EXHIBIT 4.19
AMENDED AND RESTATED CREDIT AGREEMENT
(PARTNERSHIP GUARANTORS)
Among
SALTON SEA FUNDING CORPORATION,
a Delaware corporation,
as lender,
and
CALENERGY OPERATING COMPANY,
a Delaware corporation
VULCAN POWER COMPANY,
a Nevada corporation
CONEJO ENERGY COMPANY,
a California corporation,
NIGUEL ENERGY COMPANY,
a California corporation,
SAN FELIPE ENERGY COMPANY,
a California corporation,
BN GEOTHERMAL INC.,
a Delaware corporation,
DEL RANCH, L.P.,
a California limited partnership,
ELMORE, L.P.,
a California limited partnership,
LEATHERS, L.P.,
a California limited partnership,
and
VULCAN/BN GEOTHERMAL POWER COMPANY,
a Nevada general partnership,
as borrowers
dated June 20, 1996
TABLE OF CONTENTS
Page
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- - DEFINITIONS AND AMENDMENT.........................................................8
Definitions.........................................................................8
Amendment and Restatement...........................................................8
- - DESCRIPTION OF THE LOAN...........................................................8
Acknowledgements of the Partnership Guarantors; Partnership Project Loan............8
Term of This Agreement..............................................................9
Interest ...........................................................................9
Repayment...........................................................................9
(a) Optional Prepayment.............................................................10
Mandatory Prepayment................................................................10
Obligations of the Partnership Guarantors Hereunder Unconditional...................10
General Terms of Payment............................................................11
Security ...........................................................................11
- - REPRESENTATIONS AND WARRANTIES....................................................11
Organization, Power and Status of the Partnership Guarantors........................12
Authorization; Enforceability; Execution and Delivery...............................12
No Conflicts; Laws and Contracts; No Default; Representations and Warranties........13
Litigation..........................................................................14
Environmental Matters...............................................................14
Employee Benefit Plans..............................................................14
Business of the Partnership Guarantors..............................................15
Valid Title.........................................................................15
Security Interests..................................................................15
Utility Regulation..................................................................15
Qualifying Facility.................................................................16
Investment Company Act..............................................................16
No Defaults.........................................................................16
Governmental Approvals..............................................................16
Margin Stock........................................................................16
Taxes ...........................................................................17
Ownership of Partnership Guarantors.................................................17
Disclosure..........................................................................17
- - COVENANTS AND AGREEMENTS OF THE PARTNERSHIP GUARANTORS............................18
Reporting Requirements..............................................................18
Sale of Assets......................................................................18
Sale of Partnership Interests.......................................................19
Insurance...........................................................................19
QF Status...........................................................................19
Governmental Approvals; Title.......................................................20
Nature of Business..................................................................20
Compliance With Laws................................................................21
Prohibition on Fundamental Changes..................................................21
Revenue Fund........................................................................22
Transactions With Affiliates........................................................22
Restricted Payments.................................................................22
Exercise of Rights Under Partnership Project Documents..............................22
Amendments to Contracts.............................................................23
Limitations on Debt/Liens...........................................................23
Books and Records...................................................................24
Additional Project Documents........................................................24
Maintenance of Existence............................................................24
Taxes ...........................................................................24
Additional Documents; Filings and Recordings........................................25
- - DEFAULT AND REMEDIES..............................................................25
Events of Default...................................................................25
Consequences of Event of Default....................................................29
Continuing Lien.....................................................................30
Defense of Actions..................................................................31
- - GENERAL TERMS AND CONDITIONS......................................................32
Notices ...........................................................................32
Amendments and Waivers..............................................................34
Election of Remedies................................................................35
Severability........................................................................35
Third-Party Beneficiaries; Prior Agreements.........................................35
Partnership Guarantors in Control...................................................36
Number and Gender...................................................................36
Captions ...........................................................................36
Applicable Law and Jurisdiction.....................................................36
Consent ...........................................................................36
No Recourse.........................................................................36
Counterparts........................................................................37
Successors and Assigns..............................................................37
Joint and Several Obligations.......................................................37
AMENDED AND RESTATED CREDIT AGREEMENT
(PARTNERSHIP GUARANTORS)
This AMENDED AND RESTATED CREDIT AGREEMENT dated as of June
20, 1996 (this "Amendment") is by and between SALTON SEA FUNDING CORPORATION,
a Delaware corporation ("Funding Corporation"), as lender, and 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") as borrowers.
W I T N E S S E T H:
WHEREAS, Funding Corporation is a corporation established
for the sole purpose of making loans to the Guarantors of proceeds from the
issuance of notes and bonds (collectively, the "Securities") in its individual
capacity as principal and as agent acting on behalf of the Guarantors pursuant
to the Trust Indenture, dated as of July 21, 1995, between Funding Corporation
and Chemical Trust Company of California, a California corporation, as trustee
("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 $475,000,000.00; and
WHEREAS, Funding Corporation used a portion of the proceeds
from the sale of such Securities to make a loan to CEOC and VPC pursuant to
that certain Credit Agreement (Partnership Guarantors) dated as of July 21,
1995 between Funding Corporation, CEOC and VPC (the "Original Partnership
Credit Agreement") in the aggregate amount of $75,000,000.00 (the "Original
Partnership Project Loan") portions of which were used: (a) to repay certain
non-recourse indebtedness incurred by California Energy in connection with the
Magma Acquisition; and (b) used to pay certain costs of issuing the
Securities; and
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WHEREAS, Funding Corporation has simultaneously with the
execution and delivery of this Amendment issued and sold Securities in the
aggregate principal amount of $135,000,000.00; and
WHEREAS, Funding Corporation intends to use the proceeds
from the Securities issued and sold contemporaneously herewith to make a loan
to the Partnership Guarantors in the amount of $135,000,000.00 (the
"Additional Partnership Project Loan", and together with the Original
Partnership Project Loan, the "Partnership Project Loan") portions of which
will be used for the following purposes: (a) approximately $96 million to
refinance all existing project-level indebtedness of the Partnership Projects,
(b) approximately $15 million to fund certain capital improvements to the
Partnership Projects and the Salton Sea Projects, and (c) approximately $23
million to fund a portion of the purchase price for the acquisition by certain
of the Partnership Guarantors of the 50% interest in each of the Partnership
Projects previously owned by a third party; and
WHEREAS, in connection with the making of the Additional
Partnership Project Loan, each Partnership Guarantor (including Conejo,
Niguel, San Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan) has agreed to
become jointly and severally liable with each other Partnership Guarantor for
the entire amount of the Original Partnership Project Loan; and
WHEREAS, in order to evidence and implement the making of
the Additional Partnership Project Loan and the addition of Conejo, Niguel,
San Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan as borrowers under the
Original Partnership Project Loan, the parties hereto have agreed to amend and
restate the Original Partnership Credit Agreement as set forth herein.
