Exhibit 10.1.16
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LETTER OF CREDIT AND LOAN AGREEMENT
BETWEEN
ORMAT NEVADA INC.,
AS BORROWER,
AND
XXXXXX UNITED BANK,
AS LENDER
DATED AS OF JUNE 30, 2004
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TABLE OF CONTENTS
SECTION 1.1 General Definitions.......................................................................1
SECTION 1.2 Accounting Terms and Determinations......................................................10
SECTION 1.3 Other Terms; Headings....................................................................10
ARTICLE II THE CREDIT FACILITIES.................................................................................10
SECTION 2.1 Letters of Credit and Loans..............................................................10
SECTION 2.2 Term.....................................................................................13
SECTION 2.3 Evidence of Debt; Account Statements.....................................................13
SECTION 2.4 Amortization of Loans; Post-Default Cash Collateralization of Letters of Credit..........13
SECTION 2.5 Maximum Amount of the Facility; Mandatory Prepayments; Optional Prepayments..............14
SECTION 2.6 Payment Procedures.......................................................................14
SECTION 2.7 Payments.................................................................................15
ARTICLE III INTEREST, FEES AND EXPENSES..........................................................................15
SECTION 3.1 Interest.................................................................................15
SECTION 3.2 Interest After Event of Default..........................................................16
SECTION 3.3 Commitment Fee...........................................................................16
SECTION 3.4 Unused Line Fee..........................................................................16
SECTION 3.5 Letter of Credit Fees....................................................................16
SECTION 3.6 Calculations.............................................................................16
SECTION 3.7 Indemnification in Certain Events........................................................17
ARTICLE IV CONDITIONS PRECEDENT..................................................................................17
SECTION 4.1 Conditions to Initial Letter of Credit...................................................17
SECTION 4.2 Conditions Precedent to Issuance of Each Letter of Credit................................19
SECTION 4.3 Determinations Under Section 4...........................................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES.........................................................................20
SECTION 5.1 Representations and Warranties of the Borrower...........................................20
ARTICLE VI COVENANTS OF THE BORROWER.............................................................................25
SECTION 6.1 Affirmative Covenants....................................................................25
SECTION 6.2 Negative Covenants.......................................................................31
ARTICLE VII FINANCIAL COVENANTS..................................................................................33
SECTION 7.1 Tangible Net Worth.......................................................................33
SECTION 7.2 Leverage Ratio...........................................................................33
SECTION 7.3 Minimum Coverage Ratio...................................................................33
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AMENDED AND RESTATED
ARTICLE VIII EVENTS OF DEFAULT...................................................................................33
SECTION 8.1 Events of Default........................................................................33
SECTION 8.2 Acceleration and Cash Collateralization..................................................35
ARTICLE IX GENERAL PROVISIONS....................................................................................36
SECTION 9.1 GOVERNING LAW............................................................................36
SECTION 9.2 SUBMISSION TO JURISDICTION...............................................................36
SECTION 9.3 SERVICE OF PROCESS.......................................................................36
SECTION 9.4 JURY TRIAL...............................................................................36
SECTION 9.5 LIMITATION OF LIABILITY..................................................................37
SECTION 9.6 Delays; Partial Exercise of Remedies.....................................................37
SECTION 9.7 Notices..................................................................................37
SECTION 9.8 Assignments and Participations...........................................................37
SECTION 9.9 Indemnification; Reimbursement of Expenses of Collection.................................37
SECTION 9.10 Right of Setoff..........................................................................38
SECTION 9.11 Amendments and Waivers...................................................................38
SECTION 9.12 Nonliability of Lender...................................................................39
SECTION 9.13 Counterparts; Telecopied Signatures......................................................39
SECTION 9.14 Severability.............................................................................39
SECTION 9.15 Maximum Rate.............................................................................39
SECTION 9.16 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS.................................................40
SECTION 9.17 References to Ormat Technologies.........................................................40
SCHEDULES
Schedule 5.1(e) Consents and Filings
Schedule 5.1(f) Material Transactions
Schedule 5.1(h) Joint Ventures or Partnerships
Schedule 5.1(o) Taxes and Tax Returns
Schedule 5.1(p) Judgments or Litigation
Schedule 5.1(s) ERISA
Schedule 5.1(x) Contracts, Orders, etc.
Schedule 9.10 Excluded Accounts
EXHIBITS
Exhibit A Promissory Note
Exhibit B Subordination Agreement
Exhibit C Letter of Credit Request
Exhibit D Opinion of Counsel
Exhibit E Compliance Certificate
AMENDED AND RESTATED
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THIS LETTER OF CREDIT AND LOAN AGREEMENT is entered into as of JUNE 30,
2004, between ORMAT NEVADA INC., a Delaware corporation having its chief
executive office and principal place of business at 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxx 00000 (the "Borrower"), and XXXXXX UNITED BANK, a bank organized under
the laws of the State of New Jersey having an office at 00 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Lender").
W I T N E S S E T H :
WHEREAS, the Borrower has requested the Lender to provide a letter of
credit and term loan facility upon the terms and subject to the conditions
herein set forth; and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lender is willing to issue, and to use its best efforts to cause to be
issued by Fronting Banks, letters of credit for the account of the Borrower and
wholly owned Subsidiaries of the Borrower and to make term loans to the Borrower
to fund payment of the reimbursement obligations arising from such letters of
credit that have not been paid by the Borrower;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings and the terms and conditions contained herein, the Borrower and the
Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General Definitions. As used herein, the following terms
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):
"Adjusted Consolidated Cash Flow" means, for any Person, for any
period, the sum of (i) Unrestricted Adjusted Consolidated Net Income of such
Person and its consolidated Subsidiaries and Consolidated Persons with respect
to such first Person for such period plus (ii) the aggregate amount of all
non-cash charges deducted in arriving at such Unrestricted Adjusted Consolidated
Net Income less (iii) principal payments made or required to be made on account
of Indebtedness during such period.
"Affiliate" means, as to any Person, any other Person who directly or
indirectly controls, is under common control with, is controlled by or is a
director or officer of such Person. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common control
with") means possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership of voting
securities or partnership or other ownership interests, by contract or
otherwise).
"Agreement" means this Letter of Credit and Loan Agreement, as amended,
supplemented or otherwise modified from time to time.
AMENDED AND RESTATED
"Auditors" means PricewaterhouseCoopers LLP, another "Big Four" firm of
independent public accountants, or another nationally-recognized firm of
independent public accountants selected by the Borrower and satisfactory to the
Lender in its reasonable discretion.
"Availability Expiration Date" means the earlier of (i) the Initial
Availability Expiration Date, as such date may be extended from time to time
under Section 2.2, and (ii) the date of termination of the Lender's obligation
to issue, or use its best efforts to cause to be issued, Letters of Credit or to
make Loans
"Base Rate" means as of any date the higher of (i) the prime, base or
equivalent rate of interest announced from time to time by Citibank, N.A. or any
successor thereto (which may not be the lowest rate of interest charged by such
bank) and (ii) the published annualized rate for ninety-day dealer commercial
paper that appears in the "Money Rates" Section of the Wall Street Journal (U.S.
Edition).
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York or Reno, Nevada are required or
permitted by law to close. When used in connection with the LIBOR Rate or any
Interest Period, a Business Day shall also exclude any day on which commercial
banks are not open for dealings in Dollar deposits in the London interbank
market.
"Capital Expenditures" means expenditures (or commitments to make
expenditures that are required to be recorded as capital expenditures in
accordance with GAAP) for the acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful life of
more than one year, and shall include all such commitments and payments in
respect of expenditures for any fixed assets or improvements, replacements,
substitutions or additions of or to Facilities covered by Capitalized Lease
Obligations, operating leases and leasehold improvements.
"Capitalized Lease Obligations" means any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the lessee,
taken at the amount thereof accounted for as indebtedness (net of interest
expense) in accordance with GAAP.
"Change of Control" means one or more of the following events:
(i) the shareholder of the Borrower shall approve any plan or
proposal for the liquidation or dissolution of the Borrower; or
(ii) the shareholder of the Borrower shall approve any plan or
proposal for a merger or consolidation to which the Borrower is a party
and as a result of which either
(A) the Tangible Net Worth of the survivor or successor
entity is less than that required under Section 7.1, or
(B) the shareholder of the Borrower ceases to own a
sufficient amount of the voting stock of the Borrower
with rights to elect
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AMENDED AND RESTATED
a majority of the members of the Borrower's board of
directors.
"Closing Date" means the date of execution and delivery of this
Agreement.
"Code" has the meaning specified in Section 1.3.
"Commitment" means the Lender's commitment to issue Letters of Credit,
and to use its best efforts to cause Letters of Credit to be issued, reissued
and renewed by Fronting Banks and to make Loans in an aggregate outstanding
amount up to the Maximum Amount of the Facility, as such amount may be decreased
from time to time in accordance with Section 2.1(g).
"Confidential Information" means information that the Borrower or any
of its Affiliates furnishes to the Lender that is designated by the Borrower or
such Affiliate as being confidential, but does not include any such information
that (i) is or becomes generally available to the public or (ii) is or becomes
available to the Lender from a source other than the Borrower or such Affiliate
which is not known at such time by the Lender to be subject to a confidentiality
restriction until such time as it is known by the Lender to be subject to a
confidentiality restriction.
"Consolidated Person" means any Person that is required to be accounted
for on the financial statements of another Person under FASB FIN 46,
Consolidation of Variable Interest Entities.
"Default" means any of the events specified in Section 8.1, whether or
not any of the requirements for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and the sign "$" mean freely transferable lawful currency of
the United States.
"Electric Utility" means a public utility, an electric utility or an
electric utility holding company or a Subsidiary of any thereof or an Affiliate
of an electric utility holding company, as those terms are used in PUHCA, PURPA,
the rules or regulations implementing PUHCA or PURPA or under any other
Requirement of Law.
"Environmental Laws" means all federal, state and local statutes, laws
(including, without limitation, common or case law), rulings, regulations or
governmental, administrative or judicial policies, directives, orders or
interpretations applicable to the business or property of the Borrower relating
to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act, the Resource Conservation
and Recovery Act and all other laws and regulations relating to emissions,
discharges, releases or threatened releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of any Hazardous Materials.
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AMENDED AND RESTATED
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. xx.xx. 1000 et seq., as amended, successor statutes and regulations or
guidelines promulgated thereunder.
