[Draft of 1/20/05]
January [o], 2005
EXCHANGE AGENT AGREEMENT
Union Bank of California, N.A.
000 Xxxxx Xxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Operations
Ladies and Gentlemen:
Ormat Funding Corp., a Delaware corporation (the "Company"), proposes
to make an offer (the "Exchange Offer") to exchange up to $190,000,000 aggregate
principal amount of its 8 1/4% Senior Secured Notes due 2020 (the "Exchange
Notes"), for a like principal amount of its outstanding 8 1/4% Senior Secured
Notes due 2020 (the "Private Notes"). The terms and conditions of the Exchange
Offer are set forth in a prospectus (the "Prospectus") included in the Company's
registration statement on Form S-4 (File No. 333-121655), as amended (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "SEC") and attached hereto as Exhibit A, proposed to be distributed to all
record holders of the Private Notes. The Private Notes and the Exchange Notes
are collectively referred to herein as the "Notes." Capitalized terms used
herein and not defined shall have the respective meanings ascribed to them in
the Prospectus.
The Company hereby appoints Union Bank of California, N.A. to act as
exchange agent (the "Exchange Agent") in connection with the Exchange Offer.
References hereinafter to "you" shall refer to Union Bank of California, N.A.
The Exchange Offer is expected to be commenced by the Company on or
about [ ], 2005. The Letter of Transmittal accompanying the Prospectus is
to be used by the holders of the Private Notes to accept the Exchange Offer and
contains instructions with respect to the delivery of certificates for Private
Notes tendered.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
[ ], 2005, or on such later date or time to which the Company may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Company expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Private Notes not theretofore
accepted for exchange upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange
Offer-Conditions." The Company will give oral (confirmed in writing) or written
notice of any amendment, termination or nonacceptance to you as promptly as
practicable.
A copy of each of the form of letter of transmittal (including
instructions for competing a substitute Form W-9) (the "Letter of Transmittal"),
the form of the notice of guaranteed delivery (the "Notice of Guaranteed
Delivery"), the form of letter to holders, the form of letter to registered
holders and Depository Trust Company participants and the form of letter to
clients (collectively, the "Tender Documents") to be used by holders of Private
Notes in order to receive Exchange Notes pursuant to the Exchange Offer are
attached hereto as Exhibit B.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer," in the Letter of Transmittal accompanying the Prospectus or as
specifically set forth herein; provided, however, that in no way will your
general duty to act in good faith be limited by the foregoing.
2. On the day that you are notified by the Company or its counsel,
Xxxxxxxxxx & Xxxxx LLP, that the Registration Statement has become effective
under the Securities Act of 1933, as amended, or as soon as practicable
thereafter, you are to mail to each registered holder of private notes and each
participant in the Depository Trust Company ("DTC") whose name appears on a
security position listing as owner of the Private Notes, a copy of the
Prospectus and the Tender Documents, and make any subsequent mailings thereof as
soon as practicable after the date of any amendment thereof and to any persons
who become holders of the Private Notes prior to the Expiration Date and to any
persons as may from time to time be requested by the Company. You shall also
accept and comply with telephone requests for information relating to the
Exchange Offer, provided that such information shall relate only to the
procedures for tendering Private Notes in (or withdrawing tenders of Private
Notes from) the Exchange Offer. All other requests for information relating to
the Exchange Offer shall be directed to the Company, Attention: Mr. Ran Raviv,
000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx 00000. Additionally, you will, as soon as
practicable after receipt of notification from the Company or its counsel,
Xxxxxxxxxx & Xxxxx LLP that the Registration Statement has become effective,
instruct DTC to launch a broadcast message to the holders of the Private Notes
regarding the commencement of the Exchange Offer.
3. You will establish a book-entry account with respect to the Private
Notes at DTC (the "Book-Entry Transfer Facility") for purposes of the Exchange
Offer within two business days after the date of the Prospectus, and any
financial institution
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that is a participant in the Book-Entry Transfer Facility's systems may make
book-entry delivery of the Private Notes by causing the Book-Entry Transfer
Facility to transfer such Private Notes into your account in accordance with the
Book-Entry Transfer Facility's procedures for such transfer.
4. You are to examine each of the Letters of Transmittal (or
confirmation of book-entry transfers of Private Notes into your account at the
Book-Entry Transfer Facility) and any other documents delivered or mailed to you
by or for holders of the Private Notes, to ascertain whether: (i) the Letters of
Transmittal and any such other documents are duly executed and properly
completed in accordance with instructions set forth therein and that such
book-entry confirmations are in due and proper form and contain the information
required to be set forth therein, and (ii) the Private Notes have otherwise been
properly tendered. In each case where the Letter of Transmittal or any other
document has been improperly completed or executed, or where book-entry
confirmations are not in due and proper form or omit certain information, or
other document is not in proper form for transfer or some other irregularity in
connection with the acceptance of the Exchange Offer exists, you will endeavor
to inform the presenters of the need (a) for fulfillment of all requirements and
(b) to take any other action as may be necessary or advisable to cause such
irregularity to be corrected.