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NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants hereinafter contained, the parties hereto formally
covenant, agree and bind themselves as follows:
1 - DEFINITIONS AND AMENDMENT
.1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in Exhibit A to the Indenture,
which Exhibit A is hereby incorporated by this reference.
.2. Amendment and Restatement. From and after the date hereof, the
terms of the Original Partnership Credit Agreement 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 Partnership Project Loan, notwithstanding any conflict between
the terms of this Amendment and the terms of the Original Partnership Credit
Agreement. As amended and restated by this Amendment, the Original Partnership
Credit Agreement shall be referred to herein as the "Agreement."
2 - DESCRIPTION OF THE LOAN
.1. Acknowledgements of the Partnership Guarantors; Partnership
Project Loan. The Partnership Guarantors hereby acknowledge and agree that:
(a) The Partnership Guarantors are indebted to Funding
Corporation for all principal, interest, and other amounts currently
outstanding on the Original Partnership Project Loan;
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(b) Pursuant to this Agreement, Funding Corporation does
hereby lend to the Partnership Guarantors and the Partnership Guarantors do
hereby borrow from Funding Corporation the principal amount of the Additional
Partnership Project Loan;
(c) The Partnership Project Loan shall be evidenced by a
promissory note or notes issued by the Partnership Guarantors in favor of
Funding Corporation (collectively, the "Partnership Project Note"); and
(d) If proceeds from the issuance of any Additional Securities
are loaned to the Partnership Guarantors, the outstanding principal balance on
the Partnership Project Loan shall be increased by the amount of such proceeds
and the Partnership Project Loan shall include the loan to the Partnership
Guarantors of such proceeds, as evidenced by a promissory note issued by the
Partnership Guarantors.
Section .2. Term of This Agreement. This Agreement shall remain in full
force and effect from the date hereof until payment in full of all amounts due
under this Agreement.
Section .3. Interest. Interest hereunder shall be paid in arrears on
each May 30th and November 30th commencing on November 30, 1996 until all
principal hereunder is paid in full. Interest shall be computed on the basis
of a three hundred sixty (360) day year, consisting of twelve (12) thirty (30)
day months and at the applicable rate per annum specified on Schedule 1
hereto. Principal shall be payable hereunder in an amount and on the dates set
forth on Schedule 1 hereto.
Section .4. Repayment. The Partnership Guarantors shall repay the
Partnership Project Loan in installments to Funding Corporation on the dates,
at the times and in the amounts
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set forth on Schedule 1 attached hereto (as the same may be modified pursuant
to Section 8.3 of the Indenture).
Section .5. (a) Optional Prepayment. The Partnership Guarantors shall
have the optional right to prepay the Partnership Project Loan in such amounts
and at such times as may be appropriate to permit Funding Corporation to
redeem the Securities pursuant to the optional redemption provisions set forth
in Section 3.1 of the Indenture or defease the Securities pursuant to the
optional defeasance provisions set forth in Section 10.1 of the Indenture.
(a) Mandatory Prepayment. The Partnership Guarantors shall
be required to prepay principal, and to pay accrued interest on such prepaid
principal, on the Partnership Project Loan in such amounts and at such times
as may be required to permit Funding Corporation to redeem the Securities
pursuant to the mandatory redemption provisions set forth in Section 3.3 of
the Indenture as they apply specifically to the Partnership Guarantors and/or
their projects or contracts.
Section .6. Obligations of the Partnership Guarantors Hereunder
Unconditional. The obligations of the Partnership Guarantors to make the
payments required in Sections 2.3 and 2.4 hereof shall be absolute and
unconditional; and the Partnership Guarantors shall not discontinue such
payments for any cause, including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction from the Partnership
Projects, destruction of or damage to the Partnership Projects, including
commercial frustration of purpose, or change in the tax or other laws or
administrative rulings of or administrative actions by the United States of
America or the State of California or any political subdivision of either. The
Partnership Guarantors may, however, at their own cost and expense
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and in their own name or in the name of Funding Corporation, prosecute or
defend any action or proceeding or take any other action involving third
persons which the Partnership Guarantors deem reasonably necessary in order to
secure or protect their rights with respect to the Partnership Projects.
Section .7. General Terms of Payment. (a) All sums payable to Funding
Corporation hereunder shall be deemed paid to the extent the Depositary Agent
shall apply amounts held by the Depositary Agent in accordance with the
Depositary Agreement to the payment of principal of or interest on the
Partnership Project Loan and the Securities in accordance with the Depositary
Agreement.
(a) Whenever any payment hereunder shall be due, or any
calculation shall be made, on a day which is not a Business Day, the date for
payment or calculation, as the case may be, shall be extended to the next
succeeding Business Day, and any interest on any payment shall be payable for
such extended time at the specified rate.
(b) If no due date is specified for the payment of any
amount payable by the Partnership Guarantors hereunder, such amount shall be
due and payable not later than ten (10) days after receipt of written demand
by Funding Corporation to the Partnership Guarantors for payment thereof.
Section .8. Security. The obligations of the Partnership Guarantors
hereunder shall be secured as set forth herein and under the Security
Documents.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
The Partnership Guarantors represent and warrant to Funding
Corporation as follows:
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Section .1. Organization, Power and Status of the Partnership Guarantors.
