EXHIBITS 4.31
COLLATERAL ASSIGNMENT
(Partnership Agreements)
This Collateral Assignment (this "Assignment") is dated as
of June 20, 1996 by 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 Del
Ranch, Elmore and Leathers, "Borrower") in favor of Chemical Trust Company of
California, a California corporation, (together with its successors and
assigns, the "Collateral Agent"), as collateral agent under the Intercreditor
Agreement (as defined below).
RECITALS
A. Initial Senior Secured Debt. Pursuant to that certain
Trust Indenture (the "Original Indenture") dated as of July 21, 1995, between
Salton Sea Funding Corporation, a Delaware corporation ("Funding
Corporation"), as issuer, and Collateral Agent, as trustee, Funding
Corporation has issued for its own account as principal, and as agent for the
Guarantors (as defined in the Original Indenture), $232,750,000 principal
amount of Senior Secured Series A Notes due 2000, $133,000,000 principal
amount of Senior Secured Series B Bonds due 2005 and $109,250,000 principal
amount of Senior Secured Series C Bonds due 2010 (collectively, the "Initial
Senior Secured Debt").
B. Additional Senior Secured Debt. Pursuant to that certain
Second Supplemental Trust Indenture (the "Supplemental Indenture") dated as of
June 20, 1996, between Funding Corporation, as issuer, and Collateral Agent,
as trustee, Funding Corporation will issue for its own account as principal,
and as agent for the Guarantors $135,000,000 principal amount of Senior
Secured Series D Notes due 2011 (the "Additional Senior Secured Debt", and
together with the Initial Senior Secured Debt and all other securities issued
under the Indenture, the "Senior Secured Debt"). The Original Indenture, as
amended, modified or supplemented, including pursuant to the Supplemental
Indenture is referred to herein as the "Indenture". Capitalized terms used and
not otherwise defined herein shall have the meanings as defined in the
Indenture.
C. Financing Documents. In connection with the issuance of
the Senior Secured Debt, Borrower has entered or will enter into certain
agreements (the "Financing Documents") with certain parties (the "Secured
Parties"), which agreements include a credit agreement with Funding
Corporation and a guarantee in favor of Collateral Agent serving in its
capacity as Collateral Agent under the Intercreditor Agreement and as trustee
under the Indenture.
D. Security Documents. In order to secure all its
obligations under the Financing Documents, Borrower has agreed to execute
certain security documents (the "Security Documents"), encumbering and
granting security interests in certain of Borrower's rights and properties in
favor of Collateral Agent, as agent for the Secured Parties and Funding
Corporation under that certain Collateral Agency and Intercreditor Agreement
dated as of July 21, 1995, as amended, by and among Funding Corporation, the
Secured Parties and the Guarantors named therein (the "Intercreditor
Agreement").
E. Purpose. This Assignment is entered into to assign,
pledge and encumber all of Borrower's right, title and interest in and to the
documents listed on Exhibit A attached hereto, in favor of the Collateral
Agent, as agent for the Secured Parties and Funding Corporation in order to
secure the payment and performance of the Obligations (as defined below) to
the Secured Parties and Funding Corporation.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the sufficiency
and adequacy of which is hereby acknowledged, the parties agree as follows:
1. Borrower hereby conveys, assigns, transfers and grants to
Collateral Agent, as security for all its obligations under the Financing
Documents (the "Obligations") all the right, title and interest of Borrower
in, to and under (including all moneys due and to become due to Borrower
under), and does hereby grant and create in favor of Collateral Agent, for the
equal and ratable benefit of the Secured Parties and Funding Corporation, a
lien on and first priority security interest in the documents listed on
Exhibit A attached hereto (as amended, supplemented or modified, individually,
an "Assigned Agreement," and collectively, the "Assigned Agreements").
Notwithstanding any provision herein to the contrary, (a) there shall be no
enforcement of remedies hereunder unless there shall have occurred and be
continuing a Credit Agreement Event of Default under the Partnership Credit
Agreement or a Guarantee Event of Default under the Partnership Guarantee, and
(b) the rights and remedies of Collateral Agent, Funding Corporation and the
Secured Parties shall be subject to the provisions of the Intercreditor
Agreement.
2. This Assignment shall be subject to all the terms and conditions
of the other Security Documents, and all the right, title and interest of
Borrower in, to and under the Assigned Agreements shall from the date hereof
constitute part of the collateral pledged, assigned or otherwise encumbered
under the Security Documents (the "Collateral") for all purposes of the
Security Documents.
