation, subject to the
conditions and at the Redemption Price (which will include a Series E Yield
Maintenance Premium) specified in the form of Series E Security attached
hereto as Exhibit A-2.
(j) The Series D and E Securities shall be subject to mandatory
redemption and shall be redeemed, ratably with each other series of
Securities, in whole or in part, prior to maturity, at a redemption price
equal to the principal amount thereof with interest on the principal amount
thereof accrued through the Redemption Date, as provided in Section 3.3 of the
Indenture.
(k) Restrictions and limitations on the transfer or exchange of the
Series D and E Securities shall be as provided in the Indenture and the
respective forms of Series D Security and Series E Security attached hereto as
Exhibit A-1 and Exhibit A-2, respectively.
(l) The Funding Corporation has entered into a Registration Rights
Agreement dated June 20, 1996 with the Initial Purchaser named therein.
Pursuant to such agreement, the Funding Corporation has agreed to use its
reasonable best efforts to file and have declared effective a registration
statement with respect to an exchange
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offer to exchange the Series D and E Securities for a series of Securities
substantially identical to the Series D and E Securities.
(m) The Trustee shall act as Trustee, Custodian, Registrar and
Paying Agent for the Series D and E Securities, as and to the extent provided
in the Indenture.
(n) The Series D and E Securities shall be issuable in denominations
of $100,000 and any integral multiple of $1,000 in excess thereof.
3. Amendments to Indenture.
(a) Section 2.3(c)(i) of the Indenture shall be amended by inserting
the following at the end thereof:
"and provided further that, after giving effect to the issuance of
the Series D and E Securities, no further Additional Securities may be
issued pursuant to this clause (i) except to acquire any or all of the
East Mesa Project (and any Additional Securities issued for such purpose
remain subject to the immediately preceding proviso);"
(b) Section 3.1 of the Indenture shall be amended by inserting the
following at the end of such Section:
"The Series E Securities may be redeemed, pro rata within such
series, at the election of the Funding Corporation, as a whole or in
part, at any time on any Business Day, at the option of the Funding
Corporation, subject to the conditions and at the Redemption Prices
(which will include a Series E Yield Maintenance Premium) specified in
the form of Series E Security attached to that certain Second
Supplemental Indenture dated as of June 20, 1996, by and between the
Funding Corporation and the Trustee. The Series D Securities are not
subject to optional redemption."
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(c) Section 3.3(a) of the Indenture shall be amended by deleting
clauses (i), (ii) and (iii) of Section 3.3(a) and inserting the following in
lieu thereof:
"(i) the Salton Sea Guarantors or the Partnership Project Companies
receive more than $15,000,000 of Loss Proceeds or Eminent Domain Proceeds
and the Salton Sea Guarantors determine that the affected Salton Sea
Project cannot be rebuilt, repaired or restored to permit operations on a
commercially reasonable basis or the Partnership Guarantors determine
that the affected Partnership Project cannot be rebuilt, repaired or
restored to permit operations on a commercially reasonable basis, or the
Salton Sea Guarantors or the Partnership Project Companies do not
rebuild, repair or restore the affected Project, as the case may be, in
which case the amount of such Loss Proceeds or Eminent Domain Proceeds
shall be available for such redemption; (ii) the Salton Sea Guarantors or
the Partnership Project Companies receive Loss Proceeds or Eminent Domain
Proceeds and the Salton Sea Guarantors or the Partnership Project
Companies determine that only a portion of the affected Salton Sea
Project or Partnership Project, as the case may be, can be rebuilt,
repaired, or restored and that the amount of such Loss Proceeds or
Eminent Domain Proceeds exceeds the cost of rebuilding, repair or
replacement by more than $15,000,000, in which case only the amount of
such excess Loss Proceeds or Eminent Domain Proceeds shall be available
for such redemption; (iii) the Salton Sea Guarantors or the Partnership
Project Companies receive Title Event Proceeds of more than $5,000,000,
in which case such Title Event Proceeds shall be made available for such
redemption, subject to reduction by the amount of (x) the costs of
collection of such proceeds and (y) any additional costs or expenses
incurred or to be incurred (in an amount not to exceed $25,000,000) by
the Salton Sea Guarantors or the Partnership Project Companies as a
result of the Title Event giving rise to such Title Event Proceeds;"
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(d) Section 3.3(a)(iv) of the Indenture shall be amended by deleting
the parenthetical contained therein.
