EXHIBIT 10.71
TRUST INDENTURE
dated as of September 10, 1999
between
CORDOVA FUNDING CORPORATION
and
CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee
Providing For the Issuance From Time to Time
of Debt Securities in One or More Series
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; INDENTURE TO CONSTITUTE CONTRACT
SECTION 1.1 Definitions; Construction 2
SECTION 1.2 Indenture to Constitute Contract 2
SECTION 1.3 Compliance Certificates and Opinions 2
SECTION 1.4 Form of Documents Delivered to Trustee 3
SECTION 1.5 Conflict with Trust Indenture Act 4
SECTION 1.6 Agency 4
ARTICLE II
THE SECURITIES
SECTION 2.1 Authorization, Amount, Terms and Issuance of Securities 4
SECTION 2.2 Authorization and Terms of the Initial Securities 5
SECTION 2.3 Additional Securities 6
SECTION 2.4 Record Dates 12
SECTION 2.5 Form; Transfer and Exchange 13
SECTION 2.6 Execution 18
SECTION 2.7 Authentication 19
SECTION 2.8 Mutilated, Destroyed, Lost or Stolen Securities 19
SECTION 2.9 Temporary Securities 20
SECTION 2.10 Cancellation and Destruction of Surrendered Securities 20
SECTION 2.11 Disposition of Net Proceeds of Initial Securities 20
ARTICLE III
REDEMPTION OF SECURITIES
SECTION 3.1 Optional Redemption 20
SECTION 3.2 Election or Requirement to Redeem; Notice to Trustee 21
SECTION 3.3 Mandatory Redemption; Redemption at the Option of the
Holders; Selection of Securities to Be Redeemed 22
SECTION 3.4 Notice of Redemption 25
SECTION 3.5 Securities Payable on Redemption Date 26
SECTION 3.6 Securities Redeemed in Part 26
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Principal of and Interest on Securities 27
SECTION 4.2 Reporting Requirements 27
SECTION 4.3 Corporate Existence 28
SECTION 4.4 Compliance with Laws 28
SECTION 4.5 Governmental Approvals 28
SECTION 4.6 Payment of Taxes and Claims 28
SECTION 4.7 Books and Records 29
SECTION 4.8 Use of Proceeds 29
SECTION 4.9 Indebtedness 29
SECTION 4.10 Business Activities 32
SECTION 4.11 Liens 32
SECTION 4.12 Fundamental Changes 33
SECTION 4.13 Transactions with Affiliates 33
SECTION 4.14 Amendments to the Cordova Energy Credit Agreement and
Cordova Energy Project Note 33
SECTION 4.15 Non-Consolidation 33
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 Events of Default Defined 34
SECTION 5.2 Enforcement of Remedies 36
SECTION 5.3 Specific Remedies 41
SECTION 5.4 Judicial Proceedings Instituted by Trustee 41
SECTION 5.5 Holders May Demand Enforcement of Rights by Trustee 44
SECTION 5.6 Control by Holders 44
SECTION 5.7 Waiver of Past Defaults or Events of Default 44
SECTION 5.8 Holder May Not Bring Suit Under Certain Conditions 45
SECTION 5.9 Undertaking to Pay Court Costs 46
SECTION 5.10 Right of the Holders to Receive Payment Not to be Impaired 46
SECTION 5.11 Application of Moneys Collected by Trustee 46
SECTION 5.12 Securities Held by Certain Persons Not to Share in
Distribution 47
SECTION 5.13 Waiver of Appraisement, Valuation, Stay, Right to
Marshalling 47
SECTION 5.14 Limitation on Holders' Bankruptcy Rights 48
SECTION 5.15 Remedies Cumulative; Delay or Omission Not a Waiver 48
SECTION 5.16 The Intercreditor Agreement 48
SECTION 5.17 The Depositary Agreement 48
ARTICLE VI
ACTS OF HOLDERS
SECTION 6.1 Acts of Holders 49
SECTION 6.2 Purposes for Which Holders' Meeting May Be Called 50
SECTION 6.3 Call of Meetings by Trustee 50
SECTION 6.4 The Funding Corporation and Holders May Call Meeting 51
SECTION 6.5 Persons Entitled to Vote at Meeting 51
SECTION 6.6 Determination of Voting Rights; Conduct and Adjournment
of Meeting 51
SECTION 6.7 Counting Votes and Recording Action of Meeting 52
SECTION 6.8 Evidence of Action Taken by Holders 52
SECTION 6.9 Proof of Execution of Instruments and of Holding of
Securities 53
SECTION 6.10 Securities Owned by the Funding Corporation Deemed Not
Outstanding 54
SECTION 6.11 Right of Revocation of Action Taken 54
ARTICLE VII
AMENDMENTS AND SUPPLEMENTS
SECTION 7.1 Amendments and Supplements to Indenture without Consent
of Holders 55
SECTION 7.2 Amendments and Supplements to Indenture with Consent
of Holders 56
SECTION 7.3 Amendment of the Credit Agreements or Project Notes 56
SECTION 7.4 Trustee Authorized to Join in Amendments and Supplements;
Reliance on Counsel 56
SECTION 7.5 Effect of Supplemental Indentures 56
SECTION 7.6 Conformity with Trust Indenture Act 57
SECTION 7.7 Reference in Securities to Supplemental Indentures 58
SECTION 7.8 Conformity with Trust Indenture Act 58
SECTION 7.9 Reference in Securities to Supplemental Indentures 58
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Securities 58
SECTION 8.2 Satisfaction and Discharge of Indenture 59
SECTION 8.3 Application of Trust Money 60
ARTICLE IX
DEFEASANCE
SECTION 9.1 Funding Corporation's Option to Effect Defeasance or
Covenant Defeasance 60
SECTION 9.2 Defeasance and Discharge 61
SECTION 9.3 Covenant Defeasance 61
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance 61
SECTION 9.5 Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions 63
SECTION 9.6 Reinstatement 63
ARTICLE X
THE TRUSTEE AND DTC
SECTION 10.1 Certain Duties and Responsibilities of the Trustee 64
SECTION 10.2 Notice of Defaults 65
SECTION 10.3 Certain Rights of Trustee 66
SECTION 10.4 Not Responsible for Recitals or Issuance of Securities 67
SECTION 10.5 May Hold Securities 67
SECTION 10.6 Money Held in Trust 67
SECTION 10.7 Compensation; Reimbursement; Indemnification 67
SECTION 10.8 Eligibility 67
SECTION 10.9 Resignation and Removal; Appointment of Success 68
SECTION 10.10 Acceptance of Appointment by Successor 69
SECTION 10.11 Merger, Conversion, Consolidation or Succession to
Business 69
SECTION 10.12 Maintenance of Offices and Agencies 70
SECTION 10.13 Disqualification; Conflicting Interests 72
SECTION 10.14 The Depository Trust Company 72
ARTICLE XI
HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND THE FUNDING CORPORATION
SECTION 11.1 The Funding Corporation to Furnish to the Trustee Names
and Addresses of the Holders 73
SECTION 11.2 Trustee to Furnish Other Information 73
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 Deposit of Funds for Payment of Securities 74
SECTION 12.2 Third Party Beneficiaries; No Rights Conferred on Others 74
SECTION 12.3 Illegal Provisions Disregarded 74
SECTION 12.4 Substitute Notice 74
SECTION 12.5 Notice to Rating Agencies 74
SECTION 12.6 Notices 74
SECTION 12.7 Successors and Assigns 76
SECTION 12.8 Headings for Convenience Only 76
SECTION 12.9 Counterparts 76
SECTION 12.10 APPLICABLE LAW 76
SECTION 12.11 Holidays 76
SECTION 12.12 Limitation of Liability 76
SCHEDULE I - Schedule of Amortization of Principal on the Securities SCHEDULE II
- - Schedule of Major Maintenance Reserve Requirement
EXHIBIT A - Definitions
EXHIBIT B - Form of Bond
EXHIBIT C - Form of Certificate
EXHIBIT D - Form of Transferor Certificate
EXHIBIT E - Form of Institutional Accredited Investor Transferee
Compliance Letter
EXHIBIT F - Terms of Subordination
Cross-reference sheet showing the location in this Indenture of the
provisions inserted pursuant to Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939, as amended.
Trust Indenture Act Section Indenture Section
Section 310 (a) (1) 11.8
(a) (2) 11.8
(a) (3) Not Applicable
(a) (4) Not Applicable
(a) (5) 11.8
(b) 11.9
(c) Not Applicable
Section 311 (a) 6.4(d)
(b) 6.4(d)
(c) Not Applicable
Section 312 (a) 2.6(b), 12.1
(b) 1.5
(c) 1.5
Section 313 (a) 12.2
(b) 12.2
(c) 12.2(b), 13.6(b)
(d) 12.2
Section 314 (a) 5.2, 5.10
(b) (1) Not Applicable
(b) (2) Not Applicable
(c) (1) 1.3
Trust Indenture Act Section Indenture Section
(c) (2) 1.3
(c) (3) Not Applicable
(d) Not Applicable
(e) 1.3
(f) Not Applicable
Section 315 (a) 11.1(a)
(b) 6.2, 12.2
(c) 11.1(b)
(d) (1) 11.1(c)
(d) (2) 11.1(c)(2)
(d) (3) 11.1(c)(3)
(e) 6.9
Section 316 (a) (1) (A) 6.6
(a) (1) (B) 6.7
(a) (2) 6.7
(b) 6.10
(c) 2.4
Section 317 (a) (1) 6.4(a)
(a) (2) 6.4(d)
(b) 11.12
Section 318 1.5
TRUST INDENTURE
This TRUST INDENTURE, dated as of September 10, 1999 (this
"Indenture"), is by and between CORDOVA FUNDING CORPORATION, a corporation
organized under the laws of the state of Delaware (the "Funding Corporation"),
and CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a banking
association organized under the federal laws of the United States of America, as
Trustee (together with its successors in such capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, the Funding Corporation was formed for the sole
purpose of issuing its bonds, debentures, promissory notes or other evidences of
indebtedness under this Indenture;
WHEREAS, the Funding Corporation has duly authorized the
creation of an issue of senior secured bonds to be issued up to such principal
amount authorized in accordance with the terms of this Indenture, and the
Funding Corporation has duly authorized the execution and delivery of this
Indenture to secure the Securities and to provide for the authentication and
delivery thereof by the Trustee;
WHEREAS, the Funding Corporation has authorized the issuance
of its Series A Senior Secured Bonds (the "Initial Securities") and will use the
proceeds of the Initial Securities to make loans from time to time to Cordova
Energy Company LLC, a Delaware limited liability company ("Cordova Energy"),
pursuant to the Credit Agreement, dated as of the date hereof, between the
Funding Corporation and Cordova Energy (the "Cordova Energy Credit Agreement");
WHEREAS, the Cordova Energy Credit Agreement provides for the
payment by Cordova Energy of amounts sufficient to enable the Funding
Corporation to pay the principal of, premium (if any), and interest on all
Initial Securities at any time issued and outstanding under this Indenture
according to their tenor and to pay other costs of the Funding Corporation and
the Trustee incurred in connection with the Initial Securities, this Indenture,
the Cordova Energy Credit Agreement and the other Financing Documents; and
WHEREAS, Cordova Energy has guaranteed to the Trustee the
payment of principal, premium (if any), interest and other amounts due from the
Funding Corporation under this Indenture with respect to the Securities.
NOW, THEREFORE, that, for and in consideration of the premises
and of the covenants herein contained and of the purchase of the Securities by
Holders thereof, it is mutually covenanted and agreed, for the benefit of the
parties hereto and the equal and proportionate benefit of all Holders, as
follows:
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ARTICLE I
DEFINITIONS; INDENTURE TO CONSTITUTE CONTRACT
SECTION 1.1 Definitions; Construction. For all purposes of
this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) capitalized terms used and not otherwise defined herein
shall have the meanings assigned to them in Exhibit A attached hereto, which
Exhibit A is hereby incorporated by reference herein, and shall include the
plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) all references in this Indenture to designated "Articles,"
"Sections," "Exhibits" and other subdivisions are to the designated Articles,
Sections, Exhibits and other subdivisions of this Indenture;
(e) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section, Exhibit or other subdivision;
(f) unless otherwise expressly specified, any agreement,
contract or document defined or referred to herein shall mean such agreement,
contract or document as in effect as of the date hereof, as the same may
thereafter be amended, restated, supplemented or otherwise modified from time to
time in accordance with the terms thereof and of this Indenture and the other
Financing Documents and including any agreement, contract or document in
substitution or replacement of any of the foregoing;
(g) unless the context clearly intends to the contrary,
pronouns having a masculine or feminine gender shall be deemed to include the
other gender; and
(h) any reference to any Person shall include its successors
and assigns, and in the case of any Governmental Authority, any Person
succeeding to its functions and capacities.
SECTION 1.2 Indenture to Constitute Contract. In consideration
of the purchase and acceptance of any or all of the Securities by those who
shall hold the same from time to time, the provisions of this Indenture shall be
part of the contract of the Funding Corporation with Holders of the Securities,
and shall be deemed to be and shall constitute contracts between the Funding
Corporation, the Trustee and Holders from time to time of the Securities. The
provisions, covenants and agreements herein set forth to be performed by or on
behalf of the Funding Corporation shall be for the equal benefit, protection and
security of the Holders of any and all of the Securities. All of the Securities,
regardless of the time or times of their issuance or maturity, shall be of equal
rank without preference, priority or distinction of any of the Securities over
any other thereof except as expressly provided in or pursuant to this Indenture.
SECTION 1.3 Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Indenture, upon any application or request
by the Funding Corporation to the Trustee that the Trustee take any action under
any provision of this Indenture, the Funding Corporation shall furnish to the
Trustee an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
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counsel all such conditions precedent, if any, have been complied with, except
that in the case of any particular application or request as to which the
furnishing of documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished. The Trustee may conclusively rely, and
shall be fully protected in relying, on any such Officer's Certificate.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
such examination or investigation has been made as is necessary to enable such
individual to express an informed opinion as to whether or not such covenant or
condition has been complied with;
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with; and
(e) in the case of an Officer's Certificate of the Funding
Corporation, a statement that no Default or Event of Default under this
Indenture has occurred and is continuing (unless such Officer's Certificate
relates to a Default or an Event of Default).
SECTION 1.4 Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
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Any certificate or opinion of an officer of the Funding
Corporation may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows or has reason to believe that the certificate or opinion or
representations with respect to the matters upon which such Officer's
Certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon an
Authorized Representative of the Funding Corporation stating that the
information with respect to such factual matters is in the possession of the
Funding Corporation, unless such counsel knows that the certificate or opinion
or representations with respect to such matters are erroneous.
Any Opinion of Counsel stated to be based on the opinion of
other counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.5 Conflict with Trust Indenture Act. If any
provision hereof, including without limitation, Section 5.16 or 5.17 hereof,
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply in this
Indenture as so modified or to be excluded, as the case may be.
SECTION 1.6 Agency. In executing the Securities and this
Indenture, the Funding Corporation will be acting both as principal and as agent
for Cordova Energy and any Additional Guarantor to the extent of Cordova
Energy's or such Additional Guarantor's, as the case may be, obligations under
the Securities. As used in this Indenture, references to the "Funding
Corporation" shall be interpreted to include the Funding Corporation in its
capacity as principal and the Funding Corporation in its capacity as agent
pursuant to the Agency Agreement with Cordova Energy or any Additional
Guarantor, as the case may be, with respect to Cordova Energy's or such
Additional Guarantor's, as the case may be, obligations under this Indenture.
ARTICLE II
THE SECURITIES
SECTION 2.1 Authorization, Amount, Terms and Issuance of
Securities. (a) Securities may be issued hereunder from time to time. No
Securities may be issued under this Indenture except in accordance with this
Article II. The maximum principal amount of Securities which may be issued
hereunder is not limited. The Securities (i) shall be designated "Cordova
Funding Corporation Senior Secured Bonds" and (ii) shall be issued in Authorized
Denominations. The Securities may have notations, legends or endorsements
required by Law or usage satisfactory to the Trustee. The Initial Securities
shall contain substantially the terms recited in the form of Security set forth
in Exhibit B.
4
(b) Private placement numbers issued by S&P's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) or "CUSIP" numbers may be printed on the
Securities. Neither the Funding Corporation nor the Trustee shall have any
responsibility for any defect in the private placement number or CUSIP number,
as the case may be, that appears on any bond, check, advice of payment or
redemption notice, and any such document may contain a statement to the effect
that private placement numbers or CUSIP numbers, as the case may be, have been
assigned by an independent service for convenience of reference and that neither
the Funding Corporation nor the Trustee shall be liable for any inaccuracy in
such numbers. The Securities may bear such endorsements or legends satisfactory
to the Trustee as may be required to conform to usage or law with respect
thereto.
SECTION 2.2 Authorization and Terms of the Initial Securities.
(a) The Initial Securities to be issued under this Indenture are hereby created.
The Funding Corporation may issue the Initial Securities from time to time in
accordance with the Bond Purchase Agreement, substantially in the form of
Exhibit B, upon the execution of this Indenture. The Trustee shall, at the
Funding Corporation's written request, authenticate the Initial Securities and
deliver them as specified in such request.
(b) The Initial Securities shall be issued in five separate
series (each, a "Series"), designated A-1 through A-5, respectively, on five
different closing dates, in each case in accordance with the Bond Purchase
Agreement. Each Series of Initial Securities shall be dated the date of issuance
thereof (the "Applicable Closing Date" for such Series) and shall be in an
aggregate principal amount determined for such Series as provided in the Bond
Purchase Agreement.
(c) Each Series of Initial Securities shall have a final
maturity date of December 15, 2019 (the "Series A Final Maturity Date") and
shall bear interest at the rate determined for such Series in accordance with
Section 1 of the Bond Purchase Agreement. The Series A-2 through A-5 Securities
shall be dated as of the date of authentication thereof. The Funding Corporation
shall deliver to the Trustee an Officer's Certificate specifying the date of
issuance of such Initial Securities, the aggregate principal amount of the
Initial Securities being issued on such date and the interest rate for such
Series of Initial securities being issued.
(d) The principal of, premium (if any) and interest on, the
Initial Securities shall be payable in any coin or currency of the United States
of America which, at the respective dates of payment thereof, is legal tender
for the payment of public and private debts. Payment of principal of and
interest on the Initial Securities shall be made (i) by check or draft mailed on
the Scheduled Payment Date to the registered owner as of the close of business
on the Record Date immediately preceding the Scheduled Payment Date, at his
address as it appears on the registration books of the Trustee or (ii) by wire
transfer to such registered owner as of the close of business on such Record
Date upon written notice of such wire transfer address in the continental United
States given not less than fifteen (15) days prior to such Record Date;
provided, however, that if and to the extent that there shall be a default in
the payment of the interest or principal due on such Scheduled Payment Date,
5
such defaulted interest and/or principal shall be paid to the Holder in whose
name any such Initial Security is registered at the close of business on the day
determined by the Trustee as provided in Section 2.4 hereof.
(e) Interest on each Series of Initial Securities shall be
paid in arrears on each June 15 and December 15, commencing on the Scheduled
Payment Date next succeeding the Applicable Closing Date for such Series and
concluding on the Series A Final Maturity Date. Interest on the Initial
Securities shall be computed upon the basis of a 360-day year, consisting of
twelve (12) thirty (30) day months.
(f) Principal of each Series of Initial Securities shall be
paid in an amount, and on the Scheduled Payment Dates, as set forth with respect
to such Series on Schedule I hereto.
(g) Final payment or prepayment in full of the Initial
Securities shall be made to the Holders thereof upon presentation and surrender
of such Initial Securities at the office of the Trustee as indicated in Section
10.12 hereof. Prior to final payment of principal on any Initial Security, the
principal amount outstanding on an Initial Security will be automatically
reduced by the amount of any principal payment made to a registered Holder.
SECTION 2.3 Additional Securities.
(a) Additional Securities may, upon the satisfaction of the
conditions set forth in this Section 2.3, be issued in the amounts and for the
purposes permitted herein. All Additional Securities shall rank pari passu with
the Initial Securities, shall be secured by the Funding Corporation Collateral
and guaranteed pursuant to the Guarantees and shall have such date or dates,
bear such interest rate or rates, have such maturity dates, redemption dates and
redemption premiums, be in such form and be issued at such prices as shall be
approved in writing by the Funding Corporation.
(b) Upon (i) the satisfaction of the applicable conditions set
forth in paragraph (c) and (d) of this Section, (ii) the execution and delivery
of (x) an appropriate Supplemental Indenture in compliance with Section 2.3(e)
and Article VII of this Indenture, and (y) appropriate supplements or amendments
to the Credit Agreements, the Security Documents and the Project Notes, (iii)
receipt of a consent in writing by the Guarantors confirming that the Guarantees
apply to such Additional Securities, and (iv) receipt by the Securities
Intermediary of an Officer's Certificate confirming that Moneys on deposit in
the Debt Service Reserve Account or otherwise available to be drawn on any Debt
Service Reserve Letter of Credit or Debt Service Reserve Guarantee shall, in the
aggregate, after giving effect to the issuance of such Additional Securities, be
equal to the then current Debt Service Reserve Required Balance (as defined in
the Depositary Agreement), and, if a Debt Service Reserve Letter of Credit or
Debt Service Reserve Guarantee is to be available for amounts payable in respect
of Additional Securities, the consent of the Debt Service Reserve LOC Provider
or the Debt Service Reserve Guarantor and the requisite amount of financial
institutions under any Debt Service Reserve LOC Reimbursement Agreement, if so
required under any Debt Service Reserve LOC Reimbursement Agreement for such
availability, shall have been obtained and be in full force and effect, as
provided in the Debt Service Reserve Letter of Credit or Debt Service Reserve
6
Guarantee and/or the Depositary Agreement, as the case may be, the Funding
Corporation shall execute Additional Securities and deliver them to the Trustee,
and the Trustee upon the written request of the Funding Corporation shall
authenticate such Additional Securities and deliver them to the purchasers
thereof as may be directed by the Funding Corporation; provided, however, that
notwithstanding anything to the contrary contained herein, no Additional
Securities may be issued hereunder (x) without the prior written consent of the
Funding Corporation, and (y) except with respect to clause (c)(i) below, at any
time when a Default or an Event of Default shall have occurred and be continuing
or if such issuance would, upon notice or the passage of time, cause a Default
or an Event of Default. Upon the issuance of any Additional Securities, the
Funding Corporation shall promptly provide the Trustee with a revised Schedule I
to this Indenture that will provide for the payment of principal of such
Additional Securities.
(c) Additional Securities may be issued by the Funding
Corporation; provided that except with respect to clause (c)(i) below, no
Default or Event of Default exists at time of the issuance of the Additional
Securities, before and after giving effect to such issuance, and an Authorized
Officer of the Funding Corporation so certifies to the Trustee; and provided,
further, that all of the net proceeds of such Additional Securities must be
loaned by the Funding Corporation to Cordova Energy and/or one or more
Additional Guarantors pursuant to the Cordova Energy Credit Agreement and/or one
or more Additional Credit Agreements, or supplement thereto, and such proceeds
must be used by Cordova Energy and/or such Additional Guarantors for one or more
of the following purposes, as certified at the time of authentication of such
Additional Securities to the Trustee by an Authorized Officer of the Funding
Corporation:
(i) to finance Required Modifications, so long as
either:
(A) the Independent Engineer confirms (with
customary assumptions and qualifications)
as reasonable a certification from an
Authorized Officer of the Funding
Corporation to the Trustee (with
customary assumptions and qualifications)
that the minimum annual projected Debt
Service Coverage Ratio during the
remaining term of the Securities, after
taking into account the issuance of such
Additional Securities, is reasonably
expected to be equal to or greater than:
(1) 1.2 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be 100%,
(2) 1.25 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 75% but less than
100%,
(3) 1.35 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 50% but less than
75%,
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(4) 1.40 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 25% but less than
50%, and
(5) 1.5 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be less than 25%, or
(B) the Funding Corporation obtains a
Ratings Reaffirmation with respect to
the issuance of such Additional
Securities;
(ii) to finance Optional Modifications, so long as:
(A) the Independent Engineer confirms (with
customary assumptions and qualifica-
tions) as reasonable a certification
from an Authorized Officer of the
Funding Corporation to the Trustee
(with customary assumptions and
qualifications) that (x) the minimum
annual projected Debt Service Coverage
Ratio during the remaining term of the
Securities, after taking into account
the issuance of such Additional
Securities, is reasonably expected to
be equal to or greater than:
(1) 1.4 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be 100%,
(2) 1.55 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 75% but less than
100%,
(3) 1.7 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 50% but less than
75%,
(4) 1.85 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be equal to or
greater than 25% but less than
50%, and
8
(5) 2.0 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably
expected to be less than 25%,
and (y) the average annual projected
Debt Service Coverage Ratio during the
remaining term of the Securities,
after taking into account the issuance
of such Additional Securities, is
reasonably expected to be equal to or
greater than:
(1) 1.4 to 1.0, if the PPA Factor
during the remaining term of
the Securities is reasonably
expected to be 100%,
(2) 1.6 to 1.0, if the PPA Factor
during the remaining term of
the Securities is reasonably
expected to be equal to or
greater than 75% but less
than 100%,
(3) 1.8 to 1.0, if the PPA Factor
during the remaining term of
the Securities is reasonably
expected to be equal to or
greater than 50% but less
than 75%,
(4) 2.0 to 1.0, if the PPA Factor
during the remaining term of
the Securities is reasonably
expected to be equal to or
greater than 25% but less
than 50%, and
(5) 2.25 to 1.0, if the PPA
Factor during the remaining
term of the Securities is
reasonably expected to be
less than 25%; and
(B) the Funding Corporation obtains a
Ratings Reaffirmation with respect
to the issuance of such Additional
Securities;
(iii) to finance Expansion Modifications, so long
as the Funding Corporation obtains a Ratings
Reaffirmation with respect to the issuance
of such Additional Securities;
9
(iv) to finance the construction, development,
acquisition, reconstruction, repowering,
improvement, start-up or operation of any
Additional Project, so long as after giving
effect to the issuance of such Additional
Securities, the Securities are rated at
least the higher of (a) "Baa3" by Moody's
(or the equivalent from another Rating
Agency if Moody's is not then providing
credit ratings) and "BBB-" by S&P (or the
equivalent from another Rating Agency if S&P
is not then providing credit ratings) and
(b) the then current Ratings of the
Securities;
(v) for working capital purposes in an
outstanding amount not to exceed at any one
time, when aggregated with any outstanding
Indebtedness incurred pursuant to Section
4.9(g), $5,000,000 (such amount to be
escalated annually in accordance with
increases in the Consumer Price Index);
(vi) for any purpose in an outstanding amount not
to exceed at any one time, when aggregated
with any outstanding Indebtedness incurred
pursuant to Section 4.9(j), $20,000,000
(such amount to be escalated annually in
accordance with increases in the Consumer
Price Index); or
(vii) for any purpose, so long as, after giving
effect to the incurrence of such Indebted-
ness, the Funding Corporation receives
confirmation that the Securities are rated
at least "Baa3" by Moody's (or the
equivalent from another Rating Agency if
Moody's is not then providing credit
ratings) and at least "BBB-" by S&P (or
the equivalent from another Rating Agency
if S&P is not then providing credit
ratings); provided that any Additional
Securities issued for the purpose described
in clause (iv) above shall satisfy the
conditions set forth in such clause (iv).
(d) There shall have been delivered to the Trustee the
certification and other information, if any, required by Section 2.3(c) hereof.
The Trustee may conclusively rely on any certification or information so
received.
(e) There shall be established in one or more Supplemental
Indentures, prior to the issuance of Additional Securities of any series:
10
(i) the title of the Securities of such series
(which shall distinguish the Securities of
such series from all other Securities) and
the form or forms of Securities of such
series;
(ii) any limit upon the aggregate principal
amount of the Securities of such series that
may be authenticated and delivered under
this Indenture (except for Securities
authenticated and delivered upon
registration of transfer of, or in exchange
for, or in lieu of, other Securities of such
series and except for Securities that are
deemed never to have been authenticated and
delivered hereunder);
(iii) the date or dates on which the principal of
the Securities of such series is payable,
the amounts of principal payable on such
date or dates and the Record Date for the
determination of the Holders to whom
principal is payable; and the date or dates
on or as of which the Securities of such
series shall be dated;
(iv) the rate or rates at which the Securities of
such series shall bear interest, or the
method by which such rate or rates shall be
determined, the date or dates from which
such interest shall accrue, the interest
payment dates on which such interest shall
be payable and the Record Date for the
determination of the Holders to whom
interest is payable, and the basis of
computation of interest;
(v) the place or places where (x) the principal
of, premium, if any, and interest on
Securities of such series shall be payable,
(y) Securities of such series may be
surrendered for registration of transfer or
exchange and (z) notices and demands to or
upon the Funding Corporation in respect of
the Securities of such series and this
Indenture may be served;
(vi) the price or prices at which, the period or
periods within which and the terms and
conditions upon which Securities of such
series may be redeemed, in whole or in part,
at the option of the Funding Corporation;
(vii) the obligation, if any, of the Funding
Corporation to redeem, purchase or repay
Securities of such series pursuant to any
sinking fund or analogous provision or at
the option of a Holder thereof and the price
or prices at which and the period or periods
within which and the terms and conditions
upon which Securities of such series shall
be redeemed, purchased or repaid, in whole
or in part, pursuant to such obligations;
11
(viii) if other than denominations of $100,000 and
any integral multiple of $1,000 in excess
thereof, the denominations in which
Securities of such series shall be issuable;
(ix) the restrictions or limitations, if any, on
the transfer or exchange of the Securities
of such series;
(x) the obligation, if any, of the Funding
Corporation to file a registration statement
with respect to the Securities of such
series or to exchange the Securities of such
series for Securities registered pursuant to
the Securities Act;
(xi) any other terms of such series (which terms
shall not contravene the provisions of this
Indenture); and
(xii) any trustees, authenticating or paying
agents, warrant agents, transfer agents or
registrars with respect to the Securities of
such series.
