EXHIBIT 4.8
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ASSIGNMENT AND SECURITY AGREEMENT
dated as of March 2, 1999
among
MAGMA POWER COMPANY
SALTON SEA POWER COMPANY
FALCON SEABOARD RESOURCES, INC.
FALCON SEABOARD POWER CORPORATION
FALCON SEABOARD OIL COMPANY
CALIFORNIA ENERGY DEVELOPMENT CORPORATION
CE TEXAS ENERGY LLC
and
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION,
as Collateral Agent
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS AND PRINCIPLES OF CONSTRUCTION....................2
ARTICLE 2 GRANT OF SECURITY INTERESTS.....................................2
Section 2.1 Assignment and Grant of Security Interest.........2
Section 2.2 Security Interest Absolute........................3
Section 2.3 Power of Attorney.................................3
Section 2.4 Assignors' Duties.................................4
Section 2.5 Effective as a Financing Statement................4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES..................................4
Section 3.1 Necessary Filings.................................5
Section 3.2 No Liens..........................................5
Section 3.3 Other Financing Statements........................5
Section 3.4 Legal Name; Chief Executive Office................5
Section 3.5 Status. .........................................5
Section 3.6 Power and Authority. .............................6
Section 3.7 No Violation. ...................................6
Section 3.8 Litigation........................................6
Section 3.9 Governmental Approvals. .........................7
Section 3.10 No Default. .....................................7
Section 3.11 Licenses, etc. ..................................7
Section 3.12 Compliance With Law. ............................7
Section 3.13 Tax Returns and Payments..........................7
Section 3.14 Investment Company Act; Public Utility Holding
Company Act.......................................7
Section 3.15 Representations and Warranties in Relevant
Documents.........................................8
Section 3.16 Environmental Matters.............................8
Section 3.17 ERISA.............................................8
Section 3.18 Insurance.........................................8
ARTICLE 4 COVENANTS.......................................................9
Section 4.1 No Other Liens....................................9
Section 4.2 Chief Executive Office............................9
Section 4.3 Supplements; Further Assurances, etc..............9
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Section 4.4 Financing Statements.............................10
Section 4.5 Deposit of Available Cash Flow...................10
Section 4.6 Information Covenants............................10
Section 4.7 Books, Records and Inspections. ................10
Section 4.8 Taxes............................................11
Section 4.9 Maintenance of Existence.........................11
Section 4.10 Compliance with Laws; Governmental Approvals.....11
Section 4.11 Performance of Obligations. ....................12
Section 4.12 Maintenance of Title.............................12
Section 4.13 Project Companies................................12
Section 4.14 Indebtedness.....................................13
Section 4.15 Liens............................................14
Section 4.16 Restriction on Fundamental Changes...............14
Section 4.17 Sale of Interest in Project Company..............15
Section 4.18 Restricted Payments..............................15
Section 4.19 Transactions with Affiliates.....................15
Section 4.20 Modifications; Additional Contracts..............15
Section 4.21 Changes in Business..............................16
Section 4.22 Investments......................................16
Section 4.23 Guarantee Obligations............................16
Section 4.24 SECI Holdings Stock..............................16
Section 4.25 Project Company Distributions....................17
Section 4.26 Turnover of Available Cash Flow..................17
ARTICLE 5 REMEDIES UPON OCCURRENCE OF AN EVENT OF
DEFAULT........................................................17
Section 5.1 Remedies Generally...............................17
Section 5.2 Sale of Cash Flow Collateral.....................17
Section 5.3 Purchase of Cash Flow Collateral.................18
Section 5.4 Application of Proceeds..........................18
Section 5.5 Expenses.........................................18
ARTICLE 6 MISCELLANEOUS..................................................19
Section 6.1 Notices..........................................19
Section 6.2 Continuing Security Interest.....................19
Section 6.3 Release..........................................19
Section 6.4 Reinstatement....................................19
Section 6.5 Independent Security.............................20
Section 6.6 Amendments.......................................20
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Section 6.7 Successors and Assigns...........................20
Section 6.8 Third Party Beneficiaries........................20
Section 6.9 Survival.........................................21
Section 6.10 No Waiver; Remedies Cumulative...................21
Section 6.11 Counterparts.....................................21
Section 6.12 Headings Descriptive.............................21
Section 6.13 Severability.....................................21
Section 6.14 Governing Law; Submission to Jurisdiction and
Venue; Waiver of Jury Trial......................22
Section 6.15 Entire Agreement.................................23
Section 6.16 Independent Obligations..........................23
Section 6.17 Waiver of Defenses...............................23
Section 6.18 Subrogation, Etc.................................23
Section 6.19 Joint and Several Liability......................24
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Exhibit A-1: Form of Pledge and Security Agreement
Exhibit A-2: Form of Opinion of Counsel
Schedule 3.1: Financing Statements
Schedule 3.4: Chief Executive Offices
Schedule 3.19: Environmental Matters
Schedule 4.14: Project Company Indebtedness and Liens
Schedule 4.15: Indebtedness
Schedule 4.16: Liens
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EXHIBIT 4.8
ASSIGNMENT AND SECURITY AGREEMENT
This ASSIGNMENT AND SECURITY AGREEMENT (this "Agreement"), dated as of
March 2, 1999, is entered into by MAGMA POWER COMPANY, a Nevada corporation,
SALTON SEA POWER COMPANY, a Nevada corporation, FALCON SEABOARD RESOURCES, INC.,
a Texas corporation, FALCON SEABOARD POWER CORPORATION, a Texas corporation,
FALCON SEABOARD OIL COMPANY, a Texas corporation, CALIFORNIA ENERGY DEVELOPMENT
CORPORATION, a Delaware corporation, and CE TEXAS ENERGY LLC, a Delaware limited
liability company (each individually an "Assignor" and collectively the
"Assignors"), in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL
ASSOCIATION, as Collateral Agent for the Secured Parties (as defined in the
Indenture referred to below) under the Collateral Agency and Intercreditor
Agreement, dated as of the date hereof (the "Intercreditor Agreement"), among CE
Generation, LLC ("CE Generation"), the Assignors, the Collateral Agent and the
other Secured Parties.