"ERISA Affiliate" means any Person required to be aggregated with the
Borrower under Section 414(b), (c), (m) or (o) of the Internal Revenue Code.
"Event of Default" means the occurrence of any of the events specified
in Section 8.1.
"Facility" means a power plant, industrial power generation
infrastructure asset, or other alternative energy plant and related facilities
owned or leased by the Borrower or any of its Subsidiaries, in each case with
related rights under power purchase contracts, sales and service agreements,
leases, easements, permits and similar contractual rights.
"Federal Reserve Board" has the meaning specified in Section 5.1(n).
"FERC" means the Federal Energy Regulatory Commission and any Person
succeeding to the functions thereof.
"Financial Covenants" means those covenants set forth in Article VII.
"Financial Statements" means the consolidated balance sheets and
statements of cash flow, profits and losses and shareholders' equity of the
Borrower and its Subsidiaries and Consolidated Persons for the period specified,
prepared in accordance with GAAP and consistently with prior practices.
"Foreign Plan" has the meaning specified in Section 6.1(k).
"Fronting Bank" means HSBC Bank USA or a U.S. federal chartered bank
with offices located in any of the twenty largest cities in the United States
whose combined capital and surplus is at least $1,000,000,000 and whose
long-term unsecured debt is rated A or better by Standard & Poor's Corporation
and A3 or better by Xxxxx'x Investors Service, Inc.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.
"Governing Documents" means the certificate of incorporation and
by-laws or other organizational or governing documents of the Borrower or Ormat
Technologies.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions thereof or
pertaining thereto.
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AMENDED AND RESTATED
"Hazardous Materials" means any and all pollutants and contaminants and
any and all toxic, caustic, radioactive or hazardous materials, substances or
wastes that are regulated under any Environmental Laws.
"Indebtedness" means as of the date of determination thereof (without
duplication), (i) all obligations of a Person for borrowed money of any kind or
nature, including, without limitation, funded debt, and net amounts payable
under currency and interest rate hedging or swap agreements or arrangements
therefor, regardless of whether the same is evidenced by any note, debenture,
bond or other instrument, (ii) all obligations of a Person to pay the deferred
purchase price of property or services (other than current trade accounts
payable under normal trade terms and which arise in the ordinary course of
business and are not delinquent), (iii) the then outstanding amount of
withdrawal or termination liability incurred under ERISA, (iv) all Indebtedness
of others secured by a Lien on any asset of a Person whether or not the
Indebtedness is assumed by such Person, (v) all Indebtedness of others to the
extent guaranteed by a Person and (vi) all obligations of a Person in respect of
letters of credit, bankers acceptances or similar instruments issued or accepted
by banks or other financial institutions for the account of such Person.
"Initial Availability Expiration Date" means June 30, 2007.
"Insolvency Event" means, with respect to any Person, the occurrence of
any of the following: (i) such Person shall be adjudicated insolvent or
bankrupt, or shall generally fail to pay or admit in writing its inability to
pay its debts as they become due, (ii) such Person shall seek dissolution or
reorganization or the appointment of a receiver, trustee, custodian or
liquidator for it or a substantial portion of its property, assets or business
or to effect a plan or other arrangement with its creditors, (iii) such Person
shall make a general assignment for the benefit of its creditors, or consent to
or acquiesce in the appointment of a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business, (iv) such Person
shall file a voluntary petition under any bankruptcy, insolvency or similar law,
(v) such Person shall take any corporate or similar act in furtherance of any of
the foregoing or (vi) such Person, or a substantial portion of its property,
assets or business shall become the subject of an involuntary proceeding or
petition for (A) its dissolution or reorganization or (B) the appointment of a
receiver, trustee, custodian or liquidator, and (I) such proceeding shall not be
dismissed or stayed within sixty days or (II) such receiver, trustee, custodian
or liquidator shall be appointed; provided, however, that the Lender shall have
no obligation to make any Advance during the pendency of any sixty-day period
described in clauses (A) and (B).
"Interest Period" means the initial period commencing on the Closing
Date and terminating on June 30, 2004, and each subsequent three-month period
determined in accordance with Section 3.1(b); provided, however, that (i) an
Interest Period may not end after the Maturity Date; and (ii) whenever the last
day of an Interest Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, except that, if such extension would cause the last day
of such Interest Period to occur in the next following calendar month, then the
last day of such Interest Period shall occur on the next preceding Business Day.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, any successor statute and any regulations or guidelines promulgated
thereunder.
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AMENDED AND RESTATED
"Internal Revenue Service" or "IRS" means the United States Internal
Revenue Service and any successor agency.
"L/C Cash Collateral Account" means an interest-bearing cash collateral
account established by the Borrower with the Lender in the name of the Borrower,
but under the sole dominion and control of the Lender, subject to the terms of
this Agreement.
"Letter of Credit Request" has the meaning specified in Section 2.1(c).
"Letters of Credit" means all letters of credit issued under Section
2.1(a) hereof for the account of the Borrower or, at the Borrower's request, for
the account of any of the Borrower's wholly owned Subsidiaries.
"Leverage Ratio" means at any time, the ratio of (i) all Indebtedness
of the Borrower to (ii) the Tangible Net Worth of the Borrower.
"Liabilities" of a Person as of the date of determination thereof means
the liabilities of such Person on such date as determined in accordance with
GAAP. Liabilities to Affiliates shall be treated as Liabilities except where
eliminated by consolidation in financial statements prepared in accordance with
GAAP or as otherwise provided herein.
"LIBOR Rate" means, with respect to each Interest Period, the rate
determined by the Lender to be (i) the per annum rate for deposits in Dollars
for a period of one month that appears on the Dow Xxxxx Market Service (formerly
Telerate) Page 3750 Screen as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of an Interest Period (rounded upwards, if
necessary, to the nearest 1/100th of 1%); or (ii) if such rate does not appear
on the Dow Xxxxx Market Service Page 3750 Screen, the reserve adjusted rate per
annum equal to the one-month London Interbank Offered Rate that appears in the
"Money Rates" section of The Wall Street Journal (U.S. Edition) on the first day
of such Interest Period; or (iii) if such rate does not appear on the Dow Xxxxx
Market Service Page 3750 Screen and The Wall Street Journal (U.S. Edition) no
longer publishes such one-month London Interbank Offered Rate, the per annum
rate for deposits in U.S. Dollars for a period of one month that appears on the
Reuters Screen ISDA Page as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of an Interest Rate Period (rounded
upwards, if necessary, to the nearest 1/100th of 1%). As used under this
definition, "Dow Xxxxx Market Service Page 3750 Screen" means the display
designated as "Page 3750" on the Dow Xxxxx Market Service (or such other page as
may replace Page 3750 on that service or such other service as may be nominated
by the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).
"Lien" means any lien, claim, charge, pledge, security interest,
assignment, hypothecation, deed of trust, mortgage, lease, conditional sale,
retention of title or other encumbrance or preferential arrangement having
substantially the same economic effect as any of the foregoing, whether
voluntary or imposed by law.
"Loan" has the meaning specified in Section 2.1(d).
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AMENDED AND RESTATED
"Loan Documents" means this Agreement, the Note, the Subordination
Agreement and all other documents and instruments delivered or to be delivered
by the Borrower or any Affiliate under or in connection with this Agreement and
designated therein as a "Loan Document," as each of the same may be amended,
supplemented or otherwise modified from time to time.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature before the Availability Expiration
Date, whether singly or in conjunction with any one or more other events, acts,
conditions or occurrences, whether or not related, (i) a material and adverse
effect on the business, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrower individually, or the
Borrower and its Subsidiaries in the aggregate and taken as a whole, which could
reasonably be expected to render the Borrower unable to repay the outstanding
Loans and to reimburse or, to the extent required by the terms of this
Agreement, cash collateralize all the obligations of the Borrower with respect
to the Letters of Credit.
"Material Contract" means any long term power purchase agreement to
which the Borrower or any of its Subsidiaries is a party in each case for which
breach, nonperformance, cancellation or failure to renew could have a Material
Adverse Effect.
"Maximum Amount of the Facility" means Fifteen Million Dollars
($15,000,000) less the amount of any reduction of the Commitment under Section
2.1(g) less the amount of any Letter of Credit issued by a Fronting Bank that is
not re-issued, extended or renewed upon its expiration following the Borrower's
request for such re-issuance, extension or renewal (if the beneficiary of such
Letter of Credit will not accept a Letter of Credit issued by the Lender).
"Minimum Coverage Ratio" means, at any time, the ratio of (i) Adjusted
Consolidated Cash Flow for any calendar quarter or calendar year, as applicable,
to (ii) the aggregate amount of all principal and interest payable by the
Borrower and its Subsidiaries on account of Indebtedness during such calendar
quarter or calendar year.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate has
contributed within the past six years or with respect to which the Borrower or
any ERISA Affiliate may incur any liability.
"Note" means a promissory note of the Borrower payable to the order of
the Lender, substantially in the form of Exhibit A hereto, as amended,
supplemented or otherwise modified from time to time.
"Obligations" means all loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Lender of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, which may arise under, out of, or in connection
with this Agreement, the Note, the other Loan Documents, whether or not for the
payment of money, whether arising by reason of an extension of credit, opening,
guaranteeing or confirming of a letter of credit (including, but not limited to,
the Letters of Credit), loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including, without limitation, those acquired by
assignment, purchase, discount or otherwise), whether absolute or contingent,
due or to become due, and however acquired. The term includes, without
limitation, all interest (including interest accruing on or after an Insolvency
Event, whether or not an allowed claim),
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AMENDED AND RESTATED
charges, expenses, commitment, facility, unused line, closing, letter of credit
or other fees, reasonable attorneys' fees, and any other sum properly chargeable
to the Borrower under this Agreement, the Note, or the other Loan Documents.
"Ormat Funding" means Ormat Funding Corp., a Delaware corporation.
"Ormat Technologies" means Ormat Technologies, Inc., a Delaware
corporation.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) which the
Borrower or any ERISA Affiliate sponsors or maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time within the immediately preceding five years.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
joint stock company, association, corporation, institution, entity, party or
government (including, without limitation, any division, agency or department
thereof) or any other legal entity, whether acting in an individual, fiduciary
or other capacity, and, as applicable, the successors, heirs and assigns of
each.
"Plan" means any employee benefit plan, as defined in Section 3(3) of
ERISA, maintained or contributed to by the Borrower or any ERISA Affiliate with
respect to which any of them may incur liability.