SECTION 2.4 Record Dates. The Person in whose name any
Security is registered at the close of business on any Record Date with respect
to any Scheduled Payment Date shall be entitled to receive the interest and/or
principal payable on such Scheduled Payment Date notwithstanding the
cancellation of such Security upon any transfer or exchange subsequent to the
Record Date and prior to such Scheduled Payment Date; provided, however, that if
and to the extent there is a default in the payment of the interest and/or
principal due on such Scheduled Payment Date, such defaulted interest and/or
principal shall be paid to the Persons in whose names Outstanding Securities are
registered at the close of business on a subsequent Record Date established by
notice mailed by the Trustee to the registered owners of the Securities not less
than fifteen (15) days preceding such subsequent Record Date, such Record Date
to be not less than five (5) days preceding the date of payment of such
defaulted interest and/or principal.
12
SECTION 2.5 Form; Transfer and Exchange.
(a) The Initial Securities shall be issued as definitive
Restricted Securities. Upon surrender for registration of transfer of an Initial
Security at the office or agency of the Registrar, the Funding Corporation shall
execute, and the Trustee shall authenticate and deliver, in the name of the
transferee, one or more new definitive Initial Securities of any Authorized
Denomination, in the same aggregate principal amount and of the same maturity
which the registered owner is entitled to receive. The Initial Security being
surrendered for registration of transfer shall be accompanied by the following
additional information and documents, as applicable:
(i) if such Initial Security is being acquired
for the account of such Holder, a
certification from such Holder to that
effect;
(ii) if such Initial Security is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) (a "QIB") in accordance with
Rule 144A under the Securities Act or
pursuant to an effective registration
statement under the Securities Act, a
certification to that effect;
(iii) if such Initial Security is being
transferred to certain Persons in offshore
transactions pursuant to an exemption from
registration in accordance with Regulation S
under the Securities Act, a certification to
that effect; or
(iv) if such Initial Security is being trans-
ferred to a Person in reliance on another
exemption from the registration requirements
of the Securities Act, a certification to
that effect together with either (1) the
prior written authorization of the Funding
Corporation, which shall not be unreasonably
withheld, or (2) an opinion of counsel
addressed to the Funding Corporation and
the Trustee and reasonably satisfactory to
each of them to the effect that such
transfer is exempt from the registration
requirements of the Securities Act.
All Initial Securities delivered in transfer shall be dated,
pursuant to Section 2.2(b), so that neither gain nor loss in interest shall
result from the transfer or exchange. No service charge shall be made for any
exchange or transfer, but the Funding Corporation or the Trustee, as the case
may be, may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
13
(b) The Additional Securities sold within the United States
may be issued (i) as definitive Securities or (ii) in the form of one or more
Global Securities and registered in the name of DTC or its nominee, Cede & Co.,
and shall represent the beneficial interests of Persons purchasing such
Additional Securities. The Funding Corporation may appoint DTC to act as
depositary (together with its successors in such capacity, the "Depositary")
with respect to Additional Securities issued in global form. In the event any
Additional Securities are issued in a transaction under Rule 144A of the
Securities Act, any Person purchasing such Additional Securities shall do so in
transactions complying with Rule 144A under the Securities Act. The Trustee, as
custodian ("Custodian"), will act as custodian of each Global Security for the
Depositary or appoint a sub-custodian to act in such capacity. So long as the
Depositary or its nominee is the registered owner of any Global Security, it
shall be considered the Holder of the Securities represented thereby for all
purposes hereunder and under such Global Security. Interests in Global
Securities shall be transferred on the Depositary's book-entry settlement
system.
Additional Securities may also be offered and sold in offshore
transactions in reliance on Regulation S, and if so offered and sold may be
issued in the form of one or more temporary global Securities in registered form
substantially in the form as above recited (the "Temporary Offshore Global
Securities") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Funding Corporation and authenticated by the Trustee as
hereinafter provided. At any time beginning 40 days after the later of the
commencement of the offering and the closing in connection with such Additional
Securities (the "Offshore Securities Exchange Date"), upon receipt by the
Trustee and the Funding Corporation of a certificate substantially in the form
of Exhibit C hereto, one or more permanent global securities in registered form
substantially in the form as above recited (the "Permanent Offshore Global
Securities" and, together with the Temporary Offshore Global Securities, the
"Offshore Global Securities") duly executed by the Funding Corporation and
authenticated by the Trustee as hereinafter provided shall be deposited with the
Trustee, as custodian for the Depositary, and the registrar shall reflect on its
books and records the date and a decrease in the principal amount of the
Temporary Offshore Global Securities in an amount equal to the principal amount
of the beneficial interest in the Temporary Offshore Global Securities
transferred.
(c) Additional Securities may also be offered and sold to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) in accordance with Regulation D under the
Securities Act and, if so offered and sold, shall be issued in the form of
definitive physical certificates and shall be Restricted Securities.
(d) The Funding Corporation shall cause books for the
registration and transfer of the Initial Securities and any Additional
Securities (the "Securities Register") to be kept at the principal office of the
Trustee in San Francisco and hereby appoints the Trustee as registrar (the
"Registrar") to keep such books.
(e) The transfer and exchange of Securities in global form
shall be effected through the Depositary, in accordance with this Indenture
(including the restrictions on transfer set forth herein) and the procedures of
the Depositary therefor. Upon surrender for registration of transfer or exchange
14
of any definitive Security (including any definitive Security issued pursuant to
Section 2.5(h) or 2.5(i) hereof), at the office or agency of the Registrar, the
Funding Corporation shall execute, and the Trustee shall authenticate and
deliver, in the name of the Holder (in the case of exchanges) or the transferees
(in the case of transfers), one or more new definitive Securities of any
Authorized Denomination, in the same aggregate principal amount and of the same
maturity which the registered owner is entitled to receive; provided, however,
that in the case of the surrender for registration of transfer of any definitive
Restricted Security, such definitive Restricted Security shall be accompanied by
the following additional information and documents, as applicable:
(i) if such definitive Restricted Security is
being acquired for the account of such
Holder, without transfer, a certification
from such Holder to that effect;
(ii) if such definitive Restricted Security is
being transferred to a QIB in accordance
with Rule 144A under the Securities Act or
pursuant to an effective registration
statement under the Securities Act, a
certification to that effect;
(iii) if such definitive Restricted Security is
being transferred to certain Persons in
offshore transactions pursuant to an
exemption from registration in accordance
with Regulation S under the Securities Act,
a certification to that effect; or
(iv) if such definitive Restricted Security is
being transferred to a Person in reliance on
another exemption from the registration
requirements of the Securities Act, a
certification to that effect together with
either (1) the prior written authorization
of the Funding Corporation, which shall not
be unreasonably withheld, or (2) an opinion
of counsel addressed to the Funding Corpora-
tion and the Trustee and reasonably satis-
factory to each of them to the effect that
such transfer is exempt from the registra-
tion requirements of the Securities Act.
All Securities delivered in connection with a transfer or
exchange shall be dated, in accordance with Section 2.2(b), so that neither gain
nor loss in interest shall result from the transfer or exchange. No service
charge shall be made for any exchange or transfer, but the Funding Corporation
or the Trustee, as the case may be, may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto.
(f) Each certificate evidencing the Securities in global form
and the definitive Securities, if any (and all Securities issued in exchange
therefor or substitution thereof), shall bear the legend in substantially the
form set forth in the form of Security attached hereto as Exhibit B. Upon a
15
request for registration of any transfer of an Additional Security which is a
Restricted Security (including any restricted Additional Security represented by
a security in global form) pursuant to an effective registration statement under
the Securities Act in accordance with a Registration Rights Agreement and any
applicable securities laws of any State of the United States, the Registrar
shall exchange any such Restricted Security for definitive Securities that do
not bear the legend referenced above and rescind any restriction on the transfer
of such Additional Security.
(g) Notwithstanding any other provision herein (other than the
provisions set forth in paragraph (h) of this Section), a Security in global
form may not be transferred except as a whole by the Depositary to a nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(h) The beneficial interests represented by any Global
Security shall be issued as definitive Securities, without coupons, to Holders
or their nominees, rather than to Cede & Co. as nominee for the Depositary, if
(i) the Funding Corporation advises the Trustee in writing that the Depositary
is no longer willing or able to discharge properly its responsibilities as
Depositary with respect to such Global Security and the Funding Corporation is
unable to locate a qualified successor, (ii) the Funding Corporation, at its
option, elects to terminate the book-entry system through the Depositary with
respect to the Securities represented by such Global Security or (iii) after the
occurrence of an Event of Default, beneficial owners holding interests
representing an aggregate principal amount of Securities of not less than 51% of
the Securities represented by such Global Security advise the Trustee through
the Depositary in writing that the continuation of a book-entry system through
the Depositary with respect to the Securities represented by such Global
Security is no longer in such owners' best interests.
Upon the occurrence of any of the events in clauses (i)
through (iii) of the preceding paragraph, the Trustee shall, upon receipt of
written notice and a list of all Persons who hold a beneficial interest in the
relevant Global Security from the Depositary, be required to notify, at the
expense of the Funding Corporation, all Persons who hold a beneficial interest
in such Global Security through participants in the Depositary or indirect
participants through participants in the Depositary of the issuance of
definitive Securities. Upon surrender by the Custodian of such Global Security
and receipt from the Depositary of instructions for re-registration, the Funding
Corporation will execute and the Trustee, upon the written instructions of the
Funding Corporation in the case of an event in clause (i) or (ii) of the
preceding paragraph and upon the written instructions of the beneficial owners
holding interests representing an aggregate principal amount of Outstanding
Securities of not less than 51% of the Securities represented by such Global
Security in the case of an event in clause (iii) of the preceding paragraph,
will authenticate and deliver the definitive Securities.
Definitive Securities issued in exchange for all or any
portion of a Security in global form pursuant to this Section 2.5 shall be
registered in such names and in such Authorized Denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
16
shall instruct the Trustee. The Trustee shall make available for delivery such
definitive Securities to the Persons in whose names such Securities are so
registered.
(i) Upon satisfaction of the requirements of this paragraph
(i), any Person having a beneficial interest in Securities in global form may
upon request exchange its interest in the Securities in global form for a
definitive Security or cause a definitive Security to be issued upon transfer of
such beneficial interest. Upon receipt by the Trustee of (1) written or
electronic instructions from the Depositary or its nominee on behalf of any
Person having a beneficial interest in Securities in global form, (2) a written
order of the Depositary or its nominee containing instructions with respect to
the registration of transfer or exchange, and (3) in the case of Restricted
Securities only, the following additional information and documents, as
applicable:
(i) if such Restricted Security is being
acquired for the account of such Person,
without transfer, a certification to that
effect; or
(ii) if such Restricted Security is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an effective registration statement under
the Securities Act, a certification to that
effect; or
(iii) if such Restricted Security is being trans-
ferred to a Person in reliance on another
exemption from the registration requirements
of the Securities Act, a certification to
that effect together with either (1) the
prior written authorization of the Funding
Corporation, which shall not be unreasonably
withheld, or (2) an opinion of counsel
addressed to the Funding Corporation and the
Trustee and reasonably satisfactory to each
of them to the effect that such transfer is
exempt from the registration requirements of
the Securities Act;
the Trustee, or the Custodian at the direction of the Trustee, will cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of the Securities
in global form to be reduced by the principal amount of Securities for which
issuance of definitive Securities has been requested and for which the
requirements of this paragraph have been satisfied and, following such
reduction, the Funding Corporation will execute and the Trustee will
authenticate and deliver to such person or the transferee, as the case may be, a
definitive Security in the principal amount by which the Securities in global
form have been so reduced.
Upon satisfaction of the requirements of this Section 2.5, any
holder of a definitive Security other than an Initial Security may exchange such
definitive Security for an interest in the Security in global form. Upon receipt
by the Trustee of a definitive Security, duly endorsed or accompanied by
17
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with (a) a certification from the Holder that such definitive Security
is being transferred to a QIB in accordance with Rule 144A under the Securities
Act, and (b) written instructions from the Holder that the Security so
transferred shall be registered in the name of DTC or its nominee, the Trustee
shall cancel such definitive Security and cause, or direct the Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Custodian, the aggregate principal amount of
Securities represented by the Security in global form to be increased
accordingly.
(j) At such time as all interests in a Security in global form
have been exchanged for definitive Securities or cancelled, such Security in
global form shall be cancelled by the Trustee. At any time prior to such
cancellation, if (i) any interest in a Global Security is exchanged for
definitive Securities or cancelled, the principal amount of Securities
represented by such Security in global form shall be reduced by the principal
amount of Securities exchanged for definitive Securities, and an endorsement
shall be made on such Security in global form by the Trustee or the Custodian,
at the direction of the Trustee, to reflect such reduction or (ii) any
definitive Security is exchanged for an interest in a Global Security, the
principal amount of Securities represented by such Global Security shall be
increased by the principal amount of definitive Securities exchanged for an
interest in such Global Security, and an endorsement shall be made on such
Global Security by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such increase.
(k) New Securities delivered upon any transfer or exchange
shall be valid obligations of the Funding Corporation, evidencing the same debt
as the Securities surrendered, shall be secured by this Indenture and shall be
entitled to all of the security and benefits of the Indenture to the same extent
as the Securities surrendered.
(l) Any Additional Securities which are presented to the
Registrar for exchange pursuant to an Exchange Offer shall be exchanged for
Exchange Securities of the same series and of equal principal amount upon
surrender to the Registrar of the Securities to be exchanged; provided, however,
that the Additional Securities so surrendered for exchange shall be duly
endorsed and accompanied by a letter of transmittal or written instrument of
transfer in form satisfactory to the Funding Corporation and the Registrar, duly
executed by the Holder thereof or its attorney who shall be duly authorized in
writing to execute such document. Whenever any Additional Securities are so
surrendered for exchange, the Funding Corporation shall execute, and the Trustee
shall authenticate and deliver to the Registrar, the same aggregate principal
amount of Exchange Securities of the same series that have been surrendered.
SECTION 2.6 Execution. The Securities shall be executed by the
manual or facsimile signature of the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President of the Funding Corporation.
(b) Securities executed as provided above may be issued and
shall be authenticated by the Trustee, notwithstanding that any officer signing
such Securities or whose facsimile signature appears thereon shall have ceased
18
to hold office at the time of issuance or authentication or shall not have held
office at the date of such Securities.
SECTION 2.7 Authentication. No Security shall be valid for any
purpose until the certificate of authentication shall have been duly executed by
the Trustee. Such authentication shall be conclusive proof that such Security
has been duly authenticated and delivered under this Indenture and that the
Holder thereof is entitled to the benefit of the trust hereby created. The
Trustee shall, at the written request of the Funding Corporation, authenticate
the Securities at the initial issuance thereof and deliver them to the purchaser
thereof upon payment to the Funding Corporation of the purchase price therefor.
Any Securities subsequently issued under this Indenture may be authenticated by
the Trustee or any authenticating agent appointed by the Trustee, and such
authentication shall, for all purposes of this Indenture, be deemed to be the
authentication of and delivery by the Trustee.
SECTION 2.8 Mutilated, Destroyed, Lost or Stolen Securities.
(a) If any Security shall become mutilated, the Funding
Corporation shall execute, and the Trustee shall thereupon authenticate and
deliver, a new Security of like tenor, maturity and denomination in exchange and
substitution for the Security so mutilated, but only upon surrender to the
Trustee of such mutilated Security for cancellation, and the Funding Corporation
or the Trustee may require reasonable indemnity therefor. If any Security shall
be reported lost, stolen or destroyed, evidence as to the ownership thereof and
the loss, theft or destruction thereof shall be submitted to the Trustee. If
such evidence shall be satisfactory to both the Trustee and the Funding
Corporation and indemnity satisfactory to both shall be given, the Funding
Corporation shall execute, and thereupon the Trustee shall authenticate and
deliver, a new Security of like tenor, maturity and denomination. The cost of
providing any substitute Security under the provisions of this Section shall be
borne by the Holder for whose benefit such substitute Security is provided. If
any such mutilated, lost, stolen or destroyed Security shall have matured or be
about to mature, the Funding Corporation may, with the consent of the Trustee,
pay to the Holder the principal amount of such Security upon the maturity
thereof and the compliance with the aforesaid conditions by such Holder, without
the issuance of a substitute Security therefor, and likewise pay to the Holder
the amount of the unpaid interest, if any, which would have been payable on a
substitute Security had one been issued. Notwithstanding the foregoing
provisions of this Section 2.8(a) with respect to evidence of ownership of a
mutilated, lost or stolen Security and provision by the Holder thereof of
indemnity, if the Holder of such Security is an insurance company with a net
worth of more than $100,000,000 (or, in either such case, a nominee or affiliate
thereof if the obligations as contemplated hereunder are guaranteed by such
insurance company), such Holder's statement as to ownership and an unsecured
agreement of indemnity shall, for purposes of this Section 2.8(a), be deemed
satisfactory.
(b) Every substitute Security issued pursuant to this Section
2.8 shall constitute an additional contractual obligation of the Funding
Corporation, whether or not the Security alleged to have been destroyed, lost or
stolen shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.
19
(c) All Securities shall be held and owned upon the express
condition that the foregoing provisions are, to the extent permitted by Law,
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude any and all other rights or
remedies.
SECTION 2.9 Temporary Securities. Pending preparation of
definitive Securities, the Funding Corporation may issue, and, upon its written
request, the Trustee shall authenticate, in lieu of definitive Securities, one
or more temporary printed or typewritten Securities in the form recited in this
Indenture, in any Authorized Denomination. Upon written request of the Funding
Corporation, the Trustee shall authenticate definitive Securities in exchange
for, and upon surrender of an equal principal amount of, temporary Securities.
Until so exchanged, temporary Securities shall have the same rights, remedies
and security hereunder as definitive Securities.
SECTION 2.10 Cancellation and Destruction of Surrendered
Securities. Securities surrendered for payment, or exchanged and surrendered to
the Trustee for cancellation by the Funding Corporation, shall be cancelled and
destroyed by the Trustee.
SECTION 2.11 Disposition of Net Proceeds of Initial
Securities. Upon receipt of the net proceeds from the sale of each Series of
Initial Securities, the Trustee shall apply such proceeds to the account of the
Funding Corporation for loan by the Funding Corporation to Cordova Energy
pursuant to the Cordova Energy Credit Agreement.
ARTICLE III
REDEMPTION OF SECURITIES
SECTION 3.1 Optional Redemption.
(a) Outstanding Initial Securities may be redeemed prior to
maturity, as a whole or in part, at any time on any Business Day, at the option
of the Funding Corporation, subject to the conditions and at the Redemption
Price (which will include the Standard Make-Whole Premium) specified in the form
of Security attached hereto as Exhibit B.
(b) The Funding Corporation, at its option, may elect, at any
time on any Business Day, to redeem a principal amount of the Outstanding
Initial Securities constituting the Guaranteed Payment at the Redemption Price
(which will include the Special Make-Whole Premium) specified in the form of
Security attached hereto as Exhibit B. For the avoidance of doubt, (x) the
portion of the Outstanding Initial Securities redeemed pursuant to this clause
(b) shall be deemed to be the Guaranteed Payment and (y) this clause (b) shall
not be deemed to require the redemption of any portion of the Outstanding
Initial Securities other than the Guaranteed Payment.
Upon the occurrence of any such redemption pursuant to this
Section 3.1(b), the Trustee shall, in accordance with the terms of the
MidAmerican Holdings Guarantee, release the Guarantors (as defined in the
20
MidAmerican Holdings Guarantee) from all of their obligations under the
MidAmerican Holdings Guarantee. The Trustee shall take all actions reasonably
requested by the Funding Corporation in connection with such release. The
Trustee may rely on an Officer's Certificate from the Funding Corporation as to
principal amount to be redeemed under this Section 3.1(b) and the calculation of
the Standard Make-Whole Premium to be applied to such redemption.
(c) If the Cordova Energy Project has not achieved Substantial
Performance Tests Completion, the Funding Corporation may elect to redeem
Outstanding Initial Securities, as a whole or in part, at any time on any
Business Day, at a redemption price equal to the principal amount of the Initial
Securities being redeemed with interest on the principal amount of the Initial
Securities being redeemed accrued to but not including the Redemption Date. If
any such redemption shall occur, and the Initial Securities shall then have
Ratings which are equivalent to or better than the ratings assigned to the
Initial Securities on the initial Closing Date, Substantial Completion of the
Cordova Energy Project shall be deemed to have occurred as of the date on which
the Funding Corporation shall have deposited the required amount of funds in the
Mandatory Redemption Fund in connection with such redemption, notwithstanding
the failure of the Cordova Energy Project to achieve Substantial Performance
Tests Completion, if, after giving effect to such redemption and any redemption
made pursuant to Section 3.3(a)(i), the minimum annual projected Debt Service
Coverage Ratio during the remaining term of the Initial Securities is reasonably
expected to be equal to or greater than (i) 1.4 to 1.0 during the term of the
Power Purchase Agreement or any Acceptable Power Purchase Agreement and (ii)
2.25 to 1.0 during any other period.
(d) All proceeds received by the Trustee from or on behalf of
the Funding Corporation which are identified as proceeds for an optional
redemption of the Outstanding Initial Securities under this Section 3.1 shall be
applied by the Trustee to the redemption of such Securities on the Redemption
Date therefor.
(e) Any redemption of Outstanding Initial Securities pursuant
to this Section 3.1 shall be pro rata among all Series of Outstanding Initial
Securities.
SECTION 3.2 Election or Requirement to Redeem; Notice to
Trustee. If the Funding Corporation elects or is required to redeem any
Securities pursuant to this Indenture or otherwise, it shall, except to the
extent that the Trustee is required to select the Redemption Date pursuant to
Section 3.3(a), (b) or (c), at least forty-five (45) days prior to the date upon
which notice of redemption is required to be given to Holders pursuant to
Section 3.4 hereof (unless a shorter notice period shall be satisfactory to the
Trustee), deliver to the Trustee and the Securities Intermediary an Officer's
Certificate, or a determination of a Redemption Date by the Trustee pursuant to
Section 3.3(a), (b) or (c), specifying the date on which such redemption shall
occur (the "Redemption Date"), as determined in accordance with this Article III
and the series and principal amount of Securities to be redeemed. Upon receipt
of any such Officer's Certificate, the Trustee shall establish a non-interest
bearing special purpose trust fund (the "Mandatory Redemption Fund") into which
shall be deposited by the Funding Corporation, the Securities Intermediary, the
Collateral Agent or any other Person, as the case may be, not later than one
Business Day prior to the Redemption Date, immediately available amounts to be
21
held by the Trustee and applied to the redemption of such Securities on the
Redemption Date. The Mandatory Redemption Fund shall at all times be in the
exclusive possession of, and under the exclusive dominion and control of, the
Trustee.
SECTION 3.3 Mandatory Redemption; Redemption at the Option of
the Holders; Selection of Securities to Be Redeemed.
(a) Outstanding Initial Securities shall be redeemed, pro rata
among all Series of all Outstanding Securities, in whole or in part, prior to
maturity, at a redemption price equal to the principal amount of the Outstanding
Initial Securities being redeemed, together with the interest on the principal
amount of the Outstanding Initial Securities being redeemed accrued to but not
including the Redemption Date, if:
(i) Cordova Energy and/or the Collateral Agent
receives Performance Liquidated Damages in
excess of $5,000,000 (after subtracting
(x) the amount of any refunds of Performance
Liquidated Damages made to the EPC
Contractor in accordance with Section
3.7.4(a) of the Depositary Agreement and
(y) the amount of such Performance
Liquidated Damages used by Cordova Energy to
complete the Cordova Energy Project in
accordance with an Approved Completion
Plan), such Performance Liquidated Damages
less (x) the amount of any refunds of
Performance Liquidated Damages made to the
EPC Contractor in accordance with Section
3.7.4(a) of the Depositary Agreement and (y)
the amount of such Performance Liquidated
Damages used by Cordova Energy to complete
the Cordova Energy Project in accordance
with an Approved Completion Plan shall be
available for such redemption; provided,
however, that the Funding Corporation will
not be required to redeem Outstanding
Initial Securities as described in this
clause (i) if a Ratings Reaffirmation is
issued with respect to the event triggering
the obligation to redeem Outstanding
Initial Securities under this subclause (i).
The Funding Corporation and Cordova Energy
will be permitted to take such actions as
requested by the Rating Agencies (including,
without limitation, the redemption of a
lesser amount of Outstanding Initial
Securities than as described in this clause
(i)) to obtain such Ratings Reaffirmation;
or
(ii) Cordova Energy and/or the Collateral Agent
receives an El Paso Termination Payment,
then the total amount of such El Paso
Termination Payment shall be used for such
redemption.
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(b) Outstanding Securities shall be redeemed, pro rata among
all series of Outstanding Securities in whole or in part, prior to maturity, at
a redemption price equal to the principal amount of the Outstanding Securities
being redeemed, together with interest on the principal amount of the
Outstanding Securities being redeemed accrued to but not including the
Redemption Date, if:
(i) Cordova Energy and/or the Collateral Agent
receives more than $5,000,000 of Loss
Proceeds because of a single Loss Event and
Cordova Energy determines not to use such
Loss Proceeds to rebuild, repair or restore
the Cordova Energy Project, then such Loss
Proceeds shall be available for such
redemption;
(ii) Cordova Energy and/or the Collateral Agent
receives Loss Proceeds because of a single
Loss Event and more than $5,000,000 of such
Loss Proceeds remain after Cordova Energy
uses a portion of such Loss Proceeds to
rebuild, repair or restore the Cordova
Energy Project, such remaining Loss Proceeds
shall be available for such redemption;
(iii) Cordova Energy and/or the Collateral Agent
receives more than $5,000,000 of Title
Insurance Proceeds because of a single Title
Defect and Cordova Energy determines not to
use such Title Insurance Proceeds to correct
such Title Defect, then such Title Insurance
Proceeds shall be made available for such
redemption; or
(iv) Cordova Energy and/or the Collateral Agent
receives Title Insurance Proceeds because of
a single Title Defect and more than
$5,000,000 of such Title Insurance Proceeds
remain after Cordova Energy uses a portion
of such Title Insurance Proceeds to correct
such Title Defect, then such remaining Title
Insurance Proceeds shall be available for
such redemption;
provided, however, that the Funding Corporation will not be required to redeem
Outstanding Securities as described in clauses (i) through (iv) of this Section
3.3(b) if a Ratings Reaffirmation is issued with respect to the event triggering
the obligation to redeem Outstanding Securities. The Funding Corporation and
Cordova Energy will be permitted to take such actions as requested by the Rating
Agencies (including, without limitation, the redemption of a lesser amount of
Outstanding Securities than as described in clauses (i) through (iv) of this
Section 3.3(b)) to obtain such Ratings Reaffirmation.
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(c) The amounts available for redemption described in clauses
(i) and (ii) of Section 3.3(a) and clauses (i) through (iv) of Section 3.3(b)
shall be subject to reduction by the amount of distributions made by the
Securities Intermediary for purposes other than any such redemption, acting upon
instructions from the Collateral Agent, in accordance with clauses (i), (ii) and
(iii) of Section 3 of the Intercreditor Agreement. All monies received by the
Trustee from the Securities Intermediary for any such redemption pursuant to
clauses (ii) and (iii) of Section 3 of the Intercreditor Agreement shall be
deposited in the Mandatory Redemption Fund and applied by the Trustee to the
redemption of Outstanding Securities as and to the extent provided in this
Article III, the Intercreditor Agreement and the Depositary Agreement.
(d) The Redemption Date for any redemption made pursuant to
Section 3.3(a) or 3.3(b) shall be any date selected by the Trustee during the
45-day period following the receipt by the Trustee of a distribution from the
Securities Intermediary for any such redemption pursuant to Section 3 of the
Intercreditor Agreement.