(a) CEOC and BNG are corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware, (b) VPC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, (c) Conejo, Niguel and San Felipe are corporations duly
organized, validly existing and in good standing under the laws of the State
of California, (d) Del Ranch, Elmore and Leathers are limited partnerships,
duly organized, validly existing and in good standing under the laws of the
State of California, (e) Vulcan is a general partnership, duly organized,
validly existing and in good standing under the laws of the State of Nevada
and (f) each of the Partnership Guarantors is duly qualified in the State of
California and is duly authorized to do business in each other jurisdiction
where the nature of its activities makes such qualification necessary. Each of
the Partnership Guarantors has all requisite power and authority to carry on
its business as now being conducted and as proposed to be conducted.
Section .2. Authorization; Enforceability; Execution and Delivery.
(a) Each of the Partnership Guarantors has all necessary
power and authority to execute, deliver and perform its obligations under this
Agreement, the Partnership Project Note and each other Financing Document to
which it is a party.
(b) All action on the part of each of the Partnership
Guarantors that is required for the authorization, execution, delivery and
performance of this Agreement, the Partnership Project Note and each other
Financing Document to which such Partnership Guarantor is a party have been
duly and effectively taken; and the execution, delivery and performance of
this Agreement, the Partnership Project Note and each such other Financing
Document to which any of the Partnership Guarantors is a party does not
require the approval or consent of any holder or
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trustee of any Debt or other material obligations of the Partnership
Guarantors which has not been obtained.
(c) This Agreement, the Partnership Project Note and each other
Financing Document to which any of the Partnership Guarantors is a party have
been duly authorized, executed and delivered by the Partnership Guarantors.
Each of this Agreement, the Partnership Project Note and each other Financing
Document to which any of the Partnership Guarantors is a party constitutes a
legal, valid and binding obligation of such Partnership Guarantor enforceable
against such Partnership Guarantor in accordance with the terms hereof and
thereof, except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally, and subject
to general principles of equity.
Section .1. No Conflicts; Laws and Contracts; No Default;
Representations and Warranties. (a) Neither the execution, delivery and
performance of this Agreement, the Partnership Project Note or any other
Financing Document to which any of the Partnership Guarantors is a party, nor
the consummation of any of the transactions contemplated hereby or thereby (i)
contravenes any provision of Law applicable to any of the Partnership
Guarantors or any of the Collateral, except any contravention which,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, (ii) conflicts or is inconsistent with or
constitutes a default under the articles of incorporation, by-laws, or
partnership agreement of any of the Partnership Guarantors, or of any other
terms of any Partnership Project Document, Financing Document or any other
agreement or instrument to which the Partnership Guarantors may be subject
except any such conflict, inconsistency, default or violation which,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect or (iii)
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results in the creation or imposition of (or the obligation to create or
impose) any Liens (other than Permitted Liens) on the Partnership Collateral.
(b) Each of the Partnership Guarantors is in compliance with
any and all Laws applicable to it, except any such noncompliance which,
individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.
Section .2. Litigation There are no claims, actions, suits,
investigations or proceedings at law or in equity (including any Environmental
Claims) or by or before any arbitrator or Governmental Authority now pending
against any of the Partnership Guarantors or, to the best knowledge of any of
the Partnership Guarantors after due inquiry, threatened against any of the
Partnership Guarantors or any property or other assets or rights of the
Partnership Guarantors that could reasonably be expected to result in a
Material Adverse Effect.
Section .3. Environmental Matters. To the best knowledge of the
Partnership Guarantors after due inquiry, the Partnership Projects are in
compliance with all existing applicable Environmental Laws and there are no
facts, circumstances or conditions under any existing Environmental Law which
could, individually or in the aggregate with all other circumstances or
conditions, reasonably be expected to result in a Material Adverse Effect.
Section .4. Employee Benefit Plans. Each Plan (including without
limitation each Plan of a Commonly Controlled Entity) as to which the
Partnership Guarantors may have any liability complies with all applicable
requirements of Law and regulations, and (i) no "reportable event" (as defined
in Section 4043 of ERISA (other than an event not subject to the notice
requirement of the PBGC)) has occurred with respect to any such Plan, (ii)
there has been no withdrawal from any Multiemployer Plan or steps taken to do
so that have resulted or could
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reasonably be expected to result in material liability for the Partnership
Guarantors, (iii) no Plan has been terminated or has commenced to be
terminated which could reasonably be expected to result in material liability
for the Partnership Guarantors, (iv) no contribution failure has occurred with
respect to any Plan sufficient to give rise to a lien under Section 302(f) of
ERISA or Section 412 of the Code and (v) no condition exists or event or
transaction has occurred with respect to any Plan that, in each case, could
reasonably be expected to result in a Material Adverse Effect.
Section .5. Business of the Partnership Guarantors. Except as otherwise
permitted in this Agreement and the other Financing Documents, none of the
Partnership Guarantors is engaged in any business other than the development,
acquisition, construction, operation and financing of the Projects and
transactions related thereto or as permitted under Section 4.7 hereof.
Section .6. Valid Title. Each of the Partnership Guarantors has valid
legal title to all of its assets.
Section .7. Security Interests. The security interests to be
transferred to and/or to be created in favor of Funding Corporation hereunder
and under the Security Documents will be, to the extent provided herein and
therein, valid and perfected first priority security interests in and liens on
the collateral described therein.
Section .8. Utility Regulation. None of the Partnership Guarantors is
subject to regulation by any Governmental Authority under PUHCA as a "public
utility company" or an "affiliate," or "subsidiary company" of a "registered
holding company" or a company subject to registration under PUHCA.
15
Section .9. Qualifying Facility. The Partnership Projects are
Qualifying Facilities.
Section .10. Investment Company Act. None of the Partnership Guarantors
is, and following the execution of the Partnership Project Note, will be, an
"investment company" or, to its knowledge, an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company Act
of 1940, as amended.
Section .11. No Defaults. None of the Partnership Guarantors is in
default under any Project Documents or other material project contract which
could reasonably be expected to result in a Material Adverse Effect. To the
best of the Partnership Guarantors' knowledge, no material default exists by
any other party to the Project Documents or other material project contracts.