"Prohibited Transaction" has the meaning specified in Section
5.1(s)(v).
"Property" means any real property owned, leased or controlled by the
Borrower.
"Pro Rata Share" means, on any date, a fraction (expressed as a
percentage) (i) the numerator of which is the sum of the amount of all undrawn
Letters of Credit and the outstanding amount of the Loans on such date and (ii)
the denominator of which is the aggregate unsecured Indebtedness of the Borrower
with respect to which the Borrower has any obligation to make payments of
principal or interest or to create segregated cash reserves or deposit cash
collateral, in each case during the twelve-month period following such date
including, without limitation, the amount of all undrawn Letters of Credit and
the outstanding amount of the Loans on such date.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended, any successor statute and any regulations or guidelines promulgated
thereunder.
"PURPA" means the Public Utility Regulatory Policies Act of 1978, as
amended, any successor statute and regulations or guidelines promulgated
thereunder.
"Reportable Event" means any of the events described in Section 4043 of
ERISA and the regulations thereunder, other than a reportable event for which
the thirty-day notice requirement to the PBGC has been waived.
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AMENDED AND RESTATED
"Requirement of Law" means (i) the Governing Documents, (ii) any law,
treaty, rule or regulation or determination of an arbitrator, court or other
Governmental Authority applicable to the Borrower or Ormat Technologies, or
(iii) any franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, or other right or approval binding on the
Borrower or any of its property.
"Responsible Officer" means (i) the President, the Chief Executive
Officer, the Chief Financial Officer or the Chief Operating Officer of the
Borrower, (ii) either of Xxxx Xxxxx or Xxxxxx Xxxxxxxx in his or her capacity as
an Authorized Representative appointed by the Board of Directors of the Borrower
or (iii) any other executive officer of the Borrower approved by the Lender from
time to time.
"Solvent" means, when used with respect to any Person, that as of the
date as to which such Person's solvency is to be measured:
(i) the fair saleable value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities as valued in accordance with applicable law) as
they become absolute and matured;
(ii) it has sufficient capital to conduct its business; and
(iii) it is able to meet its debts as they mature.
"Subordination Agreement" means the subordination agreement between
Ormat Technologies and the Lender, substantially in the form of Exhibit B
hereto, as amended, supplemented or otherwise modified from time to time.
"Subsidiary" means, as to any Person, a corporation or other entity in
which that Person directly or indirectly owns or controls the shares of stock or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or appoint other managers of such corporation or other
entity and whose accounts are consolidated with the accounts of such Person in
such Person's financial statements.
"Tangible Net Worth" means, as at any date for the determination
thereof, with respect to any Person, (i) total assets determined under GAAP less
(ii) intangible assets including, without limitation, goodwill, patents, patent
rights, trademarks, trade names, copyrights, design rights, franchises, bond
discounts, underwriting expenses, treasury stock, organization expenses, and
other similar items (other than the value of power purchase agreements, FERC
licensing costs, geothermal leases and other agreements that contribute to the
value of the Facilities), less (iii) total Liabilities determined under GAAP
(other than liabilities that are subordinated to the Obligations under the
Subordination Agreement).
"Termination Event" means (i) a Reportable Event with respect to any
Pension Plan or Multiemployer Plan, (ii) the withdrawal of the Borrower or any
ERISA Affiliate from a Pension Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), (iii) the
providing of notice of intent to terminate a Pension Plan in a distress
termination (as described in Section 4041(c) of ERISA), (iv) the institution by
the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan, (v)
any event or condition
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AMENDED AND RESTATED
(A) which is reasonably likely to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan, or (B) that is reasonably likely to result
in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, or
(vi) the partial or complete withdrawal, within the meaning of Sections 4203 and
4205 of ERISA, of the Borrower or any ERISA Affiliate from a Multiemployer Plan.
"Unrestricted Adjusted Consolidated Net Income" means, for any period,
the aggregate net income (or loss) of any Person and its consolidated
Subsidiaries and Consolidated Persons with respect to such first Person for such
period determined in conformity with GAAP and that is not restricted for use by
such Person under any Requirement of Law or contract or agreement.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
defined or specified herein, all accounting terms used in this Agreement shall
be construed in accordance with GAAP, applied on a basis consistent in all
material respects with the Financial Statements delivered to the Lender on or
before the Closing Date. All accounting determinations for purposes of
determining compliance with Articles VI, VII and VIII shall be made in
accordance with GAAP as in effect on the Closing Date and applied on a basis
consistent in all material respects with the Financial Statements delivered to
the Lender on or before the Closing Date. The Financial Statements required to
be delivered hereunder from and after the Closing Date, and all financial
records, shall be maintained in accordance with GAAP. If GAAP shall change from
the basis used in preparing the Financial Statements delivered to the Lender on
or before the Closing Date, the certificates required to be delivered pursuant
to Section 6.1(i)(ii) demonstrating compliance with the covenants contained
herein shall include calculations setting forth the adjustments necessary to
demonstrate whether the Borrower is in compliance with the financial covenants
based upon GAAP as in effect on the Closing Date.
SECTION 1.3 Other Terms; Headings. Terms used herein that are defined
in the Uniform Commercial Code, as in effect from time to time in the State of
New York (the "Code") shall have the meanings given in the Code. Each of the
words "hereof," "herein," and "hereunder" refer to this Agreement as a whole. An
Event of Default shall "continue" or be "continuing" unless and until such Event
of Default has been waived in accordance with Section 9.11 or cured. References
to Articles, Sections, Annexes, Schedules and Exhibits are internal references
to this Agreement, and to its attachments, unless otherwise specified. The
headings and the Table of Contents are for convenience only and shall not affect
the meaning or construction of any provision of this Agreement.
ARTICLE II
THE CREDIT FACILITIES
SECTION 2.1 Letters of Credit and Loans.
(a) Subject to the terms and conditions set forth in this Agreement, on
and after the Closing Date until (but excluding) the Availability Expiration
Date, the Lender, upon receipt of a Letter of Credit Request, shall issue, or if
so requested by the Borrower from time to time, use its
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AMENDED AND RESTATED
best efforts to cause a Fronting Bank to issue, reissue or renew, Letters of
Credit for the account of the Borrower or, at the Borrower's request, for the
account of any wholly owned Subsidiary of the Borrower. Each Letter of Credit
shall be requested in accordance with the Borrower's ordinary business
requirements in the ownership, operation and development of Facilities to
support the obligations of the Borrower or its wholly owned Subsidiaries under
power purchase or other material project agreements or Ormat Funding's debt
reserve requirements with respect to Ormat Funding's 8 1/4% Senior Secured Notes
due 2020, each with a tenor and containing terms acceptable to the Borrower, the
Lender and, if applicable, the Fronting Bank, and in a face amount of not less
than $1,000,000. The Lender shall not be required to issue, or use its best
efforts to cause the issuance of, any Letter of Credit if, after giving effect
thereto, the maximum aggregate amount of (i) all Letters of Credit and Loans
outstanding at such time would exceed the Maximum Amount of the Facility or (ii)
the aggregate outstanding amount of Letters of Credit from Fronting Banks would
exceed $6,000,000. Notwithstanding any provision of this Agreement or any other
Loan Document, no Subsidiary of the Borrower shall be liable for any
reimbursement obligation with respect to any Letter of Credit.
(b) Unless otherwise previously agreed in writing by the Borrower and
the Lender, the initial term of any Letter of Credit shall not exceed one
calendar year from the date of issuance, subject to automatic renewal unless
notice to the contrary is given by the Lender or the Fronting Bank, as the case
may be, to the beneficiary of such Letter of Credit in writing at least thirty
days before the then effective expiration date of such Letter of Credit or
before the end of such longer period before the then effective expiration date
as may be specified in such Letter of Credit. Each Letter of Credit shall state
that, except as otherwise provided therein, such Letter of Credit is governed by
the UCP 500 Uniform Customs and Practice for Documentary Credits. Each Letter of
Credit issued, at the Borrower's request, for the account of a wholly owned
Subsidiary of the Borrower shall be deemed issued for the account of the
Borrower and the obligations arising in connection therewith shall be part of
the Obligations.
(c) Whenever the Borrower desires the issuance of a Letter of Credit,
the Borrower shall deliver to the Lender a written notice no later than 2:00
P.M. New York City time at least five Business Days (or such shorter period as
may be agreed to by the Lender) in advance of the proposed date of issuance of a
letter of credit request in substantially the form attached as Exhibit C (a
"Letter of Credit Request"). The transmittal by the Borrower of each Letter of
Credit Request shall be deemed to be a representation and warranty by the
Borrower that the Letter of Credit may be issued in accordance with and will not
violate any of the requirements of this Section 2.1. Prior to the date of
issuance of each Letter of Credit, the Borrower shall provide to the Lender a
precise description of the documents and the text of any certificate to be
presented by the beneficiary of such Letter of Credit which, if presented by
such beneficiary on or prior to the expiration date of such Letter of Credit,
would require the Lender (in its capacity as issuing bank) or the Fronting Bank,
as the case may be, to make payment under such Letter of Credit. The Lender, in
its reasonable judgment, may require changes in any such documents and
certificates. A Letter of Credit Request may be given in writing or
electronically with prompt written confirmation. Any electronic Letter of Credit
Request shall be deemed to have been prepared by, or under the supervision of, a
Responsible Officer.
(d) If any request for drawing under any Letter of Credit is presented
to the Lender or a Fronting Bank by the beneficiary thereof prior to the
Availability Expiration Date,
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AMENDED AND RESTATED
(i) the Borrower shall be deemed to have requested a loan (a "Loan") on the date
on which such drawing is honored in an amount equal to the amount of such
drawing and (ii) without regard to the satisfaction of the applicable conditions
specified in Section 5.2 and the other terms and conditions of borrowing
hereunder, the Lender shall, on the date of such drawing, make a Loan in the
amount of such drawing, the proceeds of which shall be applied directly by the
Lender to repay the reimbursement obligation owed to the Lender or the Fronting
Bank, as the case may be, for the amount of such drawing. Each Loan shall be
payable in full, with all interest accrued thereon, on the earlier of (i) twelve
months after the date on which such Loan was made under Section 2.1(d) and (ii)
the Availability Expiration Date.