(e) Section 3.3(a)(viii) of the Indenture shall be amended by
inserting the following therein immediately following the phrase "a Guarantee
Event of Default under":
"the Salton Sea Guarantee,"
(f) Section 4.11 of the Indenture is hereby amended by inserting the
following sentence at the end of such section:
"Each of the Series D and E Preliminary Offering Circular and Series
D and E Final Offering Circular as of its date did not, and the Series D
and E Final Offering Circular (as the same may have been amended or
supplemented) as of the date of the issuance of the Series D and E
Securities will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made,
misleading."
(g) Section 6.1(i) of the Indenture shall be amended by deleting
clause (ii) thereof and inserting the following in lieu thereof:
"(ii) at least 51% of the general partnership voting
interests and economic interests of each of Salton Sea Brine
Processing L.P., Salton Sea Power Generation L.P., Elmore, Leathers,
Del Ranch and Vulcan, or"
(h) Exhibit A of the Indenture shall be amended by:
(i) deleting the word "Guarantors" contained in the definition of
"Agency Agreements" and inserting the phrase "Initial Guarantors" in lieu
thereof.
(ii) inserting the following at the end of the definition of "Agency
Agreements": "and the Agency
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Agreement, dated as of June 20, 1996, between the Funding Corporation,
San Felipe, BN/Geothermal, Niguel, Conejo, Leathers, Del Ranch, Elmore
and Vulcan."
(iii) deleting the definition of "Available Cash Flow" and inserting
the following in lieu thereof:
""Available Cash Flow" means (a) with respect to CEOC, VPC and
the Royalty Guarantor, as applicable, the total Equity Cash Flows
and Royalties received by such Guarantor, minus without duplication
(i) any Royalties paid, (ii) all Operating and Maintenance Costs,
(iii) all capital expenditures for such Guarantor and its respective
Projects and (iv) debt service, all as computed by such Guarantor
for such period and (b) with respect to San Felipe, Conejo, Niguel,
BN/Geothermal, Vulcan, Leathers, Elmore and Del Ranch, as
applicable, the total revenues received by such Guarantor, minus
without duplication (i) any Royalties paid, (ii) all Operating and
Maintenance Costs, (iii) all capital expenditures for such Guarantor
and its respective Projects and (iv) debt service, all as computed
by such Guarantor for such period."
(iv) deleting the definition of "California Energy" and inserting
the following in lieu thereof:
""California Energy" means CalEnergy Company, Inc., a Delaware
corporation."
(v) deleting the definition of "CEOC" and inserting the following in
lieu thereof:
""CEOC" means CalEnergy Operating Company, Inc., a Delaware
corporation."
(vi) deleting the definition of "Credit Agreements" and inserting
the following in lieu thereof:
""Credit Agreements" means the Salton Sea Credit Agreement, the
Partnership Credit Agreement and the Royalty Credit Agreement."
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(vii) inserting the following at the end of the definition of "Debt
Service Reserve LOC Reimbursement Agreement":
"or any similar agreement supplementing, refinancing or
replacing, in whole or in part, such Credit and Reimbursement
Agreement or any other then existing Debt Service Reserve LOC
Reimbursement Agreement which provides for credit facilities in an
aggregate amount equal to or less than (i) the Debt Service Reserve
Fund Required Balance, as the same may be adjusted from time to time
in accordance with Schedule I to the Depositary Agreement, less (ii)
the aggregate amount of credit facilities under the then existing
Debt Service Reserve LOC Reimbursement Agreement which are not being
replaced so long as any such refinancing or replacement is effected
in accordance with the terms of any then existing Debt Service
Reserve LOC Reimbursement Agreement."