Section .12. Governmental Approvals. All Governmental Approvals which
are required to be obtained by, in the name of or on behalf of any of the
Partnership Guarantors or, to the knowledge of any of the Partnership
Guarantors, any other party to any Financing Document, in connection with (a)
the issuance of the Partnership Project Note and (b) the execution, delivery
and performance by the Partnership Guarantors and any other party to any
Financing Document of the Financing Documents, have been duly obtained or
made, are validly issued and are in full force and effect.
Section .13. Margin Stock. None of the Partnership Guarantors is
engaged, directly or indirectly, principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purposes of purchasing or carrying any margin stock, within the
meaning of Regulation G, T, U or X of the Board of Governors of the Federal
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Reserve System. No part of the proceeds of any loan made under this Agreement
will be used for "purchasing" or "carrying" any "margin stock" as so defined,
or for extending credit to others for the purpose of purchasing or carrying
margin stock, or for any purpose which would violate, or cause a violation of,
any such regulation.
Section .14. Taxes. The Partnership Guarantors have filed all federal
and state tax returns, to date, required to be filed by applicable laws and
have paid all federal and state taxes due under such tax returns except to the
extent that such taxes are being contested in good faith and by appropriate
proceedings and adequate reserves, bonds or other security have been
established with respect thereto.
Section .15. Ownership of Partnership Guarantors. As of the date of this
Agreement, (a) Magma and Funding Corporation are the sole shareholders of CEOC
and VPC, (b) CEOC and Conejo are the sole general partners of Del Ranch, and
Magma and Conejo are the sole limited partners of Del Ranch, (c) CEOC and
Niguel are the sole general partners of Elmore, and Magma and Niguel are the
sole limited partners of Elmore, (d) CEOC and San Felipe are the sole general
partners of Leathers, and Magma and San Felipe are the sole limited partners
of Leathers, (e) VPC and BNG are the sole general partners of Vulcan, (f) CEOC
is the sole shareholder of each of Conejo, Niguel and San Felipe and (g) VPC
is the sole shareholder of BNG.
Section .16. Disclosure. Each of the Series D and E Preliminary
Offering Circular and the Series D and E Final Offering Circular as of its
date did not, and the Series D and E Final Offering Circular (as the same may
have been amended or supplemented) as of the Closing Date will not, contain
any untrue statement of a material fact with respect to the Partnership
Guarantors or omit to state any material fact necessary to make the statements
made therein
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with respect to the Partnership Guarantors, in the light of the circumstances
under which they were made, not misleading.
ARTICLE 2 - COVENANTS AND AGREEMENTS OF THE PARTNERSHIP
GUARANTORS
Each Partnership Guarantor hereby covenants and agrees that
from the date of this Agreement, it shall faithfully observe and fulfill, and
shall cause to be fulfilled and observed, each of the following covenants that
is applicable to such Partnership Guarantor until all amounts due under the
Securities and the Indenture shall have been repaid.
Section .1. Reporting Requirements. Each of the Partnership
Guarantors shall provide to Funding Corporation (a) unaudited quarterly
reports for the first three quarters of each fiscal year containing condensed
financial information within forty-five (45) days of the end of each quarter
and audited annual reports within ninety (90) days of the end of each fiscal
year, (b) all other information in respect of the Partnership Guarantors
requested by Funding Corporation to enable Funding Corporation to meet its
obligations under the Indenture, (c) copies of material notices delivered in
connection with any Partnership Project Documents, and (d) written notice of
any Credit Agreement Default or Event of Default under this Agreement or any
event or condition that could reasonably be expected to result in a Material
Adverse Effect.
Section .2. Sale of Assets. Except as contemplated by the Partnership
Project Documents, none of the Partnership Guarantors shall sell, lease (as
lessor) or transfer (as transferor) any property or assets material to the
operation of the Partnership Projects except in the ordinary course of business
to the extent that such property is no longer useful or necessary in connection
with the operation of the Partnership Projects; provided, however, without
limiting the
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generality of the foregoing, that the Partnership Guarantors shall be allowed
to lend useful spare parts to the Salton Sea Guarantors for use in the Salton
Sea Projects or to other Permitted Facilities financed with Permitted Debt for
use in such Permitted Facilities.
Section .3. Sale of Partnership Interests. Neither CEOC nor VPC
shall sell, transfer or convey any of their partnership interests in the
Partnership Project Companies.
Section .4. Insurance. Except as set forth below, the Partnership
Project Companies shall maintain or cause to be maintained (a) on the date
hereof the insurance in effect with respect to the Partnership Projects on the
date hereof and (b) insurance as is generally carried by companies engaged in
similar businesses and owning similar properties in the same general areas and
financed in a similar manner. The Partnership Project Companies have business
interruption insurance, casualty insurance, including flood and earthquake
coverage, and primary and excess liability insurance, as well as customary
worker's compensation and automobile insurance. The Partnership Project
Companies shall not reduce or cancel such insurance coverages (or permit any
such coverages to be reduced or cancelled) if the Insurance Consultant
determines that (i) such reduction or cancellation would not be reasonable
under the circumstances and (ii) the insurance coverages sought to be reduced
or cancelled are available on commercially reasonable terms or that another
level of coverage greater than that proposed by the Partnership Project
Companies is available on commercially reasonable terms (in which case such
coverage may be reduced to such greater available levels).
Section .5. QF Status. The Partnership Project Companies shall operate
and maintain the Partnership Projects as Qualifying Facilities unless the
failure to do so operate and maintain such Projects as Qualifying Facilities
would not cause or result in (a) a breach of the
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power purchase agreements that the Partnership Project Companies are party to
or (b) an adverse effect on the revenues to be received under such power
purchase agreements.
Section .6. Governmental Approvals; Title. Each of the Partnership
Guarantors shall at all times (a) obtain and maintain in full force and effect
all material Governmental Approvals and other consents and approvals required
at any time in connection with its business and (b) preserve and maintain good
and valid title to its properties and assets (subject to no liens other than
Permitted Liens), except in each case where the failure to do so in clause (a)
or (b) could not reasonably be expected to have a Material Adverse Effect.