(e) As between the Borrower, on the one hand, and the Lender (including
in its capacity as an account party of a Fronting Bank), on the other hand, the
Borrower assumes all risks of the acts and omissions of the Lender other than
the Lender's gross negligence or willful misconduct or of the misuse of the
Letters of Credit by the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Lender shall not be
responsible (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effects of any document submitted by any party in connection with the
application for and issuance of or any drawing honored under such Letters of
Credit even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged, (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason, (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, telecopy or
otherwise, (v) for errors in interpretation of technical terms, (vi) for any
loss or delay in the transmission or otherwise of any document required to make
a drawing under any such Letter of Credit, or of the proceeds thereof, (vii) for
the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing honored under such Letter of Credit, (viii) any failure
of the Lender to cause a Fronting Bank to re-issue, extend or renew a Letter of
Credit despite the Lender's best efforts to cause the same and (ix) for any
consequences arising from causes beyond the control of the Lender. None of the
above shall affect, impair, or prevent the vesting of any of the Lender's rights
or powers hereunder. Any action taken or omitted to be taken by the Lender under
or in connection with any Letter of Credit, if taken or omitted in the absence
of gross negligence or willful misconduct, shall not create any liability of the
Lender to the Borrower.
(f) The obligations of the Borrower to reimburse the Lender for
drawings honored under the Letters of Credit shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances: (i) any lack of validity or enforceability of this Agreement, any
Letter of Credit or any other agreement or instrument relating thereto, (ii) the
existence of any claim, setoff, defense or other right which the Borrower or any
Affiliate of the Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for which any such
beneficiary or transferee may be acting), the Lender or any other Person,
whether in connection with this Agreement, the other Loan Documents, the
transactions contemplated herein or therein or any unrelated transaction, (iii)
any draft, demand, certificate or other documents presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect, (iv) the
surrender or
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AMENDED AND RESTATED
impairment of any security for the performance or observance of any of the terms
of any of the Loan Documents, (v) payment by the Lender or a Fronting Bank under
any Letter of Credit against presentation of a demand, draft or certificate or
other document which does not comply with the terms of such Letter of Credit,
(vi) failure of any drawing under a Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of any drawing, or (vii) the
fact that a Default or Event of Default shall have occurred and be continuing.
Any action taken or omitted to be taken by the Lender or a Fronting Bank in
connection with any payment under a Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create any
liability of the Lender or a Fronting Bank to the Borrower.
(g) Upon not less than three Business Days' prior notice from the
Borrower to the Lender, the Borrower may reduce the Commitment permanently, in
whole or in part, provided that (i) any partial reduction shall be in an
integral multiple of $1,000,000 and (ii) any such notice shall be irrevocable
once given.
SECTION 2.2 Term. The Commitment shall commence on the Closing Date and
extend through the Initial Availability Expiration Date, unless sooner
terminated by the terms hereof, provided that the Availability Expiration Date
shall be extended for successive one-year periods beyond the then-effective
expiration date unless the Borrower notifies the Lender, or the Lender notifies
the Borrower, in writing at least one hundred twenty days and no more than one
hundred fifty days prior to the then effective Availability Expiration Date that
it does not wish to extend the Availability Expiration Date.
SECTION 2.3 Evidence of Debt; Account Statements. The Lender shall
maintain in its records one or more accounts evidencing the Obligations and the
amount of the Loans made by the Lender and of principal and interest payable and
paid to the Lender from time to time under this Agreement. In any legal action
or proceeding in respect of this Agreement, the Lender's records shall be prima
facie evidence of the existence and amounts of the Obligations, absent manifest
error. The Lender shall provide the Borrower with statements of the accounts
maintained by it hereunder promptly following the making of each Loan, the
receipt of each payment to the Lender under this Agreement, any other
adjustments made by the Lender to such accounts from time to time and any other
information relating to such accounts as the Borrower may reasonably request
from time to time.
SECTION 2.4 Amortization of Loans; Post-Default Cash Collateralization
of Letters of Credit.
(a) The Borrower shall pay to the Lender in four consecutive quarterly
installments, commencing on the last Business Day of the calendar quarter
immediately following the making of each Loan under Section 2.1(d), and on the
last Business Day of each of the three calendar quarters thereafter, the Pro
Rata Share of the Adjusted Consolidated Cash Flow for such calendar quarter (not
to exceed, so long as no Event of Default has occurred and is continuing, the
outstanding balance of the Loans including accrued and unpaid interest and fees
and expenses payable to the Lender at such time), which payments shall be
applied to the principal outstanding amount of such Loan and any accrued and
unpaid interest thereon, and, if an Event of Default has occurred and is
continuing, the cash collateralization in full of the undrawn amount of all
outstanding Letters of Credit; provided, however, that the amount of each Loan
shall be repaid in
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AMENDED AND RESTATED
full, and all amounts of Adjusted Consolidated Cash Flow shall be available for
such repayment, on the earlier of (i) twelve months after the date on which such
Loan was made and (ii) the Availability Expiration Date.
(b) All payments received by the Lender under subsection (a) hereof
shall be applied first to any accrued and unpaid interest on the Loans and then
to the outstanding principal amount of the Loans, provided that, if an Event of
Default has occurred and is continuing, the Lender shall have the right to apply
all payments and other amounts received by it on account of the Obligations to
such of the Obligations and in such order as it shall elect in its sole
discretion.
SECTION 2.5 Maximum Amount of the Facility; Mandatory Prepayments;
Optional Prepayments.
(a) In no event shall (i) the sum of the aggregate outstanding
principal balances of the Loans and the aggregate undrawn amount of all
outstanding Letters of Credit exceed the Maximum Amount of the Facility or (ii)
the amount of Letters of Credit issued by Fronting Banks exceed $6,000,000.
(b) In addition to any prepayment required as a result of an Event of
Default hereunder, the Borrower shall immediately upon discovery by or notice to
the Borrower that the lending limit specified in Section 2.5(a) has been
exceeded, prepay to the Lender an amount sufficient to reduce the outstanding
balances to the applicable maximum allowed amount, or, in the case of Letters of
Credit, to cash collateralize such excess amount, without the necessity of a
demand by the Lender.
(c) The Borrower shall have the right at any time to make prepayments
of the Loans without premium or penalty, upon irrevocable notice given to the
Lender prior to 4:00 P.M., New York City time, at least two Business Days prior
to the date of such prepayment, specifying the date and amount thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of the Loans under this
Section shall be applied as reasonably specified by the Borrower in such notice
or, if an Event of Default has occurred and is continuing, as the Lender shall
elect in its sole discretion.
(d) The entire outstanding principal amount of the Loans, together with
all accrued and unpaid interest thereon and fees related thereto, shall become
due and payable on the Availability Expiration Date.
SECTION 2.6 Payment Procedures.
(a) The Borrower hereby authorizes the Lender to charge the Borrower
with the amount of all interest, fees, reasonable expenses and other payments to
be made hereunder and under the other Loan Documents by adding such amount to
the Obligations. The Lender may, but shall not be obligated to, discharge the
Borrower's payment obligations hereunder by so increasing the amount of the
Obligations.
(b) Whenever any payment or other transfer of funds to be made
hereunder shall be stated to be due or made on a day that is not a Business Day,
such payment or transfer may, except as provided in the proviso to the
definition of "Interest Period," be made on the next
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AMENDED AND RESTATED
succeeding Business Day, and, if applicable, such extension of time shall be
included in the computation of the amount of interest due hereunder.
SECTION 2.7 Payments.
The Borrower shall make each payment hereunder not later than 4:00 P.M.
(New York time) on the day when due, in Dollars, to the Lender by wire transfer
in immediately available funds to the Lender's office in Mahwah, New Jersey,
Account No. 270600002201, ABA No. 000000000, Reference: Ormat, Attention: Xxxx
Xxxx.
ARTICLE III
INTEREST, FEES AND EXPENSES
SECTION 3.1 Interest.
(a) The Borrower shall pay to the Lender interest on the Loans at an
interest rate per annum equal to the LIBOR Rate plus 4.00%, payable quarterly in
arrears on the last Business Day of each calendar quarter and on the
Availability Expiration Date.
(b) The initial Interest Period for each Loan shall commence on the
date such Loan is made under Section 2.1(d) and a new Interest Period shall
automatically commence on the day following the last day of the initial Interest
Period (and on the day following the last day of each subsequent Interest
Period) and end in each case on the first day of the following month.
(c) Anything in subsections (a) and (b) hereof to the contrary
notwithstanding,
(i) If the last day of an Interest Period is less than one month
prior to the Maturity Date, the Loans will bear interest for the period
from the last day of such Interest Period to the Maturity Date at a
fluctuating rate per annum equal to the Base Rate plus 1.50%, each
change in such fluctuating rate to take effect simultaneously with the
corresponding change in the Base Rate.
(ii) If, at least one Business Day before the last day of an
Interest Period, the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other Governmental Authority asserts that it is
unlawful, for the Lender or any of its Affiliates to perform its
obligations hereunder to continue any Loan as a loan bearing interest
with reference to the LIBOR Rate, the Lender shall promptly give
written notice of such circumstance, and the Loans shall not thereafter
bear interest with reference to the LIBOR Rate until such circumstances
no longer exist, and the Loans shall thereafter during such period bear
interest at a fluctuating rate per annum equal to the Base Rate plus
1.50%, each change in such fluctuating rate to take effect
simultaneously with the corresponding change in the Base Rate.
(iii) If, at least one Business Day before the last day of any
Interest Period, the LIBOR Rate cannot be determined pursuant to any of
clause (i), (ii) or (iii) of the definition of such term in Section 1.1
due to a disruption in the market over which
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AMENDED AND RESTATED
the Lender has no control, the Lender shall promptly give written
notice of such circumstance, and the Loans shall not thereafter bear
interest with reference to the LIBOR Rate until such circumstances no
longer exist, and the Loans shall thereafter during such period bear
interest at a fluctuating rate per annum equal to the Base Rate plus
1.50%, each change in such fluctuating rate to take effect
simultaneously with the corresponding change in the Base Rate.
(iv) All interest payable by reference to the Base Rate under this
subsection (c) shall be payable quarterly, in arrears, on the first
Business Day of each calendar quarter and on the Maturity Date.
SECTION 3.2 Interest After Event of Default. Upon the occurrence and
during the continuance of an Event of Default, interest on the Loans shall be
payable on demand at a rate per annum equal to the rate in effect under Section
3.1 plus 2%.