(e) If requested in writing to the Trustee and the Funding
Corporation by any Holder within twenty (20) days of receipt by such Holder of a
notice of a Change of Control pursuant to the last sentence of this clause (e),
the Outstanding Securities owned by such Holder shall be redeemed prior to
maturity, as a whole or in part, at a Redemption Price equal to 101% of the
principal amount of the Outstanding Securities being redeemed plus accrued and
unpaid interest on the principal amount of the Outstanding Securities being
redeemed to but not including the Redemption Date. Within thirty (30) Business
Days after any such request by a Holder, the Funding Corporation shall pay to
the Trustee for deposit in the Mandatory Redemption Fund an amount of funds
sufficient to redeem the Outstanding Securities subject to such request. The
Trustee shall apply all such funds received by it to the redemption of the
Outstanding Securities pursuant to this Section 3.3(e) as soon as practicable
after the receipt by the Trustee of such funds in accordance with written
allocation instructions from the Funding Corporation provided to the Trustee in
accordance with the notice provisions set forth in this Article III. Within
thirty (30) days of the occurrence of any Change of Control, the Funding
Corporation shall provide notice of such Change of Control to the Trustee and
the Trustee shall provide a notice of such Change of Control to Holders in
accordance with the terms of this Indenture.
(f) Upon any mandatory redemption of the Securities of any
series in accordance with this Section 3.3, the scheduled principal amortization
of the Securities of such series as set forth on Schedule I hereto shall be
reduced by an amount equal to the product of (x) the scheduled principal
amortization of the Securities of such series then in effect, multiplied by (y)
a fraction, the numerator of which is equal to the principal amount of the
Outstanding Securities of such series to be redeemed and the denominator of
which is the principal amount of the Outstanding Securities of such series
immediately prior to such redemption.
(g) Except as otherwise specified herein or in the
Supplemental Indenture relating thereto, if less than all the Securities of a
series are to be redeemed pursuant to this Section 3.3, the Securities of such
24
series shall be redeemed ratably by the Trustee from the Outstanding Securities
of such series not previously called for redemption in whole, by such method as
the Trustee shall deem appropriate.
(h) The Trustee shall promptly notify the Funding Corporation
in writing of the Securities selected for redemption and, in the case of any
Securities to be redeemed in part, the principal amount thereof to be redeemed.
(i) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities that has been or
is to be redeemed.
SECTION 3.4 Notice of Redemption. Notice of redemption shall
be given in the manner provided in Section 12.6 hereof to Holders of Securities
of the series to be redeemed at least thirty (30) days but not more than sixty
(60) days prior to the Redemption Date. All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be
redeemed, the identification of the particular Securities to be redeemed;
(d) in the case of Securities to be redeemed in part, the
principal amount of such Securities to be redeemed and that after the Redemption
Date upon surrender of any such Securities, new Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that, except in the case of partial redemption of any
Initial Security, Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security or portion thereof, and that
(unless the Funding Corporation shall default in payment of the Redemption
Price) interest thereon shall cease to accrue on and after said date;
(g) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(h) that the availability in the Mandatory Redemption Fund on
the Redemption Date of an amount of immediately available funds to pay the
Redemption Price in full is a condition precedent to the redemption;
(i) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
25
(j) the private placement number or CUSIP number, if any,
relating to such Securities.
Notice of redemption of Securities to be redeemed at the
election of the Funding Corporation shall be given by the Funding Corporation
or, at the Funding Corporation's written request, by the Trustee in the name and
at the expense of the Funding Corporation. Notice of a mandatory redemption of
the Securities shall be given by the Trustee, in the name and at the expense of
the Funding Corporation.
With respect to mandatory redemption pursuant to Section 3.3
hereof, notice of redemption may be given by the Trustee prior to receipt of
funds sufficient to pay the Redemption Price.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
SECTION 3.5 Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, and the conditions, if any, set forth
in such notice having been satisfied, the Securities or portions thereof so to
be redeemed shall, on the Redemption Date, become due and payable, and from and
after such date such Securities or portions thereof shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
such notice, an amount in respect of such Security or portion thereof shall be
paid as provided therein; provided, however, that any payment of interest on any
Security the Scheduled Payment Date of which is on or prior to the Redemption
Date shall be payable to the Holder of such Security registered as such at the
close of business on the related Record Date according to the terms of such
Security.
SECTION 3.6 Securities Redeemed in Part. Except in the case of
the Initial Securities, any Security that is to be redeemed only in part shall
be surrendered at the place of payment therefor (with, if the Funding
Corporation or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Funding Corporation and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Funding Corporation shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security
without service charge, a new Security or Securities of the same series, of any
Authorized Denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the remaining unpaid
principal amount of the Security so surrendered.
26
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Principal of and Interest on
Securities. The Funding Corporation shall promptly pay or cause to be paid the
principal of, premium (if any) and interest on every Security issued hereunder
according to the terms hereof and thereof.
SECTION 4.2 Reporting Requirements. The Funding Corporation
shall furnish to the Trustee, the Rating Agencies and, in the case of clauses
(a) and (b) of this Section 4.2, any Holder or any owner of a beneficial
interest in an Initial Security upon request (which request may indicate that it
is a Continuing Request):
(a) within 60 days after the end of the first, second and
third fiscal quarters of the Funding Corporation and Cordova Energy (commencing
with the quarter ending March 31, 2000, an unaudited balance sheet of each of
the Funding Corporation and Cordova Energy as of the end of such quarter and the
related statements of operations, income, cash flows and changes in
shareholder's equity for such quarter and for the portion of the fiscal year
ending with the last day of such quarter (prepared on a basis consistent (other
than with respect to changes in the accounting methods of the Funding
Corporation or Cordova Energy, as the case may be) with that used in the
preparation of corresponding figures for the preceding fiscal year), setting
forth in each case in comparative form corresponding unaudited figures from the
preceding fiscal year and accompanied by an Officer's Certificate to the effect
that such financial statements fairly present the financial condition and
results of operations of the Funding Corporation and Cordova Energy on the dates
and for the periods indicated in accordance with GAAP;
(b) within 120 days after the end of each fiscal year of the
Funding Corporation and Cordova Energy (commencing with the fiscal year ended
December 31, 1999), a balance sheet of each of the Funding Corporation and
Cordova Energy as of the end of such year and the related statements of
operations, income, cash flows and changes in shareholder's equity for such
fiscal year (prepared on a basis consistent (other than with respect to changes
in the accounting methods of the Funding Corporation or Cordova Energy, as the
case may be) with that used in the preparation of corresponding figures for the
preceding fiscal year) setting forth in each case in comparative form
corresponding figures from the preceding fiscal year and accompanied by (i) an
audit opinion thereon by Deloitte & Touche LLP or another firm of independent
public accountants of recognized national standing, which opinion shall state
that said financial statements of the Funding Corporation and Cordova Energy
present fairly, in all material respects, the financial position of the Funding
Corporation and Cordova Energy at the end of, and for, such fiscal year in
accordance with GAAP, and (ii) an Officer's Certificate stating that no Default
or Event of Default has occurred and is continuing, or that if a Default or an
Event of Default has occurred and is continuing, a statement as to the nature
thereof;
27
(c) promptly and in any event within 15 Business Days after a
Responsible Officer of Funding Corporation receives actual knowledge thereof,
written notice of the occurrence of any event or condition which constitutes an
Event of Default, specifically stating that such event or condition has occurred
and describing it and any action being, or proposed to be, taken with respect
thereto; and
(d) promptly and in any event within 15 Business Days after
delivery to the Funding Corporation of a notice of any Credit Agreement Event of
Default, a copy of such notice.
SECTION 4.3 Corporate Existence. The Funding Corporation
shall, subject to Section 4.12:
(a) maintain its existence as a corporation in good standing
in the State of Delaware, and
(b) maintain its rights, powers and privileges that are
necessary for the issuance of the Securities, except in each case where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect;
provided that the Funding Corporation may change its form of organization if the
entity in its new form assumes all of the obligations of the Funding Corporation
under the Financing Documents and the change does not increase the Indebtedness
of the Funding Corporation.
SECTION 4.4 Compliance with Laws. The Funding Corporation
shall comply with all valid and applicable Laws (including Environmental Laws)
relating to the Funding Corporation's issuance of the Securities and the
performance of its obligations hereunder, except (x) where the failure to so
comply would not reasonably be expected to result in a Material Adverse Effect,
or (y) where such compliance is being diligently contested in good faith by
appropriate proceedings and adequate reserves have been established in
connection therewith in accordance with GAAP.
SECTION 4.5 Governmental Approvals. The Funding Corporation
shall obtain, maintain and comply with all material Governmental Approvals which
are required for the conduct of its business, except (x) where the failure to do
so would not reasonably be expected to result in a Material Adverse Effect or
(y) where such compliance is being diligently contested in good faith by
appropriate proceedings and adequate reserves have been established in
connection therewith in accordance with GAAP.
SECTION 4.6 Payment of Taxes and Claims. The Funding
Corporation shall, prior to the time penalties shall attach thereto, pay and
discharge or cause to be paid and discharged all taxes lawfully imposed upon it;
provided that the Funding Corporation shall not be required to pay any such
obligation (x) if the same is being diligently contested in good faith by
appropriate proceedings and adequate reserves are established in accordance with
GAAP or (y) the nonpayment of which would not reasonably be expected to result
in a Material Adverse Effect.
28
SECTION 4.7 Books and Records. The Funding Corporation shall
at all times keep proper books and records of all of its business and financial
affairs in accordance with GAAP.
SECTION 4.8 Use of Proceeds. The Funding Corporation shall use
the proceeds from the sale of Securities solely to make one or more loans to one
or more Guarantors pursuant to one or more Credit Agreements, or supplements
thereto, as the case may be, except to the extent otherwise permitted under this
Indenture.
SECTION 4.9 Indebtedness. The Funding Corporation shall not
incur any Indebtedness other than the following ("Permitted Funding Debt"):
(a) the Initial Securities and any Exchange Securities;
(b) Indebtedness outstanding on the Closing Date;
(c) any Additional Securities issued in accordance with the
provisions of Section 2.3 hereof and related Exchange Securities;
(d) surety bonds, performance bonds or similar arrangements
with third-party sureties, indemnitors or similar persons obtained or made in
connection with a good faith contest;
(e) Indebtedness incurred under any Debt Service Reserve LOC
Reimbursement Agreement;
(f) Subordinated Indebtedness issued by an Affiliate of the
Funding Corporation;
(g) Indebtedness incurred under any Working Capital Facility
in an aggregate outstanding amount not to exceed $5,000,000 at any one time
(such amount to be escalated annually in accordance with increases in the
Consumer Price Index);
(h) Indebtedness incurred under Interest Rate Protection
Agreements entered into in order to provide a hedge against changes in the rates
of interest on Permitted Funding Debt which accrues interest at a floating or
variable rate; provided that the notional amount of the obligations subject to
any such Interest Rate Protection Agreement shall at no time exceed the
aggregate principal amount of Permitted Funding Debt which accrues interest at a
floating or variable rate;
(i) obligations incurred in connection with Permitted Hedging
Transactions;
(j) Indebtedness in an outstanding amount not to exceed
$20,000,000 at any one time (such amount to be escalated annually in accordance
with increases in the Consumer Price Index);
29
(k) guarantees of Permitted Funding Debt, Permitted Cordova
Energy Debt or any Indebtedness of an Additional Guarantor which is permitted to
be incurred by such Additional Guarantor under an Additional Credit Agreement
entered into by such Additional Guarantor;
(l) Indebtedness incurred to finance Required Modifications,
so long as either:
(i) the Independent Engineer confirms (with
customary assumptions and qualifications) as
reasonable a certification from an Athorized
Officer of the Funding Corporation to the
Trustee (with customary assumption and quali-
fications) that the minimum annual projected
Debt Service Coverage Ratio during the
remaining term of the Securities, after
taking into account the incurrence of such
Indebtedness, is reasonably expected to be
equal to or greater than:
(1) 1.2 to 1.0, if the PPA Factor during
the remaining term of the Securities is
reasonably expected to be 100%,
(2) 1.25 to 1.0, if the PPA Factor during
the remaining term of the Securities is
reasonably expected to be equal to or
greater than 75% but less than 100%,
(3) 1.35 to 1.0, if the PPA Factor during
the remaining term of the Securities is
reasonably expected to be equal to or
greater than 50% but less than 75%,
(4) 1.40 to 1.0, if the PPA Factor during
the remaining term of the Securities is
reasonably expected to be equal to or
greater than 25% but less than 50%, and
(5) 1.5 to 1.0, if the PPA Factor during
the remaining term of the Securities is
reasonably expected to be less than
25%; or
(ii) the Funding Corporation obtains a Ratings
Reaffirmation with respect to the incurrence
of such Indebtedness;
(m) Indebtedness incurred to finance Optional Modifications,
so long as:
30
(i) the Independent Engineer confirms (with
customary assumptions and qualifications) as
reasonable a certification from an
Authorized Officer of the Funding
Corporation to the Trustee (with customary
assumptions and qualifications) that:
(x) the minimum annual projected Debt
Service Coverage Ratio during the remaining
term of the Securities, after taking into
account the incurrence of such Indebtedness,
is reasonably expected to be equal to or
greater than,
(1) 1.4 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be 100%,
(2) 1.55 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably expected to
be equal to or greater than 75% but
less than 100%,
(3) 1.7 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be equal
to or greater than 50% but less than
75%,
(4) 1.85 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably expected to
be equal to or greater than 25% but
less than 50%, and
(5) 2.0 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be less
than 25%; and
(y) the average annual projected Debt
Service Coverage Ratio during the
remaining term of the Securities,
after taking into account the
incurrence of such Indebtedness, is
reasonably expected to be equal to
or greater than:
(1) 1.4 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be 100%,
(2) 1.6 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be equal
to or greater than 75% but less than
100%,
31
(3) 1.8 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be equal
to or greater than 50% but less than
75%,
(4) 2.0 to 1.0, if the PPA Factor during
the remaining term of the Securities
is reasonably expected to be equal
to or greater than 25% but less than
50%, and
(5) 2.25 to 1.0, if the PPA Factor
during the remaining term of the
Securities is reasonably expected to
be less than 25%; and
(ii) the Funding Corporation obtains a Ratings
Reaffirmation with respect to the incurrence
of such Indebtedness;
(n) Indebtedness incurred to finance Expansion Modifications,
so long as the Funding Corporation obtains a Ratings Reaffirmation with respect
to the incurrence of such Indebtedness; provided that if an incurrence of
Indebtedness falls within more than one of the categories of Permitted Funding
Debt described above, the Funding Corporation may elect which category (or
categories) of Permitted Funding Debt in which to include such issuance; and
(o) Indebtedness in addition to the foregoing, so long as,
after giving effect to the incurrence of such Indebtedness, the Funding
Corporation receives confirmation that the Securities are rated at least "Baa3"
by Moody's (or the equivalent by another Rating Agency if Moody's is not then
providing credit ratings) and at least "BBB-" by S&P (or the equivalent by
another Rating Agency if S&P is not then providing credit ratings); provided
that any Additional Securities issued for the purpose described in Section
2.3(c)(iv) shall satisfy the conditions set forth in such Section.
SECTION 4.10 Business Activities. The Funding Corporation
shall not conduct any business other than the incurrence of Permitted Funding
Debt and activities incidental thereto, except (a) as contemplated by the
Transaction Documents and (b) Permitted Hedging Transactions.
SECTION 4.11 Liens. The Funding Corporation shall not create,
suffer to exist or permit any Lien upon or with respect to any of its properties
except for Permitted Liens.
32
SECTION 4.12 Fundamental Changes. The Funding Corporation
shall not consolidate or merge with or into any other Person, unless (a) the
Funding Corporation is the surviving corporation and (b) both immediately before
and after such transaction, no Default or Event of Default shall have occurred
and be continuing; provided that the Funding Corporation may merge or
consolidate with or transfer all or substantially all of its assets to an
Affiliate that has no significant assets or liabilities and was formed solely
for the purpose of changing the jurisdiction or form of organization of the
Funding Corporation, so long as (x) the amount of Indebtedness of the Funding
Corporation is not increased thereby, (y) such Affiliate assumes all obligations
of the Funding Corporation under the Financing Documents and (z) any such merger
or consolidation does not cause a significant modification of the Securities
(including any change in the obligor on the Securities) as determined under
Section 1001 of the Code.
SECTION 4.13 Transactions with Affiliates. The Funding
Corporation shall not enter into any transaction or arrangement with any
Affiliate, except (a) transactions or arrangements existing on the Closing Date
or transactions or arrangements entered into in substitution therefor, (b)
transactions or arrangements which are on terms that are no less favorable to
the Funding Corporation than terms in a comparable arm's-length transaction by
the Funding Corporation with a person that is not an Affiliate, or (c) Approved
Regulated Affiliate Transactions.
SECTION 4.14 Amendments to the Cordova Energy Credit Agreement
and Cordova Energy Project Note.
(a) The Funding Corporation shall not consent to, enter into
or grant any amendment, waiver, consent, change or modification to the Cordova
Energy Credit Agreement or the Cordova Energy Project Note, except as in
compliance with Section 7.3.
(b) The Funding Corporation will enforce all of its rights
under the Cordova Energy Credit Agreement and the Cordova Energy Project Note
for the benefit of the Trustee and Holders. The Funding Corporation shall
exercise all remedies under the Cordova Energy Credit Agreement and the Cordova
Energy Project Note (including acceleration of the Cordova Energy Project Note)
as directed by the Required Holders (or, in the case of an acceleration of the
Securities following an Event of Default under Section 5.1(a), the Holders of at
least 33" in aggregate principal amount of the Outstanding Securities), in
accordance with the terms hereof and the Intercreditor Agreement.
SECTION 4.15 Non-Consolidation. If (a) the rating assigned to
MidAmerican Holdings' long-term senior unsecured debt obligations by S&P is
reduced to below "BBB-" or (b) Holders representing more than 50% of the
Outstanding Securities shall instruct the Trustee to direct the Funding
Corporation to take such action, and in each case the Funding Corporation shall
determine in its sole discretion that (x) not taking such action would result in
the Ratings then assigned to the Securities by S&P to be reduced to below "BBB-"
or (y) taking such action would result in the Ratings then assigned to the
Securities by S&P to be increased to "BBB-" or better, then the Funding
Corporation shall use its reasonable best efforts (provided that the Funding
33
Corporation shall not be required to expend unreasonable amounts of money) to
take any action reasonably requested by S&P to institute, within ninety (90)
days after the occurrence of the event specified in clause (a) or (b), the
customary requirements (as are being generally recommended or required by S&P
for such purposes for similarly structured transactions as of the date of this
Indenture) for the assets of the Funding Corporation not to be substantively
consolidated with the assets of MidAmerican Holdings in the event of a
bankruptcy or insolvency of MidAmerican Holdings, including the appointment of
one (but not more than one) independent director of the Funding Corporation;
provided, however, that this provision shall not in any event be interpreted as
a representation or warranty by the Funding Corporation that a bankruptcy court
would not rule that the assets of the Funding Corporation would be substantively
consolidated with the assets of MidAmerican Holdings in the event of a
bankruptcy or insolvency of MidAmerican Holdings.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.1 Events of Default Defined. The term "Event of
Default," whenever used herein, shall mean any of the following events (whatever
the reason for such event and whether it shall be voluntary or involuntary or
come about or be affected by operation of Law, or be pursuant to or in
compliance with any applicable Law), and any such event shall continue to be an
Event of Default if and for so long as it shall not have been cured, remedied or
waived:
(a) failure by the Funding Corporation to pay or cause to be
paid any principal of, premium, if any, or interest on any Security when the
same becomes due and payable, whether by scheduled maturity or required
redemption or by acceleration or otherwise, and such failure continues uncured
for 15 or more days;
(b) a Credit Agreement Event of Default (other than a Credit
Agreement Event of Default under Section 5.1(a) of the Cordova Energy Credit
Agreement) shall have occurred and be continuing;
(c) failure by the Funding Corporation to comply with the
covenants described under Sections 4.9, 4.10 and 4.12 and such failure continues
uncured for a period of 30 or more days from the date on which a Responsible
Officer of the Funding Corporation receives actual knowledge thereof;
(d) failure by the Funding Corporation to comply with any of
its other covenants contained in this Indenture and such failure continues
uncured for a period of 30 or more days from the date on which a Responsible
Officer of the Funding Corporation receives actual knowledge thereof; provided
that if the Funding Corporation commences and diligently pursues efforts to cure
(or to cause to be cured) such default within such 30-day period, the Funding
Corporation may continue to effect (or cause) such cure and such default will
not be deemed an Event of Default for an additional 180 days so long as the
Funding Corporation is diligently pursuing (or causing) such cure;
34
(e) the Funding Corporation shall (i) apply for or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property,
(ii) admit in writing its inability, or be generally unable, to pay its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code, (v)
file a petition seeking to take advantage of any other Law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or
readjustment of debts, (vi) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vii) take any action for
the purpose of effecting any of the foregoing;
(f) a proceeding or case shall be commenced without the
application or consent of the Funding Corporation in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution,
winding-up or the composition or readjustment of debts, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of the Funding
Corporation under any Law relating to bankruptcy, insolvency, reorganization,
winding-up or the composition or readjustment of debts, or (iii) the appointment
of a trustee, receiver, custodian, liquidator or the like of the Funding
Corporation under any Law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or readjustment of debts, and such proceeding or case
shall continue undismissed, or any order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect for a period of ninety (90) or more consecutive days, or any order for
relief against the Funding Corporation shall be entered in an involuntary case
under the Federal Bankruptcy Code;
(g) any Security Document pursuant to which the Collateral
Agent is purported to have been granted a Lien on any Funding Corporation
Collateral ceases to be in full force and effect or any security interest
granted thereunder ceases to be a valid and perfected Lien in favor of the
Collateral Agent with the priority purported to be created thereby; provided
that the Funding Corporation shall have 30 days from the date on which a
Responsible Officer of the Funding Corporation receives actual knowledge of such
cessation to cure (or to cause to be cured) any such cessation or to furnish the
Collateral Agent with all documents and instruments required to cure (or to
cause the cure of) any such cessation;
(h) any event of default under any issuance of Permitted
Funding Debt (other than the Indebtedness incurred under this Indenture) in
excess of $10,000,000 causes such Permitted Funding Debt to become due and
payable prior to its stated maturity;
(i) failure by the Funding Corporation to pay any final,
non-appealable judgment for the payment of money in excess of $10,000,000
(exclusive of amounts covered by insurance or indemnity), which judgment is not
discharged or stayed within 90 days after the entry thereof; or
(j) any representation or warranty made by the Funding
Corporation in any Financing Document, or in any certificate or other document
furnished to any Person in accordance with the terms of the Financing Documents,
shall prove to have been false or misleading in any respect as of the time made,
and the fact, event or circumstance that gave rise to such misrepresentation has
35
resulted in, or is reasonably expected to result in, a Material Adverse Effect
and such misrepresentation or such Material Adverse Effect shall continue
uncured for 30 or more days from the date on which a Responsible Officer of the
Funding Corporation receives actual knowledge thereof; provided that if the
Funding Corporation commences efforts to cure (or to cause to be cured) such
misrepresentation by curing (or causing to be cured) the factual situation
resulting in such misrepresentation or such Material Adverse Effect within such
30-day period, the Funding Corporation may continue to effect (or cause) such
cure, and such misrepresentation shall not be deemed an Event of Default, for an
additional 60 days so long as the Funding Corporation is diligently pursuing (or
causing) such cure.
SECTION 5.2 Enforcement of Remedies.
(a) If one or more Events of Default shall have occurred and
be continuing, then, subject to the terms and provisions of the Intercreditor
Agreement and the Security Documents:
(i) if an Event of Default described in
subsection 5.1(a) hereof has occurred and is
continuing:
(A) the Trustee shall, upon the
direction of Holders of at least 33%
in aggregate principal amount of
the Outstanding Securities, by
written notice to the Funding
Corporation, declare the entire
principal amount of the Outstanding
Securities, all interest accrued
and unpaid thereon and all other
amounts payable under this Inden-
ture, if any, to be due and payable,
whereupon the same shall become
immediately due and payable without
presentment, demand, protest or
further notice of any kind, all of
which are hereby waived to the
extent permitted by applicable law;
and
(B) if in the good faith exercise of its
discretion the Trustee determines
that such action is necessary to
protect the interests of Holders,
the Trustee may, by written notice
to the Funding Corporation, declare
the entire principal amount of the
Outstanding Securities, all interest
accrued and unpaid thereon and all
other amounts payable under this
Indenture, if any, to be due and
36
payable, notwithstanding the absence
of direction from Holders pursuant
to Section 5.2(a)(i)(A), unless
Holders of more than 66% in
aggregate principal amount of the
Outstanding Securities direct the
Trustee not to accelerate the
maturity of the Securities; provided
that the Trustee is under no obliga-
tion to seek or obtain direction
from Holders as described in this
clause (B);
(ii) in the case of an Event of Default described
in subsection 5.1(b) hereof (other than an
Event of Default under Section 5.1(d) of the
Cordova Energy Credit Agreement):
(A) the Trustee shall, upon the
direction of Holders of more than
50% in aggregate principal amount of
the Outstanding Securities, by
written notice to the Funding
Corporation, declare a principal
amount of the Outstanding Securities
which is equal to the outstanding
principal amount of the Cordova
Energy Project Note, all interest
accrued and unpaid thereon and all
other amounts payable under this
Indenture, in respect of the Cordova
Energy Project Note, if any, to
be due and payable, whereupon the
same shall become immediately due
and payable without presentment,
demand, protest or further notice of
any kind, all of which are hereby
waived to the extent permitted by
applicable law; and
(B) if in the good faith exercise of its
discretion the Trustee determines
that such action is necessary to
protect the interests of Holders,
the Trustee may, by written notice
to the Funding Corporation, declare
a principal amount of the Out-
standing Securities which is equal
to the outstanding principal amount
of the Cordova Energy Project Note,
all interest accrued and unpaid
thereon and all other amounts
payable under this Indenture in
respect of the Cordova Energy
Project Note, if any, to be due and
payable notwithstanding the absence
of direction from Holders pursuant
to Section 5.2(a)(ii)(A), unless
Holders of more than 50% in
aggregate principal amount of the
Outstanding Securities direct the
Trustee not to accelerate the
maturity of such Securities;
provided that the Trustee is under
no obligation to seek or obtain
direction from Holders as described
in this clause (B);
37
(iii) in the case of an Event of Default described
in subsection 5.1(b) hereof resulting from
a Credit Agreement Event of Default under
Section 5.1(d) of the Cordova Energy Credit
Agreement, a principal amount of the Out-
standing Securities (on a pro rata basis
with respect to each series of Securities)
which is equal to the outstanding
principal amount of the Cordova Energy
Project Note automatically accelerated in
connection with such Event of Default, all
interest accrued and unpaid thereon and
all other amounts payable under this
Indenture in respect of the Cordova Energy
Project Note, if any, will become
immediately due and payable without
presentment, demand, protest or further
notice of any kind, all of which are hereby
waived to the extent permitted by
applicable law; and
(iv) in the case of an Event of Default described
in Sections 5.1(e) and 5.1(f), the entire
principal amount of the Outstanding
Securities, all interest accrued and unpaid
thereon and all other amounts payable under
this Indenture, if any, shall automatically
become immediately due and payable without
presentment, demand, protest or further
notice of any kind, all of which are hereby
waived to the extent permitted by
applicable law;
(v) in the case of any other Event of Default:
(A) the Trustee shall, upon the direction
of Holders of more than 50% in aggre-
gate principal amount of the Out-
standing Securities, by written
notice to the Funding Corporation,
declare the entire principal amount
of the Outstanding Securities, all
interest accrued and unpaid thereon
and all other amounts payable under
this Indenture, if any, to be due
and payable, whereupon the same shall
become immediately due and payable
without presentment, demand, protest
or further notice of any kind, all
of which are hereby waived to the
extent permitted by applicable law;
and
(B) if in the good faith exercise of its
discretion the Trustee determines
that such action is necessary to
protect the interests of Holders,
38
the Trustee may, by written notice to
the Funding Corporation, declare the
entire principal amount of the Out-
standing Securities, all interest
accrued and unpaid thereon and all
other amounts payable under this
Indenture, if any, to be due and
payable notwithstanding the absence
of direction from Holders pursuant to
Section 5.2(a)(iv)(A), unless Holders
of more than 50% in aggregate
principal amount of the Outstanding
Securities direct the Trustee not to
accelerate the maturity of the
Securities; provided that the Trustee
is under no obligation to seek or
obtain direction from Holders as
described in this clause (B);
(vi) if (A) an Event of Default described in
Section 5.1(a) shall have occurred and be
continuing, (B) Outstanding Securities shall
have been accelerated in accordance with
clause (i) of this Section 5.2(a) and (C) a
Guarantee Event of Default shall have
occurred and be continuing under the
Cordova Energy Guarantee the Trustee may, by
written notice to the Funding Corporation,
as directed by Holders of at least 33% of
the Outstanding Securities, direct the
Collateral Agent to take possession of the
Collateral and to sell the Collateral, as
and to the extent permitted under the
Intercreditor Agreement and the Security
Documents;
(vii) if (A) an Event of Default described in
Section 5.1(b) (other than a Credit
Agreement Event of Default under Section
5.1(a) or 5.1(d) of the Cordova Energy
Credit Agreement) shall have occurred and be
continuing and (B) Outstanding Securities
shall have been accelerated in accordance
with clause (ii) of this Section 5.2(a), the
Trustee may, by written notice to the
Funding Corporation, as directed by Holders
of more than 50% of the Outstanding
Securities, direct the Collateral Agent to
take possession of the Cordova Energy
Collateral and to sell the Cordova Energy
Collateral, as and to the extent permitted
under the Intercreditor Agreement and the
Security Documents;
(viii) if (A) an Event of Default described in
Section 5.1(e) and (f) shall have occurred
and be continuing and (B) Outstanding
Securities shall have been accelerated in
accordance with clause (iv) of this Section
5.2(a), the Trustee may, as directed by
Holders of more than 50% of the Outstanding
39
Securities, direct the Collateral Agent to
take possession of the Collateral and to
sell the Collateral, as and to the extent
permitted under the Intercreditor Agreement
and the Security Documents;
(ix) if (A) an Event of Default described in
Section 5.1(b) resulting from a Credit
Agreement Event of Default under Section
5.1(d) of the Cordova Energy Credit Agree-
ment and (B) Outstanding Securities shall
have been accelerated in accordance with
clause (iii) of this Section 5.2(a), the
Trustee may, as directed by Holders of more
than 50% of the Outstanding Securities,
direct the Collateral Agent to take posses-
sion of the Cordova Energy Collateral and to
sell such Cordova Energy Collateral, as and
to the extent permitted under the Inter-
creditor Agreement and the Security
Documents; and
(x) in the case of (A) an Event of Default other
than the Events of Default described in
clauses (vi), (vii), (viii) and (ix) and (B)
Outstanding Securities shall have been
accelerated in accordance with clause (v) of
this Section 5.2(a), the Trustee may, by
written notice to the Funding Corporation,
as directed by Holders of more than 50% of
the Outstanding Securities, direct the
Collateral Agent to take possession of the
Collateral and to sell the Collateral, as
and to the extent permitted under the Inter-
creditor Agreement and the Security
Documents.
