FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
First Amendment, dated as of October 12, 2004 (the "FIRST AMENDMENT"), to the
Pledge and Security Agreement (the "PLEDGE AGREEMENT"), dated as of February 13,
2004, by and between Ormat Funding Corp., a Delaware corporation (the "ISSUER"),
and Union Bank of California, N.A., in its capacity as collateral agent (the
"COLLATERAL AGENT").
Whereas, the Issuer, Xxxxx Power Partners, a Nevada general partnership,
Steamboat Development Corp., a Utah corporation, Steamboat Geothermal LLC, a
Delaware limited liability company, OrMammoth Inc., a Delaware corporation, ORNI
1 LLC, a Delaware limited liability company, ORNI 2 LLC, a Delaware limited
liability company, ORNI 7 LLC, a Delaware limited liability company, and Ormesa
LLC, a Delaware limited liability company (collectively with the Issuer, the
"ORMAT PARTIES"), and Union Bank of California, N.A., a national banking
association, as trustee (the "TRUSTEE"), are parties to the Indenture dated as
of February 13, 2004 (the "INDENTURE") with respect to the Issuer's 8 1/4%
Senior Secured Notes due December 30, 2020 (the "NOTES");
WHEREAS, the Offering Memorandum dated February 6, 2004 (the "OFFERING
MEMORANDUM") contained the following language on the cover of the Offering
Memorandum: "...the pledge by us in the Capital Stock of, one or more of, the
ORNI Entities and the pledge by the ORNI Entities of the Capital Stock of, one
or more of, Xxxxx and Steamboat Development may be released if we obtain all
necessary duly executed Resource Lease Consents with respect to the Unassigned
Leases held by such entity and we execute and record Deeds of Trust or have
previously executed and recorded Deeds of Trust with respect to such Unassigned
Leases";
WHEREAS, the Offering Memorandum contained the following language on page 82 of
the Offering Memorandum: "If a Resource Lease Consent is obtained, the
applicable Guarantors will xxxxx x Xxxx on the related Unassigned Leases and,
upon obtaining Resource Lease Consents with respect to all Unassigned Leases
held by such Guarantors and recording Deeds of Trust encumbering such Unassigned
Leases, the pledge of the Capital Stock of the applicable Guarantors will be
released from the Lien of the Collateral Agent...";
WHEREAS, the Offering Memorandum contained the following language on page 110 of
the Offering Memorandum: "....the Lien on our ownership interest in, one or more
of the, ORNI Entities and the ORNI Entities ownership interest in, one or more
of, Xxxxx or Steamboat Development, may be released at such time as we obtain a
duly executed Resource Lease Consent with respect to such entity.";
WHEREAS, in the course of drafting the Indenture and the Pledge Agreement, the
drafting parties intended to but failed to include such release provisions in
either the Indenture or the Pledge Agreement;
WHEREAS, the Issuer and the Collateral Agent are permitted to amend or modify
the Pledge Agreement by an instrument in writing signed by the Issuer and the
Collateral Agent pursuant to Section 6.02 of the Pledge Agreement
WHEREAS, the Issuer and the Collateral Agent desire to amend the Pledge
Agreement pursuant to Section 6.02;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Issuer
and the Collateral Agent agree for the equal and ratable benefit of the Holders
of the Notes as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms and Rules of Construction.
Unless the context otherwise requires, capitalized terms used herein that are
not otherwise defined herein shall have the meaning assigned to such terms in
the Indenture and the Pledge Agreement. This First Amendment will be interpreted
in accordance with the rules of construction in Section 1.01 of the Pledge
Agreement.
ARTICLE II
AMENDMENTS TO THE PLEDGE AGREEMENT
Section 2.1 Amendments.
A new Section 2.17(b) shall be added to the Pledge Agreement as follows:
(b)
If the Resource Lease Consents with respect to all Unassigned Leases held by any
Guarantor are obtained and a Deed of Trust is recorded to encumber the
Unassigned Leases held by such Guarantor, then, upon receipt by the Collateral
Agent and the Trustee of a certificate from the Issuer stating that the
conditions of this Section 2.17(b) have been met with respect to such Guarantor,
the Collateral Agent shall release the Lien in favor of the Secured Parties on
the Capital Stock of that Guarantor. The Collateral Agent shall return the
certificates held by it evidencing such Capital Stock and execute any and all
documents necessary to effectuate the foregoing.
The existing paragraph in Section 2.17 shall remain unchanged except that it
shall be referred to as paragraph (a).
ARTICLE III
MISCELLANEOUS
Section 3.1 Ratification of the Pledge Agreement
The Pledge Agreement, as supplemented by this First Amendment, is in all
respects ratified and confirmed, and this First Amendment shall be deemed part
of the Pledge Agreement in the manner and to the extent herein and therein
provided.
Section 3.2 Governing Law.
The internal law of the State of New York shall govern and be used to construe
this First Amendment, without giving effect to applicable principles of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
Section 3.3 Severability.
In case any provision in this First Amendment shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 3.4 Counterparts.
The parties may sign any number of copies of this First Amendment. Each signed
copy shall be an original, but all of them together represent the same
agreement.
2
Section 3.5 Collateral Agent Not Responsible for Recitals.
The recitals herein contained are made by the Issuer and not by the Collateral
Agent, and the Collateral Agent assumes no responsibility for the correctness
thereof. The Collateral Agent makes no representation as to the validity or
sufficiency of this First Amendment.
3
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed as of the day and year first above written.
ORMAT FUNDING CORP.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President and Secretary
UNION BANK OF CALIFORNIA, N.A.
as Collateral Agent
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
4