W I T N E S S E T H:
WHEREAS, CE Generation is issuing $400,000,000 in principal amount of
its 7.416% Senior Secured Bonds Due December 15, 2018 (the "Initial Securities")
pursuant to the Indenture, dated as of the date hereof (the "Indenture"),
between CE Generation and Chase Manhattan Bank and Trust Company, National
Association, as trustee (the "Trustee");
WHEREAS, CE Generation owns, directly or indirectly, one hundred
percent (100%) of the outstanding capital stock of each of the Assignors;
WHEREAS, the Assignors own equity interests in various Project
Companies (as defined in the Indenture) and, accordingly, have the right to
receive Available Cash Flow (as defined in the Indenture) from such Project
Companies;
WHEREAS, the Available Cash Flow received by the Assignors will be used
to pay principal of, premium (if any) and interest on the Securities;
WHEREAS, it is a condition precedent to the issuance of the Securities
under the Indenture that the Assignors execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINED TERMS AND PRINCIPLES OF CONSTRUCTION
(a) Unless otherwise defined herein, all capitalized terms used herein
but not defined herein shall have the meanings set forth in the Indenture.
(b) Commercial terms used but not otherwise defined herein shall have
the meanings specified for such terms in the Uniform Commercial Code as in
effect from time to time in the State of New York.
ARTICLE 2
GRANT OF SECURITY INTERESTS
Section 2.1 Assignment and Grant of Security Interest. (a) As collateral
security for the prompt and complete payment and performance when due (whether
at stated maturity, by acceleration or otherwise) of all of the Secured
Obligations, whether now existing or hereafter arising and howsoever evidenced,
each Assignor hereby assigns, transfers and grants to the Collateral Agent and
hereby creates in favor of the Collateral Agent, for the benefit of the Secured
Parties, a continuing Lien on and security interest of first priority (subject
to Permitted Assignor Liens and Permitted Project Company Liens) in all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired
(collectively, the "Cash Flow Collateral"):
(i) all of such Assignor's Available Cash Flow; and
(ii) any and all substitutions and replacements for the foregoing and
all products and Proceeds thereof.
(b) The security interest granted to the Collateral Agent pursuant to
this Agreement extends to all Cash Flow Collateral of the kind which is the
subject of this Agreement which any Assignor may acquire at any time during the
continuation of this Agreement, whether such Cash Flow Collateral is in transit
or in such Assignor's, the Collateral Agent's, any Secured Party's or any other
Person's constructive, actual or exclusive occupancy or possession.
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(c) Notwithstanding the foregoing, monies distributed from the
Distribution Suspense Account in accordance with the requirements of the
Depositary Agreement shall be released from the security interests created
hereunder and shall not constitute Cash Flow Collateral.
Section 2.2 Security Interest Absolute. All rights of the Collateral Agent
and all security interests created hereunder shall be absolute and unconditional
irrespective of any circumstance or occurrence whatsoever, including, without
limitation:
(i) any lack of validity or enforceability of all or any part of
the Secured Obligations or of any security therefor or of any of the
Financing Documents or any other agreement or instrument relating thereto
(other than against the Collateral Agent);
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from or exercise or
non-exercise of any right under any of the Financing Documents or any other
agreement or instrument relating thereto;
(iii) any exchange, release or non-perfection of any other
collateral for, or any release or amendment or waiver of or consent to any
departure from any guaranty for, all or any of the Secured Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Assignor.
Section 2.3 Power of Attorney. (a) Each Assignor hereby appoints the
Collateral Agent, on behalf of the Secured Parties, or any Person, officer or
agent whom the Collateral Agent may designate, as its true and lawful
attorney-in-fact, with full irrevocable power and authority in the place and
stead of such Assignor and in the name of such Assignor or in its own name, at
such Assignor's cost and expense, from time to time in the Collateral Agent's
reasonable discretion to execute and deliver and, if appropriate, to file with
the appropriate filing officer or office such security agreements, financing
statements, continuation statements or other instruments as the Collateral Agent
may reasonably deem necessary or advisable to impose, perfect or continue the
perfection of the Liens created by such Assignor
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hereby and to take any and all action to execute any and all instruments which
may be necessary to accomplish the purposes of this Agreement.
(b) Each Assignor hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof, in each case pursuant to the powers
granted hereunder. Each Assignor hereby acknowledges and agrees that in acting
pursuant to this power-of-attorney the Collateral Agent shall be acting in its
own interest and on behalf of the Secured Parties, and each Assignor
acknowledges and agrees that the Collateral Agent and the Secured Parties shall
have no fiduciary duties to such Assignor and such Assignor hereby waives any
claims to the rights of a beneficiary of a fiduciary relationship hereunder.
Section 2.4 Assignors' Duties. Anything herein contained to the contrary
notwithstanding, the Collateral Agent shall not have any obligations or
liabilities under or with respect to any Cash Flow Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Cash Flow Collateral.
Section 2.5 Effective as a Financing Statement. This Agreement shall also be
effective as a Financing Statement covering any Cash Flow Collateral and may be
filed in any appropriate filing or recording office. A carbon, photographic,
facsimile or other reproduction of this Agreement or of any Financing Statement
relating to this Agreement shall be sufficient as a Financing Statement for any
of the purposes referred to in the preceding sentence.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Each Assignor represents and warrants, as of the date of this Agreement
and the Closing Date, as follows, which representations and warranties shall
survive execution and delivery of this Agreement and the making and repayment of
the Secured Obligations:
Section 3.1 Necessary Filings. Upon the filing of the Financing Statements
in the form attached as Schedule 3.1 hereto in the jurisdictions noted on such
Financing Statements, all filings, registrations and recordings necessary or
appropriate to create, preserve, protect and perfect the security interest
granted to the Collateral Agent hereby in respect of the Cash Flow Collateral
owned by such
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Assignor have been accomplished and the security interest granted to the
Collateral Agent pursuant to this Agreement in and to such Cash Flow Collateral
constitutes a valid and enforceable perfected security interest therein superior
and prior to the rights of all other Persons therein and, in each case, subject
to no other Liens, sales, assignments, conveyances, settings over or transfers
(except that such Cash Flow Collateral may be subject to Permitted Assignor
Liens and Permitted Project Company Liens).