For the avoidance of doubt, if an Event of Default described
in Section 5.1(b) shall have occurred and be continuing, subject to the other
provisions of this Indenture, (i) only a principal amount of the Outstanding
Securities equal to the outstanding principal amount of the Project Note issued
by the Guarantor party to the Credit Agreement causing such Event of Default may
be accelerated, and (ii) the Trustee may not direct the Collateral Agent to take
possession of any collateral other than the Collateral pledged to secure the
Guarantee issued by such Guarantor.
(b) At any time after the principal of the Securities shall
have become due and payable upon a declared acceleration as provided herein, and
before any judgment or decree for the payment of the money so due, or any
portion thereof, shall be entered, the Required Holders by written notice to the
Funding Corporation and the Trustee, may rescind and annul such declaration and
its consequences if:
(i) there shall have been paid to or deposited
with the Trustee a sum sufficient to pay:
40
(A) all overdue installments of interest on the
Securities;
(B) the principal of and premium (if any) on any
Securities that have become due other than
by such declaration of acceleration and
interest thereon at the respective rates
provided in the Securities for late payments
of principal;
(C) to the extent that payment of such interest
is lawful, interest upon overdue
installments of interest at the respective
rates provided in the Securities for late
payments of interest; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment
of the principal of the Securities that has become
due solely by such acceleration, have been cured
or waived as provided in Section 5.7 hereof.
No such rescission shall affect any subsequent Default or
Event of Default or impair any right consequent thereon.
SECTION 5.3 Specific Remedies. Subject to Section 10.2 hereof,
if any Event of Default shall have occurred and be continuing or if any Default
under Section 5.1(a) shall have occurred and be continuing, the Trustee, subject
to the provisions of Sections 5.2, 5.5 and 5.6 hereof, shall enforce the Cordova
Energy Guarantee and the rights of Holders thereunder.
SECTION 5.4 Judicial Proceedings Instituted by Trustee.
(a) Trustee May Bring Suit. Subject to the terms of the
Intercreditor Agreement, if an Event of Default shall have occurred and be
continuing, then the Trustee, in its own name, and as trustee of an express
trust, subject to the provisions of Section 5.2 hereof, shall be entitled and
empowered to institute any suits, actions or proceedings at Law, in equity or
otherwise, for the collection of the sums so due and unpaid on the Securities,
and may prosecute any such claim or proceeding to judgment or final decree, and,
subject to the Intercreditor Agreement with respect to the Collateral, may
enforce any such judgment or final decree and collect the moneys adjudged or
decreed to be payable in any manner provided by Law, whether before or after or
during the pendency of any proceedings for the enforcement of any of the
Trustee's rights or the rights of Holders under this Indenture, and such power
of the Trustee shall not be affected by any sale hereunder or by the exercise of
any other right, power or remedy for the enforcement of the provisions of this
Indenture.
41
(b) Trustee May Recover Unpaid Indebtedness after Sale of
Collateral. Subject to Section 5.14 hereof and the terms of the Intercreditor
Agreement, in the case of a sale of the Collateral and of the application of the
proceeds of such sale to the payment of the Indebtedness secured by this
Indenture, the Trustee in its own name, and as trustee of an express trust,
shall be entitled and empowered, by any appropriate means, legal, equitable or
otherwise, to enforce payment of, and to receive all amounts then remaining due
and unpaid upon, all or any of the Securities, for the benefit of Holders
thereof, and upon any other portion of the Securities remaining unpaid, with
interest at the rates specified in the respective Securities on the overdue
principal of and premium (if any) and (to the extent that payment of such
interest is legally enforceable) on the overdue installments of interest.
(c) Recovery of Judgment Does Not Affect Rights. No recovery
of any such judgment or final decree by the Trustee and no levy of any execution
under any such judgment upon any of the Collateral, or upon any other property,
shall in any manner or to any extent affect any rights, powers or remedies of
the Trustee, or any liens, rights, powers or remedies of Holders, but all such
liens, rights, powers or remedies shall continue unimpaired as before.
(d) Trustee May File Proofs of Claim; Appointment of Trustee
as Attorney-in-Fact in Judicial Proceedings. Subject to Section 5.14 hereof and
to the terms of the Intercreditor Agreement, the Trustee in its own name, or as
trustee of an express trust, or as attorney-in fact for Holders, or in any one
or more of such capacities (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
for the payment of overdue principal, premium (if any) or interest), shall be
entitled and empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and of Holders (whether such claims be based upon the provisions of the
Securities or of this Indenture) allowed in any equity, receivership,
insolvency, bankruptcy, liquidation, readjustment, reorganization or any other
judicial proceedings relating to the Funding Corporation or any obligor on the
Securities (within the meaning of the Trust Indenture Act), the creditors of the
Funding Corporation or any such obligor, the Funding Corporation Collateral or
any other property of the Funding Corporation or any such obligor and any
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to Holders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee and its agents and counsel. Subject to the terms of the
Intercreditor Agreement, the Trustee is hereby irrevocably appointed (and the
successive respective Holders of the Securities, by taking and holding the same,
shall be conclusively deemed to have so appointed the Trustee) the true and
lawful attorney-in-fact of the respective Holders, with authority to:
(i) make and file in the respective names of
Holders (subject to deduction from any such
claims of the amounts of any claims filed by
42
any of Holders themselves), any claim, proof
of claim or amendment thereof, debt, proof
of debt or amendment thereof, petition or
other document in any such proceeding and to
receive payment of any amounts distributable
on account thereof;
(ii) execute any such other papers and documents
and to do and perform any and all such acts
and things for and on behalf of such
Holders, as may be necessary or advisable
in order to have the respective claims of
the Trustee and of Holders against the
Funding Corporation or any such obligor,
the Collateral or any other property of
the Funding Corporation or any such obligor
allowed in any such proceeding; and
(iii) receive payment of or on account of such
claims and debt; provided, however, that
nothing contained in this Indenture shall be
deemed to give to the Trustee any right to
accept or consent to any plan of reorganiza-
tion or otherwise by action of any character
in any such proceeding to waive or change in
any way any right of any Holder. Any moneys
collected by the Trustee under this Section
shall be applied as provided in Section 5.11
hereof.
(e) Trustee Need Not Have Possession of Securities. All proofs
of claim, rights of action and rights to assert claims under this Indenture or
under any of the Securities may be enforced by the Trustee without the
possession of the Securities or the production thereof at any trial or other
proceedings instituted by the Trustee. In any proceedings brought by the Trustee
(and also any proceedings involving the interpretation of any provision of this
Indenture or the Securities to which the Trustee shall be a party) the Trustee
shall be held to represent all Holders of the Securities and it shall not be
necessary to make any such Holders parties to such proceedings.
(f) Suit to Be Brought for Ratable Benefit of Holders. Any
suit, action or other proceeding at law, in equity or otherwise which shall be
instituted by the Trustee under any of the provisions of this Indenture or the
Securities shall be for the equal, ratable and common benefit of all Holders,
subject to the provisions of this Indenture.
(g) Trustee May Be Restored to Former Position and Rights in
Certain Circumstances. In case the Trustee shall have instituted any proceeding
to enforce any right, power or remedy under this Indenture or the Securities by
foreclosure, entry or otherwise, and such proceedings shall have been determined
adversely to the Trustee, then and in every such case the Funding Corporation
and the Trustee shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of the Trustee shall continue as
if no such proceedings had been taken.
43
SECTION 5.5 Holders May Demand Enforcement of Rights by
Trustee. Subject to Section 5.14 hereof, if any Event of Default shall have
occurred and be continuing, the Trustee shall, subject to the terms of the
Intercreditor Agreement, upon the written request of the Required Holders
proceed to institute one or more suits, actions or proceedings at law, in equity
or otherwise, or take any other appropriate remedy, to enforce payment of the
principal of, or premium (if any) or interest on the Securities, or to deliver
notice to the Collateral Agent in accordance with the Intercreditor Agreement
requesting that the Collateral Agent foreclose under the Security Documents or
to sell the Collateral under a judgment or decree of a court or courts of
competent jurisdiction or under the power of sale granted in the Security
Documents, or the Trustee may, subject to the terms of the Intercreditor
Agreement, take such other appropriate legal, equitable or other remedy, as the
Trustee, which may be advised by counsel, shall deem most effectual to protect
and enforce any of the rights or powers of the Trustee or Holders, or, in case
such Holders shall have requested a specific method of enforcement permitted
hereunder, in the manner required, subject to the terms of the Intercreditor
Agreement, provided that such action shall not be otherwise than in accordance
with Law and the provisions of this Indenture, and the Trustee, subject to such
indemnity provisions, shall have the right to decline to follow any such request
if the Trustee in good faith shall determine that the suit, proceeding or
exercise of remedies so requested would involve the Trustee in personal
liability or expense.
SECTION 5.6 Control by Holders. The Required Holders shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee, provided that (i) such direction shall not be in
conflict with any rule of Law or with this Indenture or the Intercreditor
Agreement, and (ii) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
(b) The Required Holders shall have the right to direct the
time, method and place of conducting any proceeding for any right or remedy
available to the Funding Corporation under the Cordova Energy Credit Agreement
and the Cordova Energy Project Note, provided that (i) upon the occurrence of an
Event of Default described in Section 5.1(a), Holders of at least 33"% in
aggregate principal amount of the Outstanding Securities have the right to cause
the acceleration of the Cordova Energy Project Note, (ii) such direction shall
not be in conflict with any rule of law or with this Indenture or the
Intercreditor Agreement, and (ii) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
SECTION 5.7 Waiver of Past Defaults or Events of Default. The
Required Holders may on behalf of Holders of all Securities waive any past
Default or Event of Default and its consequences except that (i) Holders of not
less than 66"% in aggregate principal amount of the Outstanding Securities may
on behalf of Holders of all Securities waive a Default or an Event of Default
described in Section 5.1(a) and (ii) except as provided in clause (i), only
Holders of all Outstanding Securities which are affected by the waiver may waive
a Default or an Event of Default in respect of a covenant or provision hereof
that under Section 7.2 hereof cannot be modified or amended without the consent
of the Holder of each Security Outstanding affected. Upon any such waiver such
Default shall cease to exist and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture or the
44
Intercreditor Agreement, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 5.8 Holder May Not Bring Suit Under Certain
Conditions. A Holder shall not have the right to institute any suit, action or
proceeding at law or in equity or otherwise for the appointment of a receiver or
for the enforcement of any other remedy under or upon this Indenture, unless:
(a) such Holder previously shall have given written notice to
the Trustee of a continuing Event of Default;
(b) Holders of at least 25% in aggregate principal amount of
the Outstanding Securities shall have requested the Trustee in writing to
institute such action, suit or proceeding;
(c) the Trustee shall have refused or neglected to institute
any such action, suit or proceeding for 30 days after receipt of such notice by
the Trustee;
(d) no direction inconsistent with such written request shall
have been given to the Trustee during such 30-day period by Holders of a
majority in principal amount of Outstanding Securities; and
(e) the institution of such suit, action or proceeding is not
prohibited by Section 5.14 hereof or by the Intercreditor Agreement.
It is understood and intended that no one or more of Holders
shall have any right in any manner whatever hereunder or under the Securities to
(i) surrender, impair, waive, affect, disturb or prejudice the Lien of the
Security Documents on any property subject thereto or the rights of Holders of
any other Securities, (ii) obtain or seek to obtain priority or preference over
any other Holder or (iii) enforce any right under this Indenture except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders subject to the provisions of this Indenture and the Intercreditor
Agreement.
45
SECTION 5.9 Undertaking to Pay Court Costs. All parties to
this Indenture, and each Holder by his acceptance of a Security, shall be deemed
to have agreed that any court may in its discretion require, in any suit, action
or proceeding for the enforcement of any right or remedy hereunder, or in any
suit against the Trustee for any action taken or omitted by it as Trustee
hereunder, the filing by any party litigant in such suit, action or proceeding
of any undertaking to pay the costs of such suit, action or proceeding, and that
such court may, in its discretion, assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, action or proceeding
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided, however, that the provisions of this Section 5.9
shall not apply to (a) any suit, action or proceeding instituted by the Trustee,
(b) any suit, action or proceeding instituted by any Holder or group of Holders
holding in the aggregate more than 10% in aggregate principal amount of the
Outstanding Securities or (c) any suit, action or proceeding instituted by any
Holder for the enforcement of the payment of the principal of, or premium (if
any) or interest on any of the Securities on or after the respective due dates
expressed therein.
SECTION 5.10 Right of Holders to Receive Payment Not to be
Impaired. Anything in this Indenture to the contrary notwithstanding, the right
of any Holder to receive payment of the principal of, premium (if any) and
interest on, such Security, on or after the respective due dates expressed in
such Security (or, in case of redemption, on the Redemption Date fixed for such
Security), or to institute suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 5.11 Application of Moneys Collected by Trustee.
Following the application of funds as provided in the Intercreditor Agreement,
any money collected or to be applied by the Trustee pursuant to this Article V
in respect of the Securities of a series, together with any other moneys which
may then be held by the Trustee under any of the provisions of this Indenture as
security for the Securities of such series (other than moneys at the time
required to be held for the payment of specific Securities of such series at
their stated maturities or at a time fixed for the redemption thereof) shall be
applied in the following order from time to time, on the date or dates fixed by
the Trustee and, in the case of a distribution of such moneys on account of
principal, premium (if any) or interest, upon presentation of the Outstanding
Securities of such series, and stamping thereon of payment, if only partially
paid, and upon surrender thereof, if fully paid:
FIRST: to the payment of all amounts due the Trustee or any
predecessor Trustee under Section 10.7 hereof;
SECOND: in case the unpaid principal amount of the Outstanding
Securities of such series or any of them shall not have become due, to
the payment of any interest in default, in the order of the maturity of
the payments thereof, with interest at the rates specified in the
respective Securities of such series in respect of overdue payments (to
the extent that payment of such interest shall be legally enforceable)
on the payments of interest then overdue;
46
THIRD: in case the unpaid principal amount of a portion of the
Outstanding Securities of such series shall have become due, first to
the payment of accrued interest on all Outstanding Securities of such
series in the order of the maturity of the payments thereof, with
interest at the respective rates specified in the Securities of such
series for overdue payments of principal, premium (if any) and (to the
extent that payment of such interest shall be legally enforceable)
interest then overdue, and next to the payment of the unpaid principal
amount of all Securities of such series then due;
FOURTH: in case the unpaid principal amount of all the
Outstanding Securities of such series shall have become due, first to
the payment of the whole amount then due and unpaid on Outstanding
Securities of such series for principal, premium (if any) and interest,
together with interest at the respective rates specified in the
Securities of such series for overdue payments on principal, premium
(if any) and (to the extent that payment of such interest shall be
legally enforceable) interest then overdue; and
FIFTH: in case the unpaid principal amount of all the
Outstanding Securities of such series shall have become due, and all
amounts payable in respect of such Outstanding Securities of such
series, pursuant to clause Fourth of this Section 5.11, shall have been
fully paid, any surplus then remaining shall be paid to the Funding
Corporation, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct;
provided, however, that all payments in respect of the Securities of a
series to be made pursuant to clauses "SECOND" through "FOURTH" of this
Section 5.11 shall be made ratably to Holders of Securities of such
series entitled thereto, without discrimination or preference, based
upon the ratio of (i) the unpaid principal amount of the Securities of
such series in respect of which such payments are to be made that are
held by each such Holder to (ii) the unpaid principal amount of all
Securities of such series.
SECTION 5.12 Securities Held by Certain Persons Not to Share
in Distribution. Any Securities known to the Trustee to be owned or held by, or
for the account or benefit of, the Funding Corporation or an Affiliate of the
Funding Corporation shall not be entitled to share in any payment or
distribution provided for in this Article 6 until all Securities held by other
Persons have been indefeasibly paid in full.
SECTION 5.13 Waiver of Appraisement, Valuation, Stay, Right to
Marshalling. To the full extent it may lawfully do so, the Funding Corporation,
for itself and for any other Person who may claim through or under it, hereby:
5.10
(a) agrees that neither it nor any such Person will set up,
plead, claim or in any manner whatsoever take advantage of, any appraisal,
valuation, stay, extension or redemption laws, now or hereafter in force in any
jurisdiction which may delay, prevent or otherwise hinder (i) the performance or
enforcement of this Indenture, (ii) the foreclosure of the Security Documents,
47
(iii) the sale of any of the Collateral or (iv) the putting of the purchaser or
purchasers thereof into possession of such Collateral immediately after the sale
thereof;
(b) waives all benefit or advantage of any such Laws;
(c) consents and agrees that the Collateral may be sold by the
Collateral Agent as an entirety or in parts; and
(d) waives and releases all rights to have the Collateral
marshaled upon any foreclosure, sale or other enforcement of this Indenture or
the Security Documents.
SECTION 5.14 Limitation on Holders' Bankruptcy Rights. Each
Holder hereby irrevocably agrees, for itself and for any other Person who may
claim by, through or under it, not to file a petition to commence or join any
other Person in the filing or prosecution of a petition to commence an
involuntary filing or prosecution of a petition to commence an involuntary case
under the Federal Bankruptcy Code against the Funding Corporation.
SECTION 5.15 Remedies Cumulative; Delay or Omission Not a
Waiver. Each and every right, power and remedy herein specifically given to the
Trustee shall be cumulative and shall be in addition to every other right, power
and remedy herein specifically given or now or hereafter existing at law, in
equity or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by the Trustee
and the exercise or the commencement of the exercise of any right, power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other right, power or remedy, and no delay or
omission by the Trustee in the exercise of any right, power or remedy or in the
pursuance of any remedy shall impair any such right, power or remedy or to be
construed to be a waiver of any default on the part of the Funding Corporation
or be an acquiescence therein.
SECTION 5.16 The Intercreditor Agreement. Simultaneously with
the execution and delivery of this Indenture and the Depositary Agreement, the
Trustee shall enter into the Intercreditor Agreement on behalf of itself and all
Holders of the Outstanding Securities and all future Holders of any of the
Securities. All rights, powers and remedies available to the Trustee and Holders
of the Outstanding Securities, and all future Holders of any of the Securities,
with respect to the Security Documents, shall be subject to the Intercreditor
Agreement. In the event of any conflict or inconsistency between the terms and
provisions of this Indenture and the terms and provisions of the Intercreditor
Agreement, the terms and provisions of the Intercreditor Agreement shall govern
and control.
SECTION 5.17 The Depositary Agreement. On the Closing Date,
the Collateral Agent shall enter into the Depositary Agreement on behalf of the
Trustee, all Holders of the Outstanding Securities, all future Holders of any
Securities and all other present and future Secured Parties. In the event of any
conflict or inconsistency between the terms and provisions of this Indenture and
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terms and provisions of the Depositary Agreement, the terms and provisions of
the Depositary Agreement shall govern and control.
ARTICLE VI
ACTS OF HOLDERS
SECTION 6.1 Acts of Holders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders (collectively, an "Act" of such
Holders, which term also shall refer to the instruments or record evidencing or
embodying the same) may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing or, alternatively, may be embodied in and evidenced by
the record of Holders of Securities voting in favor thereof, either in person or
by proxies duly appointed in writing, at any meeting of Holders of Securities
duly called and held in accordance with the provisions of this Article VI, or a
combination of such instruments and any such record. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record, or both, are delivered to the Trustee, and, when it is
specifically required herein, to the Funding Corporation. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Funding Corporation, if made in the manner provided in this
Section 6.1. The record of any meeting of Holders of Securities shall be proved
in the manner provided in Section 6.7 hereof.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the certificate of any public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer, and where such execution is by
an officer of a corporation, association or partnership, on behalf of such
corporation, association or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The principal amount and serial numbers of Securities held
by any Person, and the date or dates of holding the same, shall be proved by the
Securities Register and the Trustee shall not be affected by notice to the
contrary.
(d) Any Act by the Holder of any Security (i) shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the transfer thereof or the exchange therefor or in lieu thereof, whether or not
notation of such action is made upon such Security, and (ii) shall be valid
notwithstanding that such Act is taken in connection with the transfer of such
Security to any other Person, including the Funding Corporation or any Affiliate
thereof.
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(e) Until such time as written instruments shall have been
delivered with respect to the requisite percentage of principal amount of
Securities for the Act contemplated by such instruments, any such instrument
executed and delivered by or on behalf of a Holder of Securities may be revoked
with respect to any or all of such Securities by written notice by such Holder
(or its duly appointed agent) or any subsequent Holder (or its duly appointed
agent), proven in the manner in which such instrument was proven unless such
instrument is by its terms expressly irrevocable. In determining whether Holders
of the requisite percentage of principal amount of Securities has joined in any
Act of Holders, (i) the percentage of Holders of Securities voting and (ii) the
manner in which such Holders of Securities have voted shall be as notified to
the Trustee by the Funding Corporation.
(f) Securities of any series authenticated and delivered after
any Act of Holders may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any action taken by such Act of Holders. If
the Funding Corporation shall so determine, new Securities of any series so
modified as to conform, in the opinion of the Trustee and the Funding
Corporation, to such action, may be prepared and executed by the Funding
Corporation and authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
The Funding Corporation may, but shall not be obligated to,
fix a record date for the purpose of determining Holders entitled to sign any
instrument evidencing or embodying an Act of Holders. If a record date is fixed,
those Persons who were Holders at such record date (or their duly appointed
agents), and only those Persons, shall be entitled to sign any such instrument
evidencing or embodying an Act of Holders or to revoke any such instrument
previously signed, whether or not such Persons continue to be Holders after such
record date. No such instrument shall be valid or effective if signed more than
90 days after such record date, and may be revoked as provided in paragraph (e)
above.
SECTION 6.2 Purposes for Which Holders' Meeting May Be Called.
A meeting of Holders may be called at any time and from time to time pursuant to
this Article VI for any of the following purposes:
(a) to give any notice to the Funding Corporation or to the
Trustee, or to give any directions to the Trustee, or to waive or to consent to
the waiving of any default hereunder and its consequences, or to take any other
action authorized to be taken by Holders pursuant to this Indenture;
(b) to remove the Trustee and appoint a successor Trustee
pursuant to Article X;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to Section 7.2; or
(d) to take any other action authorized to be taken by or on
behalf of Holders of any specified aggregate principal amount of the Securities
under any other provision of this Indenture or under applicable Law.
SECTION 6.3 Call of Meetings by Trustee. The Trustee may at
any time call a meeting of Holders of Securities of any series to be in the City
of San Francisco, as the Trustee shall determine. Notice of every meeting of
Holders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given by the
Trustee, in the manner provided in Section 12.6, not less than 20 nor more than
180 days prior to the date fixed for the meeting, to Holders of Securities of
such series.
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SECTION 6.4 The Funding Corporation and Holders May Call
Meeting. In case the Funding Corporation or Holders of at least 10% in aggregate
principal amount of the Securities of any series then Outstanding shall have
requested the Trustee to call a meeting of Holders of such series, by written
request setting forth in general terms the action proposed to be taken at the
meeting, and the Trustee shall not have made the mailing of the notice of such
meeting within 20 days after receipt of such request, then the Funding
Corporation or Holders of such Securities in the amount above specified may
determine the time and place in the Borough of Manhattan, The City of New York,
for such meeting and may call such meeting to take any action authorized in
Section 6.2 hereof by giving notice thereof as provided in Section 6.3 hereof.
SECTION 6.5 Persons Entitled to Vote at Meeting. To be
entitled to vote at any meeting of Holders a Person shall be (a) a Holder of one
or more Securities with respect to which such meeting is being held or (b) a
Person appointed by an instrument in writing as proxy for the Holder or Holders
of such Securities by a Holder of one or more such Securities. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Funding Corporation and its counsel.
SECTION 6.6 Determination of Voting Rights; Conduct and
Adjournment of Meeting. Notwithstanding any other provisions of this Indenture,
the Funding Corporation may make such reasonable regulations as it may deem
advisable for any meeting of Holders, in regard to proof of the holding of
Securities and of the appointment of proxies, and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 6.9 hereof or other
proof. Except as otherwise permitted or required by any such regulations, the
holding of Securities shall be proved in the manner specified in Section 6.9
hereof and the appointment of any proxy shall be proved in the manner specified
in said Section 6.9 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any bank, banker, trust company or firm satisfactory
to the Trustee.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Funding Corporation or by Holders as provided in Section 6.4 hereof, in
which case the Funding Corporation or Holders calling the meeting, as the case
51
may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of Holders of
a majority in principal amount of the Securities represented at the meeting and
entitled to vote.
Subject to the provisions of Section 6.10 hereof, at any
meeting each Holder of a Security of a series or a proxy therefor shall be
entitled to one vote for each $100,000 principal amount of Securities of such
series held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote other than by virtue of
Securities of such series held by him or instruments in writing as aforesaid
duly designating him as the Person to vote on behalf of other Holders of such
series. Any meeting of Holders duly called pursuant to Section 6.3 or Section
6.4 hereof may be adjourned from time to time, and the meeting may be held as so
adjourned without further notice. At any meeting, the presence of Persons
holding or representing Securities with respect to which such meeting is being
held in an aggregate principal amount sufficient to take action upon the
business for the transaction of which such meeting was called shall be necessary
to constitute a quorum; but, if less than a quorum be present, the Persons
holding or representing a majority of the Securities represented at the meeting
may adjourn such meeting with the same effect, for all intents and purposes, as
though a quorum had been present.
SECTION 6.7 Counting Votes and Recording Action of Meeting.
The vote upon any resolution submitted to any meeting of Holders of Securities
of a series shall be by written ballots on which shall be subscribed the
signatures of Holders of Securities of such series or of their representatives
by proxy and the serial numbers and principal amounts of the Securities of such
series held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was given as provided in Section 6.3 hereof. The record shall show
the serial numbers of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Funding Corporation and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 6.8 Evidence of Action Taken by Holders. Whenever in
this Indenture it is provided that Holders of a specified percentage or a
majority in aggregate principal amount of the Securities or of any series of
Securities may take any action (including the making of any demand or request,
52
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action Holders of such specified
percentage or majority have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Holders in
person or by agent or proxy appointed in writing, or (b) by the record of
Holders of Securities voting in favor thereof at any meeting of Holders duly
called and held in accordance with the provisions of this Article 6, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Holders, and except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments and/or such
record are delivered to the Trustee, and, where expressly required, to the
Funding Corporation.
SECTION 6.9 Proof of Execution of Instruments and of Holding
of Securities. Subject to the provisions of Section 10.3 and Section 6.6 hereof
and Section 315 of the Trust Indenture Act, proof of the execution of any
instrument by a Holder or his agent or proxy and proof of the holding by any
Person of any of the Securities shall be sufficient if made in the following
manner.
The fact and date of the execution by any such Person of any
instrument may be proved by the certificate of any notary public or other
officer authorized to take acknowledgments of deeds to be recorded in any State
within the United States stating that the Person executing such instrument
acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other such officer. Where such
execution is by an officer of a corporation or association or a member of a
partnership or limited liability company on behalf of such corporation,
association, partnership or limited liability company, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument may also be proved in any other
manner which the Trustee may deem sufficient.
The ownership of Securities may be proved by the Securities
Register or by a certificate of the Registrar.
If the Funding Corporation shall solicit from Holders of
Securities of any series any request, demand, authorization, direction, notice,
consent, waiver or other act, the Funding Corporation may, at its option, fix in
advance a record date for the determination of Holders of Securities entitled to
give such request, demand, authorization, direction, notice, consent, waiver or
other act, but the Funding Corporation shall have no obligation to do so. Any
such record date shall be fixed at the Funding Corporation's discretion in
accordance with Section 316(c) of the Trust Indenture Act. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other act may be sought or given before or after the record date, but
only Holders of Securities of record at the close of business on such record
date shall be deemed to be Holders of Securities for the purpose of determining
whether Holders of the requisite aggregate principal amount of Securities of
such series Outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other act, and for
that purpose the Securities of such series Outstanding shall be computed as of
such record date.