3. Neither this Assignment nor the receipt by Collateral Agent of any
payments pursuant hereto shall cause Collateral Agent, Funding Corporation or
any Secured Party to be under any obligation to Borrower for any action taken
or omitted to be taken by Collateral Agent, Funding Corporation or any Secured
Party under or in connection with the Assigned Agreements, this Assignment or
any other Security Document.
4. Borrower hereby irrevocably constitutes and appoints Collateral
Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact (which appointment as attorney-in-fact
shall be coupled with an interest) with full and irrevocable power and
authority in the place and stead of Borrower and in the name of Borrower or in
the name of Collateral Agent for the purpose of carrying out the terms of this
Assignment or any of the Security Documents, to execute and deliver and, if
appropriate, to file with the appropriate filing officer or office such
security agreements, financing statements,
continuation statements or other instruments as Collateral Agent deems
necessary or advisable to impose, perfect or continue the perfection of the
Lien created hereby and to take any and all action and to execute any and all
instruments which may be necessary to accomplish the purposes of this
Assignment; provided, however, Collateral Agent shall not exercise such rights
except upon the occurrence and continuance of a Credit Agreement Event of
Default under the Partnership Credit Agreement or a Guarantee Event of Default
under the Partnership Guarantee.
5. At any time and from time to time, Collateral Agent or any officer
or agent thereof shall have the right to perform any act, duty or obligation
required of Borrower that Collateral Agent reasonably determines to be
necessary or appropriate to cure any default, action or omission of Borrower
under any of the Assigned Agreements and, in connection with such cure, to
protect the rights of Borrower and Collateral Agent thereunder, and may do so
in Collateral Agent's name or in the name of Borrower; provided, however,
nothing herein shall require Collateral Agent to cure any default, action or
omission of Borrower under any such Assigned Agreement or to perform any act,
duty or obligation to Borrower thereunder. In accordance with the Security
Documents, neither Collateral Agent, Funding Corporation or any Secured Party,
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable to Borrower or any other
Person for any action taken or omitted to be taken by it or them under or in
connection with any Assigned Agreement notwithstanding that any such action
taken, or omission, by Collateral Agent or such other Persons shall prove to
be inadequate, inappropriate or invalid, in whole or in part, except for
liability resulting from Collateral Agent's gross negligence or willful
misconduct.
6. Borrower hereby agrees to execute and deliver such additional
assignments and other documents as Collateral Agent reasonably may request in
order to implement the purpose and intent of this Assignment and the Security
Documents, including, without limitation, those documents required to perfect
and protect the assignment and security interest granted hereunder and
thereunder.
7. Borrower hereby represents and warrants that, other than such
security interests as have been granted by the Borrower pursuant to (a) the
collateral assignments entered into by each of Del Ranch, Elmore and Leathers
in favor of Morgan Guaranty Trust Company of New York, as Agent, which
security interests shall have been terminated as of even date herewith, and
(b) the Security Documents, it has not heretofore assigned or otherwise
disposed of or encumbered any right, title or interest of the Borrower in, to
or under the Assigned Agreements or any moneys due or to become due to the
Borrower under or by reason thereof, and that the Borrower has, subject to the
terms and conditions of the Assigned Agreements and all applicable
governmental laws, rules or other requirements, the right and power to
transfer to Collateral Agent, for the benefit of the Secured Parties and
Funding Corporation, absolute title to the Borrower's right, title and
interest in, to and under the Assigned Agreements and in and to all the moneys
due and to become due to the Borrower under the Assigned Agreements.
8. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
9. This Assignment shall create a continuing assignment, pledge and
first priority security interest in the Assigned Agreements and shall remain
in full force and effect for the benefit of Collateral Agent until all
Obligations to be paid or performed by Borrower have been paid and performed
in full. Upon the happening of all of such events, the security interest
granted hereby shall terminate. Upon such termination, Collateral Agent shall,
upon the request and at the expense of Borrower, execute and deliver to
Borrower such documents as Borrower shall reasonably request to evidence such
termination.
10. This Assignment shall be binding upon and inure to the benefit of
Borrower and Collateral Agent for the benefit of Funding Corporation and the
Secured Parties and their respective successors and assigns.