Section 3.2 No Liens. Such Assignor is the owner of all of its right, title
and interest in the Cash Flow Collateral assigned by it hereunder free from any
Lien or other right, title or interest of any Person (other than Permitted
Assignor Liens).
Section 3.3 Other Financing Statements. There is no Financing Statement (or
similar statement or instrument of registration under the applicable law of any
jurisdiction) executed by such Assignor, or, to the knowledge of such Assignor
after due inquiry, by any other Person covering or purporting to cover any
interest of any kind in the Cash Flow Collateral assigned by such Assignor
hereunder (other than Permitted Assignor Liens), except Financing Statements
filed or to be filed in respect of and covering the security interests granted
hereby by such Assignor.
Section 3.4 Legal Name; Chief Executive Office. Such Assignor's legal name
is set forth on Schedule 3.4 hereto. The chief executive office of such Assignor
and the office where such Assignor keeps its records concerning the Cash Flow
Collateral assigned by such Assignor hereunder is located at the address set
forth opposite such Assignor's name on Schedule 3.4 hereto.
Section 3.5 Status. Such Assignor (i) is a duly organized and validly
existing corporation or limited liability company, as the case may be, in good
standing under the applicable laws of the jurisdiction of its incorporation or
formation, as the case may be, (ii) has the corporate or other power and
authority to own its property and assets and to transact the business in which
it is engaged or presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing as a foreign corporation or
limited liability company, as the case may be, in every jurisdiction in which it
owns or leases real property or in which the nature of its business requires it
to be so qualified, except where the failure to so qualify, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
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Section 3.6 Power and Authority. Such Assignor has the corporate or other
power and authority to execute, deliver and carry out the terms and provisions
of each of the Financing Documents to which it is a party and has taken all
necessary corporate or other action to authorize the execution, delivery and
performance by it of such Financing Documents. Such Assignor has duly executed
and delivered each such Financing Document, and each such Financing Document
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms. except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar Applicable Laws relating to or affecting creditors' rights
generally and by general equitable principles.
Section 3.7 No Violation. Neither the execution, delivery or performance by
such Assignor of the Financing Documents to which it is a party, nor compliance
by it with the terms and provisions thereof nor the consummation of the
transactions contemplated thereby, (i) will contravene any applicable provision
of any Applicable Law, statute, rule, regulation, order, writ, injunction or
decree of any court or Governmental Authority, (ii) will conflict or be
inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(other than Permitted Assignor Liens) upon any of the property or assets of such
Assignor pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which such Assignor is a party or by which it
or any of its property or assets is bound or to which it may be subject, or
(iii) will violate any provision of the certificate of incorporation or the
bylaws, or the certificate of formation or the operating agreement, as the case
may be, of such Assignor, except in the case of clauses (i) and (ii) any
contravention, conflict, breach, default, Lien or violation which could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.8 Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of such Assignor, threatened, against such Assignor (a)
with respect to any of the Financing Documents to which such Assignor is a party
or the transactions contemplated thereby or otherwise related to such Assignor's
Available Cash Flow, or (b) that could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Section 3.9 Governmental Approvals. Other than the filings, registrations
and recordings described in Section 3.1, no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption
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by, any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance by such Assignor of any Financing Document to which it
is party or the consummation of any of the transactions contemplated thereby,
(ii) the legality, validity, binding effect or enforceability of any such
Financing Document with respect to such Assignor, (iii) the pledge by such
Assignor of the Cash Flow Collateral owned by such Assignor, or (iv) the
exercise by the Collateral Agent of the rights provided for in this Agreement or
of the remedies in respect of such Cash Flow Collateral pursuant to this
Agreement, in each case other than those the absence of which could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.10 No Default. Such Assignor is not in default under or with
respect to any agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound in any respect which could reasonably
be expected to result in a Material Adverse Effect.
Section 3.11 Licenses, etc. Such Assignor has obtained and holds in full
force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
its business as presently conducted, except where the failure to so obtain the
foregoing could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
Section 3.12 Compliance With Law. Such Assignor is in compliance with all
Applicable Laws, rules, regulations, orders, judgments, writs and decrees,
except where the failure to so comply, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
Section 3.13 Tax Returns and Payments. Such Assignor has filed all tax
returns required to be filed by it and has paid all taxes and assessments
payable by it which have become due, other than those not yet delinquent or
those that are reserved against in accordance with GAAP which are being
diligently contested in good faith by appropriate proceedings.
Section 3.14 Investment Company Act; Public Utility Holding Company Act.
Such Assignor is not (x) an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, (y) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company"
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within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or (z) subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money (other than usury
laws).
Section 3.15 Representations and Warranties in Relevant Documents. All
representations and warranties made by such Assignor in such Assignor's
Transaction Documents (other than the Financing Documents) and, to such
Assignor's knowledge, all representations and warranties made by each other
Person in such Transaction Documents, are true and correct in all material
respects. None of such representations and warranties are inconsistent in any
material respect with the representations and warranties of such Assignor made
herein or in any other Financing Document.
Section 3.16 Environmental Matters. Except as set forth in Schedule 3.19,
neither such Assignor nor, to the knowledge of such Assignor, such Assignor's
Project Company, (i) is in violation of any Applicable Law, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances
(collectively, "environmental laws"), (ii) owns or operates any real property
contaminated with any substance that is subject to any environmental laws, (iii)
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or (iv) is subject to any claim relating to environmental
laws, which violation, contamination, liability or claim could individually or
in the aggregate reasonably be expected to have a Material Adverse Effect.