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The Trustee may require such additional proof, if any, of any
matter referred to in this Section 6.9 hereof as it shall deem necessary.
The record of any meeting of Holders shall be proved as
provided in Section 6.7 hereof.
SECTION 6.10 Securities Owned by the Funding Corporation
Deemed Not Outstanding. In determining whether Holders of the requisite
aggregate principal amount of Securities have concurred in any request, demand,
authorization, direction, notice, consent, waiver or other act under this
Indenture, Securities which are owned by the Funding Corporation or any
Affiliate of the Funding Corporation shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities for which the Trustee has
received written notice of such ownership as conclusively evidenced by the
Securities Register shall be so disregarded. The Funding Corporation shall
furnish the Trustee, upon its reasonable request, with a list of such
Affiliates. Securities so owned which have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section 6.10, if the pledgee
shall establish to the satisfaction of the Trustee that the pledgee has the
right to vote such Securities and that the pledgee is not an Affiliate of the
Funding Corporation. Subject to the provisions of Section 315 of the Trust
Indenture Act, in case of a dispute as to such right, any decision by the
Trustee, taken upon the advice of counsel, shall be full protection to the
Trustee.
SECTION 6.11 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
6.8 hereof, of the taking of any action by Holders of the percentage in
aggregate principal amount of the Securities or of any series of Securities
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included in
the Security Holders of which have consented to such action may, by filing
written notice with the Trustee and upon proof of holding as provided in Section
6.9 hereof, revoke such action so far as concerns such Security. Except as
aforesaid, any such action taken by the Holder of any Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Security, and of any Security issued in exchange therefor or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Security or any Security issued in exchange therefor or in place
thereof. Any action taken by Holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action shall be conclusively binding upon the Funding Corporation, the Trustee
and Holders of all the Securities.
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ARTICLE VII
AMENDMENTS AND SUPPLEMENTS;
ACTIONS UNDER CERTAIN AGREEMENTS
SECTION 7.1 Amendments and Supplements to Indenture without
Consent of Holders. This Indenture may be amended or supplemented by the Funding
Corporation and the Trustee at any time and from time to time, without the
consent of Holders, by a Supplemental Indenture filed with, and in form
satisfactory to, the Trustee, solely for one or more of the following purposes:
(a) to add additional covenants of the Funding Corporation, to
surrender any right or power herein conferred upon the Funding Corporation or to
confer upon Holders any additional rights, remedies, benefits, powers or
authorities that may lawfully be conferred;
(b) to increase the assets securing the Funding Corporation's
obligations under this Indenture;
(c) to incorporate the issuance of Additional Securities on
the conditions set forth in Article II hereof;
(d) for any purpose not inconsistent with the terms of this
Indenture or to cure any ambiguity or to correct or supplement any provision
contained herein or in any Supplemental Indenture which may be defective or
inconsistent with any other provision contained herein or in any Supplemental
Indenture; or
(e) in connection with, and to reflect, any amendments to the
provisions hereof or of any Supplemental Indenture requested by the Rating
Agencies in circumstances where confirmation of the Ratings is required or
permitted under this Indenture or any Supplemental Indenture; provided, however,
that such amendments are not, in the judgment of the Trustee, to the material
prejudice of the Trustee or Holders; or
(f) to provide for the issuance of Exchange Securities as
contemplated by a Registration Rights Agreement.
SECTION 7.2 Amendments and Supplemental Indentures with
Consent of Holders. At any time and from time to time, but only with the
approval of the Holders of more than 50% in aggregate principal amount of the
Securities then Outstanding, the Funding Corporation and the Trustee may enter
into a Supplemental Indenture for the purpose of adding any mutually agreeable
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture, or waive compliance with any provision hereof; provided
that, without the unanimous consent of Holders affected thereby, no such
Supplemental Indenture and no such waiver of compliance with any of the
provisions hereof shall alter or modify or waive compliance with (i) any
55
provision with respect to the amount of principal, premium (if any) or interest
payable upon any Securities, (ii) any provision with respect to the dates on
which interest on or principal of any Securities is payable, (iii) any provision
with respect to the dates of maturity of any Securities or (iv) any provision of
this Article VII. Notice of any Supplemental Indenture or waiver which alters,
modifies or waives compliance with any of the provisions referred to any of
subclauses (i) through (iv) of the proviso to the preceding sentence shall be
given by the Funding Corporation to any Rating Agency then maintaining a Rating
for the Securities.
SECTION 7.3 Amendment of the Credit Agreements or Project
Notes. The Funding Corporation and the Trustee may without the consent of or
notice to Holders enter into, or consent to the execution of, any amendment,
supplement, waiver, consent or other modification of any Credit Agreement or
Project Note (i) to add additional covenants of the Guarantor party thereto, to
surrender any rights or powers therein conferred upon such Guarantor or to
confer upon the Funding Corporation or the Trustee any additional rights,
remedies, benefits, powers or authorities that may lawfully be conferred; (ii)
to incorporate the issuance of additional Project Notes in connection with the
issuance of Additional Securities; (iii) for any purpose not inconsistent with
the terms of this Indenture or such Credit Agreement or Project Note or to cure
any ambiguity or to correct or supplement any provision contained in such Credit
Agreement or Project Note which may be defective or inconsistent with any
provision contained therein, provided that such amendment or modification does
not have a material adverse effect on the Outstanding Securities; or (iv) in
connection with and to reflect any amendments or supplements to the provisions
thereof requested by the Rating Agencies in circumstances where confirmation of
the Ratings is required or permitted under such Credit Agreement or any
amendment or supplement thereto. Except as otherwise provided in this Section
7.3, neither the Funding Corporation nor the Trustee shall consent to any other
amendment to or modification of the Cordova Energy Credit Agreement or Cordova
Energy Project Note or grant any waiver or consent thereunder without the
written approval or consent of Holders of more than 50% in aggregate principal
amount of the Securities then Outstanding which are affected by such amendment
or modification. Any amendment or modification to the Cordova Energy Credit
Agreement or the Cordova Energy Project Note which changes (i) the amount of
payments due thereunder, (ii) the Person to whom such payments are to be made or
(iii) the dates on which such payments are to be made shall not be made without
the unanimous consent of Holders affected by such amendment or modification.
SECTION 7.4 Actions Taken Under Depositary Agreement. Any
consent which is expressly required to be provided to the Securities
Intermediary by the Trustee as a Secured Party under the Depositary Agreement
shall be subject to the following:
(i) any consent of the Trustee under Section 6.1(c) of the
Depositary Agreement shall require the consent of (A) all of the Holders of the
Initial Securities and (B) if the Holders of the Initial Securities hold less
than a majority of the aggregate principal amount of the Outstanding Securities
affected by the applicable amendment, supplement, waiver, consent or other
modification, Holders of Outstanding Additional Securities in an aggregate
principal amount which, together with the aggregate principal amount of the
Outstanding Initial Securities, is more than 50% in aggregate principal amount
of the Outstanding Securities affected by the applicable amendment, supplement,
waiver, consent or other modification;
56
(ii) any consent of the Trustee as a Secured Party which is
expressly required under clause (b) or (d) of Section 6.1 of the Depositary
Agreement shall require the consent of Holders representing more than 50% of the
Outstanding Securities affected by the applicable amendment, supplement, waiver,
consent or other modification; and
(iii) any direction or consent of the Trustee as a Secured
Party which is expressly required under the Depositary Agreement and which is
not addressed in clause (i) or (ii) immediately above shall require the consent
of Holders representing more than 50% of the Outstanding Securities affected by
the event or circumstance which requires such direction or consent.
SECTION 7.5 Actions Taken Under Intercreditor Agreement. Any
direction or consent which is expressly required to be provided to the
Collateral Agent by the Trustee as a Secured Party under the Intercreditor
Agreement shall be subject to the following:
(i) any direction or consent of the Trustee as a Secured Party
which is expressly required under Section 5 or 6 of the Intercreditor Agreement
shall require the consent of (x) if the event or circumstance which requires
such direction or consent is addressed in Section 5.2 hereof, the applicable
percentage of Holders set forth in Section 5.2 hereof, and (y) if the event or
circumstance which requires such direction or consent is not addressed in
Section 5.2 hereof, Holders representing (1) 33-1/3% of the Outstanding
Securities in the case of a Trigger Event resulting from an Event of Default
under Section 5.1(a) hereof or (2) more than 50% of the Outstanding Securities
in the case of any other Trigger Event;
(ii) any consent of the Trustee under Section 10(f)(iii) of
the Intercreditor Agreement shall require the consent of (A) all of the Holders
of the Initial Securities and (B) if the Holders of the Initial Securities
represent less than a majority of the aggregate principal amount of the
Outstanding Securities affected by the applicable amendment, supplement, waiver,
consent or other modification, Holders of Outstanding Additional Securities in
an aggregate principal amount which, together with the aggregate principal
amount of the Outstanding Initial Securities, is more than 50% of the principal
amount of the Outstanding Securities affected by the applicable amendment,
supplement, waiver, consent or other modification;
(iii) any consent of the Trustee as a Secured Party which is
expressly required under clause (ii) or (iv) of Section 10(f) of the
Intercreditor Agreement shall require the consent of Holders representing more
than 50% of the Outstanding Securities affected by the applicable amendment,
supplement, waiver, consent or other modification; and
(iv) any direction or consent of the Trustee as a Secured
Party which is expressly required under the Intercreditor Agreement and which is
not addressed in clause (i), (ii) or (iii) immediately above shall require the
consent of Holders representing more than 50% of the Outstanding Securities
affected by the event or circumstance which requires such direction or consent.
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SECTION 7.6 Trustee Authorized to Join in Amendments and
Supplements; Reliance on Counsel. The Trustee is authorized to join with the
Funding Corporation in the execution and delivery of any Supplemental Indenture
or amendment permitted by this Article VII and in so doing shall be fully
protected by an Opinion of Counsel that such Supplemental Indenture or amendment
is so permitted and has been duly authorized by the Funding Corporation and that
all things necessary to make it a valid and binding agreement have been done.
SECTION 7.7 Effect of Supplemental Indentures. Upon the
execution of any Supplemental Indenture under this Article VII, this Indenture
shall be modified in accordance therewith, and such Supplemental Indenture shall
form a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 7.8 Conformity with Trust Indenture Act. Every
Supplemental Indenture executed pursuant to this Article VII shall conform to
the requirements of the Trust Indenture Act as then in effect.
SECTION 7.9 Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
Supplemental Indenture pursuant to this Article VIII may, and shall if required
by the Funding Corporation, bear a notation in form approved by the Funding
Corporation and the Trustee as to any matter provided for in such Supplemental
Indenture; and, in such case, suitable notation may be made upon Outstanding
Securities after proper presentation and demand. If the Funding Corporation
shall so determine, new Securities so modified as to conform, in the opinion of
the Funding Corporation and the Trustee, to any such Supplemental Indenture may
be prepared and executed by the Funding Corporation and authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
ARTICLE VIII
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge of Securities. Except
as otherwise provided with respect to the Securities of any series in the
Supplemental Indenture relating thereto, the Securities of such series shall, on
or prior to the Scheduled Payment Date with respect to the final installment of
principal thereof, be deemed to have been paid for all purposes of this
Indenture, and the entire Indebtedness of the Funding Corporation in respect
thereof shall be deemed to have been satisfied and discharged, upon satisfaction
of the following conditions:
(a) the Funding Corporation shall have irrevocably deposited
or caused to be deposited with the Trustee, in trust, money in an amount which
shall be sufficient to pay when due the principal, premium, if any, and interest
due and to become due on the Securities of such series on and prior to the
Scheduled Payment Date with respect to the final installment of principal
thereof or upon redemption or prepayment;
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(b) if any such deposit of money shall have been made prior to
the Scheduled Payment Date with respect to the final installment of principal of
such Securities or the Redemption Date for such Securities, the Funding
Corporation shall have delivered to the Trustee an Officer's Certificate stating
that such money shall be held by the Trustee, in trust, as provided in Section
8.3 hereof;
(c) in the case of redemption or prepayment of Securities, the
notice requisite to the validity of such redemption or prepayment shall have
been given, or irrevocable authority shall have been given by the Funding
Corporation to the Trustee to give such notice, under arrangements satisfactory
to the Trustee; and
(d) there shall have been delivered to the Trustee an Opinion
of Counsel to the effect that such satisfaction and discharge of the
Indebtedness of the Funding Corporation with respect to the Securities of such
series shall not be deemed to be, or result in, a taxable event with respect to
Holders of such series for purposes of United States Federal income taxation
unless the Trustee shall have received documentary evidence that each Holder of
such series either is not subject to, or is exempt from, United States Federal
income taxation.
Upon satisfaction of the aforesaid conditions with respect to the Securities of
any series, the Trustee shall, upon receipt of a notice from the Funding
Corporation, acknowledge in writing that the Securities of such series are
deemed to have been paid for all purposes of this Indenture and that the entire
Indebtedness of the Funding Corporation in respect thereof is deemed to have
been satisfied and discharged.
In the event that Securities which shall be deemed to have
been paid as provided in this Section 8.1 do not mature and are not to be
redeemed within the 60-day period commencing on the date of the deposit with the
Trustee of moneys, the Funding Corporation shall, as promptly as practicable,
give a notice, in the same manner as a notice of redemption with respect to such
Securities, to Holders of such Securities to the effect that such Securities are
deemed to have been paid and the circumstances thereof.
Notwithstanding the satisfaction and discharge of any
Securities as aforesaid, the obligations of the Funding Corporation and the
Trustee in respect of such Securities under Sections 2.5, 2.8 and 10.7 hereof
and this Article VIII shall survive.
SECTION 8.2 Satisfaction and Discharge of Indenture. This
Indenture shall upon request of the Funding Corporation cease to be of further
effect (except as hereinafter expressly provided), and the Trustee, at the
expense of the Funding Corporation, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:
(a) either
(i) all Securities theretofore authenticated and
delivered (other than Securities which have
been destroyed, lost or stolen and which
have been replaced or paid as provided in
Section 2.8 and Securities deemed to have
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been paid in accordance with Section 8.1
hereof) have been delivered to the Trustee
for cancellation, or
(ii) all Securities not theretofore delivered to
the Trustee for cancellation shall be deemed
to have been paid in accordance with Section
8.1 hereof; and
(b) all other sums due and payable hereunder have been paid;
and
(c) the Funding Corporation has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein required for the satisfaction and discharge of this
Indenture have been complied with.
Upon satisfaction of the aforesaid conditions, the Trustee
shall, upon receipt of a written request from the Funding Corporation,
acknowledge in writing the satisfaction and discharge of this Indenture and take
all other action reasonably requested by the Funding Corporation to evidence the
termination of any and all Liens created with respect to this Indenture or the
Security Documents.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Funding Corporation and the
Trustee under Sections 2.5, 2.8 and 10.7 hereof and this Article VIII shall
survive.
Upon satisfaction and discharge of this Indenture as provided
in this Section 8.2, the Trustee shall assign, transfer and turn over to, or
upon the order of, the Funding Corporation any and all money, securities and
other property then held by the Trustee for the benefit of Holders, other than
money deposited with the Trustee pursuant to Section 8.1(a) hereof and interest
and other amounts (if any) earned or received thereon.
SECTION 8.3 Application of Trust Money. The money deposited
with the Trustee pursuant to Section 8.1 hereof shall not be withdrawn or used
for any purpose other than, and shall be held in trust for, the payment of the
principal of, and premium (if any) and interest on, the Securities or portions
of principal amount thereof in respect of which such deposit was made.
ARTICLE IX
DEFEASANCE
SECTION 9.1 Funding Corporation's Option to Effect Defeasance
or Covenant Defeasance. The Funding Corporation may elect, at its option at any
time, to have Section 9.2 or Section 9.3 applied to the Outstanding Securities
(as a whole and not in part) upon compliance with the conditions set forth below
in this Article IX and upon payment or provision for payment to the Trustee of
all fees and expenses due hereunder.
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SECTION 9.2 Defeasance and Discharge. Upon the Funding
Corporation's exercise of its option to have this Section 9.2 applied to the
Outstanding Securities (as a whole and not in part), the Funding Corporation
shall be deemed to have been discharged from its obligations with respect to
such Securities as provided in this Section 9.2 on the date after the conditions
set forth in Section 9.4 are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Funding Corporation shall be deemed
to have paid and discharged the entire Indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Funding Corporation, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 9.4 and
as more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities when payments are due, (b) the
Funding Corporation's obligations with respect to such Securities under Sections
2.2 and 4.3(a), (c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture, including, without limitation, Section 10.7, (d)
Article III, (e) this Article IX and (f) Article X. Subject to compliance with
this Article IX, the Funding Corporation may exercise its option to have this
Section 9.2 applied to the Outstanding Securities (as a whole and not in part)
notwithstanding the prior exercise of its option to have Section 9.3 applied to
such Securities.
SECTION 9.3 Covenant Defeasance. Upon the Funding
Corporation's exercise of its option to have this Section 9.3 applied to the
Outstanding Securities (as a whole and not in part), (a) the Funding Corporation
shall be released from its obligations under Article IV (except for Section
4.3(a)) and Section 5.1(c) (except with respect to Section 4.3(a)) and Section
5.1(d) shall be of no force and effect), in each case with respect to such
Outstanding Securities as provided in this Section 9.3 on and after the date the
conditions set forth in Section 9.4 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Outstanding Securities, the Funding Corporation may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document; but the remainder of this Indenture and such Securities
shall be unaffected thereby.
The Funding Corporation may exercise its option under Section
9.2 notwithstanding the prior exercise of its option under Section 9.3.
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 9.2 or
Section 9.3 to the Outstanding Securities:
(a) The Funding Corporation shall irrevocably have deposited
or caused to be deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as security for,
and dedicated solely for the benefit of Holders of such Securities, (i) money in
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an amount, or (ii) U.S. government obligations for the payment of principal of,
premium (if any) and interest on the Outstanding Securities in accordance with
their terms to any Redemption Date or final maturity date, as applicable, of the
Outstanding Securities or (iii) a combination thereof.
(b) The Funding Corporation shall deliver to the Trustee a
certificate of a nationally recognized firm of independent public accountants
expressing their opinion that such payments of principal and interest when due
without reinvestment of the deposited U.S. government obligations plus any
deposited monies without investment will provide cash at such times and in such
amounts will be sufficient to pay the principal of, premium (if any) and any
installment of accrued interest on such Outstanding Securities on the respective
stated maturities thereof or, if the Funding Corporation makes arrangements
satisfactory to the Trustee for the redemption of the Securities prior to their
stated maturity, on any earlier Redemption Date, in accordance with the terms of
this Indenture and such Outstanding Securities.
(c) In the event of an election to have Section 9.2 apply to
the Outstanding Securities, the Funding Corporation shall have delivered to the
Trustee an Opinion of Counsel to the effect that, or based upon existing
precedents, if the matter were properly briefed, a court should hold that,
Holders shall not recognize income, gain or loss for United States federal
income tax purposes as a result of such defeasance and shall be subject to
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such defeasance were not to occur and the
Funding Corporation had paid or redeemed such Securities on the applicable
dates, which Opinion of Counsel must be based upon a ruling of the Internal
Revenue Service to the same effect or a change in applicable United States
federal income tax law or related United States Department of Treasury
regulations after the Closing Date.
(d) In the event of an election to have Section 9.3 apply to
the Outstanding Securities, the Funding Corporation shall have delivered to the
Trustee an Opinion of Counsel to the effect that Holders shall not recognize
income, gain or loss for United States federal income tax purposes as a result
of the Covenant Defeasance and shall be subject to federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such Covenant Defeasance were not to occur and the Funding Corporation
had paid or redeemed such Securities on the applicable dates.
(e) Immediately after giving effect to such deposit and the
Covenant Defeasance, no Default or Event of Default (other than a Default or an
Event of Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Securities), with respect
to the Outstanding Securities shall have occurred and be continuing on the date
of such deposit and after giving effect to such deposit.
(f) Such Defeasance or Covenant Defeasance shall not
constitute a default under any other material agreement or instrument to which
the Funding Corporation is a party or by which it is bound.
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(g) The Funding Corporation shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent with respect to such Defeasance or Covenant Defeasance
have been complied with.
Notwithstanding anything to the contrary set forth herein, the
conditions set forth in clauses (b), (c), (d), (e) and (f) need not be satisfied
so long as, at the time the Funding Corporation makes such deposit, (1) no
Default under subsections 5.1(a), (e) or (f) hereof shall have occurred and be
continuing on the date of and after giving effect to such deposit and (2) either
(x) a notice of redemption has been mailed pursuant to Section 3.2 hereof
providing for redemption of all the Outstanding Securities not more than forty
(40) days after such mailing and the provisions of Article III hereof with
respect to such redemption shall have been complied with or (y) the final
maturity date of the Securities will occur within forty (40) days. If the
conditions set forth in this paragraph are satisfied, the Funding Corporation
shall be deemed to have effected Covenant Defeasance.
All Opinions of Counsel required in this Section 9.4 may be
subject to customary assumptions, qualifications and limitations.
SECTION 9.5 Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions. All money and U.S. government
obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 9.4 or otherwise in respect of the Outstanding Securities shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Securities and this Indenture, to the payment, either directly or through
any such Paying Agent (other than the Funding Corporation acting as its own
Paying Agent) as the Trustee may determine, to Holders of such Securities, of
all sums due and to become due thereon in respect of principal and any premium
and interest, but money so held in trust need not be segregated from other funds
except to the extent required by law.
The Funding Corporation shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
government obligations deposited pursuant to Section 9.4 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge that by law is for the account of Holders of Outstanding Securities.
Anything in this Article IX to the contrary notwithstanding,
the Trustee shall deliver or pay to the Funding Corporation from time to time
upon request by the Funding Corporation any money or U.S. government obligations
held by it as provided in Section 9.4 that, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to the Outstanding
Securities.
SECTION 9.6 Reinstatement. If the Trustee or the Paying Agent
is unable to apply any money in accordance with this Article IX with respect to
any Securities by reason of any order or judgment of any court or Governmental
Authority enjoining, restraining or otherwise prohibiting such application, then
the obligations under this Indenture and such Securities from which the Funding
63
Corporation has been discharged or released pursuant to Section 9.2 or 9.3 shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article IX with respect to such Securities, until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to Section
9.5 with respect to such Securities in accordance with this Article IX; provided
that if the Funding Corporation makes any payment of principal of or any premium
or interest on any such Security following such reinstatement of its
obligations, the Funding Corporation shall be subrogated to the rights (if any)
of Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE XI
HE TRUSTEE AND DTC
SECTION 10.1 Certain Duties and Responsibilities of the
Trustee.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such
duties and only such duties as are
specifically set forth in this Indenture,
and no implied covenants or obligations
shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the
truth of the statements and the correctness
of the opinions expressed therein, upon
certificates or opinions furnished to the
Trustee and conforming to the requirements
of this Indenture; but in the case of any
such certificates or opinions which by
any provision hereby are specifically
required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the
same to determine whether or not they con-
form to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this clause (c) shall not be construed to limit
the effect of clause (a) of this Section;
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(2) the Trustee shall not be liable for any error or
judgment made in good faith by an Authorized
Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by
it in good faith in accordance with the
direction of Holders of not less than a majority
in principal amount of the Outstanding
Securities relating to the time, method and
place of conducting any proceeding for any
remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee,
under this Indenture with respect to the
Securities; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or
otherwise incur any financial liability in the
performance of any of its duties hereunder, or
in the exercise of any of its rights or powers,
if it shall have reasonable grounds for
believing that repayment of such funds or
adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture, the Depositary Agreement and the Intercreditor
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
(e) The Trustee shall not be responsible for insuring the
Cordova Energy Project or for collecting any insurance moneys and shall have no
responsibility for the financial, physical or other condition of the Cordova
Energy Project.
SECTION 10.2 Notice of Defaults. If payment of any interest on
any Security is not made when it becomes due and payable and such failure
continues unremedied for a period of ten (10) days, the Trustee shall, as soon
thereafter as practicable, notify the Funding Corporation that it has failed to
make interest payments by telephone or telecopy. Any telephonic notice shall be
promptly confirmed in writing. Within thirty (30) days after the occurrence of
any Event of Default of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee shall transmit by mail to all Holders of Securities, as
their names and addresses appear in the Securities Register, notice of such
Event of Default known to the Trustee, unless such Event of Default shall have
been cured or waived; provided, however, that, except in the case of default in
the payment of the principal of or premium, if any, or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors or
Authorized Officers of the Trustee in good faith determines that the withholding
of such notice is in the interest of Holders of Securities.
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Except as otherwise expressly provided herein, the Trustee
shall not be bound to ascertain or inquire as to the performance or observance
of any of the terms, conditions, covenants or agreements herein, in the Security
Documents, or of any of the documents executed in connection with the
Securities, or as to the existence of an Event of Default thereunder, and shall
not be deemed to have notice of an Event of Default unless a Responsible Officer
has actual knowledge thereof or shall have been notified in writing in
accordance with the terms hereof.
SECTION 10.3 Certain Rights of Trustee. (a) The Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Funding Corporation shall
be sufficiently evidenced by written instrument signed by an Authorized Officer
of the Funding Corporation;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence is herein specifically prescribed to be relied upon) may, in the
absence of bad faith on its part, rely upon a certificate of an Authorized
Officer of the Funding Corporation delivered to the Trustee;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
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SECTION 10.4 Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Funding Corporation, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Funding Corporation of Securities
or the proceeds thereof.
SECTION 10.5 May Hold Securities. The Trustee or any other
agent of the Funding Corporation, in its individual or any other capacity, may
become the owner or pledgee of Securities and may deal with the Funding
Corporation with the same rights it would have if it were not Trustee or such
other agent.
SECTION 10.6 Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by Law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Funding
Corporation.
SECTION 10.7 Compensation; Reimbursement; Indemnification. The
Funding Corporation agrees (a) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of Law in regard to the
compensation of a trustee of an express trust), (b) except as otherwise
expressly provided herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith, and (c) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. All
indemnifications and releases from liability granted hereunder to the Trustee
shall extend to its officers, directors, employees, agents, successors and
assigns.
SECTION 10.8 Eligibility. There shall at all times be a
Trustee hereunder which shall be a corporation which complies with the
eligibility requirements of the Trust Indenture Act, either (a) having a
combined capital and surplus of at least $50,000,000 or (b) having a combined
capital and surplus of at least $10,000,000 and being a wholly-owned subsidiary
of a corporation having a combined capital and surplus of at least $50,000,000,
and in each case subject to supervision or examination by Federal or State or
District of Columbia authority and having a corporate trust office in New York,
New York, to the extent there is such an institution eligible and willing to
serve. If such corporation publishes reports of condition at least annually,
pursuant to Law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
67
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 10.9 Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article X shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 10.10 hereof.
(b) The Trustee may resign at any time by giving written
notice thereof to the Funding Corporation, provided that in the event the
Trustee is also the Collateral Agent and/or Securities Intermediary, it must
also at the same time resign as Collateral Agent and/or Securities Intermediary,
as the case may be. If the instrument of acceptance by a successor Trustee
required by Section 10.10 hereof shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by act of Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Funding Corporation.
(d) If at any time:
(1) the Trustee shall cease to be eligible under
Section 10.8 hereof and shall fail to resign
after written request therefor by the
Funding Corporation or by any such Holder,
or
(2) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or
of its property shall be appointed or any
public officer shall take charge or control
of the Trustee or of its property of affairs
for the purpose of rehabilitation, conserva-
tion or liquidation,
then, in any such case, (i) the Funding Corporation may remove the Trustee, or
(ii) subject to the requirements of Section 315(e) of the Trust Indenture Act,
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of action, or if a vacancy shall occur in the office of Trustee for
any cause, the Funding Corporation shall promptly appoint a successor Trustee or
Trustees, a successor Collateral Agent and a successor Securities Intermediary,
as applicable, in accordance with the applicable requirements of Section 10.10
hereof. If, within 30 days after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by
Holders of a majority in aggregate principal amount of the Outstanding
68
Securities by written instrument delivered to the Funding Corporation and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 10.10 hereof, become the successor Trustee and supersede the successor
Trustee appointed by the Funding Corporation. If no successor trustee shall have
been so appointed by the Funding Corporation or Holders and accepted appointment
in the manner required by Section 10.10 hereof, subject to the requirements of
Section 315(e) of the Trust Indenture Act, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Funding Corporation shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities as their names and addresses appear in the
Securities Register and to the Rating Agencies. Each notice shall include the
name of the successor Trustee and the address of its principal trust office.
SECTION 10.10 Acceptance of Appointment by Successor. (a) In
case of the appointment hereunder of a successor Trustee, every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Funding
Corporation and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Funding Corporation
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Funding
Corporation shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article X.
