EXHIBIT 4.8(c)
$285,000,000
SALTON SEA FUNDING CORPORATION
7.475% Senior Secured Series F Bonds Due November 30, 2018
PURCHASE AGREEMENT
October 7, 1998
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
c/o Credit Suisse First Boston Corporation
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
1. Introductory. Salton Sea Funding Corporation, a
Delaware corporation (the ?Funding Corporation"), proposes,
subject to the terms and conditions stated herein, to issue
and sell to the several initial purchasers named in Schedule
I hereto (the "Purchasers"), U.S.$285,000,000 principal
amount of its 7.475% Senior Secured Series F Bonds Due
November 30, 2018 (the "Securities"), to be issued under a
Trust Indenture dated as of July 21, 1995, as supplemented
by the First Supplemental Indenture dated as of October 18,
1995, the Second Supplemental Indenture dated as of June 20,
1996, the Third Supplemental Indenture dated as of July 29,
1996 and the Fourth Supplemental Indenture to be dated as of
the Closing Date (as hereinafter defined) (as so supplement
ed, the ?Indenture?), each by and between the Funding
Corporation and Chase Manhattan Bank and Trust Company,
National Association, as trustee (the "Trustee"), on a
private placement basis pursuant to an exemption under
Section 4(2) of the United States Securities Act of 1933, as
amended (the "Securities Act"). Payments owed under the
Securities will be guaranteed by Salton Sea Brine Processing
L.P., a California limited partnership ("SSBP"), Salton Sea
Power Generation L.P., a California limited partnership
("SSPG"), Fish Lake Power Company, a Delaware corporation
("Fish Lake"), Salton Sea Power L.L.C., a Delaware limited
liability company ("Power LLC" and, collectively with SSBP,
SSPG and Fish Lake, the "Salton Sea Guarantors"), Vulcan
Power Company, a Delaware corporation ("VPC"), CalEnergy
Operating Corporation, a Delaware corporation ("CEOC"), BN
Geothermal, Inc., a Delaware corporation ("BN/Geothermal"),
San Xxxxxx Energy Company, a California corporation ("San
Xxxxxx"), Conejo Energy Company, a California corporation
("Conejo"), Niguel Energy Company, a California corporation
("Niguel"), Vulcan/BN Geothermal Power Company, a Nevada
general partnership ("Vulcan"), Leathers, L.P., a California
limited partnership ("Leathers"), Xxxxxx, X.X., a California
limited partnership ("Xxxxxx"), Del Ranch, L.P., a
California limited partnership ("Del Ranch"), CalEnergy
Minerals LLC, a Delaware limited liability company
("Minerals LLC"), CE Turbo LLC, a Delaware limited liability
company ("Turbo LLC" and, collectively with VPC, CEOC,
BN/Geothermal, San Xxxxxx, Conejo, Niguel, Vulcan, Leathers,
Elmore, Del Ranch and Minerals LLC, the "Partnership
Guarantors") and Salton Sea Royalty Company, a Delaware
corporation ("SSRC" or the "Royalty Guarantor" and, collec
tively with the Salton Sea Guarantors and the Partnership
Guarantors, the "Guarantors"). Capitalized terms used
herein without being defined herein shall have the meanings
ascribed to such terms in the Indenture (as modified by the
form of Fourth Supplemental Indenture attached as Annex A
hereto). Each of the Funding Corporation and the Guarantors
hereby agrees with the Purchaser as follows:
2. Representations and Warranties of the Funding
Corporation and the Guarantors.
Each of the Funding Corporation and the Guarantors
jointly and severally represents and warrants to, and agrees
with, the Purchasers that:
(a) The Funding Corporation and the Guarantors
have prepared a preliminary offering circular dated
September 28, 1998 (as it may be amended or supplemented,
and together with the letter dated September 28, 1998
included therewith, the "Preliminary Offering Circular") and
a final offering circular dated October 7, 1998 (as it may
be amended or supplemented, the "Offering Circular") relat
ing to the Securities. Copies of the Preliminary Offering
Circular and the Offering Circular have been delivered by
the Funding Corporation and the Guarantors to the
Purchasers. The Preliminary Offering Circular was on the
date thereof accurate in all material respects and did not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; and the Offering Circular is as of its date (and
any amendment or supplement thereto will be as of its date)
accurate in all material respects and does not (and will
not) contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided that the Funding
Corporation and the Guarantors make no representation or
warranty as to information contained in or omitted from the
Preliminary Offering Circular or the Offering Circular in
reliance upon and in conformity with written information
furnished to the Funding Corporation by any Purchaser
through Credit Suisse First Boston Corporation ("CSFBC")
specifically for inclusion therein, it being understood and
agreed that the only such information is that described as
such in Section 7(b) hereof.
(b) The Funding Corporation has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, and
is duly qualified to do business as a foreign corporation,
and is a corporation in good standing, in each jurisdiction
in which its ownership or lease of property or the conduct
of its business requires such qualification (except where
the failure to so qualify would not have a material adverse
effect on the Funding Corporation and the Guarantors, taken
as a whole). Each of SSBP, SSPG, Xxxxxxxx, Xxxxxx and Del
Ranch is a limited partnership duly formed and validly
existing in good standing under the laws of the State of
California, and is duly qualified to do business as a
foreign limited partnership, and is a foreign limited
partnership in good standing, in each jurisdiction in which
its ownership or lease of property or the conduct of its
business requires such qualification (except where the
failure to so qualify would not have a material adverse
effect on the Funding Corporation and the Guarantors, taken
as a whole). Each of CEOC, Fish Lake, SSRC and
BN/Geothermal has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, and is duly qualified to do business
as a foreign corporation, and is a corporation in good
standing, in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires
such qualification (except where the failure to so qualify
would not have a material adverse effect on the Funding
Corporation and the Guarantors, taken as a whole). VPC has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Nevada, and is duly qualified to do business as a foreign
corporation, and is a corporation in good standing, in each
jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification
(except where the failure to so qualify would not have a
material adverse effect on the Funding Corporation and the
Guarantors, taken as a whole). Each of San Xxxxxx, Conejo
and Niguel has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of California, and is duly qualified to do
business as a foreign corporation, and is a corporation in
good standing, in each jurisdiction in which its ownership
or lease of property or the conduct of its business requires
such qualification (except where the failure to so qualify
would not have a material adverse effect on the Funding
Corporation and the Guarantors, taken as a whole). Vulcan
is a general partnership duly formed and validly existing in
good standing under the laws of the State of Nevada, and is
duly qualified to do business as a foreign general
partnership, and is a foreign general partnership in good
standing, in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires
such qualification (except where the failure to so qualify
would not have a material adverse effect on the Funding
Corporation and the Guarantors, taken as a whole). Each of
Power LLC, Minerals LLC and Turbo LLC is a limited liability
company duly formed and validly existing in good standing
under the laws of the State of Delaware, and is duly
qualified to do business as a foreign limited liability
company, and is a foreign limited liability company in good
standing, in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires
such qualification (except where the failure to so qualify
would not have a material adverse effect on the Funding
Corporation and the Guarantors, taken as a whole). The
Funding Corporation and each Guarantor have all necessary
power and authority to own or lease their respective
properties and to conduct the respective businesses in which
they are engaged as described in the Offering Circular. All
of the outstanding shares of capital stock of the Funding
Corporation have been duly authorized and validly issued and
are fully paid and nonassessable and are owned by Magma
Power Company ("Magma"), free and clear of any claim, lien,
encumbrance or agreement, except as contemplated by the
Financing Documents; all of the partnership interests of
each of SSBP and SSPG represent valid partnership interests
in such partnership; all of the general partnership inter
ests in SSBP and SSPG are owned by Salton Sea Power Company
("SSPC"), free and clear of any claim, lien, encumbrance or
agreement except as contemplated by the Financing Documents;
all of the limited partnership interests in SSBP are owned
by Magma, free and clear of any claim, lien, encumbrance or
agreement except as contemplated by the Financing Documents;
all of the limited partnership interests in SSPG are owned
by SSBP, free and clear of any claim, lien, encumbrance or
agreement except as contemplated by the Financing Documents;
99% of the outstanding shares of capital stock of SSPC are
owned by Magma and 1% of such shares are owned by the
Funding Corporation, in each case free and clear of any
claim, lien, encumbrance or agreement except as contemplated
by the Financing Documents; all of the outstanding shares of
capital stock of each of VPC, CEOC, Fish Lake and SSRC have
been duly authorized and validly issued and are fully paid
and nonassessable; 99% of the outstanding shares of capital
stock of each of VPC, CEOC, Fish Lake and SSRC are owned by
Magma and 1% of the outstanding shares of capital stock of
each of VPC, CEOC, Fish Lake and SSRC are owned by the
Funding Corporation, in each case, free and clear of any
claim, lien, encumbrance or agreement except as contemplated
by the Financing Documents; all of the outstanding shares of
capital stock of BN/Geothermal, San Xxxxxx, Conejo and
Niguel have been duly authorized and validly issued and are
fully paid and nonassessable; all of the outstanding shares
of capital stock of BN/Geothermal are owned by VPC, free and
clear of any claim, lien, encumbrance or agreement except as
contemplated by the Financing Documents; all of the
outstanding shares of capital stock of San Xxxxxx, Xxxxxx
and Niguel are owned by CEOC, free and clear of any claim,
lien, encumbrance or agreement except as contemplated by the
Financing Documents; all of the partnership interests in
Vulcan represent valid general partnership interests in
Vulcan; 50% of such partnership interests in Vulcan are
owned by BN/Geothermal and 50% of such partnership interests
are owned by VPC, in each case, free and clear of any claim,
lien, encumbrance or agreement except as contemplated by the
Financing Documents; all of the partnership interests in
each of Leathers, Del Ranch and Xxxxxx represent valid
partnership interests in such partnership; a 40% general
partnership interest and a 10% limited partnership interest
in Leathers is owned by San Xxxxxx, a 40% general
partnership interest in Leathers is owned by CEOC and a 10%
limited partnership interest in Leathers is owned by Xxxxx,
in each case, free and clear of any claim, lien, encumbrance
or agreement except as contemplated by the Financing
Documents; a 40% general partnership interest and a 10%
limited partnership interest in Del Ranch is owned by
Xxxxxx, a 40% general partnership interest in Del Ranch is
owned by CEOC and a 10% limited partnership interest in Del
Ranch is owned by Xxxxx, in each case, free and clear of any
claim, lien, encumbrance or agreement except as contemplated
by the Financing Documents; a 40% general partnership
interest and a 10% general partnership interest in Xxxxxx is
owned by Niguel, a 40% general partnership interest in
Xxxxxx is owned by CEOC and a 10% limited partnership
interest in Xxxxxx is owned by Magma, in each case, free and
clear of any claim, lien, encumbrance or agreement except as
contemplated by the Financing Documents; all of the
membership interests in each of Power LLC, Minerals LLC and
Turbo LLC represent valid membership interests in such
limited liability company; 50% of the membership interests
in Power LLC, Minerals LLC and Turbo LLC are owned by Magma,
free and clear of any claim, lien, encumbrance or agreement
except as contemplated by the Financing Documents; 50% of
the membership interests in Power LLC and Turbo LLC are
owned by XX Xxxxxx Sea Inc. ("CESS"), free and clear of any
claim, lien, encumbrance or agreement except as contemplated
by the Financing Documents; 50% of the membership interests
in Minerals LLC are owned by Salton Sea Minerals Corp.
("SSMC"), free and clear of any claim, lien, encumbrance or
agreement except as contemplated by the Financing Documents;
all of the outstanding shares of capital stock of CESS and
SSMC are owned by Magma, free and clear of any claim, lien,
encumbrance or agreement except as contemplated by the
Financing Documents.
(c) Each of the Funding Corporation and the
Guarantors has all power and authority necessary to execute
and deliver this Agreement and each other Transaction
Document to which it is a party and perform its obligations
hereunder and thereunder; each of this Agreement and the
other Transaction Documents to which the Funding Corporation
or the Guarantors is a party has been or on the Closing Date
(as hereinafter defined) will have been duly authorized,
executed and delivered by such party or parties thereto and
constitutes the legal, valid and binding obligation of such
party or parties, subject to the qualification that the
enforceability of such party's or parties' obligations
hereunder or thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally
and by general principles of equity and except as rights to
indemnity and contribution hereunder may be limited by
federal or state securities laws or principles of public
policy; the execution, delivery and performance by each of
the Funding Corporation and the Guarantors of this
Agreement, the Fourth Supplemental Indenture dated as of the
Closing Date (the "Supplemental Indenture") by and between
the Funding Corporation and the Trustee, the Securities and
the other Transaction Documents to which it is a party and
its compliance with the provisions hereof and thereof will
not breach or (except as contemplated by the Financing
Documents) result in the creation or imposition of any lien,
charge or encumbrance upon any asset which is material to
the Funding Corporation and the Guarantors, taken as a whole
(a "Material Asset"), pursuant to the terms of, or
constitute a breach of, or default under, the partnership
agreement or certificate of limited or general partnership
of SSBP, SSPG, Vulcan, Xxxxxxxx, Xxxxxx or Del Ranch, the
corporate charter or by-laws of the Funding Corporation,
Fish Lake, VPC, CEOC, BN/Geothermal, San Xxxxxx, Conejo,
Niguel or SSRC, the limited liability company agreement or
certificate of limited liability company of Power LLC,
Minerals LLC or Turbo LLC or any agreement, indenture
(including, without limitation, the Indenture) or other in
strument to which the Funding Corporation or the Guarantors
is a party or by which the Funding Corporation or the Guaran
tors is bound (in each case which is material to the Funding
Corporation and the Guarantors, taken as a whole) or to
which any Material Asset is subject, or any law, order,
rule, regulation, judgment or decree of any court or
governmental agency having jurisdiction over the Funding
Corporation or the Guarantors or any Material Asset of the
Funding Corporation or the Guarantors; and, except as
completed on or prior to the Closing Date (as hereinafter
defined) or as required by applicable state securities laws,
no consent, authorization or order of, or filing or
registration by the Funding Corporation or any Guarantor
with, any court, governmental agency or third party is
required in connection with the execution, delivery and
performance of each of this Agreement and the other
Transaction Documents to which the Funding Corporation or
any Guarantor is a party.
(d) The execution, delivery and performance by
each of the Funding Corporation and the Guarantors of this
Agreement and the other Transaction Documents to which it is
a party and its compliance with the provisions hereof and
thereof will not conflict with, result in the creation or
imposition (except as contemplated by the Financing
Documents) of any lien, charge or encumbrance upon any asset
which is material to the business or financial condition of
CalEnergy Company, Inc. ("CalEnergy") or Magma pursuant to
the terms of, or constitute a breach of, or default under,
the corporate charter or by-laws of CalEnergy or Magma or
any agreement, indenture or other instrument material to the
business or financial condition of CalEnergy or Magma and to
which CalEnergy or Magma is a party or by which CalEnergy or
Magma is bound or to which any asset which is material to
the business or financial condition of CalEnergy or Magma is
subject, or any law, order, rule, regulation, judgment or
decree of any court or governmental agency having
jurisdiction over CalEnergy or Magma.
(e) None of the Funding Corporation, Fish Lake,
VPC, CEOC, BN/Geothermal, San Xxxxxx, Conejo, Niguel or SSRC
is in violation of its respective corporate charter or by-
laws. None of Leathers, Elmore, Del Ranch, SSBP or SSPG is
in violation of its respective certificate of limited
partnership or partnership agreement. Vulcan is not in
violation of its certificate of general partnership or
partnership agreement. None of Power LLC, Minerals LLC or
Turbo LLC is in violation of its respective certificate of
limited liability company or limited liability company
agreement. Neither the Funding Corporation nor any
Guarantor (i) is in default, and no event has occurred
which, with notice or lapse of time or both, would con
stitute such a default, in the due performance and xxxxx
xxxxx of any material term, representation, covenant or
condition contained in any lease, license, indenture,
mortgage, deed of trust, note, bank loan or other evidence
of indebtedness or any other agreement, understanding or
instrument to which the Funding Corporation or any Guarantor
is a party or by which the Funding Corporation or any
Guarantor or any property of the Funding Corporation or any
Guarantor may be bound or affected, which default would have
a material adverse effect on the financial condition,
business or results of operations of the Funding Corporation
and the Guarantors, taken as a whole, or (ii) is in
violation of any law, ordinance, governmental rule or
regulation or court decree to which it may be subject, which
violation would have a material adverse effect on the
financial condition, business or results of operations of
any Guarantor, which would in turn be reasonably likely to
have a material adverse effect on the financial condition,
properties, business or results of operations of the
Guarantors, taken as a whole.
(f) Except as described in or contemplated by the
Offering Circular, each Guarantor represents, after due
inquiry, that it (i) has properly obtained each license,
permit, certificate, franchise or other governmental
authorization necessary to the ownership of its property or
to the conduct of its business as described in the Offering
Circular, and (ii) is in compliance with all terms and
conditions of such license, permit, certificate, franchise
or other governmental authorization, except (x) in either
case where the failure to do so would not have a material
adverse effect on the financial condition, business or
results of operations of the Funding Corporation and the
Guarantors, taken as a whole, (y) permits, consents and
approvals that may be required for future drilling or
operating activities which are ordinarily deemed to be
ministerial in nature and which are anticipated to be
obtained in the ordinary course and (z) permits, consents
and approvals for developmental or construction activities
which have not yet been obtained but which have been or will
be applied for in the course of development or construction
and which are anticipated to be obtained in the ordinary
course.
(g) Except as described in or contemplated by the
Offering Circular, each of the Funding Corporation and the
Guarantors holds, as applicable, good and valid title to, or
valid and enforceable leasehold or contractual interests in,
all items of real and personal property which are material
to the business of the Funding Corporation and the
Guarantors, taken as a whole, free and clear of all liens,
encumbrances and claims which would materially interfere
with the conduct of the business of the Funding Corporation
and the Guarantors, taken as a whole, as described in the
Offering Circular. Each of Vulcan, Leathers, Elmore, Del
Ranch, SSBP, SSPG, Fish Lake, Power LLC, Minerals LLC and
Turbo LLC has insurance coverage in such amounts and
covering such risks as is adequate for the conduct of its
business and the value of its properties and which is
consistent with what is customarily carried by similar
companies engaged in similar businesses. Each of the forego
ing insurance policies is valid and in full force and
effect. The Funding Corporation and the Guarantors are
presently conducting their respective businesses as
described in the Offering Circular and in substantial
compliance with all applicable rules, regulations and laws.
(h) Xxxxxxxx & Touche LLP, whose report appears
in the Offering Circular, is and was, during the period cov
ered by such report, independent with respect to the Funding
Corporation and the Guarantors within the meaning of the
Securities Exchange Act of 1934, as amended, and the
applicable rules and regulations thereunder (the "Exchange
Act").
(i) The Supplemental Indenture has been validly
authorized and, when executed by the proper officers of the
Funding Corporation (assuming the due authorization,
execution and delivery thereof by the Trustee) and delivered
by the Funding Corporation, will constitute the legal, valid
and binding obligation of the Funding Corporation, except as
the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights generally and by general principles of equity; the
Securities have been validly authorized and, upon payment
therefor on the Closing Date (as hereinafter defined) as
provided herein, will be validly issued and outstanding, and
will constitute obligations of the Funding Corporation
entitled to the benefits of the Indenture, except as the
enforceability thereof may be limited by bankruptcy, insol
vency, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors'
rights generally and by general principles of equity; the
summary descriptions contained in the Offering Circular of
the Securities, the Indenture and the other Financing Docu
ments conform in all material respect to these documents.
(j) This Agreement has been duly authorized, exe
cuted and delivered by the Funding Corporation and the
Guarantors.
(k) Each Financing Document to which the Funding
Corporation is a party (other than this Agreement, the
Supplemental Indenture and the Securities) has been duly
authorized, executed and delivered by the Funding Corpo
ration and, assuming due authorization, execution and
delivery by the other Persons party thereto (other than such
Persons which are Guarantors or Affiliates thereof), consti
tutes the legal, valid and binding agreement of the Funding
Corporation, enforceable in accordance with its terms,
except as enforceability thereof may be subject to bank
ruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally and to general principles of
equity.
(l) Each Financing Document to which any of the
Guarantors is a party (other than this Agreement) has been
duly authorized, executed and delivered by the Guarantors
party thereto and, assuming due authorization, execution and
delivery by the other Persons party thereto (other than such
Persons which are the Funding Corporation, other Guarantors
or Affiliates thereof), constitutes the legal, valid and
binding agreement of the Guarantors party thereto, enforce
able in accordance with its terms, except as enforceability
thereof may be subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and to
general principles of equity.
(m) Each Project Document to which any of the
Guarantors is a party has been duly authorized, executed and
delivered by the Guarantors party thereto and, assuming due
authorization, execution and delivery by the other parties
thereto which are not Guarantors or Affiliates thereof,
constitutes a legal, valid and binding agreement of such
Guarantor, enforceable against such Guarantor in accordance
with its respective terms, except as enforceability thereof
may be subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally and to general principles of
equity.
(n) The execution and delivery of each of the
Security Documents to which the Funding Corporation or any
of the Guarantors is a party or will be a party on the
Closing Date (as hereinafter defined) is or will be
effective to create in favor of the Collateral Agent for the
benefit of the Secured Parties and, in certain
circumstances, the Funding Corporation, as security for the
payment and performance of the obligations secured thereby,
a valid and enforceable security interest in the Collateral
covered or purported to be covered thereby. Such security
interests granted by the Funding Corporation, SSBP, SSPG,
Fish Lake, CEOC, VPC, BN/Geothermal, San Xxxxxx, Conejo,
Niguel, Vulcan, Leathers, Elmore, Del Ranch and SSRC have
the priority purported to be created by such Security
Documents. All filings and recordings necessary to protect,
preserve and perfect such security interests have been made
and are in full force and effect. Upon recordation of each
Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing, dated as of the Closing Date, entered into
by Power LLC, Minerals LLC and Turbo LLC (collectively, the
"New Deeds of Trust") and filing of the UCC-1 financing
statements naming Power LLC, Minerals LLC and Turbo LLC as
debtors and the Collateral Agent as secured party (the "Fi
nancing Statements"), such security interests granted by
such Guarantors will have the priority purported to be
created by such Security Documents. Each New Deed of Trust
is, or on the Closing Date will be, in appropriate form for
recording as a mortgage of real estate and for filing as a
fixture filing financing statement to protect, preserve and
perfect the liens and security interests created or to be
created by such New Deed of Trust. The Financing Statements
on the Closing Date will be in appropriate form for filing
(including the description of the Collateral set forth
therein) in each office and in each jurisdiction where re
quired to create and perfect the lien and security interest
described above.
(o) Magma, the Funding Corporation, SSPC, CESS,
SSMC and the Guarantors will own all of the Funding
Corporation Collateral and the Collateral on the Closing
Date (as hereinafter defined), free and clear of any Liens
other than Permitted Liens.
(p) Except as described in the Offering Circular,
there is no litigation or proceeding pending before or by
any court or governmental agency, authority or body, or any
arbitrator or, to the knowledge of the Funding Corporation
or any Guarantor, threatened, to which the Funding
Corporation or any Guarantor is a party or of which any
Material Asset of the Funding Corporation or any Guarantor
is the subject, including, without limitation, any audit by
the Internal Revenue Service of the federal income tax re
turns of the Funding Corporation or any Guarantor, which, if
an adverse decision were reached, would be likely to have a
material adverse effect on (x) the financial condition, busi
ness or results of operations of the Funding Corporation and
the Guarantors, taken as a whole, or (y) the ability of any
of the Funding Corporation or any Guarantor to perform in
any material respect their respective obligations under the
Transaction Documents to which any of them is a party.
(q) The financial statements (including the
related notes) included on pages F-1 through F-58 in the
Offering Circular present fairly the financial condition,
results of operations and changes in financial position of
the entities purported to be shown thereby, at the dates and
for the periods indicated, and, except as otherwise
described in the Offering Circular, have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved, and the capitalization of the Funding Corporation
and the Guarantors, as set forth in the column labeled
"Actual" under the caption "Capitalization" in the Offering
Circular, is accurately described as of the date presented
therein.
(r) Except as disclosed in the Offering Circular,
since the date of the latest audited financial statements
included in the Offering Circular there has been no material
adverse change, nor any development or event involving a
prospective material adverse change, in the financial
condition, business or results of operations of the Funding
Corporation and the Guarantors, taken as a whole.
(s) The factual information provided by the Fund
ing Corporation and the Guarantors to Xxxxx Xxxxxx, Inc.
(the "New Project Independent Engineer"), GeothermEx, Inc.
(the "Geothermal Resource Consultant"), Xxxxxxx Energy
Services (the "Independent Power Market Consultant") and
Resource Strategies International (the "Independent Zinc
Market Consultant") in the preparation of their reports set
forth at Appendices B, C, D and E to the Offering Circular
(which factual information is referenced in such reports)
was provided in good faith; provided that the foregoing does
not imply or express any representation or warranty by the
Funding Corporation and the Guarantors as to the accuracy of
the projections or conclusions contained in such reports and
does not constitute any obligation to update such reports.
(t) No labor problem or disturbance with the
persons employed in connection with the Projects exists or,
to the knowledge of the Funding Corporation or any
Guarantor, is threatened which might reasonably be expected
to have a material adverse effect on the business, financial
condition or results of operations of the Funding
Corporation and the Guarantors, taken as a whole.
(u) Neither the Funding Corporation nor any
Guarantor nor any of their respective affiliates nor
(assuming the accuracy of the representations of the
Purchasers set forth herein) any person acting on their
behalf has made offers or sales of securities under
circumstances that would require the registration of the
Securities under the Securities Act.
(v) The Securities meet the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.
(w) Neither the Funding Corporation nor any
Guarantor is an open-end investment company, unit investment
trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United
States Investment Company Act of 1940, as amended (the
"Investment Company Act"), nor is it a closed-end investment
company required to be registered, but not registered,
thereunder; and neither the Funding Corporation nor any
Guarantor is and, after giving effect to the offering and
sale of the Securities and the application of the proceeds
thereof as described in the Offering Circular, neither the
Funding Corporation nor any Guarantor will be an "investment
company" as defined in the Investment Company Act.
(x) No securities of the same class (within the
meaning of Rule 144A(d)(3) under the Securities Act) as the
Securities are listed on any national securities exchange
registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(y) Assuming the accuracy of the representations
of the Purchaser herein, the offer and sale of the
Securities in the manner contemplated by this Agreement will
be exempt from the registration requirements of the Securi
ties Act by reason of Section 4(2) thereof, Regulation D
thereunder and Regulation S thereunder; and it is not
necessary to qualify an indenture in respect of the Securi
ties under the United States Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
(z) Assuming the accuracy of the representations
of the Purchaser herein, neither the Funding Corporation or
any Guarantor nor any of their affiliates or any person
acting on their behalf (i) has, within the six-month period
prior to the date hereof, offered or sold in the United
States or to any U.S. person (as such terms are defined in
Regulation S under the Securities Act) the Securities or any
security of the same class or series as the Securities
(excluding the Exchange Securities) or (ii) has offered or
will offer or sell the Securities (A) in the United States
by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the
Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S ("Regulation
S") under the Securities Act, by means of any directed sell
ing efforts within the meaning of Rule 902(b) of Regulation
S. Assuming the accuracy of the representations of the
Purchaser herein, the Funding Corporation, the Guarantors
and any person acting on their behalf have complied and will
comply with the offering restrictions requirement of
Regulation S.
(aa) The proceeds to the Funding Corporation from
the offering of the Securities will not be used to purchase
or carry any security, except as contemplated in the
Offering Circular.
(bb) Each of the Salton Sea Projects and
Partnership Projects (other than the Zinc Project) is a
"Qualifying Small Power Production Facility," as such term
is defined pursuant to the Public Utility Regulatory Poli
cies Act of 1978, as amended. None of the Guarantors or the
Funding Corporation, will, solely as a result of the
participation by the parties separately or as a group in the
transactions contemplated by the Financing Documents and the
ownership, use or operation of the Projects, be subject to
regulation by any Governmental Authority as a "public
utility," an "electric utility," an "electric utility
holding company," a "public utility holding company," a
"holding company" or an "electrical corporation" or a
subsidiary or affiliate of any of the foregoing under any
Law (including, without limitation, rules and regulations of
the California State Energy Resources Conservation and Devel
opment Commission, the Public Utility Holding Company Act of
1935, the Federal Power Act of 1920 and the Public Utility
Regulatory Policies Act of 1978, each as amended); provided
that either Turbo LLC or Power LLC may elect to become an
Exempt Wholesale Generator and thereby become a "public
utility" subject to regulation by FERC and the FPA.
(cc) None of the Funding Corporation or any of
the Guarantors is a "party in interest" or a "disqualified
person" (within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended) with respect to any
"employee benefit plan" (within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as
amended).
(dd) The proceeds from the sale of Securities
will be loaned by the Funding Corporation to the Salton Sea
Guarantors and the Partnership Guarantors and utilized by
the Salton Sea Guarantors and the Partnership Guarantors as
described under the section of the Offering Circular titled
"Use of Proceeds."
3. Purchase, Sale and Delivery of Offered Securities.
On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Funding Corporation agrees
to sell to the Purchasers, and the Purchasers agree,
severally and not jointly, to purchase from the Funding
Corporation, at a purchase price of 99.125% of the principal
amount of the Securities, plus accrued interest from October
13, 1998 to the Closing Date (as hereinafter defined), the
respective principal amounts of the Securities set forth
opposite the names of the several Purchasers in Schedule I
hereto. The Funding Corporation will deliver against
payment of the purchase price the Securities in the form of
one or more permanent global Securities in registered form
without interest coupons (the "Global Securities"), which
will be deposited with the Trustee, as custodian for The
Depository Trust Company ("DTC"), and registered in the name
of Cede & Co., as nominee for DTC. Interests in any perma
nent Global Securities will be held only in book-entry form,
except in the limited circumstances described in the
Offering Circular.
Payment for the Securities shall be made by the
Purchasers in federal (same day) funds by official check or
checks or wire transfer to an account in New York previously
designated to CSFBC by the Funding Corporation drawn to the
order of the Funding Corporation, at the office of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000 at 10:00 A.M., (New York time), on October
13, 1998 or at such other date and time not later than seven
full business days thereafter as CSFBC and the Funding
Corporation determine, such time being herein referred to as
the "Closing Date", against delivery to the Trustee as
custodian for DTC of Global Securities representing all of
the Securities. The Global Securities will be made
available for checking at the above office of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP at least 24 hours prior to the
Closing Date.
Notwithstanding the foregoing, any Securities sold
to Institutional Accredited Investors (as hereinafter
defined) pursuant to Section 4(e) shall be issued in
definitive physical certificates and shall bear the legend
relating thereto set forth under "TRANSFER RESTRICTIONS" in
the Offering Circular, but shall be paid for in the same
manner as any Securities to be purchased by the Purchasers
hereunder and to be offered and sold by them in reliance on
Rule 144A under the Securities Act.
4. Representations by Purchasers; Resale by Purchaser.
(a) Each Purchaser severally represents and
warrants to the Funding Corporation that it is an ?accred
ited investor? within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that
the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except
in accordance with Regulation S or pursuant to an exemption
from the registration requirements of the Securities Act.
Each Purchaser severally represents and agrees that it has
offered and sold the Securities, and will offer and sell the
Securities, only in accordance with Rule 903, Rule 144A
under the Securities Act (?Rule 144A?) or to a limited
number of Institutional Accredited Investors in accordance
with clause (e)(ii) of this Section 4. Accordingly, neither
such Purchaser nor its affiliates, nor any persons acting on
its or their behalf, have engaged or will engage in any
directed selling efforts with respect to the Securities, and
such Purchaser, its affiliates and all persons acting on its
or their behalf have complied and will comply with the
offering restrictions requirement of Regulation S. Each
Purchaser severally agrees that, at or prior to confirmation
of sale of the Securities, other than a sale pursuant to
Rule 144A or a sale to an Institutional Accredited Investor
in accordance with clause (e)(ii) of this Section 4, such
Purchaser will have sent to each distributor, dealer or
person receiving a selling concession, fee or other
remuneration that purchases the Securities from it a
confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933
(the "Securities Act") and may not be offered or
sold within the United States or to, or for the
account or benefit of, U.S. persons as part of
their distribution at any time, except in either
case in accordance with Regulation S (or Rule
144A, if available) under the Securities Act.
Terms used above have the meanings given to them
by Regulation S."
Terms used in this subsection (b) have the meanings given to
them by Regulation S.
(c) Each Purchaser severally agrees that it and
each of its affiliates has not entered and will not enter
into any contractual arrangement with respect to the
distribution of the Securities except for any such arrange
ments entered into with the prior written consent of the
Funding Corporation.
(d) Each Purchaser severally agrees that it and
each of its affiliates has not offered or sold the
Securities and will not offer or sell the Securities in the
United States by means of any form of general solicitation
or general advertising within the meaning of Rule 502(c)
under the Securities Act, including, but not limited to
(i) any advertisement, article, notice or other communica
tion published in any newspaper, magazine or similar media
or broadcast over television or radio, or (ii) any seminar
or meeting whose attendees have been invited by any general
solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance
on Rule 144A of any of the Securities, to deliver either
with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the
resale of such Securities has been made in reliance upon the
exemption from the registration requirements of the
Securities Act provided by Rule 144A.
(e) Each Purchaser severally agrees that it will
offer to sell the Securities only to, and will solicit
offers to buy the Securities from, persons who in purchasing
the Securities will be deemed to have represented and agreed
that such person (i)(A) is a Qualified Institutional Buyer,
(B) is aware that the sale to it is being made in reliance
on Rule 144A and (C) is acquiring such Securities for its
own account or for the account of a Qualified Institutional
Buyer, (ii) is (A) an institutional "accredited investor"
(as defined in Rule 501 (a)(1), (2), (3) or (7) under the
Securities Act) and (B) concurrently with its purchase
executing and delivering the purchaser's letter containing
certain representations and agreements in substantially the
form attached as Appendix F to the Offering Circular or
(iii) is not a U.S. person and is purchasing such Securities
in an offshore transaction pursuant to Regulation S.
5. Certain Agreements of the Funding Corporation and
the Guarantors. The Funding Corporation and the Guarantors
agree with the several Purchasers that:
(a) The Funding Corporation and the Guarantors
will advise CSFBC promptly of any proposal to amend or
supplement the Offering Circular and will not effect such
amendment or supplementation without the CSFBC's consent.
If, at any time prior to the completion of the resale of the
Securities by the Purchasers, any event occurs as a result
of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circum
stances under which they were made, not misleading, the
Funding Corporation and the Guarantors promptly will notify
CSFBC of such event and promptly will prepare, at their own
expense, an amendment or supplement which will correct such
statement or omission. Neither CSFBC's consent to, nor the
Purchasers' delivery to offerees or investors of, any such
amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 6.
(b) The Funding Corporation and the Guarantors
will furnish to CSFBC copies of the Preliminary Offering
Circular, the Offering Circular and all amendments and
supplements to such documents, in each case as soon as
available and in such quantities as CSFBC requests, and the
Funding Corporation will furnish to CSFBC on the date hereof
three copies of the Offering Circular. At any time when the
Funding Corporation is not subject to Section 13 or 15(d) of
the Exchange Act, the Funding Corporation will promptly
furnish or cause to be furnished to the Purchasers and, upon
request of holders and prospective purchasers of the Securi
ties, to such holders and purchasers, copies of the informa
tion required to be delivered to holders and prospective
purchasers of the Securities pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in
connection with resales by such holders of the Securities.
The Funding Corporation and the Guarantors will pay the
expenses of printing and distributing to the Purchasers and
such holders and purchasers all such documents.
(c) The Funding Corporation and the Guarantors
will arrange for the qualification of the Securities for
sale and the determination of their eligibility for invest
ment under the laws of such jurisdictions in the United
States and Canada as CSFBC designates and will continue such
qualifications in effect so long as required for the resale
of the Securities by the Purchasers, provided that the
Funding Corporation and the Guarantors will not be required
to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction.
(d) During the period of five years hereafter,
the Funding Corporation will furnish to the Purchasers, as
soon as available after the end of each fiscal year, a copy
of its annual audited financial statements and the annual
audited financial statements of the Guarantors (on a
combined basis).
(e) During the period of two years after the
Closing Date, the Funding Corporation will, upon request,
furnish to the Purchasers and any holder or beneficial owner
of Securities a copy of the restrictions on transfer
applicable to the Securities.
(f) During the period of two years after the
Closing Date, the Funding Corporation and the Guarantors
will not, and will not permit any of their affiliates (as
defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been reacquired by any of them.
(g) During the period of two years after the
Closing Date, the Funding Corporation and the Guarantors
will not be or become an open-end investment company, unit
investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the
Investment Company Act, and none of the Funding Corporation
nor any of the Guarantors is or will become a closed-end
investment company required to be registered, but not regis
tered, under the Investment Company Act.
(h) The Funding Corporation and the Guarantors
will pay all expenses incidental to the performance of their
obligations under this Agreement, the Indenture and the
other Financing Documents, including, without limitation (i)
the fees and expenses of the Trustee and its professional
advisers, and (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial
delivery of the Securities, the preparation and printing of
this Agreement, the Securities, the Indenture, the
Preliminary Offering Circular, the Offering Circular and
amendments and supplements thereto, and any other document
relating to the issuance, offer, sale and delivery of the
Securities. The Funding Corporation and the Guarantors will
also pay or reimburse the Purchasers (to the extent incurred
by them) for any expenses actually and reasonably incurred
by the Purchasers in connection with the purchase and sale
of the Securities, including, without limitation, all out-
of-pocket expenses incurred by the Purchasers (such as, but
not limited to, travel, hotel, telephone and telecopy
charges), all fees and disbursements of counsel to the
Purchasers, expenses related to qualification of the Securi
ties for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the
printing of memoranda relating thereto, up to $1,000 ("blue
sky fees"), fees charged by investment rating agencies for
the rating of the Securities ("rating agency fees"), all
travel expenses of the Purchasers' and the Funding
Corporation's or the Guarantors' officers and employees and
any other expenses of the Purchasers and the Funding
Corporation or the Guarantors in connection with attending
or hosting meetings with prospective purchasers of the
Securities from the Purchasers and for expenses incurred in
distributing Preliminary Offering Circulars and Offering
Circulars (including any amendments and supplements thereto)
to the Purchasers and prospective purchasers of the
Securities from the Purchasers; provided that such fees and
expenses (other than rating agency fees, blue sky fees and
fees and disbursements of counsel to the Purchasers) are
estimated to be approximately $175,000 and will be subject
to audit and verification by the Funding Corporation and the
Guarantors that such fees and expenses were reasonably
incurred in connection with the issuance and offering of the
Securities.
(i) In connection with the offering of the
Securities, until the earlier of (x) 180 days following the
Closing Date and (y) the date on which CSFBC shall have
notified the Funding Corporation of the completion of the
resale of the Securities, neither the Funding Corporation,
the Guarantors nor any of their affiliates has or will,
either alone or with one or more other persons, bid for or
purchase for any account in which it or any of its
affiliates has a beneficial interest any Securities or
attempt to induce any person to purchase any Securities; and
neither the Funding Corporation, the Guarantors nor any of
their affiliates will make bids or purchases for the purpose
of creating actual, or apparent, active trading in, or of
raising the price of, the Securities.
(j) The Funding Corporation will not, until 30
days following the Closing Date, without the prior written
consent of CSFBC, pursuant to Rule 144A, Regulation S or an
offering registered under the Securities Act, offer, sell or
contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities
issued or guaranteed by the Funding Corporation or any of
the Guarantors (other than the Securities).
6. Conditions of the Obligations of the Purchaser.
The obligations of the Purchasers to purchase and pay for
the Securities will be subject to the accuracy of the repre
sentations and warranties made by the Funding Corporation
and the Guarantors herein, to the accuracy of the statements
of officers of the Funding Corporation and the Guarantors
made pursuant to the provisions hereof, to the performance
by the Funding Corporation and the Guarantors of their
obligations hereunder and to the following additional
conditions precedent:
(a) The Purchasers shall have received a letter,
dated the date of this Agreement, of Deloitte & Touche LLP
in form and substance reasonably satisfactory to CSFBC con
cerning the financial information with respect to the
Funding Corporation and the Guarantors set forth in the
Offering Circular.
(b) Subsequent to the execution and delivery of
this Agreement, there shall not have occurred (i) any
change, or any development or event involving a prospective
change, in or affecting the financial condition, business or
results of operations of the Funding Corporation or any of
the Guarantors which, in the reasonable judgment of the
Purchasers, materially impairs the investment quality of the
Securities or is material and adverse and makes it
impractical or inadvisable to proceed with the offering of
the Securities; (ii) any downgrading in the rating of the
Securities, the Series A Securities, the Series B
Securities, the Series C Securities, the Series D Securities
or the Series E Securities by Standard & Poor's Ratings
Group or Xxxxx'x Investors Service, Inc. or any public
announcement that such organization has under surveillance
or review its rating of the Securities, the Series A
Securities, the Series B Securities, the Series C
Securities, the Series D Securities or the Series E
Securities (other than an announcement with positive implica
tions of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension
or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for
trading on such exchange or any suspension of trading of any
securities of CalEnergy on any exchange or in the over the
counter market; (iv) any banking moratorium declared by U.S.
federal or New York authorities; (v) any outbreak or
escalation of hostilities in which the United States is
involved, any declaration of war by the United States
Congress or any other change in financial markets or
substantial national calamity or emergency if, in the
judgment of the Purchasers, the effect of any such outbreak,
escalation, declaration, change, calamity or emergency makes
it impractical or inadvisable to proceed with completion of
the sale of and payment for the Securities; or (vi) any
invalidation of Rule 144A or Regulation S by any court or
any amendment or proposed amendment of any rule or
regulation under the Securities Act or the Exchange Act by
the Commission which in the Purchasers' judgment would
materially impair the Purchasers' ability to purchase, hold
or effect resales of the Securities as contemplated hereby
or the ability of holders of the Securities to effect
resales as currently contemplated by Rule 144A and
Regulation S.
(c) The representations and warranties of each of
the Funding Corporation and the Guarantors contained herein
and in each Transaction Document to which the Funding
Corporation or any of the Guarantors is party shall be true
and correct on and as of the Closing Date with the same
effect as though such representations and warranties had
been made on and as of the Closing Date, each of the Funding
Corporation and the Guarantors shall have complied with all
agreements and satisfied all conditions on its part to be
performed or satisfied hereunder or thereunder at or prior
to the Closing Date and, subsequent to the respective dates
of the most recent financial statements in the Offering
Circular, there shall have been no material adverse change
in the financial position or results of operation of the
Funding Corporation and the Guarantors, taken as a whole, as
evidenced by a certificate, dated the Closing Date, of the
President or any Vice-President and a principal financial or
accounting officer of the Funding Corporation and the
Guarantors.
(d) CalEnergy shall have duly authorized,
executed and delivered the Equity Commitment Agreement, in
such form as shall be satisfactory to the Purchasers and
their counsel, and the Equity Commitment Agreement shall
constitute a valid and legally binding agreement of
CalEnergy, enforceable in accordance with its terms, except
as enforceability thereof may be subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws relating to or affecting creditors' rights
generally and to general principles of equity.
(e) On or prior to the Closing Date, the Funding
Corporation and the Guarantors, as applicable, shall have
entered into the Supplemental Indenture, the Amended and
Restated Depositary Agreement, Amendment No. 2 to the
Intercreditor Agreement, the Securities Account Control
Agreement, the Securities, the Series F Registration Rights
Agreement, the Second Amended and Restated Debt Service
Reserve LOC Reimbursement Agreement, the Amended and
Restated Salton Sea Credit Agreement, the Second Amended and
Restated Partnership Credit Agreement, the Amended and
Restated Salton Sea Secured Guarantee, the Second Amended
and Restated Partnership Secured Limited Guarantee and such
additional Financing Documents and amendments, modifications
or supplements thereto as may be reasonably required by the
Purchasers in connection with the issuance of Securities,
all in such form as shall be reasonably satisfactory to the
Purchasers and their counsel; and such Financing Documents
and such amendments, modifications or supplements shall have
been fully executed and delivered and shall remain in full
force and effect on the Closing Date; and all conditions
precedent under the Second Amended and Restated Debt Service
Reserve LOC Reimbursement Agreement to the issuance of one
or more Debt Service Reserve Letters of Credit in an
aggregate face amount equal to the Debt Service Reserve Fund
Required Balance (as defined in the Depositary Agreement) as
of the Closing Date shall have been satisfied on the Closing
Date and the Funding Corporation shall have delivered to the
Purchasers evidence reasonably satisfactory to the
Purchasers that the Debt Service Reserve Letter of Credit
currently anticipated to be required to be delivered to the
Depository Agent in order to fund the Debt Service Reserve
Fund at the Debt Service Reserve Fund Required Balance (as
defined in the Depositary Agreement) has been obtained and
is in existence on the Closing Date or other arrangements
with respect to such obligations acceptable to the Pur
chasers shall have been made.
(f) The Purchasers shall have received copies of
all legal opinions rendered in connection with the
transactions contemplated by the documents listed in
paragraph (e) above and reliance letters in respect thereof.
(g) On or prior to the Closing Date, the Funding
Corporation or the Guarantors shall have delivered to the
Purchasers evidence satisfactory to the Purchasers and their
counsel that a title policy or policies in the aggregate
amount of $100,000,000 insuring the New Deeds of Trust has
been obtained, each of which title policies shall be
satisfactory in form and substance to the Purchasers and
their counsel.
(h) On or prior to the Closing Date, each New
Deed of Trust shall have been delivered to Commonwealth Land
Title Company (the "Title Company") for due recordation as a
mortgage of real estate, and any required filings with
respect to personal property and fixtures subject to the
liens of such New Deed of Trust shall have been delivered to
the Title Company for filing, in each place in which such
recording or filing is required to protect, preserve and
perfect the liens of such New Deed of Trust as a valid and
enforceable lien on the real estate and as a valid and
enforceable security interest in the personal property and
fixtures covered or purported to be covered by such New Deed
of Trust, with the priority purported to be created thereby,
in each case subject only to Permitted Liens, and except for
such recordation or filing no further action shall be re
quired to create, preserve or perfect such liens and secu
rity interests. The Financing Statements and such other UCC-
1 financing statements shall have been delivered for filing,
recordation and/or registration in each office and in each
jurisdiction where required to create and perfect a valid
and enforceable security interest in the Collateral and the
Funding Corporation Collateral covered or purported to be
covered by the Security Documents, with the priority
purported to be created thereby. All taxes and recording
and filing fees required to be paid with respect to the
execution, recording or filing of the New Deeds of Trust and
the Financing Statements and such other UCC-1 financing
statements shall have been paid or provided for. All
Collateral and Funding Corporation Collateral shall be
subject to no Liens other than Permitted Liens.
(i) On or prior to the Closing Date, each of the
Project Documents, in the forms as previously delivered to
the Purchasers or their counsel and as they exist as
executed versions as of the date of this Agreement or in
such forms as shall be reasonably satisfactory in form and
substance to the Purchasers and their counsel, shall have
been executed and delivered, shall remain in full force and
effect, no default shall have occurred thereunder, all
conditions precedent thereunder shall be satisfied and there
shall not have occurred any event of force majeure
thereunder as of the Closing Date.
(j) The Purchasers shall have received a letter,
dated the Closing Date, of Deloitte & Touche LLP that meets
the requirements of subsection (a) of this Section 6, except
that the specified date referred to in such subsection will
be a date not more than five days prior to the Closing Date
for the purposes of this subsection.
(k) The New Project Independent Engineer shall
have consented to the references to it in the Offering
Circular and the use of the Independent Engineer's Report
(as defined in the Offering Circular) prepared by the New
Project Independent Engineer and contained in Appendix B to
the Offering Circular; and since the date of the Independent
Engineer's Report, no event affecting the Independent
Engineer's Report or the matters referred to therein shall
have occurred (A) which shall make untrue or incorrect in
any material respect, as of the Closing Date, any
information or statement contained in the Independent
Engineer's Report or in the Offering Circular relating to
matters referred to in the Independent Engineer's Report, or
(B) which shall not be reflected in the Offering Circular
but should be reflected therein in order to make the
statements and information contained in the Independent Engi
xxxx'x Report, or in the Offering Circular relating to
matters referred to in the Independent Engineer's Report, in
light of the circumstances under which they were made, not
misleading, as evidenced by a certificate reasonably
satisfactory to the Purchasers of an authorized officer of
the New Project Independent Engineer, dated the Closing
Date.
(l) The Geothermal Resource Consultant shall have
consented to the references to it in the Offering Circular
and the use of the Geothermal Resource Consultant's Report
(as defined in the Offering Circular) prepared by the
Geothermal Resource Consultant and contained in Appendix D
to the Offering Circular; and since the date of the
Geothermal Resource Consultant's Report, no event affecting
the Geothermal Resource Consultant's Report or the matters
referred to therein shall have occurred (A) which shall make
untrue or incorrect in any material respect, as of the
Closing Date, any information or statement contained in the
Geothermal Resource Consultant's Report or in the Offering
Circular relating to matters referred to in the Geothermal
Resource Consultant's Report, or (B) which shall not be
reflected in the Offering Circular but should be reflected
therein in order to make the statements and information
contained in the Geothermal Resource Consultant's Report, or
in the Offering Circular relating to matters referred to in
the Geothermal Resource Consultant's Report, in light of the
circumstances under which they were made, not misleading, as
evidenced by a certificate reasonably satisfactory to the
Purchasers of an authorized officer of the Geothermal
Resource Consultant, dated the Closing Date.
(m) The Independent Power Market Consultant shall
have consented to the references to it in the Offering
Circular and the use of the Independent Power Market
Consultant's Report (as defined in the Offering Circular)
prepared by the Independent Power Market Consultant and
contained in Appendix C to the Offering Circular; and since
the date of the Independent Power Market Consultant's
Report, no event affecting the Independent Power Market
Consultant's Report or the matters referred to therein shall
have occurred (A) which shall make untrue or incorrect in
any material respect, as of the Closing Date, any
information or statement contained in the Independent Power
Market Consultant's Report or in the Offering Circular
relating to matters referred to in the Independent Power
Market Consultant's Report, or (B) which shall not be
reflected in the Offering Circular but should be reflected
therein in order to make the statements and information
contained in the Independent Power Market Consultant's
Report, or in the Offering Circular relating to matters
referred to in the Independent Power Market Consultant's
Report, in light of the circumstances under which they were
made, not misleading, as evidenced by a certificate
reasonably satisfactory to the Purchasers of an authorized
officer of the Independent Power Market Consultant, dated
the Closing Date.
(n) The Independent Zinc Market Consultant shall
have consented to the references to it in the Offering
Circular and the use of the Independent Zinc Market
Consultant's Report (as defined in the Offering Circular)
prepared by the Independent Zinc Market Consultant and
contained in Appendix F to the Offering Circular; and since
the date of the Independent Zinc Market Consultant's Report,
no event affecting the Independent Zinc Market Consultant's
Report or the matters referred to therein shall have
occurred (A) which shall make untrue or incorrect in any
material respect, as of the Closing Date, any information or
statement contained in the Independent Zinc Market
Consultant's Report or in the Offering Circular relating to
matters referred to in the Independent Zinc Market
Consultant's Report, or (B) which shall not be reflected in
the Offering Circular but should be reflected therein in
order to make the statements and information contained in
the Independent Zinc Market Consultant's Report, or in the
Offering Circular relating to matters referred to in the
Independent Zinc Market Consultant's Report, in light of the
circumstances under which they were made, not misleading, as
evidenced by a certificate reasonably satisfactory to the
Purchasers of an authorized officer of the Independent Zinc
Market Consultant, dated the Closing Date.
(o) The Purchasers shall have received a
certificate, dated the Closing Date, of any President or
Vice President of the Funding Corporation and the
Guarantors, certifying, based on customary assumptions, that
there are sufficient geothermal resources to operate the
Salton Sea Projects and the Partnership Projects through the
Final Maturity Date.
(p) The Purchasers shall have received opinions,
dated the Closing Date, of Xxxxxxx Xxxx & Xxxxxxxxx, Xxxxxx
& Xxxxxxx, Xxxxxx Xxxxxx & Xxxxxxx and Xxxxx & Case, each
counsel for the Funding Corporation and the Guarantors, and
Xxxxxx X. XxXxxxxx, Esq., Executive Vice President and
General Counsel for the Funding Corporation and the
Guarantors, to the effect as set forth in Annexes B, C, D, E
and F hereto and reasonably satisfactory in all respects to
CSFBC and its counsel.
(q) The Purchasers shall have received an
opinion, dated the Closing Date, from Xxxxxxx & Xxxxxxx,
counsel to the Trustee, the Collateral Agent and the
Depositary Agent, in respect of the enforceability of the
Financing Documents to which the Trustee, the Collateral
Agent and the Depositary Agent are parties and the
authentication of the Securities by the Trustee, which
opinion shall be satisfactory in all respects to CSFBC and
its counsel.
(r) The Purchasers shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Purchasers, such opinion or opinions as CSFBC may reasonably
request, dated the Closing Date, with respect to the
Offering Circular, and the Funding Corporation and the
Guarantors shall have furnished to such counsel such
documents as they request for the purpose of enabling them
to pass upon such matters.
(s) The Purchasers shall have received, in form
and substance satisfactory to CSFBC, copies of such
opinions, certificates, letters and documents as CSFBC
reasonably requests.
7. Indemnification and Contribution.
(a) The Funding Corporation and the Guarantors
will indemnify and hold harmless each Purchaser against any
losses, claims, damages or liabilities, joint or several, to
which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any breach
of any of the representations and warranties of the Funding
Corporation and the Guarantors contained herein or any
untrue statement or alleged untrue statement of any material
fact contained in the Offering Circular, or any amendment or
supplement thereto, or any related Preliminary Offering
Circular, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection
with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred;
provided, however, that the Funding Corporation and the
Guarantors will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of
such documents in reliance upon and in conformity with
written information furnished to the Funding Corporation by
any Purchaser through CSFBC specifically for use therein, it
being understood and agreed that the only such information
consists of the information described as such in
subsection (b) below; and provided, further that, with
respect to any untrue statement or omission in the
Preliminary Offering Circular, this indemnity agreement
shall not inure to the benefit of any Purchaser on account
of any loss, claim, damage, liability or action arising from
the sale of any Securities to any person by such Purchaser
if such Purchaser failed to send or give a copy of the
Offering Circular, as the same may be amended or supple
mented, to that person within the time required by the
Securities Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact in the Preliminary Offering Circu
lar was corrected in the Offering Circular and the Offering
Circular was made available to such Purchaser prior to the
sale of the Securities.
(b) Each Purchaser will severally and not jointly
indemnify and hold harmless the Funding Corporation and the
Guarantors against any losses, claims, damages or
liabilities to which the Funding Corporation and the
Guarantors may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Offering Circular, or any amendment or supplement thereto,
or any related preliminary offering circular, or arise out
of or are based upon the omission or the alleged omission to
state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written
information furnished to the Funding Corporation by such
Purchaser through CSFBC specifically for use therein, and
will reimburse for any legal or other expenses reasonably
incurred by the Funding Corporation in connection with
investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being
understood and agreed that the only such information
furnished by any Purchaser consists of the following
information in the Offering Circular: the last paragraph at
the bottom of the cover page concerning the terms of the
offering by the Purchasers, the legend concerning stabiliz
ing on the inside front cover page and the third paragraph,
the fifth paragraph, the second sentence of the seventh
paragraph, the eighth paragraph and the ninth paragraph
under the caption "PLAN OF DISTRIBUTION."
(c) Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of
any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying
party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case
any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the
indemnified party shall have the right to employ counsel to
represent the indemnified party and its controlling persons
who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified
party against the indemnifying party under this Section 7 if
the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the
defense of such action or, if in the written opinion of
counsel to either the indemnifying party or the indemnified
party, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of
interest between them, and in that event the fees and
expenses of one firm of separate counsel (in addition to the
fees and expenses of local counsel) shall be paid by the
indemnifying party. No indemnifying party shall, without
the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such
action.
(d) If the indemnification provided for in this
Section 7 is unavailable or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Funding Corporation and the Guarantors on the one hand and
the Purchasers on the other from the offering of the Securi
ties or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of the Funding Corporation and the Guarantors on the one
hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by
the Funding Corporation and the Guarantors on the one hand
and the Purchasers on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Funding
Corporation and the Guarantors bear to the total discounts
and commissions received by the Purchasers from the Funding
Corporation under this Agreement. The relative fault shall
be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact
relates to information supplied by the Funding Corporation
or the Guarantors, on the one hand, or the Purchasers, on
the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or
claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the
Securities purchased by it were resold exceeds the amount of
any damages which such Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission.
(e) The obligations of the Funding Corporation
and the Guarantors under this Section 7 shall be in addition
to any liability which the Funding Corporation and the
Guarantors may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who con
trols any Purchaser within the meaning of the Securities Act
or the Exchange Act; and the obligations of the Purchasers
under this Section shall be in addition to any liability
which the respective Purchasers may otherwise have and shall
extend, upon the same terms and conditions, to each officer,
director, employee, agent or shareholder of the Funding
Corporation and each Guarantor and to each officer,
director, employee, agent or shareholder of each person, if
any, who controls the Funding Corporation and the Guarantors
within the meaning of the Securities Act or the Exchange
Act.
8. Default by Purchasers. If any Purchaser defaults
in its obligations to purchase Securities hereunder and the
aggregate principal amount of Securities that such
defaulting Purchaser agreed but failed to purchase does not
exceed 10% of the total principal amount of Securities, the
remaining Purchaser may make arrangements satisfactory to
the Funding Corporation for the purchase of such Securities
by other persons, including itself, but if no such
arrangements are made by the Closing Date, the non-
defaulting Purchaser shall be obligated to purchase the
Securities that such defaulting Purchaser agreed but failed
to purchase. If any Purchaser so defaults and the aggregate
principal amount of Securities with respect to which such
default occurs exceeds 10% of the total principal amount of
Securities and arrangements satisfactory to the remaining
Purchaser and the Funding Corporation for the purchase of
such Securities by other persons are not made within 36
hours after such default, this Agreement will terminate
without liability on the part of the non-defaulting
Purchaser or the Funding Corporation, except as provided in
Section 9. As used in this Agreement, the term "Purchaser"
includes any person substituted for a Purchaser under this
Section. Nothing herein will relieve a defaulting Purchaser
from liability for its default.
9. Survival of Certain Representations and
Obligations. The respective indemnities, agreements,
representations, warranties and other statements of the
Funding Corporation and the Guarantors or their officers and
of the Purchaser set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results
thereof, made by or on behalf of the Purchaser, the Funding
Corporation and the Guarantors or any of their respective
representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the
Securities. If for any reason the purchase of the Securi
ties by the Purchaser is not consummated, the Funding
Corporation and the Guarantors shall remain responsible for
the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Funding
Corporation, the Guarantors and the Purchaser pursuant to
Section 7 shall remain in effect; provided that,
notwithstanding the foregoing, in such circumstances the
Funding Corporation and the Guarantors shall not be
obligated to reimburse the Purchaser for its out-of-pocket
expenses (excluding fees and disbursements of counsel and
rating agency fees) in excess of $175,000; and provided,
further that if the purchase of the Securities is not
consummated solely because of the occurrence of an event
specified in Section 6(b)(iv), (v) or (vi), then the Funding
Corporation and the Guarantors shall have no obligation to
reimburse the Purchaser for its out-of-pocket expenses
(including fees and disbursements of counsel), except for
rating agency fees.
10. Notices. All communications hereunder will be in
writing and, if sent to the Purchaser will be mailed,
delivered or telegraphed and confirmed to the Purchaser, at
Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Investment
Banking Department-Transactions Advisory Group, or, if sent
to the Funding Corporation and the Guarantors, will be
mailed, delivered or telegraphed and confirmed to them at
000 Xxxxx 00xx Xxxxxx, Xxxxx 000-X, Xxxxx, Xxxxxxxx 00000,
Attention: General Counsel.
11. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the controlling persons referred
to in Section 7, and no other person will have any right or
obligation hereunder.
12. Representation of Purchasers. CSFBC will act for
the several Purchasers in connection with this purchase, and
any action under this Agreement taken by CSFBC will be
binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together
constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State
of New York without regard to principles of conflicts of
laws (other than Section 5-1401 of the New York General
Obligations Law). The Funding Corporation and the
Guarantors hereby submit to the non-exclusive jurisdiction
of the federal and state courts in the Borough of Manhattan
in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions
contemplated hereby.
If the foregoing is in accordance with the
Purchaser's understanding of our agreement, kindly sign and
return to us one of the counterparts hereof, whereupon it
will become a binding agreement between the Funding
Corporation, each of the Guarantors and the Purchaser in
accordance with its terms.
Very truly yours,
SALTON SEA FUNDING CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SALTON SEA BRINE PROCESSING L.P.
By: SALTON SEA POWER COMPANY, as
Managing General Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SALTON SEA POWER GENERATION L.P.
By: SALTON SEA POWER COMPANY, as
Managing General Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
FISH LAKE POWER COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SALTON SEA POWER L.L.C.
By: XX XXXXXX SEA INC., as Manager
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
CALENERGY OPERATING
CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
VULCAN POWER COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
NIGUEL ENERGY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SAN XXXXXX ENERGY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
CONEJO ENERGY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
BN GEOTHERMAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
XXXXXX, X.X.
By: CALENERGY OPERATING COR
PORATION, as General Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
XXXXXXXX, X.X.
By: CALENERGY OPERATING
CORPORATION,
as General Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
DEL RANCH, L.P.
By: CALENERGY OPERATING
CORPORATION, as General
Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
VULCAN/BN GEOTHERMAL POWER COMPANY
By: VULCAN POWER COMPANY,
as General Partner
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
CALENERGY MINERALS LLC
By: SALTON SEA MINERALS CORP., as
Manager
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
CE TURBO LLC
By: MAGMA POWER COMPANY, as
Manager
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
SALTON SEA ROYALTY COMPANY
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