Section 3.17 ERISA. Such Assignor is not 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 ERISA), except with respect to the
"employee benefit plans" (within the meaning of Section 3(3) of ERISA) of its
Affiliates.
Section 3.18 Insurance. Such Assignor and, to such Assignor's knowledge,
such Assignor's Project Company have obtained and maintains in full force and
effect all insurance coverages required to be maintained by such Assignor or
Project Company, as the case may be, under the applicable Project Documents or
pursuant to applicable law.
ARTICLE 4
COVENANTS
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Each Assignor hereby covenants and agrees from and after the date of this
Agreement until the indefeasible payment in full in cash or Cash Equivalents of
the Secured Obligations and the termination of this Agreement in accordance with
the provisions of Section 6.3:
Section 4.1 No Other Liens. Such Assignor shall not create, incur or permit
to exist, shall defend the Cash Flow Collateral owned by it against and shall
take such other action as is necessary to remove, any Lien or claim on or to
such Cash Flow Collateral (other than Permitted Assignor Liens), and shall
defend the right, title and interest of the Collateral Agent in and to any of
such Cash Flow Collateral against the claims and demands of all Persons
whomsoever.
Section 4.2 Chief Executive Office. Such Assignor shall not establish a new
location for its chief executive office or change its name until (i) it has
given to the Collateral Agent not less than thirty (30) days prior written
notice of its intention so to do, clearly describing such new location or
specifying such new name, as the case may be, and (ii) with respect to such new
location or such new name, as the case may be, it shall have taken all action,
reasonably satisfactory to the Collateral Agent, to maintain the security
interest of the Collateral Agent in the Cash Flow Collateral owned by such
Assignor intended to be granted hereby at all times fully perfected and in full
force and effect.
Section 4.3 Supplements; Further Assurances, etc. Such Assignor shall at any
time and from time to time, at the expense of such Assignor, promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Collateral Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Cash Flow
Collateral owned by such Assignor.
Section 4.4 Financing Statements. Such Assignor shall sign and deliver to
the Collateral Agent and the other Secured Parties such Financing Statements (or
similar statements or instruments of registration under the law of any
jurisdiction), in form acceptable to the Collateral Agent, as the Collateral
Agent may from time to time reasonably request or as are necessary or desirable
in the reasonable opinion of the Collateral Agent to establish and maintain the
security interests contemplated hereunder as valid, enforceable, first priority
security interests (subject to Permitted Assignor Liens) as provided herein and
the other rights and security contemplated
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herein, all in accordance with the Uniform Commercial Code as enacted in any and
all relevant jurisdictions or any other applicable law. Such Assignor shall pay
any applicable filing fees and related expenses. Such Assignor authorizes the
Collateral Agent to file any such Financing Statements (or similar statements or
instruments of registration under the law of any jurisdiction) without the
signature of such Assignor.
Section 4.5 Deposit of Available Cash Flow. Such Assignor shall irrevocably
direct, subject to Applicable Law, that all of its Available Cash Flow be
deposited directly into the Revenue Account pursuant to Section 3.1(a)(i) of the
Depositary Agreement or the Redemption Account pursuant to Section 3.5(a) of the
Depositary Agreement, as the case may be.
Section 4.6 Information Covenants. (a) Such Assignor shall furnish to the
Collateral Agent, the Trustee and each Rating Agency, promptly and in any event
within fifteen (15) days after an Authorized Officer of such Assignor obtains
knowledge thereof, notice of (i) any material litigation or regulatory events
with respect to such Assignor's Project(s) and (ii) any default or event of
default under the Project Documents or Project Financing Documents for such
Assignor's Project Company(ies), except in each such case with respect to any
Project that is not a Significant Project.
(b) Such Assignor shall furnish to CE Generation all information
regarding such Assignor, its Project Company(ies) and its Project(s) which is
necessary to enable CE Generation to satisfy its information provision
obligations under the Indenture.
Section 4.7 Books, Records and Inspections. (a) Such Assignor shall keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities, including, without
limitation, records of the Cash Flow Collateral owned by such Assignor.
(b) Such Assignor shall permit officers and designated representatives
of the Trustee, the Collateral Agent and the Depositary Bank to visit and
inspect any of the properties of such Assignor, to examine and make copies of
the books of record and accounts of such Assignor and to discuss the affairs,
finances and accounts of such Assignor with, and be advised as to the same by,
its officers, all at such reasonable times during normal business hours and
intervals and to such reasonable extent as the Trustee, the Collateral Agent and
the Depositary Bank may request.
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Section 4.8 Taxes. Such Assignor shall pay or cause to be paid all taxes,
charges and assessments and all other lawful claims required to be paid by such
Assignor, except as contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves have been established with respect
thereto in accordance with GAAP.
Section 4.9 Maintenance of Existence. (a) Such Assignor shall at all times
preserve and maintain in full force and effect (i) except as permitted under
Section 4.16, its existence as a corporation or limited liability company, as
the case may be, in good standing under the laws of the jurisdiction of its
incorporation or formation, as the case may be, and (ii) its qualification to do
business in each other jurisdiction in which the character of properties owned
or leased by it or in which the transaction of its business as conducted or
proposed to be conducted makes such qualification necessary, except, in the case
of clause (ii), where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
(b) Such Assignor shall maintain and renew all of the powers, rights,
privileges and franchises necessary for the transaction of its business as
conducted or proposed to be conducted, except where the failure to do so could
not reasonably be expected to result in a Material Adverse Effect.
Section 4.10 Compliance with Laws; Governmental Approvals. (a) Such Assignor
shall comply with all Applicable Laws and Governmental Approvals applicable to
it, and all other acts, rules, regulations, permits, orders and requirements of
any legislative, executive, administrative or judicial body relating to the
operation of such Assignor's business or the performance by such Assignor of its
obligations under the Financing Documents to which it is a party, except, in
each case, where the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
(b) Such Assignor shall obtain in a timely manner and maintain in full
force and effect (or where appropriate, renew) all Governmental Approvals
required at any time or advisable (i) in connection with the operation of such
Assignor's business and (ii) to execute and deliver the Financing Documents to
which it is a party and to perform its obligations thereunder, unless in each
case the failure to so obtain or maintain such Governmental Approvals could not
reasonably be expected to result in a Material Adverse Effect.