5. With the approval of an authorized officer of the Company (such
approval, if given orally, to be confirmed in writing) or any other person
designated by such an officer in writing, you are authorized to waive any
irregularities in connection with any tender of Private Notes pursuant to the
Exchange Offer.
6. Tenders of Private Notes may be made only as set forth in the Letter
of Transmittal and in the section of the Prospectus captioned "The Exchange
Offer--Procedures for Tendering Private Notes", and Private Notes shall be
considered properly tendered to you only when tendered in accordance with the
procedures set forth therein. Notwithstanding the provisions of this paragraph
6, Private Notes which the authorized officer of the Company or any other person
designated by any such officer shall approve as having been properly tendered
shall be considered to be properly tendered (such approval, if given orally,
shall be confirmed in writing).
7. You shall advise the Company with respect to any Private Notes
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Private Notes.
8. You shall accept tenders:
(a) in cases where the Private Notes are registered in two or more
names only if signed by all named holders;
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(b) in cases where the signing person (as indicated on the Letter
of Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Private Notes
provided that customary transfer requirements, including those regarding any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Private Notes when so indicated
and as permitted in the Letter of Transmittal and deliver certificates for
Private Notes to the transfer agent for split-up and return any untendered
Private Notes to the holder (or such other person as may be designated in the
Letter of Transmittal) as promptly as practicable after expiration or
termination of the Exchange Offer.
9. Upon satisfaction or waiver of the conditions to the Exchange Offer,
the Company will notify you (such notice if given orally, to be confirmed in
writing) of its acceptance, promptly after the Expiration Date, of all Private
Notes properly tendered and you, on behalf of the Company, will exchange such
Private Notes for Exchange Notes and cause such Private Notes to be canceled.
Delivery of Exchange Notes will be made on behalf of the Company by you at the
rate of $1,000 principal amount of Exchange Notes for each $1,000 principal
amount of the Private Notes tendered promptly after notice (such notice if given
orally, to be confirmed in writing) of acceptance of said Private Notes by the
Company; provided, however, that in all cases, Private Notes tendered pursuant
to the Exchange Offer will be exchanged only after timely receipt by you of
certificates for such Private Notes (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility), a properly completed and,
except as described in the section of the prospectus captioned "The Exchange
Offer--Procedures for Tendering", duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and any other required
documents. Unless otherwise instructed by the Company, you shall issue Exchange
Notes only in denominations of $1,000 or any integral multiple thereof.
10. Tenders, pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and Letter of Transmittal, Private Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time on or prior to the Expiration Date in accordance
with the terms of the Exchange Offer.
11. The Company shall not be required to exchange any Private Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Private Notes tendered
shall be given (and confirmed in writing) by the Company to you.
12. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Private Notes tendered because of an invalid tender,
the
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occurrence of certain other events set forth in the Prospectus or otherwise, you
shall as soon as practicable after the expiration or termination of the Exchange
Offer return those unaccepted Private Notes by appropriate book-entry transfer,
together with any related required documents and the Letters of Transmittal
relating thereto that are in your possession, to the persons who surrendered
them.
13. You are not authorized to pay or offer to pay any concessions,
commissions or other solicitation fees to any broker, dealer, commercial bank,
trust company or other nominee or to engage or use any person to solicit
tenders.
14. As Exchange Agent hereunder, you:
(a) shall have no duties or obligations other than those
specifically set forth in the Prospectus, the Letter of Transmittal or herein or
as may be subsequently agreed to in writing by you and the Company;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates for the Private Notes deposited with you pursuant to the
Exchange Offer, and will not be required to and will make no representation as
to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability, unless you
shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter, telegram or
other document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which you shall in good
faith believe to be genuine or to have been signed or represented by a proper
person or persons;
(f) may rely on and shall be protected in acting upon written or
oral instructions from any officer of the Company;
(g) may consult with your counsel with respect to any questions
relating to your duties and responsibilities, and the written opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the written opinion of such counsel; and
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(h) shall not advise any person tendering Private Notes pursuant to
the Exchange Offer as to whether to tender or refrain from tendering all or any
portion of Private Notes or as to the market value, decline or appreciation in
market value of any Private Notes that may or not occur as a result of the
Exchange Offer or as to the market value of the Exchange Notes;
provided, however, that in no way will your general duty to act in good faith be
limited by the foregoing.
15. You shall take such action as may from time to time be requested by
the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request.
16. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Mr. Ran Raviv of the Company
(telephone number (000) 000-0000, facsimile number (000) 000-0000 and such other
person or persons as the Company may request, daily (and more frequently during
the week immediately preceding the Expiration Date and if otherwise requested)
up to and including the Expiration Date, as to the aggregate principal amount of
Private Notes which have been duly tendered pursuant to the Exchange Offer and
the items received by you pursuant to the Exchange Offer and this Agreement,
separately reporting and giving cumulative totals as to items properly received
and items improperly received. In addition, you will also inform, and cooperate
in making available to, the Company or any such other person or persons upon
oral request made from time to time prior to the Expiration Date of such other
information as it or he or she reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Company and such persons
as the Company may request, of access to those persons on your staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Expiration Date the Company shall have received information in sufficient
detail to enable it to decide whether to extend the Exchange Offer. You shall
prepare a final list of all persons whose tenders were accepted, the aggregate
principal amount of Private Notes tendered, the aggregate principal amount of
Private Notes accepted and the identity of any Participating Broker-Dealers and
the aggregate principal amount of Exchange Notes delivered to each, and deliver
said list to the Company.
17. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery received by you shall be preserved by you for a period of
time at least equal to the period of time you preserve other records pertaining
to the transfer of
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securities, or one year, whichever is longer, and thereafter shall be delivered
by you to the Company. You shall dispose of unused Letters of Transmittal and
other surplus materials as instructed by the Company.
18. You hereby expressly waive any lien, encumbrance or right of setoff
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed by you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to a fee of $100.00 (One-Hundred Dollars). The Company shall pay at
cost reasonable legal expenses incurred by the Exchange Agent in connection
herewith.
20. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
21. The Company covenants and agrees to indemnify and hold you harmless
in your capacity as Exchange Agent hereunder against any loss, liability, cost
or expense, including reasonable attorneys' fees and expenses arising out of or
in connection with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order, request,
notice, instruction or other instrument or document reasonably believed by you
to be valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Private Notes reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Private Notes; provided, however, that anything in this
Agreement to the contrary notwithstanding, the Company shall not be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of your gross negligence or willful misconduct. In no case
shall the Company be liable under this indemnity with respect to any claim
against you unless the Company shall be notified by you, by letter or cable or
by facsimile which is confirmed by letter, of the written assertion of a claim
against you or of any other action commenced against you, promptly after you
shall have received any such written assertion or notice of commencement of
action. The Company shall be entitled to participate, at its own expense, in the
defense of any such claim or other action, and, if the Company so elects, the
Company may assume the defense of any pending or threatened action against you
in respect of which indemnification may be sought hereunder, in which case the
Company shall not thereafter be responsible for the subsequently-incurred fees
and disbursements of legal counsel for you under this paragraph so long as the
Company shall retain counsel
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reasonably to you to defend such suit; provided, that the Company shall not be
entitled to assume the defense of any such action if the named parties to such
action include both you and the Company and representation of both parties by
the same legal counsel would, in the written opinion of your counsel, be
inappropriate due to actual or potential conflicting interests between you and
the Company. You understand and agree that the Company shall not be liable under
this paragraph for the fees and expenses of more than one legal counsel for you.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service.
23. You shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Private Notes and, upon receipt of a
written approval from the Company, shall deliver or cause to be delivered, in a
timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Private Notes, your check in the amount of
all transfer taxes so payable, and the Company shall reimburse you for the
amount of any and all transfer taxes payable in respect of the exchange of
Private Notes; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of
California applicable to agreements made and to be performed entirely within
such state, and without regard to conflicts of law principles.
25. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and their respective successors and assigns.
Nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement. Without limitation of the foregoing, the
parties hereto expressly agree that no holder of Private Notes or Exchange Notes
shall have any right, benefit or remedy of any nature whatsoever under, or by
reason of, this Agreement.
26. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, and all of which taken together shall
constitute one and the same agreement.
27. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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28. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
29. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company, to:
Ormat Funding Corp.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
President
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxx, Esq. and
Xxxxxx X. Xxxxxxx, Esq.
If to the Exchange Agent, to:
Union Bank of California
000 Xxxxx Xxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000/(000) 000-0000
Telecopy: (000) 000-0000
Attention: Corporate Trust Operations -
Xxxxxx Xxxxxxxxx and Xxxx Xxxxxxx
30. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, paragraphs 17, 19, 21 and 23 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any
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certificates for Notes, funds or property then held by you as Exchange Agent
under this Agreement.
31. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
ORMAT FUNDING CORP.
By:
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
Accepted as of the date
first above written:
UNION BANK OF CALIFORNIA, N.A.,
as Exchange Agent
By:
----------------------------------------
Name: Xxxxx Xxxxxx
Title: [ ]
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EXHIBIT A
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REGISTRATION STATEMENT
EXHIBIT B
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TENDER DOCUMENTS