SECTION 3.3 Commitment Fee. The Borrower shall pay to the Lender on the
Closing Date a non-refundable commitment fee in the amount of $300,000.
SECTION 3.4 Unused Line Fee. The Borrower shall, for the period from
the Closing Date through the Availability Expiration Date, pay in arrears to the
Lender on the last Business Day of each calendar quarter, commencing June 2004
and on the Availability Expiration Date, in arrears, an unused line fee equal to
..10% per annum of the difference between (a) the Maximum Amount of the Facility,
and (b) the average daily outstanding amount of (i) the Loans and (ii) the
aggregate undrawn amount of all outstanding Letters of Credit during such
quarter or portion thereof.
SECTION 3.5 Letter of Credit Fees. The Borrower shall pay to the Lender
a non-refundable fee in the amount of 2.50% per annum (in the case of a Letter
of Credit issued, re-issued, extended (whether by automatic extension or
otherwise) or renewed by the Lender) and 2.75% per annum (in the case of a
Letter of Credit issued, re-issued, extended (whether by automatic extension or
otherwise) or renewed by a Fronting Bank) of (a) the weighted monthly average
amount stated to be available for drawing under such Letter of Credit during the
year following the issuance, re-issuance, extension or renewal thereof, which
shall be payable at the time of issuance, re-issuance, extension or renewal of
such Letter of Credit and (b) any increase in such weighted monthly average
amount resulting from amounts actually drawn under such Letter of Credit, which
shall be payable at the time of each such increase (such weighted monthly
average amount, including any such increase, being referred to herein as the "LC
Weighted Average"). The Borrower shall also pay or reimburse the Lender for all
advising and confirming bank fees, not to exceed 0.25% per annum of the LC
Weighted Average of the applicable Letter of Credit, actually charged by the
confirming bank in connection with the issuance, re-issuance, extension or
renewal of any Letter of Credit that has been issued by the Lender and confirmed
by such confirming bank.
SECTION 3.6 Calculations. All calculations of interest and fees
hereunder shall be made by the Lender, on the basis of a year of 360 days for
the actual number of days elapsed in the period for which such interest or fees
are payable. Each determination by the Lender of an interest rate, fee or other
payment hereunder shall be final, conclusive and binding for all purposes,
absent manifest error.
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AMENDED AND RESTATED
SECTION 3.7 Indemnification in Certain Events.
(a) If after the Closing Date, (i) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to the Lender or
any other banking or financial institution from which the Lender borrows funds
or obtains credit, (ii) the Lender complies with any future guideline or request
from any central bank or other Governmental Authority or (iii) the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has the effect described below, or the
Lender complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, and in the case of any event set forth in this clause (iii),
such adoption, change or compliance has the direct effect of reducing the rate
of return on the Lender's capital as a consequence of its obligations hereunder
to a level below that which the Lender would have achieved but for such
adoption, change or compliance (taking into consideration the Lender's policies
with respect to capital adequacy) by a material amount, and any of the foregoing
events described in clauses (i), (ii) and (iii) increases the Lender's cost of
funding or maintaining the Loans, or reduces the amount receivable in respect
thereof by the Lender, then the Borrower shall, after written request by the
Lender and receipt by the Borrower of a certificate from an officer of the
Lender specifying the cause, amount and calculation of such increase or
reduction, as applicable, pay to the Lender additional amounts sufficient to
indemnify the Lender against such increase in cost or reduction in amount
receivable.
(b) The Borrower agrees to indemnify the Lender against any loss, cost
or expense incurred by the Lender as a result of the making of a payment or
prepayment on account of a Loan on a day which is not the last day of an
Interest Period with respect thereto, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund such Loan.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 Conditions to Initial Letter of Credit. The obligation of
the Lender to issue or to use its best efforts to cause a Fronting Bank to issue
the initial Letter of Credit is subject to the satisfaction of the following
conditions prior to or concurrent with the issuance of such initial Letter of
Credit:
(a) The Lender shall have received the following, each dated the date
of the initial Letter of Credit or as of such earlier date acceptable to the
Lender, in form and substance satisfactory to the Lender:
(i) the Note, duly executed by the Borrower;
(ii) the Subordination Agreement, duly executed by Ormat
Technologies;
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AMENDED AND RESTATED
(iii) (A) the audited Financial Statements for the fiscal year
ended December 31, 2003 certified by the Auditors and (B) a certificate
executed by a Responsible Officer certifying that since December 31,
2003, except for the transactions specified in Schedule 5.1(f), no
change, event, occurrence or development or event involving a
prospective change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise)
of the Borrower has occurred which has had or could reasonably be
expected to have a Material Adverse Effect, and that all information
provided by or on behalf of the Borrower to the Lender hereunder or in
connection herewith is true and correct in all material respects;
(iv) the opinion of counsel for the Borrower, substantially in the
form of Exhibit D hereto, which the Borrower hereby requests its
counsel to provide;
(v) a copy of the Governing Documents of the Borrower and the
resolutions of the board of directors of the Borrower authorizing the
execution, delivery and performance of this Agreement, the other Loan
Documents and the transactions contemplated hereby and thereby,
attached to which is a certificate of the Secretary or an Assistant
Secretary of the Borrower certifying (A) that such copies of the
Governing Documents and resolutions are true, complete and accurate
copies thereof, have not been amended or modified since the date of
such certificate and are in full force and effect and (B) the
incumbency, names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is or is to be a
party;
(vi) a copy of the Governing Documents of Ormat Technologies and
the resolutions of the board of directors of the Ormat Technologies
authorizing the execution, delivery and performance of the
Subordination Agreement attached to which is a certificate of the
Secretary or an Assistant Secretary of Ormat Technologies certifying
(A) that such copies of the Governing Documents and resolutions are
true, complete and accurate copies thereof, have not been amended or
modified since the date of such certificate and are in full force and
effect and (B) the incumbency, names and true signatures of the
officers of Ormat Technologies authorized to sign the Subordination
Agreement;
(vii) a certified copy of the certificate of the Secretary of
State of the State of Delaware, dated within fifteen days of the
Closing Date, listing the certificate of incorporation of the Borrower
and any amendment thereto on file in such official's office and
certifying that any such amendments are the only amendments to such
certificate of incorporation on file in that office; and
(viii) a good standing certificate from the Secretary of State of
each state in which the Borrower is incorporated or qualified as a
foreign corporation, each dated within fifteen days of the Closing
Date.
(b) There shall be no pending or threatened litigation, proceeding,
inquiry or other action seeking an injunction or other restraining order,
damages or other relief with respect to
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AMENDED AND RESTATED
the transactions contemplated by this Agreement, the other Loan Documents, or
the transactions contemplated hereby or thereby or the Borrower's business,
prospects, operations, assets, liabilities or conditions (financial or
otherwise), except where such litigation, proceeding, inquiry or other action
could not reasonably be expected to have a Material Adverse Effect.
(c) The Borrower shall have paid all accrued fees and reasonable
expenses of the Lender in connection with the negotiation, preparation,
execution and delivery of the Loan Documents (including the reasonable fees and
expenses of counsel to the Lender) and all other fees required to be paid by the
Borrower on or before the Closing Date under Article III.
(d) No consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other Person shall be required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby or the continuing operations of the
Borrower or any of its Subsidiaries following the consummation of such
transactions that have not been obtained.
(e) The Borrower shall be in compliance in all material respects with
all Requirements of Law and Material Contracts.
(f) There shall exist no Default, and the representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct immediately prior to, and after giving effect to, any Letter of
Credit to be issued on the Closing Date.
(g) The Financial Covenants shall have been satisfied for the year
ended December 31, 2003 and the calendar quarter ended March 31, 2004.
SECTION 4.2 Conditions Precedent to Issuance of Each Letter of Credit.
The obligation of the Lender to issue and to use its best efforts to cause a
Fronting Bank to issue any Letter of Credit, other than the initial Letter of
Credit, is subject to the following conditions precedent:
(a) all representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct on and as of the date of
issuance of such Letter of Credit as if then made, other than representations
and warranties that expressly relate solely to an earlier date, in which case
they shall be true and correct as of such earlier date;
(b) no Default shall have occurred and be continuing or would result
from the issuance of such Letter of Credit; and
(c) except for the transactions specified in Schedule 5.1(f), no
Material Adverse Effect shall have occurred or shall be reasonably likely to
occur after giving effect to the issuance of such Letter of Credit.
SECTION 4.3 Determinations Under Section 4.1. For purposes of
determining compliance with the conditions specified in Section 4.1, the Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or to be acceptable or satisfactory to the Lender unless
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AMENDED AND RESTATED
the Borrower shall have received written notice from the Lender prior to the
initial Loan or Letter of Credit specifying its objection thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Organization, Good Standing and Qualification. The Borrower (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has the power and authority to own its
properties and assets and to conduct the business in which it now is, or
proposes to be, engaged and (iii) is duly qualified, authorized to do business
and in good standing in each jurisdiction where it now is, or proposes to be,
engaged in business.
(b) Authority. The Borrower has the requisite corporate power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents. All corporate action necessary for the execution, delivery and
performance by the Borrower of the Loan Documents (including the consent of its
shareholder where required) has been taken.
(c) Enforceability. This Agreement is and, when executed and delivered,
each other Loan Document to which the Borrower is a party will be, the legal,
valid and binding obligation of the Borrower enforceable in accordance with its
terms, except as enforceability may be limited by (i) bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) general principles
of equity.
(d) No Conflict. The execution, delivery and performance of each Loan
Document by the Borrower do not and will not contravene (i) any of the Governing
Documents of the Borrower, (ii) any Requirement of Law or (iii) any Material
Contract, and will not result in the imposition of any Liens upon any of its
properties.
(e) Consents and Filings. No consent, authorization or approval of, or
filing with or other act by, any Governmental Authority or other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Loan Document or the consummation
of the transactions contemplated hereby or thereby, except those that have been
obtained or made and are specified in Schedule 5.1(e).
(f) Financial Data. The Borrower has provided to the Lender complete
and accurate copies of audited Financial Statements for the fiscal year ended
December 31, 2003. Such statements have been prepared in accordance with GAAP
consistently applied throughout the period involved and fairly present the
results of operations and profits and losses of the Borrower for the period
covered. Since December 31, 2003, except as specified in Schedule 5.1(f), (i)
there has been no change, occurrence, development or event which has had or
could reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower and (ii) none of the capital stock of the Borrower
has been redeemed, retired, purchased or otherwise acquired for value by the
Borrower.