(viii) inserting the following in the definition of "Deeds of Trust"
after the phrase "Salton Sea Deed of Trust" contained therein:
",Partnership Deed of Trust"
(ix) deleting the definition of "Del Ranch Agreements" and inserting
the following in lieu thereof:
""Del Ranch Agreements" means, collectively, the Del Ranch ASA,
the Del Ranch O & M Agreement, the Del Ranch PPA, the Del Ranch
Transmission Services Agreement, the Del Ranch Easement, the Del
Ranch Ground Lease, the Del Ranch Partnership Agreement, the Del
Ranch Technology Transfer Agreement and any Additional Project
Document entered into by the Partnership Guarantors with respect to
the Del Ranch Project."
(x) deleting the definition of "DTC Representation Letter" and
inserting the following in lieu thereof:
""DTC Representation Letter" means (i) the Letter of
Representations dated the Closing Date, among DTC, the Funding
Corporation, the Trustee and
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the Custodian, or any successor agreement providing for the
performance of similar functions, (ii) the Letter of Representations
relating to the Series D and E Securities among DTC, the Funding
Corporation, the Trustee and the Custodian, or any successor
agreement providing for the performance of similar functions and
(iii) any other letter or agreement similar to the foregoing
relating to any Securities entered into by, or among, DTC, the
Funding Corporation, the Trustee and the Custodian."
(xi) deleting the definition of "Elmore Agreements" and inserting
the following in lieu thereof:
""Elmore Agreements" means, collectively, the Elmore ASA, the
Elmore O & M Agreement, the Elmore PPA, the Elmore Transmission
Service Agreement, the Elmore Easement, the Elmore Ground Lease, the
Elmore Partnership Agreement, the Elmore Technology Transfer
Agreement and any Additional Project Document entered into by the
Partnership Guarantors with respect to the Elmore Project."
(xii) deleting the phrase "a Partnership Guarantor" from the definition
of "Equity Cash Flow" and inserting the following in lieu thereof:
"each of VPC and CEOC"
(xiii) deleting the following parenthetical from the definition of
"Eminent Domain Proceeds":
"(to the extent, in the case of a Partnership Guarantor, of
Equity Cash Flow)".
and replacing it with the following:
"(to the extent, if any, in the case of a Partnership Guarantor
other than a Partnership Project Company, received in the form of
Equity Cash Flows)"
(xiv) deleting the definition of "Leathers Agreements" and inserting
the following in lieu thereof:
""Leathers Agreements" means, collectively, the Leathers ASA,
the Leathers O & M Agreement, the Leathers
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PPA, the Leathers Transmission Service Agreement, the Leathers
Easement, the Leathers Ground Lease, the Leathers Partnership
Agreement, the Leathers Technology Transfer Agreement and any
Additional Project Document entered into by the Partnership
Guarantors with respect to the Leathers Project."
(xv) deleting the following parenthetical from the definition of
"Loss Proceeds":
"(to the extent, in the case of a Partnership Guarantor,
received in the form of Equity Cash Flows)"
and replacing it with the following:
"(to the extent, if any, in the case of a Partnership Guarantor
other than a Partnership Project Company, received in the form of
Equity Cash Flows)".