Section .7. Nature of Business. None of the Partnership Guarantors
shall engage in any business other than their existing businesses and, in the
case of the Partnership Project Companies, the development, acquisition,
construction, operation and financing of the Partnership Projects as
contemplated by the Transaction Documents; provided, however, that (a) CEOC
shall be permitted to enter into agreements to provide operating and
maintenance services, administrative services, technical services or related
services for Permitted Facilities owned in whole or in part by CalEnergy
(directly or indirectly) and located in Imperial County, California and (b)
the Partnership Guarantors may engage in Permitted Facilities at the SSKGRA
(i)(A) for which Permitted Debt may be incurred and (B) if the Independent
Engineer certifies that such other projects could not reasonably be expected
to have an adverse impact on the geothermal resources for the Salton Sea
Projects or the Partnership Projects or (ii) if Funding Corporation and the
Guarantors take such action as the Rating Agencies require to confirm the
Investment Grade Rating of the Securities.
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Section .8. Compliance With Laws. Each of the Partnership Guarantors
shall comply with all applicable laws, except where non-compliance could not
reasonably be expected to have a Material Adverse Effect.
Section .9. Prohibition on Fundamental Changes. None of the Partnership
Guarantors shall enter into any transaction of merger or consolidation, change
its form of organization or its business, liquidate or dissolve itself (or
suffer any liquidation or dissolution); provided, however, that any Guarantor
shall be able to merge with or into any other Guarantor so long as no Default
or Event of Default exists or will occur as a result thereof and in the event
that any of the Partnership Guarantors is not the surviving entity (i) the
surviving entity shall, simultaneously with such merger, assume all the
obligations of such Partnership Guarantor under this Agreement and under the
other Financing Documents to which such Partnership Guarantor was a party,
(ii) Funding Corporation shall have received appropriate amendments to this
Agreement and the other Financing Documents to which such Partnership
Guarantor was a party, all financing statements necessary to preserve its
valid, perfected, first priority security interest in the Partnership
Collateral, each in form and substance reasonably satisfactory to Funding
Corporation, (iii) after giving effect to such merger, the merger shall not
result in a Material Adverse Effect and (iv) after giving effect to such
merger, no Credit Agreement Event of Default or Event of Default shall have
occurred or be continuing. None of the Partnership Guarantors shall purchase
or otherwise acquire all or substantially all of the assets of any other
Person, except for the purchase or acquisition by the Partnership Guarantors
of the partnership interests or assets of the Partnership Projects not
currently owned by the Partnership Guarantors; provided, however, that the
Partnership Guarantors may engage in Permitted Facilities at the SSKGRA (a)
for which Permitted
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Debt may be incurred or (b) if the Independent Engineer certifies that such
other projects could not reasonably be expected to have an adverse impact on
the geothermal resources for the Partnership Projects or the Partnership
Projects or (c) if Funding Corporation and the Guarantors take such action as
the Rating Agencies require to confirm the Investment Grade Rating of the
Securities.
Section .10. Revenue Fund. Each of the Partnership Guarantors shall take
all actions as may be necessary to cause revenues of the Partnership Guarantors
to be deposited in the Revenue Fund to the extent required by the Depositary
Agreement.
Section .11. Transactions With Affiliates. None of the Partnership
Guarantors shall enter into any transaction or agreement with any Affiliate of
the Partnership Guarantors other than (a) as contemplated under the Transaction
Documents or (b) transactions in the ordinary course of business and on terms
no less favorable to the Partnership Guarantors than the Partnership Guarantors
would obtain in an arms length transaction with a Person that is not an
Affiliate of the Partnership Guarantors.
Section .12. Restricted Payments. The Partnership Guarantors shall not
make any Restricted Payments except (a) as permitted under the Depositary
Agreement or as contemplated in the Offering Circular to occur on the Closing
Date and (b) in respect of Operating and Maintenance Costs.
Section .13. Exercise of Rights Under Partnership Project Documents. None
of the Partnership Guarantors shall exercise, or fail to exercise, their rights
under the partnership agreements of each of the Partnership Project Companies
or any of the Partnership Project Documents in a manner which could reasonably
be expected to result in a Material Adverse Effect.
22
Section .14. Amendments to Contracts. Neither CEOC nor VPC shall
terminate, amend, replace or modify the partnership agreement of any of the
Partnership Project Companies or the Partnership Project Documents to which it
is a party unless such termination, amendment, replacement or modification (i)
could not reasonably be expected to have a Material Adverse Effect or (b) is
required under applicable law. In addition, none of the Partnership Guarantors
shall terminate, amend, replace or modify (other than immaterial amendments or
modifications as certified by the Partnership Guarantors), any of the
Partnership Project Documents to which it is a party (other than a Permitted
Power Contract Buy-Out) unless (a)(1) such Partnership Guarantor certifies
that such termination, amendment, replacement or modification could not
reasonably be expected to have a Material Adverse Effect and (2) in the case
of any amendment, termination or modification of any Power Purchase Agreement
which affects the revenues derived by any of the Partnership Guarantors, the
Independent Engineer certifies that such amendment, termination or
modification could not reasonably be expected to have a Material Adverse
Effect, (b) the Partnership Guarantors provide a letter from the Rating
Agencies confirming that such amendment, termination or modification shall not
result in a Rating Downgrade, or (c) such amendment, termination or
modification is required under applicable law.
Section .15. Limitations on Debt/Liens. None of the Partnership Guarantors
shall create or incur or suffer to exist any Debt except Permitted Guarantor
Debt and except for Debt of the Partnership Project Companies in existence on
the Closing Date which has been effectively defeased or cash collateralized in
connection with the issuance of the Series D and E Securities. None of the
Partnership Guarantors shall grant, create, incur or suffer to exist any Liens
upon any of its properties, except for Permitted Liens.
23
Section .16. Books and Records. The Partnership Guarantors shall
maintain their books and records and give the Funding Corporation, the
Trustee, the Collateral Agent and the Independent Engineer inspection rights.