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Section 4.11 Performance of Obligations. (a) Such Assignor shall perform all
of its obligations under the terms of (i) each mortgage, indenture, security
agreement, debt instrument, lease, undertaking and contract by which it or any
of its properties is bound or to which it is a party, if the failure to so
perform, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, and (ii) the certificate of incorporation
(including certificates of designation) and the bylaws, or the certificate of
formation and the operating agreement, as the case may be, of such Assignor.
(b) Such Assignor shall take all reasonable and necessary actions to
prevent the termination or cancellation as against such Assignor of any
Financing Document to which it is a party, except where the result of such
termination or cancellation could not reasonably be expected to result in a
Material Adverse Effect.
Section 4.12 Maintenance of Title. Except as permitted under Section 4.17,
such Assignor shall preserve and maintain good and valid title to its properties
and assets (subject to no Liens other than Permitted Assignor Liens), except
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
Section 4.13 Project Companies. Such Assignor shall cause each of its
Project Companies: (a) to perform all of its covenants under its Project
Documents and Project Financing Documents, except where the failure to do so
could not reasonably be expected to result in a Material Adverse Effect; (b) not
to amend, terminate or otherwise modify any of its Project Documents or Project
Financing Documents, except (i) any Permitted Power Contract Buy-Out or (ii) if
such amendment, termination or other modification could not reasonably be
expected to result in a Material Adverse Effect; (c) to maintain (i) the
Qualifying Facility status of its Project or (ii) maintain its status as an
Exempt Wholesale Generator and its Project's status as an Eligible Facility,
except, in each case, where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect; (d) not to enter into any
additional Project Documents or Project Financing Documents, except where doing
so could not reasonably be expected to result in a Material Adverse Effect; (e)
not to create, incur, assume, suffer to exist or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness other than (i)
if the Rating Agencies confirm in writing that the incurrence of such
Indebtedness (and the creation of any Liens securing such Indebtedness) will not
result in a Ratings Downgrade, (ii) Indebtedness existing on the Closing Date,
or (iii) except with respect to Magma and FSRI and so long as no Default or
Event of Default has
12
occurred and is continuing, Indebtedness in an aggregate amount not to exceed,
together with the aggregate of all Indebtedness outstanding under this clause
(iii), Section 4.13(a)(iii) and Section 4.14(b)(iii), $15,000,000 (clauses (i),
(ii) and (iii) collectively, "Permitted Project Company Indebtedness"); and (f)
not to create, incur, assume or suffer to exist, directly or indirectly, any
Lien on or with respect to any of its property now owned or hereafter acquired,
other than (i) Liens to secure Indebtedness incurred in accordance with clause
(e) immediately above, (ii) Liens existing on the Closing Date, (iii) Liens for
taxes not yet due or which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves are
being maintained in accordance with GAAP, or (iv) Liens incidental to the
conduct of such Project Company's business which are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
vendor's Liens for accounts payable in the ordinary course of business), and
which do not in the aggregate materially impair the use thereof in the operation
of such Project Company's business (clauses (i), (ii), (iii) and (iv),
collectively, "Permitted Project Company Liens").
Section 4.14 Indebtedness. (a) Such Assignor shall not create, incur,
assume, suffer to exist or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness other than (i) the Secured Obligations,
(ii) Indebtedness existing on the Closing Date, (iii) Indebtedness owed to CE
Generation or (iv) except with respect to Magma and FSRI and so long as no
Default or Event of Default has occurred and is continuing, Indebtedness owed to
an Affiliate of CE Generation which owns, directly or indirectly, a majority of
the ownership interests in such Assignor, in an amount not to exceed, together
with the aggregate of all Indebtedness outstanding under this clause (iii),
Section 4.13(e)(iii) and Section 4.14(b)(iii), $15,000,000 (clauses (i), (ii)
and (iii) collectively, "Permitted Assignor Indebtedness").
(b) Such Assignor shall not permit any of its Intermediate Holding
Companies, Project Holding Companies or other Subsidiaries (other than its
Project Companies) to create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness other than (i)
if the Rating Agencies confirm in writing that the incurrence of such
Indebtedness (and the creation of any Liens securing such Indebtedness) will not
result in a Ratings Downgrade, (ii) Indebtedness existing on the Closing Date,
or (iii) except with respect to Magma and FSRI and so long as no Default or
Event of Default has occurred and is continuing, Indebtedness in an aggregate
amount not to exceed, together with the aggregate of all Indebtedness
outstanding under this clause (iii), Section 4.13(e)(iii) and ▇▇▇▇▇▇▇
▇▇
▇.▇▇(▇)(▇▇▇), ▇▇▇,▇▇▇,▇▇▇ (▇▇▇▇▇▇▇ (▇), (▇▇) and (iii) collectively, "Permitted
Holding Company Indebtedness").
Section 4.15 Liens. Such Assignor shall not create, incur, assume or suffer
to exist, directly or indirectly, any Lien on or with respect to any of its
property now owned or hereafter acquired, other than the following Liens (such
Liens, "Permitted Assignor Liens"):
(a) Liens existing on the Closing Date;
(b) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with GAAP;
(c) Liens incidental to the conduct of such Assignor's business which
are not incurred in connection with the borrowing of money or the obtaining of
advances or credit (other than vendor's Liens for accounts payable in the
ordinary course of business), and which do not in the aggregate materially
impair the use thereof in the operation of such Assignor's business; and
(d) Liens granted to the Collateral Agent pursuant to the Security
Documents securing the Secured Obligations.
Section 4.16 Restriction on Fundamental Changes.ERROR! BOOKMARK NOT DEFINED.
