EXHIBIT 4.8
COMMON SECURITIES GUARANTEE AGREEMENT
CALENERGY COMPANY, INC.
Dated as of February 26, 1997
COMMON SECURITIES GUARANTEE AGREEMENT
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common
Securities Guarantee"), dated as of February 26, 1997, is executed and delivered
by CalEnergy Company, Inc., a Delaware corporation (the "Guarantor"), for the
benefit of the Holders (as defined herein) from time to time of the Common
Securities (as defined in the Declaration) of CalEnergy Capital Trust II, a
Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of February 26, 1997, among the Trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof 92,784 Common Securities, having an
aggregate stated liquidation amount of $4,639,200 (plus up to an additional
18,557 Common Securities, having an aggregate liquidation amount of $927,850, to
meet the capital requirements of the Trust in the event of an issuance of
Additional Preferred Securities (as such term is defined in the Declaration)),
designated the 6-1/4% Convertible Common Securities;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement in substantially identical terms to this Common Securities
Guarantee for the benefit of the holders of the 6-1/4% Trust Convertible
Preferred Securities (the "Preferred Securities") (the "Preferred Securities
Guarantee") except that if an Event of Default (as defined in the Indenture),
has occurred and is continuing, the rights of holders of the Common Securities
to receive Guarantee Payments under this Common Securities Guarantee are
subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments under
the Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
ARTICLE I
SECTION 1.1. In this Common Securities Guarantee, unless the
context otherwise requires, the terms set forth below shall have the following
meanings.
(a) Capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Common Securities Guarantee have the same meaning
when used in this Common Securities Guarantee unless otherwise defined
in this Common Securities Guarantee.
(c) A term defined anywhere in this Common Securities
Guarantee has the same meaning throughout;
(d) All references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities
Guarantee as modified, supplemented or amended from time to time;
(e) All references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) A reference to the singular includes the plural and vice
versa.
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"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions which are required to be paid on such Common Securities to the
extent the Issuer shall have funds available therefore, (ii) the amount payable
upon redemption to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Common Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Common Securities to the date of payment, to the extent the
Issuer has funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Common Securities.
ARTICLE II
SECTION 2.1. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 2.2. If an Event of Default (as defined in the
Indenture), has occurred and is continuing, the rights of Holders of the Common
Securities to receive Guarantee Payments under this Common Securities Guarantee
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments under the Preferred Securities Guarantee.
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SECTION 2.3. The Guarantor hereby waives notice of acceptance
of this Common Securities Guarantee and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 2.4. The obligations, covenants, agreements and duties
of the Guarantor under this Common Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, amount payable upon redemption,
Liquidation Distribution or any other sums payable under the terms of
the Common Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Common Securities (other than an extension of time for payment of
Distributions, amount payable upon redemption, Liquidation Distribution
or other sum payable that results from the extension of any interest
payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Common Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership,
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insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or
other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in the Common
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 2.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or any other Persons to give notice
to, or obtain consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 2.5. The Guarantor expressly acknowledges that any
Holder of Common Securities may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Common Securities Guarantee,
without first instituting a legal proceeding against the Issuer or any other
Person.
SECTION 2.6. This Common Securities Guarantee creates a
guarantee of payment and not of collection.
SECTION 2.7. The Guarantor shall be subrogated to all (if any)
rights of the Holders of Common Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Common Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Common Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Common Securities Guarantee. If any amount shall
be paid to the Guarantor
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in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 2.8. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Common Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.4 hereof.
SECTION 2.9. The Guarantor acknowledges its obligation to
issue and deliver common stock upon the conversion of the Common Securities.
ARTICLE III
SECTION 3.1. So long as any Common Securities remain
outstanding, if (i) the Guarantor shall be in default with respect to its
Guarantee Payments or other obligations hereunder, (ii) there shall have
occurred and be continuing any event that, with the giving of notice or the
lapse of time or both, would constitute an Event of Default under the Indenture
or (iii) the Guarantor shall have given notice of its selection of an Extended
Interest Payment Period as provided in the Indenture and such period, or any
extension thereof, shall be continuing, then the Guarantor shall not (a) declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock (other than (1) purchases or acquisitions of shares of Common
Stock in connection with the satisfaction by the Guarantor of its obligations
under any employee benefit plans, (2) as a result of a reclassification of
capital stock of the Guarantor or the exchange or conversion of one class or
series of the Guarantor's capital stock for another class or series of capital
stock of the Guarantor, (3) the purchase of fractional interests in shares of
the Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock of the Guarantor or the security being converted or
exchanged
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or (4) stock dividends paid by the Guarantor which consist of stock of the same
class as that on which the dividend is being paid), (b) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Guarantor after the date hereof that ranks pari
passu with or junior to the Debentures and (c) make any guarantee payments with
respect to the foregoing (other than pursuant to the Preferred Securities
Guarantee).
SECTION 3.2. This Common Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor, except any
liabilities that may be made pari passu expressly by their terms, (ii) pari
passu with the most senior preferred or preference stock now or hereafter issued
by the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock or Preferred Security
of any Affiliate of the Guarantor, and (iii) senior to the Guarantor's common
stock.
ARTICLE IV
SECTION 4.1. This Common Securities Guarantee shall terminate
upon (i) full payment of the amount payable upon redemption of the Common
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Preferred Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders of all of the
Common Securities or (iii) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
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ARTICLE V
SECTION 5.1. All guarantees and agreements contained in this
Common Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders of the Common Securities then outstanding. Except in connection with
any merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of all or substantially all of the Guarantor's assets to
another entity as permitted under Article Eight of the Indenture, the Guarantor
may not assign its rights or delegate its obligations under the Common
Securities Guarantee without the prior approval of the Holders of at least a
Majority of the aggregate stated liquidation amount of the Common Securities
then outstanding.
SECTION 5.2. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Common Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount of
all the outstanding Common Securities. The provisions of Section 12.2 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
SECTION 5.3. All notices provided for in this Common
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by registered or certified
mail, as follows:
(a) if given to the Issuer, in care of the Regular
Trustees at the Issuer's mailing address set forth
below (or such other address as the Issuer may give
notice of to the Holders of the Common Securities):
Xxxxxx X. XxXxxxxx
Xxxx X. Xxxxxx
Xxxxxxx Xxxx
CalEnergy Capital Trust
c/o CalEnergy Company, Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
0
Xxxxx, Xxxxxxxx 00000
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the
Guarantor may give notice of to the Holders of the
Common Securities):
CalEnergy Company, Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: General Counsel
(c) if given to any Holder of Common Securities, at the
address set forth on the books and records of the
Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 5.4. This Common Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.
SECTION 5.5. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
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THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
CALENERGY COMPANY,
INC., as Guarantor
By: /s/ Xxxxxx X. XxXxxxxx
--------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Senior Vice President,
General Counsel
and Secretary