SECTION 10.11 Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article X, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
69
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 10.12 Maintenance of Offices and Agencies. (a) There
shall at all times be maintained in the Borough of Manhattan, the City of New
York, and in such other places of payment, if any, as shall be specified for the
Securities of any series in the related Supplemental Indenture, an office or
agency where Securities may be presented or surrendered for registration of
transfer or exchange and for payment of principal, premium, if any, and
interest. Such office shall be initially for delivery by hand:
Chase Manhattan Bank and
Trust Company, National Association
c/o The Chase Manhattan Bank
Corporate Teller
55 Water Street, Room 234
2nd Floor, North Building
New York, New York 10041
or for delivery by mail:
Chase Manhattan Bank and
Trust Company, National Association
c/o Chase Bank of Texas
1201 Main Street
Dallas, Texas 75202
Attention: Registered Processing Area, 18th Floor
(b) There shall at all times be a Securities Registrar and a
Paying Agent hereunder. In addition, at any time when any Securities remain
Outstanding, the Trustee may appoint an authenticating agent or agents with
respect to the Securities of one or more series which shall be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued upon
original issuance, exchange, registration of transfer or partial redemption
thereof or pursuant to Section 2.8, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder (it being understood
that wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an authenticating agent and a certificate
of authentication executed on behalf of the Trustee by an authenticating agent).
If an appointment of an authenticating agent with respect to the Securities of
one or more series shall be made pursuant to this Section 10.12(b), the
Securities of such series may have endorsed thereon, in addition to the
Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
70
This Security is one of the series of Securities referred to
in the within-mentioned Indenture.
------------------------------------
Trustee
By
------------------------------------
Authorized Signatory
By
------------------------------------
Authenticating Agent
Any authorized agent shall be a bank or trust company, shall
be a Person organized and doing business under the laws of the United States or
any State thereof, either (a) having a combined capital and surplus of at least
$50,000,000 or (b) having a combined capital and surplus of at least $10,000,000
and being a wholly-owned subsidiary of a corporation having a combined capital
and surplus of at least $50,000,000 and shall be authorized under such laws to
exercise corporate trust powers, subject to supervision by Federal or state
authorities. If such authorized agent publishes reports of its condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 10.12,
the combined capital and surplus of such authorized agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an authorized agent shall cease to be
eligible in accordance with the provisions of this Section 10.12, such
authorized agent shall resign immediately in the manner and with the effect
specified in this Section 10.12. The Trustee at its office specified in Section
12.6 is hereby appointed as Paying Agent and Securities Registrar hereunder.
(c) Any Paying Agent (other than the Trustee) from time to
time appointed hereunder shall execute and deliver to the Trustee an instrument
in which said Paying Agent shall agree with the Trustee, subject to the
provisions of this Section 10.12, that such Paying Agent will:
(i) hold all sums held by it for the payment of
principal of, and premium, if any, and
interest on Securities in trust for the
benefit of the Persons entitled thereto
until such sums shall be paid to such
Persons or otherwise disposed of as herein
provided;
(ii) give the Trustee within five days thereafter
notice of any default by any obligor upon
the Securities in the making of any such
payment of principal, premium, if any, or
interest; and
(iii) at any time during the continuance of any
such default, upon the written request of
71
the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying
Agent.
Notwithstanding any other provision of this Indenture, any
payment required to be made to or received or held by the Trustee may, to the
extent authorized by written instructions of the Trustee, be made to or received
or held by a Paying Agent in the Borough of Manhattan, the City of New York, for
the account of the Trustee.
(d) Any Person into which any authorized agent may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, consolidation or conversion to which any authorized agent shall be a
party, or any corporation succeeding to the corporate trust business of any
authorized agent, shall be the successor of such authorized agent hereunder, if
such successor Person is otherwise eligible under this Section 10.12, without
the execution or filing of any paper or any further act on the part of the
parties hereto or such authorized agent or such successor Person.
(e) Any authorized agent may at any time resign by giving
written notice of resignation to the Trustee and the Funding Corporation. The
Funding Corporation may, and at the request of the Trustee shall, at any time,
terminate the agency of any authorized agent by giving written notice of such
termination to the authorized agent and to the Trustee. Upon the resignation or
termination of an authorized agent or in case at any time any such authorized
agent shall cease to be eligible under this Section 10.12 (when, in either case,
no other authorized agent performing the functions of such authorized agent
shall have been appointed), the Funding Corporation shall promptly appoint one
or more qualified successor authorized agents approved by the Trustee to perform
the functions of the authorized agent which has resigned or whose agency has
been terminated or who shall have ceased to be eligible under this Section
10.12. The Funding Corporation shall give written notice of any such appointment
to all Holders as their names and addresses appear on the Securities Register.
SECTION 10.13 Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of
Section 310(b) of the Trust Indenture Act, the Trustee shall either eliminate
such interest or resign, to the extent, within the time periods and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Indenture.
SECTION 10.14 The Depository Trust Company. At any time during
which DTC is serving as Depositary, the Funding Corporation may, with the
consent of the Trustee, remove or replace DTC or any successor for any reason
upon 30 days' notice to DTC or such successor. Holders have no right to a
Depositary for Additional Securities.
Notwithstanding any other provision of this Indenture or any
Additional Securities, if and for so long as DTC is the registered owner of any
Additional Securities:
(a) the provisions of the applicable DTC Representation Letter
will control over the provisions of this Indenture with respect to the matters
covered thereby;
72
(b) presentation of such Additional Securities to the Trustee
at redemption or at maturity shall be deemed made to the Trustee when the right
to exercise ownership rights in such Additional Securities through DTC or DTC's
participants is transferred by DTC on its books; and
(c) DTC may present notices, approvals, waivers or other
communications required or permitted to be made by Holders under this Indenture
on a fractionalized basis on behalf of some or all of those Persons entitled to
exercise ownership rights in such Additional Securities through DTC or its
participants.
ARTICLE XI
HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND THE FUNDING CORPORATION
SECTION 11.1 The Funding Corporation to Furnish to the Trustee
Names and Addresses of Holders. The Funding Corporation will furnish, or will
cause to be furnished by DTC, to the Trustee:
(a) semi-annually, not later than 15 days after each Record
Date in connection with the regularly scheduled payment of interest, a list, in
such form as the Trustee may reasonably require, of the names and addresses of
Holders as of such Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Funding Corporation of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished;
provided, however, that so long as the Trustee is the Registrar no such list
shall be required to be furnished to the Trustee. If any person other than the
Trustee is the Registrar for the Securities, the Funding Corporation shall not
be required to furnish to such Person any of the lists described in Sections
11.1(a) and (b).
SECTION 11.2 Trustee to Furnish Other Information.
On or before March 15 in every year, so long as any Securities
are Outstanding hereunder, the Trustee shall transmit to Holders a brief report,
dated as of the preceding December 31, to the extent required by Section 313 of
the Trust Indenture Act in accordance with the procedures set forth in said
Section. A copy of such report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange, if any, on which the
Securities are traded.
73
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1 Deposit of Funds for Payment of Securities. (a)
If the principal of any Securities becoming due, either at maturity or
otherwise, together with all interest accruing thereon to the due date, has been
paid or provision therefor made in accordance with Section 9.1, all interest on
such Securities shall cease to accrue on the due date and all liability of the
Funding Corporation with respect thereto shall likewise cease, except as
hereinafter provided. Thereafter Holders of such Securities shall be restricted
exclusively to the funds or securities so deposited for any claim of whatsoever
nature with respect to such Securities, and the Trustee shall hold such funds or
securities in trust for such Holders.
(b) Moneys so deposited with the Trustee which remain
unclaimed two years after the date payment thereof becomes due shall, at the
request of the Funding Corporation if at the time, to the knowledge of the
Trustee, no Event of Default shall have occurred and be continuing, be paid to
the Funding Corporation and Holders of the Securities for which the deposit was
made shall thereafter be limited to a claim against the Funding Corporation;
provided, however, that the Trustee, before making payment to the Funding
Corporation, may, at the expense of the Funding Corporation, cause a notice to
be published once in a newspaper or financial journal of general circulation in
the City of New York, New York, stating that the moneys remaining unclaimed will
be returned to the Funding Corporation after a specified date.
SECTION 12.2 Third Party Beneficiaries; No Rights Conferred on
Others. Except as provided in Section 12.7 hereof, nothing herein contained
shall confer any right upon any Person other than the parties hereto and the
registered Holders of the Securities.
SECTION 12.3 Illegal Provisions Disregarded. In case any
provision in this Indenture or the Securities shall for any reason be held
invalid, illegal or unenforceable in any respect, this Indenture or the
Securities, as the case may be, shall be construed as if such provision had
never been contained herein or therein.
SECTION 12.4 Substitute Notice. If for any reason it shall be
impossible to make publication of any notice required hereby in a newspaper or
financial journal of general circulation in the City of New York, New York, then
such publication or other notice in lieu thereof as shall be made with the
approval of the Trustee shall constitute a sufficient giving of such notice.
SECTION 12.5 Notice to Rating Agencies. Upon the occurrence of
any Event of Default of which a Responsible Officer of the Trustee has actual
knowledge hereunder, the Trustee shall promptly give notice thereof to each of
the Rating Agencies.
SECTION 12.6 Notices. (a) Any notice, request, complaint,
demand, communication or other paper shall be sufficiently given and shall be
74
deemed given when delivered or mailed by registered or certified mail, postage
prepaid, or sent by overnight delivery, telecopy, telegram or telex, addressed
to the parties as follows:
The Funding Corporation: Cordova Funding Corporation
666 Grand Avenue, 29th Floor
P.O. Box 657
Des Moines, Iowa 50303-0657
Telephone: (515) 281-2919
Fax: (515) 242-4080
Attention: Chief Financial Officer
With a copy to: General Counsel
Fax: (402) 231-1578
Trustee: Chase Manhattan Bank and Trust Company,
National Association
101 California Street, #2725
San Francisco, California 94111
Telephone: (415) 954-9508
Fax: (415) 693-8850
Attention: Corporate Trust Department
Moody's: Moody's Investors Service
99 Church Street
New York, New York 10007
Telephone: (212) 553-7822
Fax: (212) 553-0468
Attention: Corporate Utilities Department
S & P: Standard & Poor's Corporation
55 Water Street
New York, New York 10041
Telephone: (212) 438-6604
Fax: (212) 438-6630
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.
(b) Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder, at its address as it appears in the Securities Register, not later
than the latest date, if any, and not earlier than the earliest date, if any,
prescribed for the giving of such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
75
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and
any notice that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given.
SECTION 12.7 Successors and Assigns. All the covenants,
promises and agreements contained in this Indenture by or on behalf of the
Funding Corporation, or by or on behalf of the Trustee, shall bind and inure to
the benefit of their respective successors and assigns, whether so expressed or
not.
SECTION 12.8 Headings for Convenience Only. The descriptive
headings in this Indenture are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 12.9 Counterparts. The Indenture may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 12.10 APPLICABLE LAW. THIS INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.11 Holidays. If any date for the payment of
principal of or premium (if any) or interest on the Securities is not a Business
Day, then such payment shall be due on the first Business Day thereafter.
SECTION 12.12 Limitation of Liability. Notwithstanding
anything to the contrary contained in this Indenture, the liability and
obligation of the Funding Corporation to perform and observe and make good the
obligations contained in this Indenture shall not be enforced by any action or
proceeding wherein damages or any money judgment or any deficiency judgment or
any judgment establishing any personal obligation or liability shall be sought,
collected or otherwise obtained against any officer, director, employee or
shareholder or related Person of the Funding Corporation, and the Trustee, for
itself and its successors and assigns, irrevocably waives any and all right to
sue for, seek or demand any such damages, money judgment, deficiency judgment or
personal judgment against any officer, director, employee or shareholder or
related Person of the Funding Corporation under or by reason of or in connection
with this Indenture and agrees to look solely to the Funding Corporation and
Cordova Energy and the Collateral held under the Security Documents for the
enforcement of the obligations of the Funding Corporation under this Indenture.
76
IN WITNESS WHEREOF, Cordova Funding Corporation has caused
this Trust Indenture to be executed by one of its duly authorized officers, and
Chase Manhattan Bank and Trust Company, National Association, has caused this
Trust Indenture to be executed by one of its duly authorized officers, all as of
the day and year first above written.
CORDOVA FUNDING CORPORATION
By: /s/ James A. Flores
-----------------------------
Title: VP Project Finance
---------------------------
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------
Title: Authorized Officer
77
Schedule I to
Trust Indenture
PRINCIPAL AMORTIZATION
Series A Senior Secured Bonds due December 15, 2019
The following table sets forth the date of each semiannual
installment of principal to be paid on the Securities and the applicable
percentage of the original principal amount payable on each such date:
Scheduled Payment Date Percentage of Principal Amount Payable
June 15, 2001 0.0000%
December 15, 2001 0.0000%
June 15, 2002 0.2750%
December 15, 2002 0.2750%
June 15, 2003 2.0000%
December 15, 2003 2.0000%
June 15, 2004 1.8000%
December 15, 2004 1.8000%
June 15, 2005 1.7500%
December 15, 2005 1.7500%
June 15, 2006 1.0000%
December 15, 2006 1.0000%
June 15, 2007 0.9250%
December 15, 2007 0.9250%
June 15, 2008 1.0500%
December 15, 2008 1.0500%
June 15, 2009 1.4250%
December 15, 2009 1.4250%
June 15, 2010 2.0000%
December 15, 2010 2.0000%
June 15, 2011 2.0500%
December 15, 2011 2.0500%
June 15, 2012 2.2500%
December 15, 2012 2.2500%
June 15, 2013 2.5500%
December 15, 2013 2.5500%
June 15, 2014 3.0000%
December 15, 2014 3.0000%
June 15, 2015 2.9000%
December 15, 2015 2.9000%
June 15, 2016 3.5000%
December 15, 2016 3.5000%
June 15, 2017 3.7000%
December 15, 2017 3.7000%
June 15, 2018 4.4503%
December 15, 2018 4.4503%
June 15, 2019 5.1525%
December 15, 2019 21.5969%
S-2
Exhibit A
to Trust Indenture
DEFINITIONS
The following terms shall have the respective meanings
assigned to them:
"Acceptable Credit Support" means (1) an irrevocable letter of
credit issued by a bank or other financial institution that is rated at least
"A2" by Moody's (or the equivalent by another Rating Agency if Moody's is not
then providing credit ratings) and at least "A" by S&P (or the equivalent by
another Rating Agency if S&P is not then providing credit ratings) or (2) an
unconditional guarantee from any Person whose long-term senior unsecured debt
obligations are rated (a) for any Affiliate of MidAmerican Holdings or any
Permitted Transferee, at least "Baa3" by Moody's (or the equivalent by another
Rating Agency if Moody's is not then providing credit ratings) and at least
"BBB-" by S&P (or the equivalent by another Rating Agency if S&P is not then
providing credit ratings), and (b) for any other Person, at least "A2" by
Moody's (or the equivalent by another Rating Agency if Moody's is not then
providing credit ratings) and at least "A" by S&P (or the equivalent by another
Rating Agency if S&P is not then providing credit ratings).
"Acceptable Power Purchase Agreement" means (1) a power
purchase agreement, tolling agreement or similar agreement for the sale of
capacity, energy and/or ancillary services from the Cordova Energy Project with
respect to which a Ratings Reaffirmation is obtained, or (2) a power purchase
agreement, tolling agreement or similar agreement for the sale of capacity,
energy and/or ancillary services from the Cordova Energy Project that (a) has a
counterparty that is rated at least "Baa3" by Moody's (or the equivalent by
another Rating Agency if Moody's is not then providing credit ratings) and at
least "BBB-" by S&P (or the equivalent by another Rating Agency if S&P is not
then providing credit ratings) or whose obligations under such agreement are
backed by Acceptable Credit Support, (b) has a term of at least six months and
(c) has pricing and commercial terms which are, as a whole, equivalent to or
better than the Power Purchase Agreement, as certified (with customary
assumptions and qualifications) by Cordova Energy.
"Accredited Investor" means an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act.
"Act" when used with respect to any Holder, has the meaning
set forth in Section 6.1 hereof.
"Additional Credit Agreement" means a credit agreement entered
into by the Funding Corporation and an Additional Guarantor pursuant to which
A-1
the Funding Corporation makes one or more loans to such Additional Guarantor
with all or a portion of the net proceeds from the sale of Additional
Securities.
"Additional Guarantee" means a guarantee issued by an
Additional Guarantor, in favor of the Trustee for the benefit of Holders,
pursuant to which such Additional Guarantor guarantees the Funding Corporation's
obligation to make payments on the Securities.
"Additional Guarantor" means any Person that issues an
Additional Guarantee.
"Additional Project" means any Permitted Power Facility, other
than the Cordova Energy Project, the generating assets of which are located
within three miles of the Cordova Energy Project Site.
"Additional Project Note" means any promissory note, executed
by an Additional Guarantor in favor of the Funding Corporation pursuant to an
Additional Credit Agreement.
"Additional Project Document" means any material agreement to
which Cordova Energy is a party relating to the development, construction,
operation, administration or maintenance of the Cordova Energy Project entered
into after the Closing Date.
"Additional Securities" means any Securities issued pursuant
to the provisions of Section 2.3 hereof.
"Affiliate" means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such first Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agency Agreement" means (i) the Agency Agreement, dated as of
the Closing Date, between the Funding Corporation and Cordova Energy, as amended
or supplemented from time to time, and (ii) any similar agency agreement entered
into between the Funding Corporation and any Additional Guarantor.
"Approved Completion Plan" means a plan to complete the
Cordova Energy Project using Performance Liquidated Damages received from the
EPC Contractor and/or other funds available to Cordova Energy, which plan
includes (1) a certificate of Cordova Energy, confirmed (with customary
assumptions and qualifications) as reasonable by the Independent Engineer,
A-2
stating that (a) the funds available to Cordova Energy are reasonably expected
to be sufficient to achieve Substantial Completion of the Cordova Energy Project
and (b) after achieving Substantial Completion of the Cordova Energy Project,
the minimum annual projected Debt Service Coverage Ratio during the remaining
term of the Securities is reasonably expected to be equal to or greater than (i)
during the term of the Power Purchase Agreement or any Acceptable Power Purchase
Agreement, 1.4 to 1.0, and (ii) during any other period, 2.25 to 1.0, or (2) a
Ratings Reaffirmation is issued with respect to the completion of the Cordova
Energy Project in accordance with such plan.
"Approved Regulated Affiliate Transaction" means, with respect
to the Funding Corporation, Cordova Energy or any Additional Guarantor,
transactions with an Affiliate of the Funding Corporation, Cordova Energy or
such Additional Guarantor, as applicable, that are subject to approval by a
public utility regulatory agency having jurisdiction over such Affiliate and
that are on terms no less favorable to the Funding Corporation, Cordova Energy
or such Additional Guarantor, as applicable, than terms in a comparable
arm's-length transaction by the Funding Corporation or Cordova Energy or such
Additional Guarantor as applicable, with a Person that is not an Affiliate
(except to the extent such agency requires a modification of such terms).
"Authorized Denominations" means, for the Initial Securities,
$100,000 or any amount in excess thereof and, for the Additional Securities,
$100,000 or any integral multiple of $1,000 in excess thereof, unless otherwise
provided in a Supplemental Indenture issued in connection with such Additional
Securities.
"Authorized Officer" or "Authorized Representative" means in
the case of the Funding Corporation or any Guarantor, the chief executive
officer, president, chief financial officer, general counsel, principal
accounting officer, treasurer or any vice president of the Funding Corporation
or such Guarantor, and when used with reference to any act or document also
means any other Person authorized by resolution of such entity to perform such
act or execute such document.
"Bankruptcy Event" means, with respect to any Person, that (A)
such Person shall (i) apply for or consent to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property, (ii) admit in writing its inability,
or be generally unable, to pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the Federal Bankruptcy Code, (v) file a petition seeking to take
advantage of any other Law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or readjustment of debts, (vi) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Federal Bankruptcy Code, or (vii)
take any action for the purpose of effecting any of the foregoing; or (B) a
proceeding or case shall be commenced without the application or consent of such
A-3
Person in any court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution, winding-up or the composition or readjustment of
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of the Person under any Law relating to bankruptcy, insolvency,
reorganization, winding-up or the composition or readjustment of debts, or (iii)
the appointment of a trustee, receiver, custodian, liquidator or the like of the
Person under any Law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or readjustment of debts, and such proceeding or case
shall continue undismissed, or any order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 90 or more consecutive days, or any order for relief
against such Person shall be entered in an involuntary case under the Federal
Bankruptcy Code.
"Bond Purchase Agreement" means the Bond Purchase Agreement,
dated as of September 10, 1999, among each of the Purchasers, the Funding
Corporation and Cordova Energy.
"Business Day" means any day that is not a Saturday, Sunday or
legal holiday in the State of New York, or a day on which banking institutions
chartered by the State of New York, or the United States, are legally required
or authorized to close.
"Cedel" shall mean Cedelbank.
"Change of Control" means a failure by MidAmerican Holdings to
maintain a direct or an indirect interest in at least 50% of the membership
interests in, and the right to control, Cordova Energy, unless at such time a
Ratings Reaffirmation is issued with respect to such failure.
"Closing Date" means the date of issuance and delivery of the
first Series of Initial Securities.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means, collectively, the Funding Corporation
Collateral and the Cordova Energy Collateral.
"Collateral Agent" means Chase Manhattan Bank and Trust
Company, National Association, as collateral agent for the benefit of the
Secured Parties under the Intercreditor Agreement, together with its successors
and assigns.
"Collateral Assignment" means the Collateral Assignment
(Project Documents), dated as of September 10, 1999, by Cordova Energy in favor
of the Collateral Agent.
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"ComEd Interconnection Agreement" means the Interconnection
Agreement, dated as of September 2, 1999, between Cordova Energy and
Commonwealth Edison Company, as amended from time to time, and any replacement
agreement.
"Common Facilities Agreement" means any one or more agreements
between Cordova Energy and any direct or indirect owner or any operator of an
Additional Project which provides for the sharing of land, transmission lines,
interconnections, utilities and other rights, interests, facilities and
equipment between the Cordova Energy Project and such Additional Project or the
use by such Additional Project of Cordova Energy's land, transmission lines,
interconnections, utilities and other rights, interests, facilities and
equipment.
"Commonly Controlled Entity" means, as applied to the Funding
Corporation, any Person who is a member of a group which is under common control
with the Funding Corporation, who together with the Funding Corporation is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 400(b) of ERISA.
"Construction Agreement" means the Construction Agreement,
dated as of May 25, 1999, between Cordova Energy and MidAmerican Energy.
"Construction Account" means the Account of such name
established pursuant to Section 2.2 of the Depositary Agreement and having the
following account number at the Securities Intermediary: C-29312A.
"Consumer Price Index" means the consumer price index as
published by the United States Department of Labor, Bureau of Labor Statistics.
"Continuing Request" means a written notice from a Holder or
beneficial owner of a Security delivered to the Trustee and the Funding
Corporation requesting that the items required to be delivered to the Trustee
pursuant to Section 4.2(a) and (b) of the Indenture be furnished to such Holder
until further notice from such Holder or beneficial owner to the contrary;
provided, however, that any such request shall expire if not renewed by such
Holder or beneficiary owner every two years.
"Cordova Energy Collateral" means all of the collateral in
which the Collateral Agent has or is purported to have a security interest
pursuant to the Security Documents (other than the Stock Pledge Agreement).
"Cordova Energy Credit Agreement" means the Credit Agreement,
dated as of September 10, 1999, by and between Funding Corporation, as lender,
and Cordova Energy, as borrower.
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"Cordova Energy Guarantee" means the Secured Guarantee, dated
as of the Closing Date, issued by Cordova Energy in favor of the Trustee for the
benefit of Holders.
"Cordova Energy Project" means an approximately 537 MW natural
gas-fired combined-cycle electric generating facility which is owned by Cordova
Energy and which will be located on the Cordova Energy Project Site.
"Cordova Energy Project Note" shall mean the promissory note
dated September 10, 1999 executed by Cordova Energy in favor of the Funding
Corporation pursuant to the Cordova Energy Credit Agreement.
"Cordova Energy Project Site" means the site in Rock Island
County, Illinois at which the Cordova Energy Project is located.
"Covenant Defeasance" has the meaning set forth in Section 9.3
hereof.
"Credit Agreement Default" means an event or condition that,
with the giving of notice or the lapse of time, or both, would become a Credit
Agreement Event of Default.
"Credit Agreement Event of Default" means an "Event of
Default" as defined in the Cordova Energy Credit Agreement.
"Credit Agreements" means collectively, the Cordova Energy
Credit Agreement and any Additional Credit Agreements.
"Custodian" has the meaning set forth in Section 2.5 hereof.
"Debt Service Coverage Ratio" means, for any period, without
duplication, the ratio of (1) (a) all revenues of Cordova Energy (including
interest and fee income, net hedging receipts, business interruption and delay
in start-up insurance and Loss Proceeds and Title Insurance Proceeds deposited
into the Revenue Account, but excluding Loss Proceeds and Title Insurance
Proceeds not deposited into the Revenue Account and other similar non-recurring
receipts not deposited into the Revenue Account) for such period minus (b) O&M
Costs (but excluding O&M Costs funded from the Major Maintenance Reserve
Account) for such period and all deposits into the Major Maintenance Reserve
Account made during such period, to (2) all principal and interest (other than
interest during construction and other similar payments which are pre-funded
with the proceeds of a debt issuance or otherwise) payments due with respect to
outstanding (without duplication) Permitted Debt (other than Subordinated
Indebtedness and the Guaranteed Payment, provided that (x) a Bankruptcy Event
(as defined in the MidAmerican Holdings Guarantee) and (y) a MEHC Change of
Control (as defined in the Mid American Holdings Guarantee), each with respect
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to MidAmerican Holdings, shall not have occurred and be continuing for a period
of six (6) months) during such period, all as determined on a cash basis in
accordance with GAAP.
"Debt Service Required Balance" means, as of any Funding Date,
(1) with respect to each series of Securities and each other issuance of
Permitted Debt that is pari passu in right of payment with the Securities, an
amount equal to the scheduled principal, premium (if any) and interest due on
such series of Securities and other issuances of Permitted Debt on the
immediately succeeding Scheduled Payment Date therefor (other than the
Guaranteed Payment, provided that (x) a Bankruptcy Event (as defined in the
MidAmerican Holdings Guarantee) and (y) a MEHC Change of Control (as defined in
the Mid American Holdings Guarantee), each with respect to MidAmerican Holdings,
shall not have occurred and be continuing for a period of six (6) months), and
(2) with respect to any principal of any loans outstanding under any Debt
Service Reserve LOC Reimbursement Agreement the payment of which is subordinated
o payments on the Securities, an amount equal to the scheduled interest due on
such principal on the immediately succeeding Scheduled Payment Date therefor.
"Debt Service Reserve Guarantee" means an unconditional
guarantee of Cordova Energy's obligation to maintain the Debt Service Reserve
Required Balance from time to time issued by MidAmerican Holdings or any
Permitted Transferee in favor of the Trustee for the benefit of Holders.
"Debt Service Reserve Guarantor" means MidAmerican Holdings or
any Permitted Transferee under a Debt Service Reserve Guarantee, in each case to
the extent such Person has continuing obligations under such Debt Service
Reserve Guarantee.
"Debt Service Reserve Letter of Credit" means one or more
irrevocable, direct pay letters of credit issued by a Debt Service Reserve LOC
Provider in favor of the Securities Intermediary pursuant to a Debt Service
Reserve LOC Reimbursement Agreement.
"Debt Service Reserve LOC Reimbursement Agreement" means an
agreement pursuant to which the Debt Service Reserve LOC Provider issues one or
more Debt Service Reserve Letters of Credit.
"Debt Service Reserve LOC Provider" means a commercial bank or
other financial institution rated at least "A2" by Moody's (or the equivalent by
another Rating Agency if Moody's is not then providing credit ratings) and at
least "A" by S&P (or the equivalent by another Rating Agency if S&P is not then
providing credit ratings) issuing any Debt Service Reserve Letter of Credit.
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"Default" means an event or condition that, with the giving of
notice, lapse of time or failure to satisfy certain specified conditions, or any
combination thereof, would become an Event of Default.
"Defeasance" has the meaning set forth in Section 9.2 hereof.
"Depositary" has the meaning set forth in Section 2.6 hereof.
"Depositary Agreement" means the Deposit and Disbursement
Agreement, dated as of the Closing Date, among the Funding Corporation, Cordova
Energy, the Collateral Agent and the Securities Intermediary.
"Discounted Present Value" has the meaning set forth in
Section 3.1(b) hereof.
"Distribution Account" means the Account of such name
established pursuant to Section 2.2 of the Depositary Agreement and having the
following account number at the Securities Intermediary: C-29312F.
"DTC" means The Depository Trust Company, having a principal
office at 55 Water Street, New York, New York, 10041-0099, together with any
Person succeeding thereto by merger, consolidation or acquisition of all or
substantially all of its assets, including substantially all of its securities
payment and transfer operations.
"DTC Representation Letter" means a Letter of Representations
among DTC, the Funding Corporation and the Trustee, or any successor agreement
relating to any Additional Securities.