Such Assignor shall not enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution) or discontinue
its business, unless (i) such Assignor is the surviving or continuing company or
the surviving or continuing company is a company formed under the laws of the
United States, one of the States thereof or the District of Columbia or Canada
and assumes Assignor's obligations under the Financing Documents, (ii)
immediately before and after such transaction, no Event of Default shall have
occurred and be continuing and (iii) the Rating Agencies confirm in writing that
such transaction will not result in a Ratings Downgrade.
Section 4.17 Sale of Interest in Project Company. Such Assignor shall not
sell, transfer or convey any portion of its equity interest in its Project
Company, other than, so long as no Event of Default has occurred and is
continuing, (a) any such sale for fair market value the proceeds of which are in
the form of cash or cash equiva-
14
▇▇▇▇▇ and are used to redeem all or a portion of the Securities in accordance
with Section 3.2.1(d) of the Indenture, if required, or (b) a Permitted
Transfer.
Section 4.18 Restricted Payments. Such Assignor shall not make any
Restricted Payments, except that such Assignor may (a) deposit its Available
Cash Flow into the Revenue Account in accordance with Section 3.1(a)(i) of the
Depositary Agreement or into the Redemption Account in accordance with Section
3.5(a) of the Depositary Agreement, as the case may be, and (b) make Restricted
Payments from monies distributed from the Distribution Suspense Account in
accordance with Section 3.4 of the Depositary Agreement.
Section 4.19 Transactions with Affiliates. Other than pursuant to
contractual arrangements existing as of the Closing Date, such Assignor shall
not enter into any transaction or series of related transactions, whether or not
in the ordinary course of business, with any Affiliate, other than on terms and
conditions substantially as favorable to such Assignor as would be obtainable at
the time in a comparable arm's-length transaction with a Person other than an
Affiliate, except that such Assignor may perform its obligations and engage in
transactions permitted by the Transaction Documents.
Section 4.20 Modifications; Additional Contracts. (a) Such Assignor shall
not amend, modify or waive, or permit the amendment, modification or waiver of,
any provision of any material contracts to which it is a party or by which it or
any of its properties is bound, including without limitation, the certificate of
incorporation, bylaws or other organizational documents of such Assignor, if
such amendment, modification or waiver could reasonably be expected to result in
a Material Adverse Effect.
(b) Such Assignor shall not assign any of its rights or obligations
under any Financing Document to which it is a party or enter into any additional
contract, agreement or undertaking if the transactions contemplated by such
assignment or additional contract, agreement or undertaking could reasonably be
expected to result in a Material Adverse Effect.
Section 4.21 Changes in Business. Such Assignor shall not engage in any
activities other than (a) the ownership of a direct or an interest in its
respective Project Company(ies) and activities incidental thereto, (b) with
respect to Magma, (i) its ownership of its existing assets and the ownership of
real property rights and assets in Imperial County, California and activities
related thereto, and (ii) its
15
performance of its obligations under the Project Documents to which it is a
party, (c) the activities contemplated by the Indenture and the other Financing
Documents and activities incidental thereto and (d) other activities which could
not reasonably be expected to result in a Material Adverse Effect and which the
Rating Agencies confirm in writing will not result in a Ratings Downgrade.
Section 4.22 Investments. Such Assignor shall not form or have any
subsidiaries, make investments, loans or advances or acquire the stock,
obligations or securities of any Person, other than (a) Permitted Investments,
(b) investments, loans or advances made with monies which do not constitute
Collateral and (c) subsidiaries the formation of which the Rating Agencies
confirm in writing will not result in a Ratings Downgrade, in each case in
accordance with Section 4.21.
Section 4.23 Guarantee Obligations. Such Assignor shall not contingently or
otherwise be or become liable, directly or indirectly, in connection with any
Guarantee Obligation, except for guarantees of Permitted Subsidiary Indebtedness
which is not incurred by an Affiliate of such Assignor (other than a
wholly-owned Subsidiary of such Assignor).
Section 4.24 SECI Holdings Stock. FSPC shall (i) on the date on which the
Liens on the capital stock of SECI Holdings created pursuant to the FSPC Term
Loan Stock Pledge Agreement, dated September 30, 1994, between FSPC and General
Electric Capital Corporation, are released, pledge all of the capital stock of
SECI Holdings to the Collateral Agent for the benefit of the Secured Parties
pursuant to a pledge and security agreement substantially in the form of Exhibit
A, and (ii) promptly take all other actions necessary or desirable in the
reasonable opinion of the Collateral Agent to establish and maintain the
Collateral Agent's security interest in all of the capital stock of SECI
Holdings as a valid, enforceable, first priority security interest (subject to
Permitted Assignor Liens).
Section 4.25 Project Company Distributions. Such Assignor shall use its
reasonable best efforts to cause each of its Project Companies, and each of its
Subsidiaries which owns an interest in any of such Project Companies, in each
case subject to the legal and fiduciary responsibilities of the boards of
directors and other governing bodies of such Project Companies and Subsidiaries
in respect of the declaration and payment of dividends and distributions, to
declare and pay dividends to such Assignor with all Available Cash Flow then
available for distribution in accordance with the organizational documents of
the Project Companies; provided,
16
however, that the foregoing shall not apply with respect to the declaration or
payment of dividends or distributions related to any Project that is not a
Significant Project.
Section 4.26 Turnover of Available Cash Flow. Such Assignor shall hold all
Available Cash Flow received by it in trust for the Secured Parties and
immediately deliver such Available Cash Flow to the Depositary Bank for
application in accordance with the Depositary Agreement.
ARTICLE 5
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
Section 5.1 Remedies Generally. If an Event of Default shall have occurred
and be continuing, the Collateral Agent may exercise, in addition to all other
rights and remedies granted in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code in
effect from time to time in any relevant jurisdiction and all other rights and
remedies available at law or in equity.