(xvi) deleting the definition of "Partnership Collateral" contained
therein and inserting the following in lieu thereof:
""Partnership Collateral": means (i) an assignment of all
Equity Cash Flows and Royalties of CEOC and VPC which will be
applied in accordance with the priorities of payment established
under the Depositary Agreement, (ii) a pledge of all of the capital
stock of or partnership interests in the Partnership Guarantors,
(iii) a Lien on the Capital Expenditure Fund and any other funds of
the Partnership Guarantors on deposit under the Depositary
Agreement, (iv) a collateral assignment of CEOC's rights to receive
payments under the Magma Services Agreement, (v) an assignment of
all Partnership Project Company revenues which will be applied in
accordance with the priorities of payment established under the
Depositary Agreement, (vi) a deed of trust on the geothermal
property interests and other material assets of each of the
Partnership Project Companies and the Partnership Projects and (vii)
a collateral assignment of certain material contracts of the
Partnership Guarantors."
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(xvii) deleting the definition of "Partnership Credit Agreement" and
inserting the following in lieu thereof:
""Partnership Credit Agreement" means the Credit Agreement
between the Funding Corporation and each of the Partnership
Guarantors."
(xviii) deleting the phrase "the Closing Date" from the definition
of "Partnership Guarantee" and replacing it with "June 20, 1996":
(xix) deleting the definition of "Partnership Guarantors" and
inserting the following in lieu thereof:
""Partnership Guarantors" means each of CEOC, VPC,
BN/Geothermal, Niguel, San Felipe, Conejo, Vulcan, Elmore, Leathers
and Del Ranch."
(xx) deleting the definition of "Partnership Guarantors Pledge
Agreement" and inserting the following in lieu thereof:
""Partnership Guarantors Pledge Agreement" means (i) the Stock
Pledge Agreement by Magma and the Funding Corporation pledging the
stock of CEOC, in favor of the Collateral Agent for the benefit of
the Secured Parties, (ii) the Stock Pledge Agreement by Magma and
the Funding Corporation pledging the stock of VPC, in favor of the
Collateral Agent for the benefit of the Secured Parties, (iii) the
Stock Pledge Agreement by VPC pledging the stock of BN/Geothermal,
in favor of the Collateral Agent for the benefit of the Secured
Parties, (iv) the Stock Pledge Agreement by CEOC pledging the stock
of San Felipe, Conejo and Niguel, in favor of the Collateral Agent
for the benefit of the Secured Parties, (v) the Partnership Interest
Pledge Agreement by VPC and BN/Geothermal, pledging the partnership
interests in Vulcan, in favor of the Collateral Agent for the
benefit of the Secured Parties, (vi) the Partnership Interest Pledge
Agreement by Magma, CEOC and San Felipe, pledging the partnership
interests in Leathers, in favor of the Collateral Agent for the
benefit of the Secured Parties, (vii) the Partnership
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Interest Pledge Agreement by Magma, CEOC and Conejo, pledging the
partnership interests in Del Ranch, in favor of the Collateral Agent
for the benefit of the Secured Parties and (viii) the Partnership
Interest Pledge Agreement by Magma, CEOC and Niguel, pledging the
partnership interests in Elmore, in favor of the Collateral Agent
for the benefit of the Secured Parties."
(xxi) deleting the definition of "Paying Agent" and inserting the
following in lieu thereof:
""Paying Agent" means any Person acting as Paying Agent
pursuant to this Indenture and Section 11.12 hereof."
(xxii) inserting the following at the end of the definition of
"Registration Rights Agreement":
"and the Registration Rights Agreement dated as of June 20,
1996 between the Funding Corporation and the initial purchaser named
therein for the benefit of the holders of the Series D and E
Securities."
(xxiii) inserting the following in the definition of "Salton Sea
Project Documents" after the phrase "Waste Disposal Agreement":
", the SSPG IV Plant Connection Agreement, the SSPG IV
Transmission Service Agreement, the SSPG IV Technology Transfer
Agreement"
(xxiv) deleting the following parenthetical from the definition of
"Title Event Proceeds":
"(to the extent received by the Partnership Guarantor in the
form of Equity Cash Flows)"
(xxv) deleting the definition of "VPC Agreements" and inserting the
following in lieu thereof:
""VPC Agreements" means, collectively, the Brine Sales
Agreement, the VPC Transmission Service Agreement, the Vulcan
Construction, Operating and Accounting Agreement, the
Vulcan Partnership Agreement, the
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Vulcan PPA, the Vulcan Easement, and any Additional Project Document
entered into by the Partnership Guarantors with respect to the
Vulcan Project."