"Eligible Facility" means an "eligible facility" in accordance
with Section 32 of the Public Utility Holding Company Act of 1935, as amended,
15 U.S.C. ss. 79z-5a(a)(2) (1994), and the rules and regulations of FERC
relating thereto.
"El Paso" means El Paso Power Services Company, a Delaware
corporation.
"El Paso Termination Payment" means the lump sum payment made
by El Paso, if El Paso exercises its option to terminate the Power Purchase
Agreement pursuant to Section 6 of the Power Purchase Agreement.
"Environmental Laws" means any and all Laws (as well as
obligations, duties and requirements relating thereto under common law) relating
to: (i) noise, emissions, discharges, spills, releases or threatened releases of
pollutants, contaminants, Environmentally Regulated Materials, materials
containing Environmentally Regulated Materials, or hazardous or toxic materials
or wastes into ambient air, surface water, groundwater, watercourses, publicly
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or privately-owned treatment works, drains, sewer systems, wetlands, septic
systems or onto land surface or subsurface strata; (ii) the use, treatment,
storage, disposal, handling, manufacture, processing, distribution,
transportation or shipment of Environmentally Regulated Materials, materials
containing Environmentally Regulated Materials or hazardous and/or toxic wastes,
material, products or by-products (or of equipment or apparatus containing
Environmentally Regulated Materials); (iii) pollution or the protection of human
health, the environment or natural resources; or (iv) zoning and land use.
"Environmentally Regulated Materials" means (i) hazardous
materials, hazardous wastes, hazardous substances, extremely hazardous wastes,
restricted hazardous wastes, toxic substances, toxic pollutants, contaminants,
pollutants or words of similar import, as used under Environmental Laws,
including but not limited to the following: the Hazardous Materials
Transportation Act, 49 U.S.C. 1801 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. 9601 et seq., the Clean Water
Act, 33 U.S.C. 1231 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Safe Drinking Water
Act, 42 U.S.C. ss. 3808 et seq., and the Oil Pollution Act, 33 U.S.C. ss. 2701
et seq. and their State and local counterparts or equivalents; (ii) petroleum
and petroleum products including crude oil and any fractions thereof; (iii)
natural gas, synthetic gas and any mixtures thereof; (iv) radon; (v) any other
hazardous, radioactive, toxic or noxious substance, material, pollutant or
solid, liquid or gaseous waste; and (vi) any substance that, whether by its
nature or its use, is now or hereafter subject to regulation under any
Environmental Law or with respect to which any Federal, state or local
Environmental Law or governmental agency requires environmental investigation,
monitoring or remediation.
"EPC Contract" means the Engineering, Procurement and
Construction Contract, dated as of May 4, 1999, between Cordova Energy and the
EPC Contractor or any replacement thereof.
"EPC Contractor" means Stone & Webster Engineers and Con-
structors, Inc., or any replacement thereof.
"EPC Guarantee" means the Guarantee, dated as of May 4, 1999,
by Stone & Webster, Incorporated for the benefit of Cordova Energy.
"Equity Commitment Agreement" means the Equity Commitment
Agreement, dated as of the Closing Date, among MidAmerican Holdings, Cordova
Energy and the Collateral Agent.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
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"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System, or any successor to Morgan
Guaranty Trust Company of New York, Brussels office, as operator thereof.
"Event of Default" means the occurrence of any of the events
set forth in Section 5.1 hereof.
"EWG" or "Exempt Wholesale Generator" means an "exempt
wholesale generator" in accordance with Section 32 of the Public Utility Holding
Company Act of 1935, as amended, 15 U.S.C. ss. 79z-5a(a)(1) (1994), and the
rules and regulations of FERC relating thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means an "Exchange Offer" as defined in any
Registration Rights Agreement.
"Exchange Securities" means "Exchange Securities" as defined
in any Registration Rights Agreement.
"Expansion Modifications" means modifications or improvements
to the Cordova Energy Project or any Additional Project that are designed to
increase the net generating capacity and/or the efficiency of the Cordova Energy
Project or such Additional Project, as the case may be, which are not Required
Modifications or Optional Modifications.
"Facilities Agreement" means the Facilities Agreement, dated
as of April 2, 1999, between Cordova Energy and MidAmerican Energy.
"Federal Bankruptcy Code" means Title 11 of the United States
Code.
"FERC" means the United States Federal Energy Regulatory
Commission, or any successor thereto.
"Final Completion" means achievement of "Final Completion," as
such term is defined in the EPC Contract.
"Final Completion Date" means the date on which the Cordova
Energy Project achieves or is deemed to have achieved Final Completion.
"Financing Documents" means, collectively, the Indenture, the
Securities, the Credit Agreements, the Guarantees, the Depositary Agreement, the
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Intercreditor Agreement, the Security Documents, the Equity Commitment Agreement
and any Debt Service Reserve LOC Reimbursement Agreement.
"Funding Corporation" means Cordova Funding Corporation, a
Delaware corporation, and its permitted successors and assigns.
"Funding Corporation Collateral" means all of the collateral
in which the Collateral Agent has or is purported to have a security interest
pursuant to the Stock Pledge Agreement.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Gas Distribution Agreement" means the Firm Natural Gas
Distribution Agreement, dated as of July 6, 1999, between MidAmerican Energy and
Cordova Energy.
"Global Securities" means, collectively, in respect of each
series of Securities, (a) the single (or multiple, as required) global security
in registered form for each series of Securities issued to QIBs and (b) the
Offshore Global Securities.
"Governmental Approvals" means all governmental approvals,
authorizations, consents, decrees, permits, waivers, privileges and filings with
Governmental Authorities required to be obtained for construction, operation and
maintenance of the Cordova Energy Project.
"Governmental Authority" means the government of any federal,
state, municipal or other political subdivision in which the Cordova Energy
Project is located, and any other government or political subdivision thereof
exercising jurisdiction over the Cordova Energy Project or any party to any of
the Project Documents, including all agencies and instrumentalities of such
governments and political subdivisions.
"Guaranteed Payment" has the meaning given to such term in the
MidAmerican Holdings Guarantee.
"Guarantee Event of Default" means an "Event of Default" under
and as defined in the Cordova Energy Guarantee or any Additional Guarantee.
"Guarantee Permitted Transferee" has the meaning set forth in
the MidAmerican Holdings Guarantee.
"Guaranteed Substantial Completion Date" means February 28,
2003, as may be modified in connection with an Approved Completion Plan.
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"Guarantees" means, collectively, the Cordova Energy Guarantee
and any Additional Guarantee.
"Guarantors" means, collectively, Cordova Energy and any
Additional Guarantor.
"Holder" means the registered holder of any Security from time
to time.
"Indebtedness" of any Person at any date means, without
duplication, (1) all obligations of such Person for borrowed money, (2) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (3) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, (4) all obligations of such Person under leases
which are or should be, in accordance with GAAP, recorded as capital leases for
which such Person is liable, (5) all obligations of such Person under interest
rate or currency protection agreements or other hedging instruments, (6) all
obligations of such Person to purchase securities (or other property) which
arise out of or in connection with the sale of the same or substantially similar
securities (or property), (7) all deferred obligations of such Person to
reimburse any bank or other Person for amounts paid or advanced under a letter
of credit or other instrument, (8) all Indebtedness of others secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by such
Person, and (9) all Indebtedness of others guaranteed directly or indirectly by
such Person or as to which such Person has an obligation substantially the
economic equivalent of a guarantee or other arrangement to assure a creditor
against loss.
"Independent" means a Person who (i) does not have any
material direct financial interest or any material indirect financial interest
in the Funding Corporation or Cordova Energy (exclusive of payments received for
consulting services provided) and (ii) is not connected with the Funding
Corporation or Cordova Energy as an officer, employee, promoter, underwriter,
partner, director or person performing similar functions.
"Independent Engineer" means Burns & McDonnell Engineering
Company, or another widely recognized Independent engineering firm or engineer
retained as independent engineer by the Funding Corporation.
"Intercreditor Agreement" means the Collateral Agency and
Intercreditor Agreement, dated as of the Closing Date, among the Collateral
Agent, the Securities Intermediary, the Trustee, the other Secured Parties from
time to time party thereto, the Funding Corporation and Cordova Energy.
"Interest Rate Protection Agreement" means any agreement
providing for swaps, ceiling rates, ceiling and floor rates, contingent
participation or other hedging mechanisms with respect to the payment of
interest.
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"Investment Company Act" means the Investment Company Act of
1940, as amended.
"Law" means any act, permit, constitution, treaty, law,
ordinance, decree, code, regulation (including regulations governing
environmental matters), order, rule, final judicial or arbitral decision or
binding requirement of any Governmental Authority and any voluntary restraint
with which such party has formally agreed to comply.
"Liens" means any mortgage, pledge, hypothecation, assignment,
mandatory deposit arrangement with any Person owning Indebtedness of such
Person, encumbrance, lien (statutory or other), preference, priority or other
security agreement of any kind or nature whatsoever which has the substantial
effect of constituting a security interest, including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same effect as any of the foregoing and the filing of any
financing statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction, domestic or foreign.
"Loss Event" means (i) an event (other than a Title Defect)
which causes all or a portion of the Cordova Energy Project to be damaged,
destroyed or rendered unfit for normal use, and for which Cordova Energy is
entitled to file a claim under the insurance policies covering the Cordova
Energy Project, or (ii) a compulsory transfer or taking or transfer under the
threat of compulsory transfer or taking of all or a substantial portion of the
Cordova Energy Project by a Governmental Authority, unless such transfer or
taking is the subject of a good faith contest.
"Loss Proceeds" means (x) all proceeds actually received by
Cordova Energy in connection with a Loss Event, other than proceeds of business
interruption, delay in start-up or similar insurance and Title Insurance
Proceeds, minus (y) all costs and expenses incurred in litigating, arbitrating,
compromising, settling or consenting to the settlement of any claims related to
such Loss Event and all other costs and expenses incurred in recovering such
proceeds.
"Major Maintenance Reserve Account Shortfall" means, for any
Funding Date, an amount equal to the Monies required to be deposited or
transferred into the Major Maintenance Reserve Account on such Funding Date
pursuant to Section 3.2(c)(iv) of the Depositary Agreement less the Monies
actually deposited into the Major Maintenance Reserve Account on such Funding
Date pursuant to Section 3.2(c)(iv) of the Depositary Agreement.
"Major Maintenance Reserve Requirement" means an amount
initially equal to $584,000 per month. The Major Maintenance Reserve Requirement
may be adjusted as follows: Cordova Energy may, from time to time, provide the
Independent Engineer with a proposed schedule of monthly deposits (which may be
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equal monthly deposits) to the Major Maintenance Reserve Account which provide,
in the aggregate (inclusive of interest estimated to accrue thereon), sufficient
funds for the completion of all turbine overhauls through and including the next
major overhaul. Such proposed schedule will become the then applicable schedule,
and the monthly deposits reflected therein will become, for each month, the
Major Maintenance Reserve Requirement, if the Independent Engineer confirms
(with customary assumptions and qualifications) that Cordova Energy is
reasonably expected to have sufficient funds to fully fund each monthly Major
Maintenance Reserve Requirement through the term of such proposed schedule;
provided, however, that if there is a Major Maintenance Reserve Account
Shortfall on any Funding Date, the Major Maintenance Reserve Requirement for the
next succeeding Funding Date shall be the sum of (a) the Major Maintenance
Reserve Requirement for such next succeeding Funding Date and (b) the Major
Maintenance Reserve Account Shortfall for such current Funding Date.
"Mandatory Redemption Fund" has the meaning set forth in
Section 3.2 hereof.
"Material Adverse Effect" means a material adverse effect on
(i) the business, operations or financial condition of the Funding Corporation
and the Guarantors, taken as a whole, (ii) the ability of the Funding
Corporation and the Guarantors to perform their material obligations under any
of the Financing Documents to which they are a party, or (iii) the validity or
priority of the liens on the Cordova Energy Collateral.
"MEC Interconnection Agreement" means the Interconnection
Agreement, dated as of April 2, 1999, between MidAmerican Energy and Cordova
Energy.
"Membership Interests Pledge Agreement" means the Pledge
Agreement, dated as of the Closing Date, by Quad Cities in favor of the
Collateral Agent.
"MidAmerican Energy" means MidAmerican Energy Company, an Iowa
corporation.
"MidAmerican Holdings" means MidAmerican Energy Holdings
Company, an Iowa corporation.
"MidAmerican Holdings Guarantee" means the Senior Unsecured
Limited Guarantee entered into on the Closing Date by MidAmerican Holdings in
favor of the Trustee for the benefit of the Holders of the Initial Securities.
"Monies" means all cash, payments, financial assets,
securities, investment property, Permitted Investments and other amounts,
including instruments evidencing such amounts, on deposit or credited to any
Account.
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"Moody's" means Moody's Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns.
"Mortgage and Security Agreement" means the Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing, dated as of the
Closing Date, by Cordova Energy in favor of the Collateral Agent.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"MW" means a unit of electrical energy equal to one million
watts of power.
"O&M Agreement" means the Operating, Maintenance and
Administrative Services Agreement, dated as of the Closing Date, between Cordova
Energy and CalEnergy Generation Operating Company.
"O&M Costs" means the operating, maintenance, ownership,
administration or repair costs of the Cordova Energy Project, including, without
limitation, fuel costs, insurance premiums, property and other taxes, legal
fees, financing fees and payments under the Project Documents, provided that O&M
Costs do not include costs funded by withdrawals from the Major Maintenance
Reserve Account.
"Offshore Securities Exchange Date" shall have the meaning set
forth in Section 2.5(a) hereof.
"Officer's Certificate" means (i) with respect to the Funding
Corporation, a certificate executed by an Authorized Representative of the
Funding Corporation, and (ii) with respect to Cordova Energy, a certificate
executed by an Authorized Representative of Cordova Energy.
"Opinion of Counsel" shall mean a written opinion of counsel
for any Person either expressly referred to herein or otherwise reasonably
satisfactory to the Trustee which may include, without limitation, counsel for
the Funding Corporation, whether or not such counsel is an employee of the
Funding Corporation.
"Optional Modifications" means discretionary modifications or
improvements to the Cordova Energy Project or any Additional Project other than
Required Modifications or Expansion Modifications.
"Outstanding" in connection with Securities means, as of the
time in question, all Securities authenticated and delivered under the
Indenture, except (a) Securities theretofore cancelled or required to be
cancelled under Section 2.10 of this Indenture; (b) Securities for which
provision for payment shall have been made in accordance with this Indenture;
(c) Securities in substitution for which other Securities have been
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authenticated and delivered pursuant to this Indenture; (d) Initial Securities
which have not been sold by the Funding Corporation and purchased by the
Purchasers pursuant to Section 2 of the Bond Purchase Agreement; and (e)
Securities directly or indirectly held by the Funding Corporation, Cordova
Energy or any of their respective Affiliates.
"Paying Agent" means any Person acting as Paying Agent
pursuant to this Indenture and Section 10.12 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Performance Liquidated Damages" means performance liquidated
damages paid by the EPC Contractor to Cordova Energy pursuant to the EPC
Contract as a consequence of the Cordova Energy Project's failure to meet the
performance guarantees set forth in the EPC Contract, less any costs incurred by
Cordova Energy in connection with the collection of such liquidated damages.
"Permitted Cordova Energy Debt" has the meaning given to such
term in Section 4.10 of the Cordova Energy Credit Agreement.
"Permitted Debt" means, without duplication, Permitted Funding
Debt, Permitted Cordova Energy Debt and any Indebtedness of an Additional
Guarantor permitted to be incurred by such Additional Guarantor pursuant to the
Additional Credit Agreement to which it is a party.
"Permitted Funding Debt" has the meaning given to such term in
Section 4.9.
"Permitted Hedging Transactions" means (i) physical or
financial transactions for the forward or future purchase or sale of gas, gas
transportation, capacity, energy, ancillary services, transmission or related
products, and (ii) interest rate hedging transactions designed to reduce
exposure to fluctuations in yields to maturity for United States treasury
securities, provided that, with respect to clause (i), such transactions (a)
shall not be entered into for speculative purposes and (b) shall not be for
quantities of capacity, energy or ancillary services that exceed the anticipated
output of the Cordova Energy Project or for quantities of gas, gas
transportation or transmission that exceed the anticipated requirements of the
Cordova Energy Project.
"Permitted Investments" means investments in securities that
are: (1) direct obligations of the United States or any agency thereof; (2)
obligations fully guaranteed by the United States or any agency thereof; (3)
certificates of deposit or bankers acceptances issued by commercial banks
(including the Trustee, the Collateral Agent, the Securities Intermediary or any
of their respective affiliates) organized under the laws of the United States or
of any political subdivision thereof or under the laws of Canada, Japan,
Switzerland or any country that is a member of the European Economic Community
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having a combined capital and surplus of at least $250,000,000 and having
long-term unsecured debt securities then rated "A" or better by S&P (or the
equivalent by another Rating Agency if S&P is not then providing credit ratings)
or "A2" or better by Moody's (or the equivalent by another Rating Agency if
Moody's is not then providing credit ratings), but at the time of investment not
more than $25,000,000 may be invested in such certificates of deposit from any
one bank; (4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (1) and (2) above,
entered into with any financial institution meeting the qualifications specified
in clause (3) above; (5) open market commercial paper of any corporation
incorporated or doing business under the laws of the United States or of any
political subdivision thereof having a rating of "A-1" or better from S&P (or
the equivalent by another Rating Agency if S&P is not then providing credit
ratings) or "P-1" from Moody's (or the equivalent by another Rating Agency if
Moody's is not then providing credit ratings), but at the time of investment not
more than $25,000,000 may be invested in such commercial paper from any one
corporation; (6) auction rate securities or money market preferred stock having
one of the two highest ratings obtainable from S&P (or the equivalent by another
Rating Agency if S&P is not then providing credit ratings) or Moody's (or the
equivalent by other Rating Agencies if Moody's is not then providing credit
ratings); (7) corporate bonds having a rating of "A" or better by S&P (or the
equivalent by another Rating Agency if S&P is not then providing credit ratings)
or "A2" or better by Moody's (or the equivalent by another Rating Agency if
Moody's is not then providing credit ratings); (8) investments in money market
funds or money market mutual funds sponsored by any securities broker dealer of
recognized national standing (or an affiliate thereof) having an investment
policy that requires substantially all the invested assets of such fund to be
invested in investments described in any one or more of the foregoing clauses
having a rating of "A" or better by S&P (or the equivalent by another Rating
Agency if S&P is not then providing credit ratings) or "A2" or better by Moody's
(or the equivalent by another Rating Agency if Moody's is not then providing
credit ratings), including money market funds for which the Securities
Intermediary, in its individual capacity, its parent or any of its affiliates is
investment manager or adviser or (9) investments in a cash escrow trust account
maintained in the Securities Intermediary or one of its Affiliates.
"Permitted Liens" means, with respect to any Person: (i) Liens
to secure Permitted Debt of such Person; (ii) Liens existing on the Closing
Date, including, without limitation, exceptions to title set forth in the
lenders' title insurance policy; (iii) Liens for taxes, assessments or
governmental charges which are either not yet due or which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP; (iv) Liens in connection
with workers' compensation, unemployment insurance or other social security or
pension obligations; (v) mechanics', workmen's, materialmen's, suppliers',
construction or other like Liens arising in the ordinary course of business or
incident to the construction of the Cordova Energy Project; (vi) servitudes,
easements, rights-of-way, restrictions, minor defects or irregularities in title
and such other encumbrances or charges against real property or interests
A-17
therein as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way interfere with the use
thereof by such Person in the conduct of its business; (vii) deposits or pledges
to secure statutory obligations or appeals, release of attachments, stay of
execution or injunction, performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or for purposes of like general
nature in the ordinary course of business; (viii) legal or equitable
encumbrances deemed to exist because of the existence of any litigation or other
legal proceeding, so long as such encumbrances are subject to a good faith
contest; (ix) other Liens incidental to the conduct of such Person's business or
the ownership of properties and assets which were not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
vendor's Liens for accounts payable in the ordinary course of business) and
which do not materially impair the use thereof by such Person in the conduct of
its business; (x) Liens substantially similar to the Liens described above so
long as any such Liens, if foreclosed upon, would not reasonably be expected to
result in a Material Adverse Effect; (xi) Liens arising as a consequence of the
execution of a Common Facilities Agreement; and (xii) Liens in favor of
Commonwealth Edison Company as required under the ComEd Interconnection
Agreement.
"Permitted Power Facility" means an electric power generation
or cogeneration facility, including any related or ancillary facilities or
equipment.
"Permitted Transferee" means, for any transfer by MidAmerican
Holdings of all or a portion of its obligations under any Equity Commitment
Agreement or any Debt Service Reserve Guarantee, any person which (1) has a
long-term unsecured debt rating of (a) if such transfer of obligations is made
in connection with a corresponding transfer of MidAmerican Holdings' equity
interests in Cordova Energy, at least "Baa3" from Moody's (or the equivalent
from another Rating Agency if Moody's is not then providing credit ratings) and
at least "BBB-" from S&P (or the equivalent from another Rating Agency if S&P is
not then providing credit ratings), and (b) otherwise, at least "A" or better
from S&P (or the equivalent from another Rating Agency if S&P is not then
providing credit ratings) and at least "A2" from Moody's (or the equivalent from
another Rating Agency if Moody's is not then providing credit ratings), or (2)
provides Acceptable Credit Support to support such obligations.
"Person" means any individual, sole proprietorship,
corporation, partnership, joint venture, limited liability partnership, limited
liability company, limited liability corporation, trust, unincorporated
association, institution, Governmental Authority or any other entity.
"Plan" means an employee benefit or other plan established or
maintained by the Funding Corporation or any Commonly Controlled Entity and
which is covered by Title IV of ERISA, other than a Multiemployer Plan.
A-18
"Policy Act" means the Energy Policy Act of 1992.
"Power Purchase Agreement" means the Power Purchase Agreement,
dated as of July 6, 1999, as amended as of September 3, 1999, between Cordova
Energy and El Paso.
"PPA Factor" means, for any period, the percentage obtained
from the following calculation: (a) (i) all revenues of Cordova Energy for such
period derived under the Power Purchase Agreement and/or any Acceptable Power
Purchase Agreement divided by (ii) all revenues of Cordova Energy for such
period derived from sales of capacity, energy and ancillary services from the
Cordova Energy Project, multiplied by (b) 100; provided that the PPA Factor
shall be deemed to be 100% at any time that at least 510 MW (based on the
Specified Ambient Conditions) of the Cordova Energy Project's capacity is
subject to the Power Purchase Agreement or an Acceptable Power Purchase
Agreement.
"Principal Amount" means as to any Security or Securities the
amount set forth on the face of each such Security as such amount is reduced by
payments made or deemed made thereon as provided herein.
"Project Notes" means, collectively, the Cordova Energy
Project Note and any Additional Project Notes.
"Project Documents" means the Power Purchase Agreement, the
EPC Contract, the O&M Agreement, the Construction Agreement, the MEC
Interconnection Agreement, the Facilities Agreement, the Gas Distribution
Agreement and any Additional Project Document entered into by Cordova Energy
with respect to the Cordova Energy Project.
"Projects" means, collectively, the Cordova Energy Project and
any Additional Projects.
"PUHCA" means the Public Utility Holding Company Act of 1935,
as amended.
"PURPA" means the Public Utility Regulatory Policies Act of
1978.
"QIB" or "Qualified Institutional Buyer" has the meaning set
forth in Section 2.5(a) hereof.
"Rating" means the ratings assigned to the Securities by the
Rating Agencies.
A-19
"Rating Agencies" means, collectively, Moody's and S&P,
together with any other nationally recognized credit rating agency of similar
standing if any such entity is not then currently rating the Securities or the
applicable Person or obligation.
"Ratings Reaffirmation" means, with respect to a specified
event, a confirmation from Moody's (or the equivalent from another Rating Agency
if Moody's is not then providing credit ratings) and S&P (or the equivalent from
another Rating Agency if S&P is not then providing credit ratings) that a
lowering of the then-current ratings of the Securities will not result from such
event.
"Record Date" means with respect to each Scheduled Payment
Date, except a Scheduled Payment Date in connection with an optional or
mandatory redemption, the first day of the calendar month, whether or not a
Business Day, immediately preceding such Scheduled Payment Date, and means with
respect to each Scheduled Payment Date in connection with an optional or
mandatory redemption, the fifteenth day, whether or not a Business Day,
preceding such Scheduled Payment Date.
"Redemption Date" has the meaning set forth in Section 3.2
hereof.
"Redemption Account" means the Account of such name
established pursuant to Section 2.2 of the Depositary Agreement and having the
following account number at the Securities Intermediary: C-29312G.
"Redemption Price" means an amount equal to the principal
amount, premium (if any) and interest accrued to but not including the
Redemption Date to be paid for Securities redeemed prior to maturity, as
specified in the notice of redemption given pursuant to Section 3.4 hereof.
"Registrar" has the meaning set forth in Section 2.5(b)
hereof.
"Registration Rights Agreement" means any exchange and
registration rights agreement for any issuance of Additional Securities.
"Regulation S" means Regulation S under the Securities Act.
"Required Holders" means those Holders holding more than 50%
in aggregate principal amount of the Outstanding Securities.
"Required Modifications" means (i) modifications or
improvements to the Cordova Energy Project or any Additional Project which are
necessary to comply with applicable law or governmental approvals or which
Cordova Energy or the applicable Additional Guarantor, as the case may be,
reasonably believes are necessary or appropriate in response to enacted or
anticipated changes in applicable law or the interpretation thereof, or (ii)
A-20
modifications to the Cordova Energy Project or any Additional Project which are
necessary to achieve final completion thereof after the utilization of all
capital contributions made by MidAmerican Holdings and/or any Permitted
Transferee under any equity commitment agreement executed in favor of Cordova
Energy or the applicable Additional Guarantor.
"Responsible Officer" means, with respect to any Person and
any subject matter or event, the president, chief executive officer, chief
financial officer, general counsel, treasurer, vice president or other officer
of such Person in each case who in the normal performance of his or her
operational duties would have knowledge of such subject matter or event.
"Restricted Payments" means, with respect to any Person, (i)
the declaration and payment of distributions, dividends or other payments in
respect of the equity interests in such Person, (ii) the payment of principal of
or interest on any Subordinated Indebtedness incurred by such Person or (iii)
the making of any loans or advances to any Affiliate of such Person, in each
case from cash or Permitted Investments on deposit in the Distribution Account.
"Restricted Security" means any Security that bears or is
required to bear the legend set forth in the first and second paragraphs of the
form of Security attached to this Indenture as Exhibit B, or similar legend set
forth in any form of security attached to a Supplemental Indenture, as the case
may be.
"Revenue Account" means the account of such name established
pursuant to Section 2.2 of the Depositary Agreement and having the following
account number at the Securities Intermediary: C-29312B.
"Rule 144A" means Rule 144A under the Securities Act.
"S & P" means Standard & Poor's Ratings Group, a corporation
organized and existing under the laws of the State of New York, its successors
and assigns.
"Scheduled Payment Date" means (i) with respect to any
Security, each June 15, and December 15, and (ii) with respect to any other
issuance of Permitted Debt, any date on which a principal and/or interest
payment on such issuance of Permitted Debt is scheduled to be made.
"Scheduled Substantial Completion Date" means July 31, 2001,
as may be modified in connection with an Approved Completion Plan.
A-21
"Secured Obligations" means all indebtedness, liabilities and
obligations, of whatsoever nature and howsoever evidenced (including, but not
limited to, principal, interest, fees, reimbursement obligations, penalties,
indemnities and legal and other expenses, whether due after acceleration or
otherwise), of the Funding Corporation and the Guarantors to the Secured
Parties, in each case, direct or indirect, primary or secondary, fixed or
contingent, now or hereafter arising.
"Secured Parties" means the Trustee (on behalf of the Holders
of the Outstanding Securities), the Collateral Agent, the Securities
Intermediary and each other party that becomes a Secured Party pursuant to the
terms of the Intercreditor Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" means Chase Manhattan Bank and Trust
Company, National Association, as Securities Intermediary under the Depositary
Agreement or any successor thereto pursuant to the terms thereof.
"Securities Register" has the meaning set forth in Section
2.5(b) hereof.
"Security" or "Securities" means any of the Initial Securities
and any of the Additional Securities issued pursuant to the Indenture or any
Supplemental Indenture.
"Security Documents" means the Mortgage and Security
Agreement, the Collateral Assignment, the Membership Interests Pledge Agreement
and the Stock Pledge Agreement.
"Series" has the meaning set forth in Section 2.2(a) hereof.
"Series A Final Maturity Date" has the meaning set forth in
Section 2.2(a) hereof.
"Special Make-Whole Premium" has the meaning given to such
term in Exhibit B hereto, as calculated by the Funding Corporation.
"Specified Ambient Conditions" means 59 degrees Fahrenheit and
60% relative humidity.
"Standard Make-Whole Premium" has the meaning given to such
term in Exhibit B hereto, as calculated by the Funding Corporation.
"Stock Pledge Agreement" means the Pledge Agreement, dated as
of the Closing Date, by MidAmerican Holdings in favor of the Collateral Agent.