Section .17. Additional Project Documents. The Partnership Guarantors
shall perform and observe their respective covenants and obligations under all
of the Partnership Project Documents in all material respects except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect. The Partnership Project Companies shall not enter into any
Additional Project Documents if entering into such document could reasonably
be expected to result in a Material Adverse Effect.
Section .18. Maintenance of Existence. The Partnership Guarantors shall at
all times preserve and maintain in full force and effect (a) their existence as
limited partnerships, corporations or a general partnership, as applicable, in
good standing under the laws of the State of California, Nevada or Delaware, as
applicable, (b) their qualification to do business in each jurisdiction in which
the character of the properties owned or leased by them or in which the
transaction of their business as conducted or proposed to be conducted makes
such qualification necessary, and (c) all of their powers, rights, privileges
and franchises which are necessary for the ownership and operation of their
respective businesses.
Section .19. Taxes. The Partnership Guarantors shall pay and discharge all
taxes, assessments and governmental charges upon them, their income and their
properties prior to the date on which penalties are attached thereto, unless
and to the extent only that (a) such taxes, assessments and governmental
charges shall be contested in good faith and by appropriate proceedings, and
(b) adequate reserves, bonds or other security are established with respect
thereto.
24
Section .20. Additional Documents; Filings and Recordings. The Partnership
Guarantors shall execute and deliver, as requested by Funding Corporation,
such other documents as shall reasonably be necessary or advisable in order to
effect or protect the rights and remedies of Funding Corporation granted or
provided for by this Agreement or the other Financing Documents to which the
Partnership Guarantors are party and to consummate the transactions
contemplated therein. The Partnership Guarantors shall, at their own expense,
take all reasonable actions (a) that are requested by Funding Corporation or
(b) that an Authorized Officer of the Partnership Guarantors has actual
knowledge are necessary as a legal matter, to establish, maintain and perfect
the first priority security interests of Funding Corporation. Without limiting
the generality of the foregoing, the Partnership Guarantors shall execute or
cause to be executed and shall file or cause to be filed such Financing
Statements, continuation statements, and fixture filings and such mortgages,
or deeds of trust in all places necessary or advisable (in the opinion of
counsel for Funding Corporation) to establish, maintain and perfect such
security interests.
ARTICLE 3 - DEFAULT AND REMEDIES
--------------------
Section .1. Events of Default. Each of the following events and
occurrences shall constitute a Credit Agreement Event of Default under this
Agreement:
(a) the failure by the Partnership Guarantors to pay or cause
to be paid any principal of, premium, if any, or interest, fees or any other
obligations on the Partnership Project Note for fifteen (15) or more days after
the same becomes due and payable, whether by scheduled maturity or required
prepayment or by acceleration or otherwise, after application by the Trustee, in
accordance with the provisions of the Indenture, of any amounts in Funding
25
Corporation's account in the Debt Service Reserve Fund (as defined in the
Depositary Agreement) and amounts otherwise advanced by other Guarantors for
the benefit of the Partnership Guarantors.
(b) any representation or warranty made by the Partnership
Guarantors under this Agreement shall prove to have been untrue or misleading
in any material respect as of the time made, confirmed or furnished and the
fact, event or circumstance that gave rise to such inaccuracy could reasonably
be expected to result in a Material Adverse Effect and such fact, event or
circumstance shall continue to be uncured for thirty (30) or more days from
the date an Authorized Officer of the Partnership Guarantors has actual
knowledge thereof; provided, however, that if the Partnership Guarantors
commence efforts to cure such fact, event or circumstance within such thirty
(30) day period, the Partnership Guarantors may continue to effect such cure
and such misrepresentation shall not be deemed a Credit Agreement Event of
Default for an additional sixty (60) days so long as the Partnership
Guarantors are diligently pursuing such cure;
(c) the failure by any of the Partnership Guarantors to
perform or observe any covenant contained in Sections 4.2, 4.4, 4.7, 4.9, 4.12,
4.13, 4.14, 4.16, or 4.19 hereof, if any, and such failure shall continue
uncured for thirty (30) or more days after an Authorized Officer of such
Partnership Guarantor obtains actual knowledge of such failure;
(d) the failure by any of the Partnership Guarantors to
perform or observe any of the other covenants contained in this Agreement or in
the other Financing Documents the Partnership Guarantors are party to (other
than such failures described in Sections 5.1(c) above) and such failure shall
continue uncured for sixty (60) or more days after an Authorized Officer of the
Partnership Guarantors has actual knowledge of such failure; provided,
26
however, that if the Partnership Guarantors commence efforts to cure such
default within such sixty (60) day period, the Partnership Guarantors may
continue to effect such cure of the default and such default shall not be
deemed a Credit Agreement Event of Default for an additional thirty (30) days
so long as the Partnership Guarantors are diligently pursuing such cure;
(e) any of the Partnership Guarantors:
(1) does not pay its Debts as they become due or admits in
writing its inability to pay its Debts or makes a general assignment
for the benefit of creditors; or
(2) commences any case, proceeding or other action seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, adjustment,
insolvency, reorganization or similar laws affecting the rights or
remedies of creditors generally, as in effect from time to time
(collectively, "Debtor Relief Law"); or
(3) in any involuntary case, proceeding or other action
commenced against it which seeks to have an order for relief
(injunctive or otherwise) entered against it, as debtor, or seeks
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its Debts under any Debtor Relief Law, (A) fails
to obtain a dismissal of such case, proceeding or other action within
sixty (60) days of its commencement, or (B) converts the case from
one chapter of the Bankruptcy Reform Act of 1978, as amended, to
another chapter, or (C) is the subject of an order for relief; or
27
(4) has a trustee, receiver, custodian or other official
appointed for or take possession of all or any part of its property
or has any court take jurisdiction of any of its property, which
action remains undismissed for a period of sixty (60) days;
(a) the entry of one or more final and
non-appealable judgment or judgments for the payment of money in excess of Ten
Million Dollars ($10 Million) (exclusive of judgment amounts fully covered by