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AMENDED AND RESTATED
(g) Accuracy and Completeness of Information. All data, reports and
information heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Lender for purposes of or in connection with this
Agreement or any other Loan Document, or any transaction contemplated hereby or
thereby, are true and accurate in all material respects on the date as of which
such data, reports and information are dated or certified and not incomplete by
omitting to state any material fact necessary to make such data, reports and
information not misleading at such time. There are no facts now known to any
executive officer of the Borrower which individually or in the aggregate could
reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower and which have not been specified herein, in the
Financial Statements, or in any certificate, opinion or other written statement
made or furnished by the Borrower to the Lender.
(h) No Joint Ventures or Partnerships. As of the Closing Date, the
Borrower is not engaged in any joint venture or partnership with any other
Person except as specified in Schedule 5.1(h).
(i) Corporate and Trade Name. During the past five years, the Borrower
has not been known by or used any corporate, trade or fictitious name other than
Ormat Nevada, Inc.
(j) No Actual or Pending Material Modification of Business. There
exists no actual or, to the best of the Borrower's knowledge, threatened
termination, cancellation, limitation, modification or change in or of the
business relationship of the Borrower with any customer or group of customers
whose purchases individually or in the aggregate could reasonably be expected to
have a material adverse effect on the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower.
(k) No Broker's or Finder's Fees. No broker or finder brought about the
obtaining, making or closing of the financial accommodations afforded hereunder
or in connection herewith by the Lender. No broker's or finder's fees or
commissions will be payable by the Borrower to any Person in connection with the
transactions contemplated by this Agreement.
(l) Investment Company. The Borrower is not an "investment company," or
an "affiliated Person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(m) Public Utility.
(i) Neither the Borrower nor any of its Subsidiaries (by reason of
any action or inaction or by reason of the ownership or operation by it
or any Affiliate of any Facility or otherwise) is subject to any type
of financial, organizational or rate regulation as an Electric Utility
or to be regulated as a "public utility company" or a company which is
a "holding company" of a "public utility company" subject to
registration with the Securities and Exchange Commission or to
regulation under PUHCA.
(ii) Neither the Lender nor any of its Affiliates will, solely
(i.e., without regard to any other activity or operation) by reason of
this Agreement and the other
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AMENDED AND RESTATED
Loan Documents and the consummation of the transactions contemplated
hereby and thereby, be or deemed to be, or be subject to regulation as,
a "public utility company" or a company which is a "holding company" of
a "public utility company" subject to registration with the Securities
and Exchange Commission or to regulation under PUHCA or any other
Requirement of Law regulating utilities or independent power producers.
(iii) Each Facility owned by the Borrower or any of its Affiliates
on the Closing Date is (A) a "qualifying facility" within the meaning
of the PURPA regulations, eligible for the benefit of the exemptions
provided by 18 C.P.R. ss. 292.601, (B) an "exempt wholesale generator"
under the National Energy Policy Act of 1992 or (C) exempt from all
regulation under PUHCA.
(n) Margin Stock. The Borrower does not own any "margin stock" as that
term is defined in Regulation U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") and the proceeds of Loans will be used only
for the purposes contemplated hereunder.
(o) Taxes and Tax Returns.
(i) To the best of the Borrower's knowledge after due inquiry, the
Borrower has properly completed and timely filed all income tax
returns, if any, it is required to file up to and including for the
year ended December 31, 2003. To the best of the Borrower's knowledge
after due inquiry, the information filed is complete and accurate in
all material respects. To the best of the Borrower's knowledge, after
due inquiry, all deductions taken in such income tax returns are
appropriate and in accordance with applicable laws and regulations.
(ii) To the best of the Borrower's knowledge after due inquiry,
except as specified in Schedule 5.1(o), all taxes, assessments, fees
and other governmental charges for periods beginning prior to the date
hereof have been timely paid (or, if not yet due, adequate reserves
therefor have been established) and the Borrower has no liability for
taxes in excess of the amounts so paid or reserves so established.
(iii) To the best of the Borrower's knowledge after due inquiry,
except as specified in Schedule 5.1(o), (A) no deficiencies for taxes
have been claimed, proposed or assessed by any taxing or other
Governmental Authority against the Borrower and no tax Liens have been
filed and (B) there are no pending or threatened audits, investigations
or claims for or relating to any liability of the Borrower for taxes
and there are no matters under discussion with any Governmental
Authority which could result in an additional liability of the Borrower
for taxes beyond amounts reserved therefor in accordance with GAAP.
Except as is required solely for the use by the Borrower of net
operating loss carryforwards, no extension of a statute of limitations
relating to taxes, assessments, fees or other governmental charges is
in effect as of the Closing Date with respect to the Borrower.
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AMENDED AND RESTATED
(iv) As of the Closing Date, the Borrower is not a party to and
has no obligations under any written tax sharing agreement or agreement
regarding payments in lieu of taxes.
(p) No Judgments or Litigation. Except as specified in Schedule 5.1(p),
no judgments, orders, writs or decrees are outstanding against the Borrower or
any of its Subsidiaries or otherwise involving any Facility, nor is there
pending or, to the best of the Borrower's knowledge, threatened any litigation,
contested claim, investigation, arbitration, or governmental proceeding by or
against the Borrower or any of its Subsidiaries or otherwise involving any
Facility that (i) individually or in the aggregate could reasonably be expected
to have a material adverse effect on the business, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of the
Borrower or (ii) purports to affect the legality, validity or enforceability of
this Agreement, the Note or any other Loan Document or the consummation of the
transactions contemplated hereby or thereby.
(q) Title to Property. The Borrower has (i) good and marketable fee
simple title to or valid leasehold interests in or other relevant rights in all
of its real property and (ii) good and marketable title to all of its other
property.
(r) No Defaults. After giving effect to the closing of the transactions
contemplated herein, neither the Borrower nor any of its Subsidiaries is in
default under any term of any Material Contract or Requirement of Law, which
default could reasonably be expected to have a material adverse effect on the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower or otherwise cause an Event of Default
to occur, nor has the Borrower or any of its Subsidiaries received notice of any
such default.
(s) ERISA.
(i) Except as specified in Schedule 5.1(s), as of the Closing
Date, the Borrower does not maintain or contribute to any Plan.
(ii) The Borrower and, to the best of the Borrower's knowledge,
each ERISA Affiliate have fulfilled all contribution obligations for
each Plan (including obligations related to the minimum funding
standards of ERISA and the Internal Revenue Code) as they have become
due, and, to the best of the Borrower's knowledge, no application for a
funding waiver or an extension of any amortization period pursuant to
Sections 303 and 304 of ERISA or Section 412 of the Internal Revenue
Code has been made with respect to any Plan.
(iii) To the best of the Borrower's knowledge no Termination Event
has occurred nor has any other event occurred that is likely to result
in a Termination Event. Neither the Borrower or, to the best of the
Borrower's knowledge, any ERISA Affiliate, nor any fiduciary of any
Plan, is subject to any direct or indirect liability with respect to
any Plan under any Requirement of Law or agreement which could
reasonably be expected to have a Material Adverse Effect.
(iv) Neither the Borrower nor, to the best of the Borrower's
knowledge, any ERISA Affiliate is required to or reasonably expects to
be required to provide
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AMENDED AND RESTATED
security to any Plan under Section 307 of ERISA or Section 401(a)(29)
of the Internal Revenue Code.
(v) The Borrower is in compliance in all respects with any
applicable provisions of ERISA with respect to all Plans except where
such noncompliance could not reasonably be expected to have a Material
Adverse Effect. To the best of the Borrower's knowledge, there has been
no prohibited transaction as defined in Section 406 of ERISA or Section
4975 of the Internal Revenue Code (a "Prohibited Transaction") with
respect to any Plan or any Multiemployer Plan. The Borrower and, to the
best of the Borrower's knowledge, each ERISA Affiliate have made when
due any and all payments required to be made under any agreement
relating to a Multiemployer Plan or any Requirement of Law pertaining
thereto. With respect to each Plan and Multiemployer Plan, the Borrower
and each ERISA Affiliate have not incurred any liability to the PBGC
and have not had asserted against them any penalty for failure to
fulfill the minimum funding requirements of ERISA.
(vi) Each Plan which is intended to qualify under Section 401(a)
of the Internal Revenue Code has received a favorable determination
letter from the IRS and no event has occurred which would cause the
loss of such qualification except where the loss of such qualification
could not reasonably be expected to have a Material Adverse Effect.
(vii) Neither the Borrower nor, to the best of the Borrower's
knowledge, any ERISA Affiliate has instituted or intends to institute
proceedings to terminate any Plan.
(t) Labor Matters. There are no collective bargaining agreements to
which the Borrower or any of its Subsidiaries is a party as of the Closing Date.
There are no existing or threatened strikes, lockouts or other disputes relating
to any collective bargaining or similar agreement to which the Borrower or any
of its Subsidiaries is a party which, individually or in the aggregate, taken as
a whole, could reasonably be expected to have a material adverse effect on the
business, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of the Borrower.
(u) Compliance with Environmental Laws. The Borrower (i) is not the
subject of a judicial or administrative proceeding or investigation relating to
the violation of any Environmental Law or asserting potential liability arising
from the release or disposal by any Person of any Hazardous Materials, (ii) has
not filed or received any notice under any Environmental Law concerning the
treatment, storage, disposal, spill or release or threatened release of any
Hazardous Materials at, on, beneath or adjacent to property owned or leased by
it, or the release or threatened release at any other location of any Hazardous
Material generated, used, stored, treated, transported or released by or on
behalf of the Borrower and (iii) has no knowledge of any contingent liability of
the Borrower for any release of any Hazardous Materials, in each case which
proceedings, investigations notices and liabilities involve an amount in excess
of $1,000,000 in the aggregate and could reasonably be expected to have a
Material Adverse Effect.
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AMENDED AND RESTATED
(v) Licenses and Permits. The Borrower has obtained, and holds in full
force and effect, all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals, in each case which are material to and necessary for the operation of
its business as now conducted and as proposed to be conducted.
(w) Business and Properties. The business of the Borrower or any of its
Subsidiaries is not presently affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance) that
could reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Borrower.