A-22
"Subordinated Indebtedness" means Indebtedness (and the note
or other instrument evidencing the same) which has been subordinated on terms
and conditions substantially the same as those attached hereto as Exhibit D, to
the prior payment of amounts owing under this Indenture and the Securities.
"Substantial Completion" means satisfaction in all material
respects of the conditions precedent set forth in Section 15.3 of the EPC
Contract, as confirmed by the Independent Engineer (with customary assumptions
and qualifications); provided that the Cordova Energy Project shall be deemed to
have achieved Substantial Completion notwithstanding the failure to achieve
Substantial Performance Tests Completion if (i) the Funding Corporation shall
have redeemed Securities in accordance with Section 3.1(c) of the Indenture and
(ii) the Initial Securities shall then have Ratings which are equivalent to or
better than the ratings assigned to the Initial Securities on the initial
Closing Date.
"Substantial Completion Date" means the date on which the
Cordova Energy Project achieves or is deemed to have achieved Substantial
Completion.
"Substantial Performance Tests Completion" means "substantial
performance tests completion" as such term is defined in the EPC Contract.
"Substitute Power Purchase Agreement" means (i) a power
purchase agreement, tolling agreement or similar agreement for the sale of
capacity, energy and/or ancillary services from the Cordova Energy Project with
respect to which a Ratings Reaffirmation is obtained, or (ii) a power purchase
agreement, tolling agreement or similar agreement for the sale of capacity,
energy and/or ancillary services from the Cordova Energy Project that (a) has a
counterparty that is rated at least "Baa3" by Moody's (or the equivalent by
another Rating Agency if Moody's is not then providing credit ratings) and at
least "BBB-" by S&P (or the equivalent by another Rating Agency if S&P is not
then providing credit ratings) or whose obligations under such agreement are
backed by Acceptable Credit Support, (b) has pricing and commercial terms which
are, as a whole and together with the terms of any other Substitute Power
Purchase Agreement then in effect, equivalent to or better than the Power
Purchase Agreement, as certified (with customary assumptions and qualifications)
by Cordova Energy and (c) has fixed capacity payments (or the equivalent
thereof) which, at equivalent availability factors (after giving effect to
applicable availability penalties and bonuses), are equivalent to or better than
the Guaranteed Payment (as defined in the Power Purchase Agreement), as
certified (with customary assumptions and qualifications) by Cordova Energy.
"Supplemental Indenture" means an Indenture supplemental to
this Indenture entered into by the Funding Corporation and the Trustee for any
of the purposes set forth in Article VII.
A-23
"Temporary Offshore Global Securities" shall have the meaning
set forth in Section 2.5(a) hereof.
"Title Defect" means the existence of any defect in the title
to the Cordova Energy Project (other than Permitted Liens) in effect on the
Closing Date which entitles the Collateral Agent to make a claim under the Title
Insurance Policy.
"Title Insurance Policy" means any title insurance policy
which insures the Collateral Agent's mortgage on the Cordova Energy Project
Site.
"Title Insurance Proceeds" means any proceeds actually
received by the Collateral Agent under the Title Insurance Policy in connection
with a Title Defect.
"Transaction Documents" means, collectively, the Project
Documents and the Financing Documents.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trustee" means Chase Manhattan Bank and Trust Company,
National Association and its successors, and any corporation resulting from or
surviving any consolidation or merger to which it or its successors may be a
party, or any successor to all or substantially all of its corporate trust
business, provided that any such successor or surviving corporation shall be
eligible for appointment as trustee pursuant to Section 10.8, until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter shall mean such successor Trustee.
"Working Capital Facility" means any agreement or agreements
from time to time in effect among the Funding Corporation and/or one or more
Guarantors and banks or other financial institutions providing for the
availability of working capital loans to the Funding Corporation and the
Guarantors.
"Working Capital Facility Provider" means the commercial
bank(s) or financial institution(s) providing working capital debt pursuant to
the Working Capital Facility.
A-24
EXHIBIT B
[Form of Series A Senior Secured Bonds due December 15, 2019]
CORDOVA FUNDING CORPORATION
SERIES A-[1] [2] [3] [4] [5] SENIOR SECURED BOND
DUE DECEMBER 15, 2019
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, ENCUMBERED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
BY ITS ACQUISITION HEREOF, THE HOLDER OF THIS SECURITY AND ANY OWNER OF
ANY INTEREST HEREIN REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, RESELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF (X)
THE ORIGINAL ISSUE DATE HEREOF AND (Y) THE LAST DATE ON WHICH CORDOVA FUNDING
CORPORATION (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) EXCEPT (A) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
B-1
S UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
B-2
No. ____ Private Placement Number:
Principal Amount Final Maturity Date Issue Date
---------------- ------------------- ----------
$_____________ December 15, 2019 [September 10, 1999]
[December 15, 1999]
[March 15, 2000]
[June 15, 2000]
[September 15, 2000]
REGISTERED HOLDER:
PRINCIPAL AMOUNT:
INTEREST RATE:
CORDOVA FUNDING CORPORATION, a Delaware corporation
(hereinafter called the "Funding Corporation", which term includes any successor
or assign under the Trust Indenture referred to below), for value received
hereby promises to pay to the Registered Holder hereof, the outstanding
principal amount hereof, such payment to be made in semiannual installments on
June 15 and December 15 of each year (commencing June 15, 2002) and ending on
the Final Maturity Date set forth above, each such installment to be in an
amount equal to the Principal Amount multiplied by the "Percentage of Principal
Amount Payable" as set forth opposite the applicable payment date in the table
set forth on Schedule I attached hereto (provided that the portion of the
Principal Amount remaining unpaid on the Final Maturity Date, together with all
interest accrued thereon, shall in any and all cases be due and payable on the
Final Maturity Date), and to pay interest on the unpaid portion of the Principal
Amount at the Interest Rate set forth above from the most recent Scheduled
Payment Date for which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from the issue date set forth
above, semiannually on June 15 and December 15 in each year (commencing on the
Scheduled Payment Date next succeeding the issue date set forth above) until the
Principal Amount is paid in full or payment thereof is duly provided for. Any
installment of principal and, to the extent permitted by applicable law, any
payment of interest not punctually paid or duly provided for shall continue to
bear interest at a rate equal to the interest rate set forth above. The
principal and interest so payable on any Scheduled Payment Date shall, as
provided in the Trust Indenture referred to below, be paid to the Person in
whose name this Security (or one or more predecessor securities) is registered
in the Securities Register at the close of business on the Record Date for such
payment of principal and interest, which shall be June 1 and December 1,
respectively. Any such principal and interest that is payable, but is not so
punctually paid or duly provided for, shall forthwith cease to be payable to the
Person in whose name this Security (or one or more predecessor securities) was
registered in the Securities Register at the close of business on such Record
Date, and may be paid to the Person in whose name this Security is registered at
the close of business on a subsequent Record Date for the payment of such
defaulted principal and interest, to be fixed by the Trustee, notice of which
B-3
shall be given to the Holder hereof not less than fifteen (15) days prior to
such subsequent Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Trust Indenture referred to
below. All payments in respect of this Security shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of debts.
Interest payments for this Security will be computed and paid
on the basis of a 360-day year consisting of twelve 30-day months.
This Security is one of an authorized Series of Securities of
the Funding Corporation known as its Series A-1 Senior Secured Bonds due
December 15, 2019 (the "Securities"). The Securities are issued under the Trust
Indenture dated as of September 10, 1999 (the "Trust Indenture") between the
Funding Corporation and Chase Manhattan Bank and Trust Company, National
Association, a national banking association organized under the laws of the
United States, as trustee (in such capacity, together with its successors in
such capacity, the "Trustee"), as contemplated by the Bond Purchase Agreement,
dated as of September 10, 1999 (the "Bond Purchase Agreement") among the Funding
Corporation, Cordova Energy Company LLC ("Cordova Energy") and the institutional
investors named on Schedule A thereto. All capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed to them in the Trust
Indenture.
All Securities are secured equally and ratably with one
another. Reference is hereby made to the Trust Indenture for a description of
the nature and extent of the Securities and the respective rights of the Holders
of the Securities and of the Trustee and the Funding Corporation in respect of
the Securities and the terms upon which the Securities are made and are to be
authenticated and delivered. Subject to the terms of the Trust Indenture, the
Holder of this Security is entitled to the benefits of the Bond Purchase
Agreement and the Trust Indenture and may enforce the agreements of the Funding
Corporation contained therein and exercise the remedies provided for thereby or
otherwise available in respect thereof.
The principal of, and interest on, this Security are payable
from, and secured by, assets subject to the Lien on the Funding Corporation
Collateral, in accordance with the terms of the Trust Indenture and the
Financing Documents.
The obligations of the Company to pay the principal of,
premium, if any, and interest on the Securities when due are unconditionally
guaranteed by Cordova Energy pursuant to the Cordova Energy Guarantee. The
Cordova Energy Guarantee will be secured by the Lien on the Cordova Energy
Collateral, in accordance with the terms of the Trust Indenture and the
Financing Documents.
B-4
The Securities are subject to a Collateral Agency and
Intercreditor Agreement dated as of September 10, 1999.
The Trust Indenture permits, with certain exceptions, as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Funding Corporation and the rights of the Holders of the
Securities under the Trust Indenture at any time by the Funding Corporation with
the consent of the Holders of more than 50% in aggregate principal amount of the
Securities at the time Outstanding affected by such amendment or modification.
The Trust Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Funding Corporation with certain provisions of the Trust Indenture and
certain past defaults under the Trust Indenture and their consequences. Any such
consent or waiver or direction by the Holder of this Security shall be
conclusive and binding upon the Holder and upon all future Holders of this
Security and of any security issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Security.
This Security is subject to optional redemption by the Funding
Corporation in accordance with Section 3.1(a) of the Trust Indenture at a
redemption price equal to all or a portion of the principal amount thereof, all
interest accrued on such principal amount to but not including the Redemption
Date and a make-whole premium (the "Standard Make-Whole Premium"). The Standard
Make-Whole Premium is an amount equal to the Discounted Present Value calculated
for any Security subject to such redemption less the unpaid principal amount of
such Security; provided that the Standard Make-Whole Premium shall not be less
than zero. For purposes of determining the Standard Make-Whole Premium, the
"Discounted Present Value" of any Security subject to such redemption shall be
equal to the discounted present value of all principal and interest payments
scheduled to become due in respect of such Security after the date of such
redemption, calculated using a discount rate equal to the sum of (1) the yield
to maturity on the United States treasury security having an average life equal
to the remaining average life of such Security and trading in the secondary
market at the price closest to par and (2) 50 basis points; provided, however,
that if there is no United States treasury security having an average life equal
to the remaining average life of such Security, such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a
straight-line basis (rounding to the nearest month, if necessary) from the
yields to maturity for two United States treasury securities having average
lives most closely corresponding to the remaining average life of such Security
and trading in the secondary market at the price closest to par.
This Security is subject to optional redemption by the Funding
Corporation in accordance with Section 3.1(b) of the Trust Indenture at a
redemption price equal to 100% of the outstanding principal amount of the
portion of this Security being redeemed plus a make-whole premium (the "Special
Make-Whole Premium"). The Special Make-Whole Premium will be an amount equal to
B-5
the Discounted Present Value calculated for the portion of this Security subject
to such redemption less the unpaid principal amount of such portion of this
Security; provided that the Special Make-Whole Premium shall not be less than
zero. For purposes of determining the Special Make-Whole Premium, the
"Discounted Present Value" of the portion of this Security subject to such
redemption shall be equal to the discounted present value of all principal and
interest payments scheduled to become due in respect of such portion of this
Security after the date of such redemption, calculated using a discount rate
equal to the sum of (1) the yield to maturity on the United States treasury
security having an average life equal to the remaining average life of such
portion of this Security and trading in the secondary market at the price
closest to par and (2) 50 basis points; provided, however, that if there is no
United States treasury security having an average life equal to the remaining
average life of such portion of this Security, such discount rate shall be
calculated using a yield to maturity interpolated or extrapolated on a
straight-line basis (rounding to the nearest month, if necessary) from the
yields to maturity for two United States treasury securities having average
lives most closely corresponding to the remaining average life of such portion
of this Security and trading in the secondary market at the price closest to
par.
This Security is subject to optional redemption by the Funding
Corporation at a redemption price equal to all or a portion of the principal
amount thereof and all interest accrued on such principal amount to but not
including the Redemption Date in accordance with Section 3.1(c) of the Trust
Indenture. This Security is, under certain conditions, subject to mandatory
redemption and redemption at the option of the Holders as set forth in Section
3.3 of the Trust Indenture.
Any payment of interest on any Security, the stated maturity
of which payment is on or prior to any Redemption Date, shall be payable to the
Holder of such Security, or one or more predecessor securities, registered as
such at the close of business on the related Record Date or subsequent Record
Date.
Notice of any redemption of Securities will be given at least
30 days before the Redemption Date to each Holder at its registered address.
Securities (or portions thereof as aforesaid) for the
redemption of which provision is made in accordance with the Trust Indenture
shall cease to bear interest from and after the Redemption Date.
The unpaid portion of principal of this Security, together
with all interest accrued thereon and all other amounts due hereunder, shall be
due and payable, as provided in the Trust Indenture, upon the occurrence of
certain Events of Default in full, or in such lesser amount in the case of an
Event of Default relating to the bankruptcy, insolvency, receivership or
reorganization of any Guarantor which has resulted in an automatic acceleration
of such Guarantor's Project Note.
B-6
The Securities are issuable in registered form in
denominations of [$100,000 or any amount in excess thereof] [$100,000 or any
integral multiple of $1,000 in excess thereof].
No service charge will be made to any Holder of Securities for
any transfer or exchange, but the Registrar and/or the Funding Corporation may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.
The person in whose name this Security is registered shall be
deemed to be the owner and holder hereof for the purpose of receiving payment as
herein provided and for all other purposes whether or not this Security be
overdue regardless of any notice to anyone to the contrary.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
For the avoidance of doubt, in the event of any conflict
between any provision of the Trust Indenture and this Security, the Trust
Indenture shall govern and supercede.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual or facsimile signature, this Security shall
not be entitled to any benefit under the Trust Indenture, or be valid or
obligatory for any purpose.
Recourse under this Security is limited as set forth in
Section 12.12 of the Trust Indenture.
B-7
IN WITNESS WHEREOF, the Funding Corporation has caused this
instrument to be duly executed.
CORDOVA FUNDING CORPORATION
By: _____________________________
Name:
Title:
B-8
CERTIFICATE OF AUTHENTICATION
Dated:
This Security is one of the Series A Senior Secured Bonds due
December 15, 2019 of Cordova Funding Corporation referred to in the
within-mentioned Indenture.
_______________________________
as Trustee
By: ___________________________
Authorized Signatory
B-9
ASSIGNMENT FORM
(To be executed by the Registered Holder
if such Holder desires to transfer this Security)
To: Chase Manhattan Bank and Trust Company, National Association
101 California Street, Suite 2725
San Francisco, CA 94111
Attention: Rose Maravilla
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s)
unto
Social Security Number of Other
Identifying Number of Assignee
(Please print or typewrite name and address,
including zip code of Assignee)
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________________________________________ attorney to transfer
said Security on the books of the Funding Corporation with full power of
substitution in the premises.
Attached to this Assignment Form is a certification of the Assignee
providing the certifications for transfer required pursuant to the terms of the
Indenture.
Dated:____________________
Signature
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name
as written upon the first page of the within instrument in
every particular, without alteration or enlargement or any
change whatsoever, and such signature must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings
and loan associations and credit unions with membership in an
approved signature guarantee medallion program) pursuant to
United States Securities and Exchange Commission Rule 17
AD-15.
B-10
Series A Senior Secured Bonds due December 15, 2019
The following table sets forth the date of each semiannual
installment of principal to be paid on this Security and the applicable
percentage of the original principal amount payable on each such date:
Scheduled Payment Date Percentage of Principal Amount Payable
June 15, 2001 0.0000%
December 15, 2001 0.0000%
June 15, 2002 0.2750%
December 15, 2002 0.2750%
June 15, 2003 2.0000%
December 15, 2003 2.0000%
June 15, 2004 1.8000%
December 15, 2004 1.8000%
June 15, 2005 1.7500%
December 15, 2005 1.7500%
June 15, 2006 1.0000%
December 15, 2006 1.0000%
June 15, 2007 0.9250%
December 15, 2007 0.9250%
June 15, 2008 1.0500%
December 15, 2008 1.0500%
June 15, 2009 1.4250%
December 15, 2009 1.4250%
June 15, 2010 2.0000%
December 15, 2010 2.0000%
June 15, 2011 2.0500%
December 15, 2011 2.0500%
June 15, 2012 2.2500%
December 15, 2012 2.2500%
B-11
June 15, 2013 2.5500%
December 15, 2013 2.5500%
June 15, 2014 3.0000%
December 15, 2014 3.0000%
June 15, 2015 2.9000%
December 15, 2015 2.9000%
June 15, 2016 3.5000%
December 15, 2016 3.5000%
June 15, 2017 3.7000%
December 15, 2017 3.7000%
June 15, 2018 4.4503%
December 15, 2018 4.4503%
June 15, 2019 5.1525%
December 15, 2019 21.5969%
B-12
EXHIBIT C
Form of Certificate
Chase Manhattan Bank and Trust Company, National Association
101 California Street, #2725
San Francisco, CA 94111
Cordova Funding Corporation
666 Grand Avenue
29th Floor
P.O. Box 657 Des Moines, IA 50303-0657
Re: Cordova Funding Corporation (the "Company")
Senior Secured Bonds (the "Securities")
Dear Sirs:
This letter relates to U.S. $_________ principal amount of
Securities represented by a Security (the "Legended Security") which bears a
legend outlining restrictions upon transfer of such Legended Security. Pursuant
to Section 2.5(a) of the Trust Indenture (the "Indenture") dated as of September
10, 1999 relating to the Securities, we hereby certify that we are (or we will
hold such securities on behalf of ) a person outside the United States to whom
the Securities could be transferred in accordance with Rule 904 of Regulation S
promulgated under the Securities Act of 1933, as amended. Accordingly, you are
hereby requested to exchange the Legended Security for an unlegended Security
representing an identical principal amount of Securities, all in the manner
provided for in the Indenture.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Securityholder]
By:
------------------------------
Authorized Signature
C-1
EXHIBIT D
[Form of Transferor Certificate]
TRANSFER CERTIFICATE
SERIES A SENIOR SECURED BONDS DUE DECEMBER 15, 2019
This is to certify that as of the date hereof with respect to
$_____________ principal amount of the above-captioned securities presented or
surrendered on the date hereof (the "Surrendered Securities") for registration
of transfer or for exchange where the securities issuable upon such exchange are
to be registered in a name other than that of the undersigned Holder (each such
transaction being a "transfer"), the undersigned Holder (as defined in the
Indenture) of the Surrendered Securities represents and certifies for the
benefit of Cordova Funding Corporation and Chase Manhattan Bank and Trust
Company, National Association, as Trustee, that the transfer of Surrendered
Securities associated with such transfer complies with the restrictive legend
set forth on the face of the Surrendered Securities for the reason checked
below:
[ ] The Surrendered Securities are being transferred to a person whom we
reasonably believe is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act of 1933) (a "QIB") that purchases
for its own account or for the account of a QIB to whom notice is given
that the resale, pledge or transfer is being made in reliance on Rule
144A under the Securities Act and in accordance with any applicable
blue sky or securities laws of any State of the United States; or
[ ] The Surrendered Securities are being transferred to an institution
that is an "accredited investor" meeting the requirements of Rule
501(a)(1), (2), (3) or (7) under Regulation D of the Securities Act
that is acquiring the Surrendered Securities for investment purposes
and not for distribution;* or
[ ] The transfer of the Surrendered Securities complies with Rule 144 or
Regulation S under the Securities Act;** or
- ----------------
*These transfers require that the transferee deliver a letter substantially in
the form of Exhibit E to the Indenture and may also require an opinion of
counsel.
**These transfers may require an opinion of counsel.
D-1
[ ] The transfer of the Surrendered Securities complies with another
applicable exemption from the registration requirements of the
Securities Act.2
________________________________
[Name of Holder]
Dated: ___________, ____
[To be dated the date of presentation or surrendered]
D-2
EXHIBIT E
[Form of Institutional Accredited
Investor Transferee Compliance Letter]
Cordova Funding Corporation
666 Grand Avenue, 29th Floor
P.O. Box 657 Des Moines, Iowa 50303-0657 Attention: Chief Financial Officer
Chase Manhattan Bank and Trust Company,
National Association
101 California Street, #2725
San Francisco, California 94111
Attention: Corporate Trust Department
Dear Ladies and Gentlemen:
In connection with our proposed purchase of $ __________
aggregate principal amount of Series A Senior Secured Bonds due December 15,
2019 (the "Securities") of Cordova Funding Corporation, a Delaware Corporation
(the "Funding Corporation") we confirm that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933 (the "Securities Act") and may not be sold
except as permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting hereafter stated, that such
Securities may be resold, pledged or transferred only (i) to the Funding
Corporation or an Affiliate of the Funding Corporation, (ii) pursuant to and in
accordance with Rule 144A under the Securities Act ("Rule 144A"), to a person
whom we reasonably believe is a "qualified institutional buyer" (as defined in
Rule 144A) (a "QIB") that purchases for its own account or for the account of a
QIB to whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the transferor on the
Transferor Certificate, a form of which is attached as Exhibit C to the
Indenture relating to the Securities, dated as of September 10, 1999), (iii)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144, (iv) in compliance with Regulation S (if applicable) under the
Securities Act, (v) to an institution that is an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act (as indicated by the box checked by the transferor on the Transferor
Certificate, a form of which is attached as Exhibit C to the Indenture relating
to the Securities, dated as of September 10, 1999) that is acquiring the
E-1
Securities for investment purposes and not for distribution and an Institutional
Accredited Investor Transferee Compliance Letter in the form hereof is delivered
to the Funding Corporation and to the Trustee under the Indenture relating to
the Securities by such accredited investor, or (vi) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United States, and we will
notify any purchaser of the Securities from us of the above resale restrictions,
if then applicable. We further understand that in connection with any transfer
of the Securities by us that Funding Corporation and the Trustee may request,
and if so requested we will furnish, such certificates and other information as
they may reasonably require to confirm that any such transfer complies with the
foregoing restrictions.
2. We are an institutional investor and are an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
3. We understand that the Securities will be issued solely in
physical certificated form (and not in the form of interests in securities
deposited with The Depository Trust Company) and the minimum principal amount of
Securities that may be purchased by an institutional accredited investor is
$100,000.
4. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
5. We acknowledge that we have had access to such financial
and other information, and have been afforded the opportunity to ask such
questions of representatives of the Funding Corporation and receive answers
thereto, as we deem necessary in connection with our decision to purchase the
Securities.
6. We understand that, on any proposed resale of any
Securities, we will be required to furnish to the Funding Corporation and Chase
Manhattan Bank and Trust Company, National Association, as Trustee, such
certifications, legal opinions and other information as they may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
7. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
E-2
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
________________________________
(Name of Purchaser)
By: ___________________________
Name:
Title:
Date: _______________ Address:
E-3
EXHIBIT F
SUBORDINATION PROVISIONS
All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed thereto in the Collateral Agency and
Intercreditor Agreement, dated as of September 10, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among Chase Manhattan Bank and Trust Company, National Association,
as trustee (the "Trustee") under a certain Trust Indenture dated as of September
10, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Indenture"), the other Secured Parties from time to time party thereto, Cordova
Funding Corporation, Chase Manhattan Bank and Trust Company, National
Association, as securities intermediary under a certain Deposit and Disbursement
Agreement dated as of September 10, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Depositary Agreement"), and Chase Manhattan
Bank and Trust company, National Association, as collateral agent under the
Intercreditor Agreement.
[NAME OF SUBORDINATED LENDER] (together with its successors
and assigns, the "Subordinated Lender") hereby agrees for the benefit of the
Secured Parties that all [DESCRIBE SUBORDINATED LIABILITIES] (the "Subordinated
Obligations") are and shall be junior and subordinate, to the extent and in the
manner set forth hereinafter, in right of payment to the prior indefeasible
payment or satisfaction in full of all Financing Liabilities. In furtherance
thereof, each of the Secured Parties, the Collateral Agent and the Subordinated
Lender further agrees that:
(i) (a) The Subordinated Lender shall not ask, demand, sue for, take
or receive from the Funding Corporation or any Guarantor, directly or
indirectly, in cash or other property or by set-off or in any other
manner (including, without limitation, from or by way of the Collateral
or any guaranty of payment or performance), payment of all or any of
the Subordinated Obligations unless and until the Financing Commitments
shall have been terminated and the Financing Liabilities shall have
been paid or otherwise satisfied in full and except to the extent of
distributions from the Distribution Account under the Depositary
Agreement. For the purposes of these provisions, the Financing
Liabilities shall not be deemed to have been paid or satisfied in full
until those Financing Liabilities shall have been indefeasibly so paid
to the Secured Parties or so otherwise satisfied (after the passage of
any relevant preference periods).
(ii) Upon any distribution of all or any of the assets of the Funding
Corporation or any Guarantor to creditors of Funding Corporation or any
Guarantor upon the dissolution, winding up, liquidation, arrangement,
reorganization or composition of the Funding Corporation or any
Guarantor, whether in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Funding Corporation or any Guarantor or
otherwise, any payment or distribution of any kind (whether in cash,
property or securities) which otherwise would be payable or deliverable
upon or with respect to the Subordinated Obligations shall be paid or
delivered directly to the Collateral Agent for application (in the case
of cash) to, or as collateral (in the case of non-cash property or
securities) for, the payment or prepayment of the Financing Liabilities
until the Financing Liabilities have been paid or otherwise satisfied
in full.
(iii) Each of the Secured Parties may demand specific performance of
these terms of subordination, whether or not the Funding Corporation or
any Guarantor shall have complied with any of the provisions hereof
applicable to them at any time when the Subordinated Lender shall have
failed to comply with any of such provisions applicable to it. The
Subordinated Lender hereby irrevocably waives any defense based on the
adequacy of a remedy at law, which might be asserted as a bar to such
remedy of specific performance.
(iv) So long as there are any Financing Commitments or any of the
Financing Liabilities shall remain unpaid or otherwise unsatisfied, the
Subordinated Lender shall not commence or join with any creditor other
than the Collateral Agent in commencing any proceeding referred to in
subsection (ii) above for the payment of any amounts which otherwise
would be payable or deliverable upon or with respect to the
Subordinated Obligations.
F-2
(v) Subject to the termination of the Financing Commitments and the
indefeasible payment or satisfaction in full of all of the Financing
Liabilities, the Subordinated Lender shall be subrogated to the rights
of the Secured Parties to receive payments or distributions of assets
of the Funding Corporation or any Guarantor made on the Financing
Liabilities until the Subordinated Obligations have been satisfied in
full.
The foregoing provisions regarding subordination are for the
benefit of the Secured Parties and shall be enforceable by them directly against
the Subordinated Lender, and no Secured Party shall be prejudiced in its right
to enforce subordination of any of the Subordinated Obligations by any act or
failure to act by either the Funding Corporation or any Guarantor or anyone in
custody of any of their respective assets or property. Notwithstanding anything
to the contrary contained in the foregoing provisions, the Subordinated Lender
may receive distributions in respect of the Subordinated Obligations from the
Funding Corporation or any Guarantor to the extent that such distributions are
permitted pursuant to Section 3.6 of the Depositary Agreement.
(b) So long as any Secured Obligations remain outstanding, the
following provisions shall apply:
(i) If a Trigger Event shall have occurred and be continuing,
the Collateral Agent, on behalf of the Secured Parties, shall be
permitted and is hereby authorized to take any and all actions to
exercise any and all rights, remedies and options which it may have
under the Security Documents or the Intercreditor Agreement.
(ii) Until the Debt Termination Date, the Subordinated Lender
shall not, without the prior written consent of the Secured Parties,
(a) exercise any rights or enforce any remedies or assert any claim
with respect to the Collateral, (b) seek to foreclose any Lien on, or
sell, the Collateral, or (c) take any action, directly or indirectly,
or institute any proceedings, directly or indirectly, with respect to
any of the foregoing.
(iii) The Subordinated Lender hereby waives: (A) notice of the
existence, creation or non-payment of all or any of the Financing
Liabilities and (B) to the fullest extent permitted by law, any right
it may have to require the Collateral Agent to marshal assets.
(c) Subject to the terms of the Intercreditor Agreement, the Secured
Parties may, at any time and from time to time, without any consent of
or notice to the Subordinated Lender and without impairing or releasing
the obligations of the Subordinated Lender: (i) amend in any manner any
agreement under which any of the Financing Liabilities is outstanding
in accordance with the terms thereof; (ii) sell, exchange, release, not
perfect and otherwise deal with any Collateral or other property at any
time pledged, assigned or mortgaged to secure the Financing Liabilities
F-3
in accordance with the Security Documents; (iii) release anyone liable
in any manner under or in respect of the Financing Liabilities; (iv)
exercise or refrain from exercising any rights against the Funding
Corporation or any Guarantor and others; and (v) apply any sums from
time to time received to payment or satisfaction of the Financing
Liabilities.
F-4