Section 5.2 Sale of Cash Flow Collateral. Without limiting the generality of
Section 5.1, upon the occurrence and during the continuance of an Event of
Default and subject to the Intercreditor Agreement, the Collateral Agent may in
its sole discretion, without notice except as specified below, sell the Cash
Flow Collateral or any part thereof at public or private sale or at the
Collateral Agent's Office or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as the
Collateral Agent may reasonably deem commercially reasonable, irrespective of
the impact of any such sales on the market price of the Cash Flow Collateral at
any such sale. Each purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of any Assignor, and each
Assignor hereby waives (to the extent permitted by law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
The Collateral Agent agrees to provide at least ten (10) days' notice to each
Assignor of the time and place of any public sale or the time after which any
private sale is to be made and each Assignor agrees that such ten (10) days'
notice shall constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Cash Flow Collateral regardless of notice of
sale having been given. The Collateral Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at
17
the time and place to which it was so adjourned. The Collateral Agent shall
incur no liability as a result of the sale of the Cash Flow Collateral, or any
part thereof, at any public or private sale. Each Assignor hereby waives any
claims against the Collateral Agent arising by reason of the fact that the price
at which any Cash Flow Collateral may have been sold at such a private sale, if
commercially reasonable, was less than the price which might have been obtained
at a public sale, even if the Collateral Agent accepts the first offer received
and does not offer such Cash Flow Collateral to more than one offeree.
Section 5.3 Purchase of Cash Flow Collateral. Any purchaser of all or any
part of the Cash Flow Collateral shall, upon any such purchase, acquire good
title to the Cash Flow Collateral so purchased, free of the security interests
created by this Agreement.
Section 5.4 Application of Proceeds. The Collateral Agent shall apply any
proceeds from time to time held by it and the net proceeds of any collection,
recovery, receipt, appropriation, realization or sale with respect to the Cash
Flow Collateral in accordance with the relevant provisions of the Intercreditor
Agreement. For avoidance of doubt, it is understood that CE Generation shall
remain liable to the extent of any deficiency between the amount of proceeds of
the Cash Flow Collateral and the aggregated amount of the Secured Obligations.
Section 5.5 Expenses. The Assignors shall upon demand pay to the Collateral
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, and any transfer
taxes, in each case payable upon sale of the Cash Flow Collateral, which the
Collateral Agent may incur in connection with (a) the custody or preservation
of, or the sale of, collection from or other realization upon, any of the Cash
Flow Collateral pursuant to the exercise or enforcement of any of the rights of
the Collateral Agent hereunder or (b) the failure by the Assignors to perform or
observe any of the provisions hereof, together with interest thereon from the
date of demand at the rate per annum equal to the Default Rate. Any amount
payable by the Assignors pursuant to this Section 5.5 shall be payable on demand
and shall constitute Secured Obligations secured hereby.
ARTICLE 6
MISCELLANEOUS
18
Section 6.1 Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto shall be
deemed to have been duly given when delivered by hand, or five days after being
deposited in the United States mail, postage prepaid, or, in the case of telex
notice, when sent, answerback received, or, in the case of telecopy notice, when
sent, or, in the case of a nationally recognized overnight courier service, one
Business Day after delivery to such courier service, addressed, in the case of
each party hereto, at its address specified below its signature hereto or to
such other address as may be designated by any party in a written notice to the
other parties hereto.
Section 6.2 Continuing Security Interest. This Agreement shall create a
continuing Lien on the Cash Flow Collateral until the release thereof pursuant
to Section 6.3.
Section 6.3 Release. Upon the indefeasible payment or other satisfaction in
full in cash or Cash Equivalents of all of the Secured Obligations, the
Collateral Agent, upon the request, and at the expense, of the Assignors, shall
execute and deliver all such documentation necessary to release the Liens
created pursuant to this Agreement.
Section 6.4 Reinstatement. This Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time any amount received by the
Collateral Agent or any other Secured Party hereunder or pursuant hereto is
rescinded or must otherwise be restored or returned by the Collateral Agent or
such Secured Party, as the case may be, upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the any of the Assignors or CE
Generation or upon the appointment of any intervenor or conservator of, or
trustee or similar official for, any of the Assignors or CE Generation or any
substantial part of any of the Assignors' or CE Generation's assets, or upon the
entry of an order by any court avoiding the payment of such amount, or
otherwise, all as though such payments had not been made.
Section 6.5 Independent Security. The security provided for in this
Agreement shall be in addition to and shall be independent of every other
security which the Secured Parties may at any time hold for any of the Secured
Obligations hereby secured, whether or not under the Security Documents. The
execution of any other Security Document shall not modify or supersede the
security interest or any rights or obligations contained in this Agreement and
shall not in any way affect, impair or invalidate the effectiveness and validity
of this Agreement or any term or condition hereof. The Assignors hereby waive
their rights to plead or claim in any court that
19
the execution of any other Security Document is a cause for extinguishing,
invalidating, impairing or modifying the effectiveness and validity of this
Agreement or any term or condition contained herein. The Collateral Agent shall
be at liberty to accept further security from the Assignors or from any third
party and/or release such security without notifying the Assignors and without
affecting in any way the obligations of the Assignors under the Security
Documents or the other Financing Documents. The Collateral Agent shall determine
if any security conferred upon the Secured Parties under the Security Documents
shall be enforced by the Collateral Agent, as well as the sequence of securities
to be so enforced. Notwithstanding any of the foregoing, this Agreement is
subject to the Intercreditor Agreement.
Section 6.6 Amendments. No waiver, amendment, modification or termination of
any provision of this Agreement, or consent to any departure by the Assignors
therefrom, shall in any event be effective without the prior written consent of
the Collateral Agent and, except as provided in the Depositary Agreement, none
of the Cash Flow Collateral shall be released without the written consent of the
Collateral Agent. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Section 6.7 Successors and Assigns. This Agreement shall be binding upon the
Assignors and their respective successors and assigns and shall inure to the
benefit of the Collateral Agent and the other Secured Parties and their
respective successors and assigns. The Assignors may not assign or otherwise
transfer any of their rights or obligations under this Agreement without the
written consent of the Collateral Agent.