(x) Contracts, Orders, etc. Set forth on Schedule 5.1(x) is a complete
and accurate list of all indentures, loan or credit agreements, lease finance
agreements, guarantees, mortgages, security agreements, bonds, notes and other
similar agreements or instruments, and all orders, writs, judgments, awards,
injunctions and decrees, which materially affect the Borrower's right to borrow
money or to incur its obligations under this Agreement.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.1 Affirmative Covenants. Until the satisfaction of all
Obligations in full, the termination of the Commitment and the expiration or, to
the extent required under the terms of this Agreement, full cash
collateralization of all Letters of Credit:
(a) Corporate Existence. The Borrower shall (i) maintain its corporate
existence, (ii) qualify to transact business as a foreign corporation where the
nature or extent of its business or the ownership of its property requires it to
be so qualified and (iii) maintain in full force and effect all licenses, bonds,
franchises, leases, trademarks and qualifications to do business, and all
patents, contracts and other rights and privileges necessary to the conduct of
its businesses or the performance of its obligations under this Agreement and
the other Loan Documents, except to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
(b) Maintenance of Property. The Borrower shall keep all property
useful, necessary and material to its business in good working order and
condition (ordinary wear and tear excepted) as may be required or appropriate,
except to the extent that the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
(c) Taxes and other Claims. The Borrower shall pay and discharge when
due (i) all federal, state and local tax assessments and other governmental
charges and levies imposed against the Borrower or any of its property; and (ii)
all lawful claims that, if unpaid, might by law become a Lien upon its property;
provided, however, that any such tax assessment, charge, levy or claim need not
be paid if it is being contested, in good faith, by appropriate proceedings
diligently conducted and if an adequate reserve or other appropriate provision
shall have been made therefor as required in accordance with GAAP.
-25-
AMENDED AND RESTATED
(d) Government Regulations. The Borrower shall comply with all
applicable federal, state, local or foreign laws and regulations, including,
without limitation, those relating to environmental matters, employee matters
(including the collection, payment and deposit of employees' income,
unemployment and social security taxes) and with respect to pension liabilities,
except where the failure to comply would not have a Material Adverse Effect.
(e) Insurance. The Borrower shall, or, at its option, shall cause one
or more of its Subsidiaries to, maintain adequate insurance on all property and
assets of the Borrower and the Facilities, including fire, theft, burglary,
pilferage, casualty, general liability, worker's compensation, public liability,
business interruption, third party property damage and replacement value
insurance under such policies of insurance, with such insurance companies, in
such amounts and covering such risks as are at all times reasonably satisfactory
to the Lender.
(f) Books and Records; Inspections. The Borrower shall (i) maintain
adequate books and records (including, without limitation, computer printouts
and programs) in accordance with GAAP and otherwise reflecting all financial
transactions of the Borrower and (ii) provide the Lender and its agents access
to the premises of the Borrower at any reasonable time and from time to time,
during normal business hours and upon reasonable notice under the circumstances,
and at any reasonable time on and after the occurrence of a Default.
(g) Notification Requirements. The Borrower shall timely give to the
Lender the following notices and other documents:
(i) Notice of Defaults. Promptly, and in any event within five
Business Days after becoming aware of the occurrence of a Default, a
certificate of a Responsible Officer specifying the nature thereof and
the Borrower's proposed response thereto, each in reasonable detail.
(ii) Proceedings, Adverse Changes and other Events. Promptly, and
in any event within ten Business Days after the Borrower becomes aware
of any of the following, (A) notice of (I) any proceeding being
instituted or threatened to be instituted by or against the Borrower in
any federal, state, local or foreign court or before any commission or
other regulatory body (federal, state, local or foreign) which has or
could reasonably be expected to have a Material Adverse Effect, (II)
any order, judgment or decree which has or could reasonably be expected
to have a Material Adverse Effect being entered against the Borrower or
any of its properties or assets or (III) any actual change, development
or event including, without limitation, any investigation or proceeding
before any Governmental Authority which has had or could reasonably be
expected to have a Material Adverse Effect, and (B) a written statement
describing such proceeding, order, judgment, decree, change,
development or event and the action, if any, being taken with respect
thereto by the Borrower.
(iii) ERISA Notices.
(A) Promptly, and in any event no later than ten Business
Days after the occurrence of the later of a Termination
Event or knowledge by the Borrower that a Termination
Event has
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AMENDED AND RESTATED
occurred, a written statement of a Responsible Officer
describing such Termination Event and any action that is
being taken with respect thereto by the Borrower or any
ERISA Affiliate, and any action taken or threatened by
the Internal Revenue Service, the Department of Labor or
the PBGC;
(B) promptly, and in any event no later than ten Business
Days after the later of the filing thereof with the
Internal Revenue Service or knowledge by the Borrower of
such filing of an ERISA Affiliate, a copy of each
funding waiver request filed with respect to any Plan
subject to the funding requirements of Section 412 of
the Internal Revenue Code and all communications
received by the Borrower or any ERISA Affiliate with
respect to such request;
(C) promptly, and in any event no later than ten Business
Days after the later of receipt by the Borrower or
knowledge by the Borrower of receipt by any ERISA
Affiliate of the PBGC's intention to terminate a Pension
Plan or to have a trustee appointed to administer a
Pension Plan, a copy of each such notice;
(D) promptly, and in any event no later than ten Business
Days after the later of the occurrence thereof or
knowledge by the Borrower of the occurrence, notice
(including the nature of the event and, when known, any
action taken or threatened by the Internal Revenue
Service or the PBGC with respect thereto) of:
(I) any Prohibited Transaction which could subject the
Borrower or any ERISA Affiliate to a civil penalty
assessed pursuant to Section 502(i) of ERISA or a
tax imposed by Section 4975 of the Internal
Revenue Code in connection with any Plan, or any
trust created thereunder and which could
reasonably be expected to have a Material Adverse
Effect,
(II) any cessation of operations (by the Borrower or
any ERISA Affiliate) at a Facility in the
circumstances described in Section 4062(e) of
ERISA and which could reasonably be expected to
have a Material Adverse Effect,
(III) a failure by the Borrower or any ERISA Affiliate
to make a payment to a Plan required to avoid
imposition of a Lien under Section 302(f) of ERISA
or
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AMENDED AND RESTATED
Section 412(n) of the Internal Revenue Code and
which could reasonably be expected to have a
Material Adverse Effect,
(IV) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to
Section 307 of ERISA or Section 401(a)(29) of the
Internal Revenue Code and which could reasonably
be expected to have a Material Adverse Effect, or
(V) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of
such change is materially to increase or reduce
the unfunded benefit liability or obligation to
make periodic contributions and which could
reasonably be expected to have a Material Adverse
Effect;
(E) promptly upon the request of the Lender, each annual
report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most
recent financial information concerning the financial
status of each Plan administered or maintained by the
Borrower or any ERISA Affiliate, and schedules showing
the amounts contributed to each such Plan by or on
behalf of the Borrower or any ERISA Affiliate in which
any of its personnel participate or from which such
personnel may derive a benefit;
(F) promptly upon the filing thereof or upon knowledge of
such filing by the Borrower, copies of any Form 5310, or
any successor or equivalent form to Form 5310, filed
with the PBGC in connection with the termination of any
Plan, and copies of any standard termination notice or
distress termination notice filed with the PBGC in
connection with the termination of any Pension Plan;
(G) promptly, and in any event no later than ten Business
Days after the later of receipt thereof by the Borrower
or knowledge by the Borrower of receipt by any ERISA
Affiliate, notice and demand for payment of withdrawal
liability under Section 4201 of ERISA with respect to a
Multiemployer Plan and which could reasonably be
expected to have a Material Adverse Effect;
(H) promptly, and in any event no later than ten Business
Days after the later of receipt thereof by the Borrower
or knowledge by the Borrower of receipt by any ERISA
Affiliate, notice by the Department of Labor of any
penalty, audit, investigation or
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AMENDED AND RESTATED
any purported violation of ERISA with respect to a Plan
and which could reasonably be expected to have a
Material Adverse Effect;
(I) promptly, and in any event no later than ten Business
Days after the later of receipt thereof by the Borrower
or knowledge by the Borrower of receipt by any ERISA
Affiliate, notice by the Internal Revenue Service or the
Treasury Department of any income tax deficiency or
delinquency, excise tax penalty, audit or investigation
with respect to a Plan and which could reasonably be
expected to have a Material Adverse Effect; and
(J) promptly, and in any event no later than ten Business
Days after the later of receipt thereof by the Borrower
or knowledge by the Borrower of receipt by any ERISA
Affiliate, notice of any administrative or judicial
complaint, or the entry of a judgment, award or
settlement agreement, in either case with respect to a
Plan that could have a Material Adverse Effect.
(iv) Material Contracts. Promptly, and in any event within ten
Business Days after any Material Contract is terminated or amended
other than amendments which are ministerial or non-substantive in
nature.
(v) Environmental Matters. Promptly, and in any event within ten
Business Days after receipt by the Borrower thereof, copies of each (A)
written notice that any violation of any Environmental Law may have
been committed or is about to be committed by the Borrower, (B) written
notice that any administrative or judicial complaint or order has been
filed or is about to be filed against the Borrower alleging violations
of any Environmental Law or requiring the Borrower to take any action
in connection with the release of toxic or Hazardous Materials into the
environment, or (C) written notice from a Governmental Authority or
other Person alleging that the Borrower may be liable or responsible
for costs associated with a response to or cleanup of a release of a
Hazardous Material into the environment or any damages caused thereby,
in each case which could reasonably be expected to have a Material
Adverse Effect.
(h) Casualty Loss. The Borrower shall (i) provide written notice to the
Lender, within ten Business Days, of any damage to, the destruction of or any
other loss to any material asset or material property owned or used by the
Borrower or any condemnation, confiscation or other taking, in whole or in part,
or any use that otherwise diminishes so as to render impracticable or
unreasonable the use of such asset or property owned or used by the Borrower
together with the amount of the damage, destruction, loss or diminution in
value, in each case if the amount involved exceeds $5,000,000 (a "Casualty
Loss") and (ii) diligently file and prosecute its claim or claims for any award
or payment in connection with a Casualty Loss.
(i) Financial Reporting. The Borrower shall deliver to the Lender the
following:
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AMENDED AND RESTATED
(i) Annual Financial Statements. As soon as available, but not
later than one hundred twenty days after the end of each fiscal year of
the Borrower, beginning with the fiscal year ending December 31, 2004,
(A) the Borrower's annual audited Financial Statements; (B) to the
extent not included in the Financial Statements delivered pursuant to
clause (A) above, a comparison in reasonable detail to the prior year's
Financial Statements in form satisfactory to the Lender; and (C) the
Auditors' unqualified opinion on the Borrower's annual audited
Financial Statements for such fiscal year.