insurance or indemnity) against the Partnership Guarantors, which remain
unpaid or unstayed for a period of ninety (90) or more consecutive days;
(b) an event of default under any Permitted
Guarantor Debt of the Partnership Guarantors in excess of Ten Million Dollars
($10 Million) occurs and such debt becomes due and payable prior to its stated
maturity;
(c) the Partnership Guarantors fail to perform
any of their respective payment obligations under the Partnership Guarantee
for fifteen (15) or more days after the same becomes due and payable;
(d) any Governmental Approval required for the
operation of a Project owned by the Partnership Project Companies is revoked,
terminated, withdrawn or ceases to be in full force and effect if such
revocation, termination, withdrawal or cessation could reasonably be expected
to have a Material Adverse Effect and such revocation, termination, withdrawal
or cessation is not cured for sixty (60) days following the occurrence
thereof;
(e) any Partnership Project Document ceases to be
valid and binding and in full force and effect other than as a result of an
amendment, termination or Permitted Power Contract Buy-Out permitted under
this Agreement, and any such event results in a Material
28
Adverse Effect; provided, however, that no such event shall be a Credit
Agreement Event of Default if within one hundred eighty (180) days from the
occurrence of any such event, the Partnership Guarantors (1) cause the third
party to resume performance or cure such misrepresentation or (2) enter into
an Additional Project Document in replacement thereof, as permitted under this
Agreement;
(f) the failure of any of the Partnership
Guarantors to perform or observe any of its covenants or obligations contained
in any of the Partnership Project Documents to which it is a party if such
failure shall result in the termination of such Partnership Project Document
or otherwise result in a Material Adverse Effect; provided, however that such
event shall not be a Credit Agreement Event of Default if within one hundred
eighty (180) days from the occurrence of any such event, the Partnership
Guarantors enter into an Additional Project Document in replacement thereof as
permitted under this Agreement;
(g) any of the Partnership Security Documents
ceases to be effective or any Lien granted therein ceases to be a valid and
perfected Lien in favor of the Collateral Agent on the Collateral described
therein with the priority purported to be created thereby; provided, however,
that the Partnership Guarantors shall have ten (10) days to cure any such
impairment or cessation or to furnish to the Trustee, the Collateral Agent or
the Depositary Agent all documents or instruments required to cure any such
cessation; or
(h) an Event of Default under Section 6.1 (c),
(d), (e), (f), (g), (h), (i), (j), (k) or (l) of the Indenture occurs.
Section .2. Consequences of Event of Default. If one or more Credit
Agreement Events of Default under this Agreement have occurred and are
continuing, then:
29
(a) in the case of a Credit Agreement Event of Default under
Section 5.1(e) hereof, the entire outstanding principal amount of the
Partnership Project Note, all interest accrued and unpaid thereon, and all
premium and other amounts payable under the Partnership Project Note and this
Agreement, if any, shall automatically become due and payable, without
presentment, demand, protest or notice of any kind; or
(b) in the case of a Credit Agreement Event of Default under:
(1) Sections 5.1(a) or (h) hereof, upon the
written and unrescinded direction of the Holders of no less than thirty three
and one-third percent (33 1/3%) in aggregate principal amount of the
Outstanding Securities, Funding Corporation shall declare the outstanding
principal amount of the Partnership Project Note to be accelerated and due and
payable and all interest accrued and unpaid thereon, and all premium and other
amounts payable under this Agreement, if any to be due and payable, and
(2) Sections 5.1(b), (c), (d), (f), (g), (i),
(j), (k), (l) and (m) hereof, upon the written and unrescinded direction of
the Holders of no less than fifty percent (50%) in aggregate principal amount
of the Outstanding Securities, Funding Corporation shall declare the
outstanding principal amount of the Partnership Project Note to be accelerated
and due and payable and all interest accrued and unpaid thereon, and all
premium and other amounts payable under this Agreement, if any to be due and
payable.
Section .3. Continuing Lien. (a) The liens and security interests
granted in this Agreement, the other Financing Documents to which the
Partnership Guarantors are party and the Security Documents to which the
Partnership Guarantors are party secure all indebtedness and all obligations of
the Partnership Guarantors owed to Funding Corporation in connection with the
30
Partnership Project Loan of whatever kind or character, whether now owing,
hereafter arising or hereafter to be performed.
(a) Notwithstanding anything to the contrary in this
Agreement, the other Financing Documents to which the Partnership Guarantors
are party or the Security Documents to which the Partnership Guarantors are
party, if at the time the principal balance of the Securities is fully paid
(the "Pay-off Date"), any other amounts owed by the Partnership Guarantors
hereunder remain to be paid, Funding Corporation shall not be obligated to
release any collateral remaining subject to the Security Documents, and such
collateral shall continue to secure the payment of such amounts remaining as
of the Pay-off Date.
Section .4. Defense of Actions. Upon the occurrence of a Credit
Agreement Event of Default, Funding Corporation may (but shall not be obligated
to) commence, appear in or defend any action or proceeding purporting to affect
the Partnership Project Loan, the Partnership Projects or the respective
rights and obligations of Funding Corporation and any other person pursuant to
this Agreement, any other Financing Document to which the Partnership
Guarantors are party or any Security Document to which the Partnership
Guarantors are party. Funding Corporation may (but shall not be obligated to)
pay all necessary expenses, including reasonable attorneys' fees and expenses,
incurred in connection with such proceedings or actions, which expenses the
Partnership Guarantors hereby agree to repay to Funding Corporation promptly
upon demand.
31
ARTICLE 2 - GENERAL TERMS AND CONDITIONS
----------------------------
Section .1. Notices. All notices, requests, complaints, demands,
communications or other papers shall be sufficiently given and shall be deemed
given when delivered or mailed by registered or certified mail, postage prepaid,
or sent by telegram or telex, addressed to the parties as follows:
If to the Partnership Guarantors: CalEnergy Operating Company
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Vulcan Power Company
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
Attention: General Counsel
Conejo Energy Company
302 South 36th Street, Suite 400-G
Omaha, Nebraska 68131
Attention: General Counsel
Niguel Energy Company
302 South 36th Street, Suite 400-H
Omaha, Nebraska 68131
Attention: General Counsel
San Felipe Energy Company
302 South 36th Street, Suite 400-I
Omaha, Nebraska 68131
Attention: General Counsel
BN Geothermal Inc.
302 South 36th Street, Suite 400-J
Omaha, Nebraska 68131
Attention: General Counsel
32
Del Ranch, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Elmore, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
33
Leathers, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
Vulcan/BN Geothermal Power Company
302 South 36th Street, Suite 400-E
Omaha, Nebraska 68131
Attention: General Counsel
If to Funding Corporation: Salton Sea Funding Corporation
302 South 36th Street, Suite 400-A
Omaha, Nebraska 68131
Attention: Chief Financial Officer
If to Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: Corporate Utilities Department
If to S & P: Standard & Poor's Corporation
25 Broadway
New York, New York 10004
Attention: Corporate Finance Department
Electric Utilities Group
The above parties may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
Section .1. Amendments and Waivers. This Agreement may only be
amended by a document signed by Funding Corporation and the Partnership
Guarantors. No waiver of any provision of this Agreement nor consent by Funding
Corporation to any departure by the Partnership Guarantors therefrom shall in
any event be effective unless the same shall be in writing and signed by Funding
Corporation. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
Funding Corporation to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver
34
thereof (except as provided above) nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. This Agreement shall be binding upon the
Partnership Guarantors, its successors and any permitted assigns.
Section .2. Election of Remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law. Funding
Corporation shall have all of the rights and remedies granted in the Financing
Documents and available at law or in equity, and these same rights and
remedies may be pursued separately, successively or concurrently against the
Partnership Guarantors, or any collateral under the Financing Documents, at
the sole discretion of Funding Corporation.
Section .3. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization, without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section .4. Third-Party Beneficiaries; Prior Agreements. It is
intended that the Trustee, the Collateral Agent and the Depositary Agent be,
and the Trustee, the Collateral Agent and the Depositary Agent are hereby made,
third-party beneficiaries of this Agreement. This Agreement is for the sole
benefit of Funding Corporation, the Trustee, the Holders and the Partnership
Guarantors and is not for the benefit of any other third party. Notwithstanding
the two preceding sentences, no Holder shall have any right to pursue any remedy
hereunder except through the Trustee as permitted under Sections 6.5 and 6.6 of
the Indenture. This Agreement supersedes all prior agreements among the parties
with respect to the matters addressed herein.
35
Section .5. Partnership Guarantors in Control. In no event shall
Funding Corporation's or the Trustee's rights and interests under this Agreement
and the other Financing Documents be construed to give Funding Corporation or
the Trustee, or be deemed to indicate that Funding Corporation or the Trustee
has, control of the business, management or properties of the Partnership
Guarantors or power over the daily management functions and operating decisions
made by the Partnership Guarantors.
Section .6. Number and Gender. Whenever used herein, the singular
number shall include the plural and the plural the singular, and the
use of any gender shall be applicable to all genders.
Section .7. Captions. The captions, headings, table of contents and
arrangements used in this Agreement are for convenience only and do not and
shall not be deemed to affect, limit, amplify or modify the terms and provisions
hereof.
Section .8. Applicable Law and Jurisdiction. This Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of California.
Section .9. Consent. Whenever the consent or approval of Funding
Corporation or the Partnership Guarantors is required herein, such consent or
approval shall not be unreasonably withheld or delayed.
Section .10. No Recourse. Funding Corporation agrees that no general
partner (except CEOC, VPC, Conejo, Niguel, San Felipe and BNG), limited partner
(except Conejo, Niguel and San Felipe), officer, director, employee or
shareholder of the Partnership Guarantors or any Affiliate of any such party
(collectively, the "Nonrecourse Parties") shall be personally liable under this
Agreement for the payment of any sums now or hereafter owing Funding
36
Corporation under the terms of, or for the performance of any obligation
contained in, this Agreement. Funding Corporation agrees that its rights shall
be limited to proceeding against the Partnership Guarantors and the security
provided or intended to be provided pursuant to the Security Documents and
that it shall have no right to proceed against the Nonrecourse Parties for (a)
the satisfaction of any monetary obligation of, or enforcement of any monetary
claim against, the Partnership Guarantors, (b) the performance of any
obligation, covenant or agreement arising under this Agreement, or (c) any
deficiency judgment remaining after foreclosure of any property securing the
obligations hereunder.
Section .11. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
Section .12. Successors and Assigns. All the covenants, promises and
agreements in this Agreement contained by or on behalf of the Partnership
Guarantors, or by or on behalf of Funding Corporation, shall bind and inure to
the benefit of their respective successors and assigns, whether so expressed or
not.
Section .13. Joint and Several Obligations. The obligations of the
Partnership Guarantors are joint and several.
Section 6.15. Maximum Interest Rate. Notwithstanding any
provision to the contrary contained herein or in the Partnership Project Note,
at no time shall the Partnership Guarantors be obligated or required to pay
interest on the principal balance due hereunder or thereunder at a rate which
could be in excess of the maximum interest rate permitted by law to be
contracted or agreed to be paid. If by the terms hereof or of the Partnership
Project Note, the
37
Partnership Guarantors are at any time required or obligated to pay interest
in excess of such maximum rate, then the rate of interest applicable hereunder
shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate.
38
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
PARTNERSHIP GUARANTORS:
CALENERGY OPERATING COMPANY,
a Delaware corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
VULCAN POWER COMPANY,
a Nevada corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
CONEJO ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
39
NIGUEL ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
SAN FELIPE ENERGY COMPANY,
a California corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
BN GEOTHERMAL INC.,
a Delaware corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
DEL RANCH, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
40
ELMORE, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
LEATHERS, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
as General Partner
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
VULCAN/BN GEOTHERMAL POWER COMPANY,
a Nevada general partnership
By: Vulcan Power Company,
a Nevada corporation,
as General Partner
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
41
FUNDING CORPORATION:
SALTON SEA FUNDING CORPORATION,
a Delaware corporation
By: /s/ John G. Sylvia
-----------------------------
Name: John G. Sylvia
Title: Senior Vice President
42
SCHEDULE 1
INTEREST AND PRINCIPAL PAYMENT SCHEDULE