IN WITNESS WHEREOF, Borrower has caused this Assignment to be duly
executed and delivered as of the date first above written.
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
_______________________
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
_______________________
Exhibit A
to the
Collateral Assignment
ASSIGNED AGREEMENTS
As each of the following may be amended, supplemented or otherwise
modified in compliance with the provisions of the Financing Documents:
1. Joint Funding Agreement, dated as of June 29, 1987, by and among
Chevron Geothermal Company of California, Desert Power Company, Earth
Energy, Inc., GEO East Mesa No. 2, Inc., GEO East Mesa No. 3, Inc.,
Heber Geothermal Company, Magma Power Company ("Magma"), Ormesa
Geothermal, Ormesa Geothermal II, Union Oil Company of California and
Vulcan/BN Geothermal Power Company ("Vulcan").
2. Amended and Restated Administrative Services Agreement, dated as
of June 17, 1996, by and between CalEnergy Operating Company ("CEOC")
and Del Ranch, L.P. ("Del Ranch").
3. Technology Transfer Agreement, dated as of March 14, 1988, by and
between Magma and Del Ranch.
4. Amended and Restated Operating and Maintenance Agreement, dated as
of June 17, 1996, by and between CEOC and Del Ranch.
5. Easement Grant Deed and Agreement Regarding Rights for Geothermal
Development, dated as of March 14, 1988, as amended as of June 17,
1996, by and between Magma and Del Ranch.
6. Ground Lease, dated as of March 14, 1988, as amended as of June
17, 1996, by and between Magma and Del Ranch.
7. Amended and Restated Administrative Services Agreement, dated as
of June 17, 1996, by and between CEOC and Elmore, L.P. ("Elmore").
8. Technology Transfer Agreement, dated as of March 14, 1988, by and
between Magma and Elmore.
9. Amended and Restated Operating and Maintenance Agreement, dated as
of June 17, 1996, by and between CEOC and Elmore.
10. Easement Grant Deed and Agreement Regarding Rights for Geothermal
Development, dated as of March 14, 1988, as amended as of June 17,
1996, by and between Magma and Elmore.
11. Ground Lease, dated as of March 14, 1988, as amended as of June
17, 1996, by and between Magma and Elmore.
12. Amended and Restated Administrative Services Agreement, dated as
of June 17, 1996, by and between CEOC and Leathers, L.P.
("Leathers".)
13. Technology Transfer Agreement, dated as of August 15, 1988, by
and between Magma and Leathers.
14. Amended and Restated Operating and Maintenance Agreement, dated
as of June 17, 1996, by and between CEOC and Leathers.
15. Easement Grant Deed and Agreement Regarding Rights for Geothermal
Development, dated as of August 15, 1988, as amended as of June 17,
1996, by and between Magma and Leathers.
16. Ground Lease, dated as of October 26, 1988, as amended as of June
17, 1996, by and between Magma and Leathers.
17. Amended and Restated Construction, Operating and Accounting
Agreement, dated as of June 17, 1996, by and between Vulcan and
Vulcan Power Company ("VPC").
18. Easement Grant Deed and Agreement Regarding Rights for Geothermal
Development, dated as of January 19, 1988, as amended as of June 17,
1996, by and between Magma and VPC.
19. Administrative Services Agreement, dated as of June 17, 1996, by
and between CEOC and Vulcan.
20. Amended and Restated Limited Partnership Agreement of Del Ranch,
L.P., dated as of March 14, 1988, among CEOC, Magma and Conejo Energy
Company, a California corporation, as the same may be amended from
time to time.
21. Amended and Restated Limited Partnership Agreement of Elmore,
L.P., dated as of March 14, 1988, among CEOC, Magma and Niguel Energy
Company, a California corporation, as the same may be amended from
time to time.
22. Limited Partnership Agreement of Leathers, L.P., dated as of
August 15, 1988, among CEOC, Magma and San Felipe Energy Company, a
California corporation, as the same may be amended from time to time.
23. Partnership Agreement of Vulcan/BN Geothermal Power Company,
dated as of August 30, 1985, among VPC and BN Geothermal Inc., a
Delaware corporation, as the same may be amended from time to time.
24. Any additional documents now existing or hereafter entered into
by Del Ranch, Elmore, Leathers or Vulcan relating to the maintenance
or operation of their respective geothermal power plants located in
Imperial Valley, California.