Section 6.8 Third Party Beneficiaries. The agreements of the parties hereto
are intended to benefit the Secured Parties and their respective successors and
assigns.
Section 6.9 Survival. All agreements, statements, representations and
warranties made by the Assignors herein or in any certificate or other
instrument delivered by the Assignors or on their behalf under this Agreement
shall be considered to have been relied upon by the Collateral Agent and the
Secured Parties and shall survive the execution and delivery of this Agreement
and the other Financing Documents until termination thereof or the indefeasible
payment in full in cash or Cash Equivalents of all of the Secured Obligations
regardless of any investigation made by the Collateral Agent or the Secured
Parties, or made on their behalf.
20
Section 6.10 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Collateral Agent in exercising any right, power or privilege hereunder
and no course of dealing between the Assignors and the Collateral Agent shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Collateral Agent would
otherwise have.
Section 6.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
Section 6.12 Headings Descriptive. The headings of the several Sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
Section 6.13 Severability. In case any provision contained in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 6.14 Governing Law; Submission to Jurisdiction and Venue; Waiver of
Jury Trial. (a) THIS AGREEMENT IS A CONTRACT MADE UNDER THE LAWS OF THE ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
(b) Any legal action or proceeding against the Assignors with respect
to this Agreement may be brought in the courts of the State of New York in the
County of New York or of the United States for the Southern District of New York
and, by execution and delivery of this Agreement, each Assignor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Assignor agrees
that a judgment, after exhaustion of all available appeals, in any such action
or proceeding shall be conclusive
21
and binding upon such Assignor and may be enforced in any other jurisdiction by
a suit upon such judgment, a certified copy of which shall be conclusive
evidence of the judgment. Each Assignor hereby irrevocably designates, appoints
and empowers CT Corporation System, with offices on the date hereof at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its designee, appointee and agent to
receive and accept for and on its behalf service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, such Assignor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Collateral Agent. Each Assignor further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to such Assignor at its address
referred to in Section 6.1, such service to become effective thirty (30) days
after such mailing. Nothing herein shall affect the right of the Collateral
Agent to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Assignor in any other jurisdiction.
(c) Each Assignor hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Financing Document brought in the courts referred to in clause (b) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(d) WITH REGARD TO THIS AGREEMENT, THE ASSIGNORS AND THE COLLATERAL
AGENT HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
Section 6.15 Entire Agreement. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their agreement as to the matters covered hereby and is intended
as a complete and exclusive statement of the terms and conditions thereof.
Section 6.16 Independent Obligations. The Assignors' obligations under this
Agreement are independent of those of CE Generation. The Collateral Agent may
bring a separate action against the Assignors without first proceeding against
CE
22
Generation or any other Person or any other security held by the Collateral
Agent and without pursuing any other remedy.
Section 6.17 Waiver of Defenses. The Assignors hereby waive: (a) any defense
of a statute of limitations; (b) any defense based on the legal disability of CE
Generation or any discharge or limitation of the liability of CE Generation to
the Collateral Agent or the Secured Parties, whether consensual or arising by
operation of law; (c) presentment, demand, protest and notice of any kind (other
than as expressly provided by the Financing Documents); and (d) any defense
based upon or arising out of any defense which CE Generation may have to the
payment or performance of any part of the Secured Obligations.
Section 6.18 Subrogation, Etc. Notwithstanding any payment or payments made
by the Assignors or the exercise by the Collateral Agent of any of the remedies
provided under this Agreement or any other Financing Document, until the Secured
Obligations have been indefeasibly paid in full in cash or Cash Equivalents, the
Assignors shall have no claim (as defined in 11 U.S.C. ss. 101(5)) of
subrogation to any of the rights of the Collateral Agent against CE Generation,
the Cash Flow Collateral or any guaranty held by the Collateral Agent for the
satisfaction of any of the Secured Obligations, nor shall the Assignors have any
claims (as defined in 11 U.S.C. ss. 101(5)) for reimbursement, indemnity,
exoneration or contribution from CE Generation in respect of payments made by
the Assignors hereunder. Notwithstanding the foregoing, if any amount shall be
paid to the Assignors on account of such subrogation, reimbursement, indemnity,
exoneration or contribution rights at any time, such amount shall be held by the
Assignors in trust for the Collateral Agent segregated from other funds of the
Assignors, and shall be turned over to the Collateral Agent in the exact form
received by the Assignors (duly endorsed by the Assignors to the Collateral
Agent if required) to be applied against the Secured Obligations in such amounts
and in such order as the Collateral Agent may elect.
Section 6.19 Joint and Several Liability. Except for the obligations of each
Assignor with respect to its Cash Flow Collateral, which shall be several only,
the obligations of the Assignors under this Agreement shall be joint and
several.
23
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Security
Agreement as of the day and year first above written.
MAGMA POWER COMPANY
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
--------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SALTON SEA POWER COMPANY
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
--------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FALCON SEABOARD RESOURCES, INC.
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
--------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signature Page to Assignor Security Agreement
▇▇▇▇▇ ▇▇▇
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FALCON SEABOARD POWER CORPORATION
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
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FALCON SEABOARD OIL COMPANY
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
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CALIFORNIA ENERGY DEVELOPMENT CORPORATION
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Signature Page to Assignor Security Agreement
Address for Notices:
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CE TEXAS ENERGY LLC
Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address for Notices:
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CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
as Collateral Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇.▇. ▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Address for Notices:
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Signature Page to Assignor Security Agreement
Schedule 3.1
FINANCING STATEMENTS
Copies on file with ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.
Schedule 3.4
CHIEF EXECUTIVE OFFICES
Legal Name of Assignor Chief Executive Office
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Magma Power Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Salton Sea Power Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Falcon Seaboard Resources, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Falcon Seaboard Power
Corporation ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Falcon Seaboard Oil Company ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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California Energy Development
Corporation ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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CE Texas Energy LLC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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Schedule 3.19
ENVIRONMENTAL MATTERS
None.
Exhibit A
FORM OF PLEDGE AND SECURITY AGREEMENT
Copy on file with ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇.