EXHIBIT 4.3
AMENDED AND RESTATED
PARTNERSHIP SECURED LIMITED GUARANTEE
This Amended and Restated Partnership Secured Limited
Guarantee (this "Amendment") is entered into as of June 20, 1996 by CALENERGY
OPERATING COMPANY, a Delaware corporation ("CEOC"), VULCAN POWER COMPANY, a
Nevada corporation ("VPC"), CONEJO ENERGY COMPANY, a California corporation
("Conejo"), NIGUEL ENERGY COMPANY, a California corporation ("Niguel"), SAN
FELIPE ENERGY COMPANY, a California corporation ("San Felipe"), BN GEOTHERMAL,
INC., a Delaware corporation ("BNG"), DEL RANCH, L.P., a California limited
partnership ("Del Ranch"), ELMORE, L.P., a California limited partnership
("Elmore"), LEATHERS, L.P., a California limited partnership ("Leathers"), and
VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership ("Vulcan",
and together with CEOC, VPC, Conejo, Niguel, San Felipe, BNG, Del Ranch,
Elmore and Leathers, the "Partnership Guarantors"), in favor of and for the
benefit of CHEMICAL TRUST COMPANY OF CALIFORNIA, a California corporation, as
trustee under that certain Indenture described in the recitals below, and as
Collateral Agent under the Intercreditor Agreement for the benefit of the
Secured Parties and Funding Corporation (in such capacities, the "Trustee").
All capitalized terms used herein but not specifically defined shall have the
respective meanings given to such terms in Exhibit A to the Indenture, which
Exhibit A is hereby incorporated by reference.
W I T N E S S E T H:
WHEREAS, Funding Corporation is a corporation established
for the sole purpose of making loans to the Guarantors from proceeds of the
issuance of notes and bonds (collectively, the "Securities") in its individual
capacity as principal and as agent acting on behalf of the Guarantors pursuant
to the Trust Indenture, dated as of July 21, 1995, between Funding Corporation
and the Trustee, as the same may be amended, modified or supplemented (as so
amended, modified or supplemented, including pursuant to that certain Second
Supplemental Indenture dated as of even date herewith, the "Indenture"); and
WHEREAS, the principal and interest payments on the
Securities will be serviced by repayment of loans made by Funding Corporation
to the Guarantors and guaranteed by the Guarantors, subject to the conditions
set forth in the Indenture; and
WHEREAS, on July 21, 1995 the Funding Corporation issued and
sold Securities in the aggregate principal amount of $475 Million; and
WHEREAS, Funding Corporation used a portion of the proceeds
from the sale of such Securities to make a loan to CEOC and VPC in the
aggregate amount of $75 Million; and
WHEREAS, in connection with the making of such loan to CEOC
and VPC, CEOC and VPC entered into the Partnership Secured Limited Guarantee
dated as of July 21, 1995 in favor of the Trustee (the "Original Secured
Limited Guarantee") whereby CEOC and VPC guaranteed certain of the obligations
of Funding Corporation under the Securities; and
WHEREAS, Funding Corporation has simultaneously with the
execution and delivery of this Amendment issued and sold Securities in the
aggregate principal amount of $135 Million the net proceeds of which will be
loaned to the Partnership Guarantors; and
WHEREAS, each Partnership Guarantor is an affiliate of
Funding Corporation and anticipates benefiting directly and indirectly from
the issuance and sale of Securities by Funding Corporation, and each
Partnership Guarantor (including Conejo, Niguel, San Felipe, BNG, Del Ranch,
Elmore, Leathers and Vulcan) has therefore agreed to jointly and severally
guarantee certain of the obligations of Funding Corporation under the
Securities (including the Securities issued and sold on July 21, 1995) in
accordance with the terms hereof; and
WHEREAS, in order to evidence and implement such guarantee
by all of the Partnership Guarantors and the joint and several obligations of
all of the Partnership Guarantors thereunder, the parties hereto have agreed
to amend and restate the Original Secured Limited Guarantee as set forth
herein.
In consideration of the above premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. From and after the date hereof, the terms of the Original
Secured Limited Guarantee shall be amended to read in their entirety as set
forth in this Amendment and the terms of this Amendment shall govern and
control the rights and obligations of the parties in and with respect to the
matters set forth herein, notwithstanding any conflict between the terms of
this Amendment and the terms of the Original Secured Limited Guarantee. As
amended and restated by this Amendment, the Original Secured Limited Guarantee
is hereinafter referred to as the "Guarantee."
2. As set forth in this Guarantee, each Partnership
Guarantor jointly and severally guarantees the payment of the Indebtedness (as
hereafter defined) when due, upon maturity, acceleration or otherwise;
provided, however, that no obligation to pay all or any portion of the
Indebtedness shall exist, unless there also shall have occurred and be
continuing (a) an Event of Default under the Partnership Credit Agreement
between the Partnership Guarantors and Funding Corporation, (b) an Event of
Default under Section 6.1(a) of the Indenture or (c) an Event of Default under
Section 18 of this Guarantee; and provided further that each Partnership
Guarantor's obligation hereunder shall be limited to the Available Cash Flow
of such Partnership Guarantor.
3. "Indebtedness" as used herein shall mean all principal,
interest, premium (if any), fees, charges, penalties, expenses, payments, and
all other amounts due with respect to the Securities.
4. Subject to the conditions set forth in Section 2 of this
Guarantee, the liability of each Partnership Guarantor under this Guarantee in
respect of the Indebtedness shall be absolute and unconditional, and shall not
be affected or released in any way, irrespective of:
(a) any lack of validity or enforceability of the
Securities, the Indenture, the Credit Agreements or any of the other
Transaction Documents;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Indebtedness or amendment or
waiver of, or any consent to any departure from, any Transaction Document,
including, without limitation, any increase in the Indebtedness or other
obligations of Funding Corporation under the Indenture;
(c) any enforcement of any Transaction Document,
including the taking, holding or sale of any collateral, or any termination or
release of any collateral from the liens created by any Transaction Document
or the non-perfection of any liens created by any Transaction Document;
(d) the failure by any one of the Partnership
Guarantors to fulfill its obligations under this Guarantee;
(e) any change, restructuring or termination of the
corporate structure or existence of Funding Corporation; or
(f) any Event of Default of Funding Corporation under
Sections 6.1(f) or (g) of the Indenture, of the Salton Sea Guarantors under
Section 5.1(e) of the Salton Sea Credit Agreement, of the Partnership
Guarantors under Section 5.1(e) of the Partnership Credit Agreement or of the
Royalty Guarantor under Section 5.1(e) of the Royalty Credit Agreement.
This Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Indebtedness is rescinded or must otherwise be returned by the Trustee or any
other Person upon the insolvency, bankruptcy or reorganization of Funding
Corporation or the Partnership Guarantors, or otherwise, all as though such
payment had not been made.
5. Except to the extent provided in Section 2 of this
Guarantee, the obligations hereunder are independent of the obligations of
Funding Corporation or any other Guarantor, and a separate action or actions
may be brought and prosecuted against any of the Partnership Guarantors
whether action is brought against either Funding Corporation or any other
Guarantor or whether either Funding Corporation or any other Guarantor be
joined in any such action or actions; and the Partnership Guarantors waive the
benefit of any statute of limitations affecting its liability hereunder.
6. The Partnership Guarantors authorize the Trustee, acting
pursuant to the Indenture, without notice or demand and without affecting its
liability hereunder, from time to time, whether before or after termination of
this Guarantee, to (a) renew, compromise, extend, accelerate or otherwise
change the time for payment of the obligations of Funding Corporation under
the Indenture or any part thereof; (b) take and hold security for the payment
of this Guarantee or the Indebtedness, and exchange, enforce, waive, release,
fail to perfect, sell, or otherwise dispose of any such security; (c) apply
such security and direct the order or manner of sale thereof; and (d) release
or substitute any one or more of the endorsers or guarantors.
7. The Partnership Guarantors hereby waive, to the extent
permitted by applicable law: (a) promptness, diligence, notice of acceptance
and any other notice with respect to any of the Indebtedness or any other
obligations under the Transaction Documents or this Guarantee; (b) any
requirement that the Trustee or any other Person protect, secure or insure any
lien or any collateral or other property subject thereto or exhaust any right
or take any action against either Funding Corporation or any other Person or
any collateral; (c) any defense arising by reason of any claim or defense
based upon an election of remedies by the Trustee which in any manner impairs,
reduces, releases or otherwise adversely affects its subrogation, contribution
or reimbursement rights or other rights to proceed against either Funding
Corporation or any other Person or any collateral; (d) any duty on the part of
the Trustee to disclose to the Partnership Guarantors any matter, fact or
thing relating to the business, operation or condition of either Funding
Corporation or any other party to any of the Transaction Documents and Funding
Corporation's assets now known or hereafter known by the Trustee; and (e) all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Guarantee and of the existence, creation, or incurrence of new or additional
Indebtedness.
8. The Partnership Guarantors hereby irrevocably waive any
claim or other rights which they may now or hereafter acquire against either
Funding Corporation or any other guarantor of any or all of the Indebtedness,
whether due or to become due, voluntary or involuntary, absolute or
contingent, liquidated or unliquidated, determined or undetermined, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
of the Trustee against either Funding Corporation or any such guarantor or any
collateral which the Trustee now has or hereafter acquires, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including without limitation, the right to take or receive from
Funding Corporation, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to the Partnership Guarantors in
violation of the preceding sentence and the Indebtedness shall not have been
paid in full, such amount shall be deemed to have been paid to the Partnership
Guarantors for the benefit of, and held in trust for the benefit of, the
Trustee and shall forthwith be paid to the Trustee to be credited and applied
to the Indebtedness, whether matured or unmatured, in accordance with the
terms of the Indenture. The Partnership Guarantors acknowledge that they have
received and will receive direct and indirect benefits from the sales of the
Securities already completed and the sales of Securities currently
contemplated by the Indenture and that the waiver set forth in this Section 8
is knowingly made in contemplation of such benefits.
9. The Partnership Guarantors agree that, to the extent that
either Funding Corporation or the Partnership Guarantors makes a payment or
payments to the Trustee, or the Trustee receives any proceeds of collateral,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or otherwise required to
be repaid to either Funding Corporation, its estate, trustee, receiver or any
other party, including, without limitation, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date such initial payment, reduction or satisfaction
occurred. The Partnership Guarantors shall defend and indemnify the Trustee
from and against any claim or loss under this Section 9 (including reasonable
attorneys' fees and expenses) in the defense of any such action or suit.
10. The Partnership Guarantors acknowledge and agree that
they shall have the sole responsibility for obtaining from Funding Corporation
such information concerning Funding Corporation's financial conditions or
business operations as the Partnership Guarantors may require, and that the
Trustee has no duty at any time to disclose to the Partnership Guarantors any
information relating to the business operations or financial condition of
Funding Corporation.
11. To the extent that the waiver set forth in Section 8 is
or is deemed to be ineffective or inapplicable, any obligations of Funding
Corporation to the Partnership Guarantors, now or hereafter existing, are
hereby subordinated to the Indebtedness. If the Trustee so requests, after the
occurrence of an Event of Default under the Indenture, such obligations of
Funding Corporation to the Partnership Guarantors shall be enforced and
performance received by the Partnership Guarantors as trustee for the Trustee
and the proceeds thereof shall be paid over to the Trustee on account of the
Indebtedness, but without reducing or affecting in any manner the maximum
liability of the Partnership Guarantors under the other provisions of this
Guarantee.
12. The Trustee may, without notice to the Partnership
Guarantors and without affecting the Partnership Guarantors' obligations
hereunder, assign this Guarantee, in whole or in part in accordance with the
provisions of the Indenture. The Partnership Guarantors agree that the Trustee
may, subject to the provisions of the Indenture, disclose to any prospective
purchaser and any purchaser of all or part of the Indebtedness any and all
information in the Trustee's possession concerning the Partnership Guarantors,
this Guarantee and any security for this Guarantee.
13. The Partnership Guarantors agree to pay all reasonable
attorneys' fees and all other fees and expenses which may be incurred by the
Trustee in the enforcement of this Guarantee.
14. The Trustee agrees that no directors, officers,
shareholders (other than CEOC, VPC, Conejo, Niguel, San Felipe and BNG) or
employees of any Partnership Guarantor shall in any way be liable for the
payment of the Securities, the Project Notes or any sums now or hereafter
owing under the terms of, or for the performance of any obligation contained
in, this Guarantee.
15. This Guarantee shall be governed by and construed
according to the laws of the State of California.
16. This Guarantee embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements
and understandings relating to the subject matter hereof.
17. This Guarantee may be executed in any number of
counterparts, all of which together shall constitute one agreement.
18. The Partnership Guarantors shall continue to be bound by
and perform all of their obligations under the terms and conditions set forth
in the Partnership Credit Agreement for the benefit of the Funding Corporation
and its legal successors and assigns, the terms of which are incorporated
herein by reference, from and after the date that the Partnership Project Note
is repaid and until the payment in full of all other obligations under the
Salton Sea Project Note and the Royalty Project Note. The Partnership
Guarantors' failure to perform such terms and conditions shall, from and after
the date that the Partnership Project Note has been repaid, be an Event of
Default hereunder.
19. The obligations hereunder are subject to the limitations
set forth in Section 6.11 of the Partnership Credit Agreement, the provisions
of which are hereby incorporated by reference.
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The Partnership Guarantors have executed this Guarantee as
of the date and year first written above.
By: VULCAN POWER COMPANY,
a Nevada corporation
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: CALIFORNIA ENERGY OPERATING COMPANY,
a Delaware corporation
By: /s/ John G. Sylvia
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Name: John G. Sylvia
--------------------------------
Title: Senior Vice President
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By: CONEJO ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
--------------------------------
Name: John G. Sylvia
--------------------------------
Title: Senior Vice President
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By: NIGUEL ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: SAN FELIPE ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: BN GEOTHERMAL INC.,
a Delaware corporation
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: DEL RANCH, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
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Name: John G. Sylvia
--------------------------------
Title: Senior Vice President
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By: ELMORE, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: LEATHERS, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
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Name: John G. Sylvia
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Title: Senior Vice President
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By: VULCAN/BN GEOTHERMAL POWER COMPANY,
a Nevada general partnership
By: Vulcan Power Company,
a Nevada corporation,
as General Partner
By: /s/ John G. Sylvia
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Name: John G. Sylvia
--------------------------------
Title: Senior Vice President
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