(i) Exhibit A to the Indenture is hereby amended by inserting
the following definitions in the appropriate alphabetical order:
""BN/Geothermal" means BN Geothermal Inc., a Delaware
corporation."
""Conejo" means Conejo Energy Company, a California
corporation."
""Del Ranch Ground Lease" means the Ground Lease, dated as of
March 14, 1988, as amended as of June 17, 1996, between Magma and
Del Ranch."
""Del Ranch Partnership Agreement" means the Amended and
Restated Limited Partnership Agreement of Del Ranch, L.P., dated as
of March 14, 1988, as amended as of April 14, 1989, between CEOC,
Magma and Conejo."
""Del Ranch Technology Transfer Agreement" means the Technology
Transfer Agreement, dated as of March 14, 1988, between Magma and
Del Ranch."
""Del Ranch Transmission Service Agreement" means the
Transmission Service Agreement, dated as of August 2, 1988, between
Del Ranch and IID."
""Elmore Ground Lease" means the Ground Lease, dated as of
March 14, 1988, as amended as of June 17, 1996, between Magma and
Elmore."
""Elmore Partnership Agreement" means the Amended and Restated
Limited Partnership Agreement of Elmore, L.P., dated as of March 14,
1988, as amended as of April 14, 1989, between CEOC, Niguel and
Magma."
""Elmore Technology Transfer Agreement" means the Technology
Transfer Agreement, dated as of March 14, 1988, between Magma and
Elmore."
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""Elmore Transmission Service Agreement" means the Transmission
Service Agreement, dated as of August 2, 1988, between Elmore and
IID."
""Initial Guarantors" means each of the Salton Sea Guarantors,
VPC, CEOC and the Royalty Guarantor."
""Leathers Ground Lease" means the Ground Lease, dated as of
October 26, 1988, as amended as of June 17, 1996, between Magma and
Leathers."
""Leathers Partnership Agreement" means the Limited Partnership
Agreement of Leathers, L.P., dated as of August 15, 1988, as amended
as of April 14, 1989, between CEOC, Magma, and San Felipe."
""Leathers Technology Transfer Agreement" means the Technology
Transfer Agreement, dated as of August 15, 1988, between Magma and
Leathers."
""Leathers Transmission Service Agreement" means the
Transmission Service Agreement, dated as of October 3, 1989, between
Leathers and IID."
""Niguel" means Niguel Energy Company, a California
corporation."
""Partnership Deed of Trust" means (i) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by Vulcan
and VPC in favor of the Collateral Agent, (ii) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by
Leathers in favor of the Collateral Agent, (iii) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by Elmore
in favor of the Collateral Agent and (iv) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing by Del
Ranch in favor of the Collateral Agent."
""San Felipe" means San Felipe Energy Company, a California
corporation."
""Series D and E Final Offering Circular" means the
confidential offering circular of the Funding Corpo-
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ration, dated June 17, 1996, with respect to the Series D and E
Securities."
""Series D and E Preliminary Offering Circular" means the
confidential preliminary offering circular of the Funding
Corporation dated June 11, 1996, with respect to the Series D and E
Securities."
""Series D Securities" and "Series E Securities" means the
Securities issued pursuant to the Second Supplemental Indenture
dated as of June 20, 1996, in the respective forms of Exhibit A-1
and Exhibit A-2 thereto."
""Series E Yield Maintenance Premium" means an amount
calculated by the Funding Corporation or any Guarantor as of the
Redemption Date as follows;
(i) the average life of the remaining scheduled payments
of principal in respect of outstanding Series E Securities (the
"Series E Remaining Average Life") shall be calculated as of
the Redemption Date;
(ii) the yield to maturity shall be calculated for the
United States Treasury security having an average life equal to
the Series E Remaining Average Life and trading in the
secondary market at the price closest to par (the "Primary
Issue"); provided, however, that if no United States Treasury
security has an average life equal to the Series E Remaining
Average Life, the yields (the "Other Yields") for the two
maturities of United States Treasury securities having average
lives most closely corresponding to such Series E Remaining
Average Life and trading in the secondary market at the price
closest to par shall be calculated, and the yield to maturity
for the Primary Issue shall be the yield interpolated or
extrapolated from such Other Yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month;
(iii) the discounted present value of the then remaining
scheduled payments of principal and interest (but excluding
that portion of any scheduled payment of interest that is
actually due and paid on
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the Redemption Date) in respect of outstanding Series E
Securities shall be calculated as of the Redemption Date using
a discount factor equal to the sum of (a) the yield to maturity
for the Primary Issue, plus (b) 50 basis points; and
(iv) the amount of Series E Yield Maintenance Premium in
respect of Series E Securities to be redeemed shall be an
amount equal to (a) the discounted present value of such Series
E Securities to be redeemed determined in accordance with
clause (iii) above minus (b) the unpaid principal amount of
such Series E Securities; provided, however, that the Series E
Yield Maintenance Premium shall not be less than zero."
""SSPG IV Plant Connection Agreement" means the Plant
Connection Agreement, dated as of July 14, 1995, between IID, SSPG
and Fish Lake."
""SSPG IV Technology Transfer Agreement" means the Technology
Transfer Agreement, dated as of February 15, 1996, between Magma,
SSPG, SSBP and Fish Lake."
""SSPG IV Transmission Service Agreement" means the
Transmission Service Agreement, dated as of July 14, 1995, between
IID, SSPG and Fish Lake."
""Vulcan Easement" means the Easement Grant Deed Agreement
dated as of January 19, 1988, between Magma and VPC, as amended,
modified or supplemented from time to time."
4. Schedule I to Indenture. Schedule I to the Indenture shall be
supplemented by adding the Amortization Schedule for the Series D and E
Securities set forth on Schedule I hereto to such Schedule I of the Indenture.
5. Effect of Supplemental Indenture. Upon the execution of this
Supplemental Indenture, the Indenture shall be modified in accordance
herewith, and this Supplemental Indenture shall form a part of the Indenture
for all purposes; and every Holder of Securities previously or thereafter
authenticated and delivered
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under the Indenture shall be bound by the terms hereof. This Supplemental
Indenture shall be construed as supplemental to the Indenture and shall form a
part thereof, and the Indenture is hereby incorporated by reference herein and
hereby ratified, approved and confirmed. From and after the date hereof,
whenever referred to in any Financing Document, the Indenture shall mean the
Indenture as modified, amended and supplemented by this Supplemental
Indenture.
6. Headings for Convenience Only. The descriptive headings in this
Supplemental Indenture are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.
7. Counterparts. This Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original; but such counterparts shall together constitute but one and the
same instrument.
8. APPLICABLE LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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EXHIBIT 4.1(C)
IN WITNESS WHEREOF, Salton Sea Funding Corporation has caused this
Supplemental Indenture to be executed and its corporate seal to be hereunto
affixed, attested by one of its duly authorized officers and Chemical Trust
Company of California has caused this Supplemental Indenture to be executed by
one of its duly authorized officers, all as of the day and year first above
written.
[SEAL] SALTON SEA FUNDING CORPORATION,
as principal and agent for
the Guarantors
By: /s/ John G. Sylvia
___________________________
Name: John G. Sylvia
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
Attest:
Title: Assistant Secretary
______________________
Assistant Law Counsel
CHEMICAL TRUST COMPANY OF
CALIFORNIA, Trustee
By: /s/ Rose Maravilla
___________________________
Name: Rose Maravilla
Title: Assistant Vice President