(ii) Quarterly Financial Statements. As soon as available, but not
later than sixty days after the end of the first three quarters of each
fiscal year of the Borrower, commencing with the first fiscal quarter
ending June 30, 2004, quarterly Financial Statements as at the end of
such quarter, certified by a Responsible Officer, together with a
compliance certificate signed by a Responsible Officer, substantially
in the form of Exhibit E hereto, with an attached schedule of
calculations demonstrating compliance with the Financial Covenants.
(j) Punctual Payment. The Borrower shall timely pay the principal and
interest and any other amount due under this Agreement and the other Loan
Documents.
(k) ERISA. The Borrower shall (i) maintain each Plan intended to
qualify under Section 401(a) of the Internal Revenue Code so as to satisfy the
qualification requirements thereof, except when the failure to so comply could
not reasonably be expected to have a Material Adverse Effect; (ii) contribute,
or require that contributions be made, in a timely manner (A) to each Plan in
amounts sufficient (I) to satisfy the minimum funding requirements of Section
302 of ERISA or Section 412 of the Internal Revenue Code, if applicable, (II) to
satisfy any other Requirements of Law and (III) to satisfy the terms and
conditions of each such Plan, and (B) to each Foreign Plan in amounts sufficient
to satisfy the minimum funding requirements of any applicable law or regulation,
without any application for a waiver from any such funding requirements, in each
case, except when the failure to so comply could not reasonably be expected to
have a Material Adverse Effect; (iii) cause each Plan or Foreign Plan to comply
in all material respects with applicable law (including, without limitation, all
applicable statutes, orders, rules and regulations); and (iv) pay in a timely
manner, in all material respects, all required premiums to the PBGC. As used in
this Section, "Foreign Plan" means a plan that provides retirement or health
benefits and that is maintained by, or otherwise contributed to, the Borrower
for the benefit of employees outside the United States.
(l) Environmental Matters. The Borrower shall conduct its business so
as to comply in all respects with all applicable Environmental Laws in all
jurisdictions in which it is doing business including, without limitation,
compliance with the terms and conditions of all permits and governmental
authorizations, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(m) Payment of Dividends and Distributions. Subject to applicable
Requirements of Law and to contractual restrictions applicable to the Borrower
or to Subsidiaries of the Borrower that are in effect from time to time, the
Borrower shall cause each of its Subsidiaries (i) to declare and pay cash
dividends, partnership, limited liability company or similar distributions, or
similar
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AMENDED AND RESTATED
forms of payment made on account of equity interests, as the case may be, so as
to maximize the amount of cash distributable to the Borrower from time to time.
(n) Solvency. The Borrower shall remain Solvent at all times.
(o) Further Assurances. The Borrower shall take all such further
actions and execute all such further documents and instruments as the Lender may
at any time determine in its reasonable discretion to be necessary to carry out
and consummate the transactions contemplated by the Loan Documents.
SECTION 6.2 Negative Covenants. Until the satisfaction of all
Obligations in full, the termination of the Commitment and the expiration or, to
the extent required under the terms of this Agreement, full cash
collateralization of all Letters of Credit:
(a) Consolidation and Merger. The Borrower will not wind up, liquidate
or dissolve its affairs or enter into any transaction of merger or
consolidation, or agree to do any of the foregoing at any future time, except a
transaction of merger or consolidation if the Borrower shall be the continuing
or surviving corporation and its Tangible Net Worth shall, immediately after
giving effect to such merger or consolidation, not be reduced as a result
thereof.
(b) Corporate Changes, etc. Except to the extent otherwise expressly
permitted under this Agreement, the Borrower will not amend, alter or modify its
Governing Documents or its corporate or capital structure or status in a manner
that could reasonably be expected to have a Material Adverse Effect.
(c) Change of Business. The Borrower will not make any material change
in the nature of its business as carried on at the date hereof or enter into any
new type of business outside the energy industry.
(d) Sales, etc. of Assets. The Borrower will not, directly or
indirectly, sell, lease, transfer or otherwise dispose of all or substantially
all its assets.
(e) Fiscal Year. The Borrower will not change its fiscal year from a
year ending on December 31.
(f) Accounting Changes. The Borrower will not at any time make or
permit any change in accounting policies or reporting practices, except as
required or permitted by GAAP.
(g) No Prohibited Transactions Under ERISA. The Borrower will not,
directly or indirectly:
(i) engage in any prohibited transaction which could reasonably be
expected to result in a civil penalty or excise tax described in
Section 406 of ERISA or 4975 of the Internal Revenue Code for which a
statutory or class exemption is not available or a private exemption
has not been previously obtained from the Department of Labor and which
could reasonably be expected to have a Material Adverse Effect;
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AMENDED AND RESTATED
(ii) permit to exist with respect to any Pension Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and
412 of the Internal Revenue Code), whether or not waived;
(iii) terminate any Pension Plan where such event would result in
any liability of the Borrower or any ERISA Affiliate under Title IV of
ERISA;
(iv) fail to make any required contribution or payment to any
Multiemployer Plan if such failure could reasonably be expected to have
a Material Adverse Effect;
(v) fail to pay any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before
the due date for such installment or other payment if such failure
could reasonably be expected to have a Material Adverse Effect;
(vi) amend a Pension Plan resulting in an increase in current
liability for the plan year such that the Borrower or any ERISA
Affiliate is required to provide security to such Plan under Section
307 of ERISA or Section 401(a)(29) of the Internal Revenue Code if such
amendment could reasonably be expected to have a Material Adverse
Effect; or
(vii) withdraw from any Multiemployer Plan where such withdrawal
is reasonably likely to result in any liability of any such entity
under Title IV of ERISA and which could reasonably be expected to have
a Material Adverse Effect.
(h) Payment of Subordinated Debt and Amendments of Material Contracts.
The Borrower will not make any payment in violation of the Subordination
Agreement. The Borrower will not, and will not permit any of its Subsidiaries
to, amend, modify, cancel or terminate, or permit the amendment, modification,
cancellation or termination of, any of the Material Contracts, except in the
event that any such amendment, modification, cancellation or termination could
not reasonably be expected to have a Material Adverse Effect.
(i) Use of Proceeds. The Borrower will not use any portion of the
proceeds of any Letter of Credit or any Loan in violation of Section 2.1 or for
the purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U of the Federal Reserve Board) in any manner which violates the
provisions of Regulation T, U or X of such Board or for any other purpose in
violation of any applicable statute or regulation, or of the terms and
conditions of this Agreement.
(j) Limitation on Actions Affecting Public Utility Regulation.
(i) The Borrower will not, and will not permit any of its
Subsidiaries to, take or fail to take any action if, as a direct
consequence thereof, the Borrower or any of its Subsidiaries would be,
or be deemed to be, subject to any financial, organizational or rate
regulation as an Electric Utility or to be regulated as a "public
utility company" or a company which is a "holding company" or a "public
utility
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AMENDED AND RESTATED
company" subject to registration with the Securities and Exchange
Commission or to regulation under PUHCA.
(ii) The Borrower will not, and will not permit any of its
Subsidiaries to, take or fail to take any action if, as a sole result
of such action or inaction, the Lender would be "a public utility
company" or a company which is a "holding company" of a "public utility
company" or otherwise be subject to registration with the Securities
and Exchange Commission or to regulation under PUHCA or any other
Requirement of Law regulating utilities or independent power producers,
provided that it shall not be a violation of this Section if as a
result of the exercise of its remedies hereunder or under applicable
law the Lender obtains control of any Facility and thus becomes subject
to regulation as the owner of a "qualifying facility" as defined under
the PURPA regulations, or as an "exempt wholesale generator" as defined
under the National Energy Policy Act of 1992.
ARTICLE VII
FINANCIAL COVENANTS
Until the satisfaction of all Obligations in full, the termination of
the Commitment and the expiration or, to the extent required under the terms of
this Agreement, full cash collateralization of all Letters of Credit:
SECTION 7.1 Tangible Net Worth. The Tangible Net Worth of the Borrower
shall not be less than $85,000,000 at any time.
SECTION 7.2 Leverage Ratio. The Leverage Ratio shall not be greater
than 4.00 to 1.00 at any time.
SECTION 7.3 Minimum Coverage Ratio. The Minimum Coverage Ratio shall
not be less than 1.25 to 1.00 for any calendar quarter or any calendar year.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default":
(a) the Borrower shall fail to pay any principal, interest, fees,
reasonable expenses or other Obligations within thirty days of the date when
due, except with respect to the last payments of principal, interest or fees due
hereunder (including, without limitation, upon acceleration), which shall be
payable on the date when due (or on the date of acceleration); or
(b) the Borrower shall fail to perform or observe:
(i) any term, condition, covenant or agreement contained in
Section 6.1(f) or (j) or Section 6.2;
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AMENDED AND RESTATED
(ii) any covenant contained in Section 6.1(g) or Article VII more
than ten days after the earlier of (A) the date on which any
Responsible Officer of the Borrower knew or reasonably should have
known of such failure in the ordinary course of his or her
responsibilities and (B) the date on which the Lender notified the
Borrower in writing of such failure; or
(iii) any term, condition, covenant or agreement contained in this
Agreement or any other Loan Document to which it is a party (except as
provided in Section 8.1(a) or (b)(i) or (ii)) more than thirty days
after the earlier of (A) the date on which any Responsible Officer of
the Borrower knew or reasonably should have known of such failure in
the ordinary course of his or her responsibilities and (B) the date on
which the Lender notified the Borrower in writing of such failure;
provided, however, that if such failure is susceptible of cure but
cannot reasonably be expected to be cured within such thirty-day
period, and provided further that the Borrower shall have commenced to
cure such failure within such thirty-day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty-day
period shall be extended for one additional thirty-day period; or
(c) the Borrower shall dissolve, wind up or otherwise cease to conduct
its business except as permitted under Section 6.2(a); or
(d) the Borrower shall become the subject of an Insolvency Event; or
(e) the Borrower (i) shall fail to make any payment in respect of
Indebtedness of the Borrower in an amount in excess of $5,000,000 when due
(whether at scheduled maturity or by acceleration, demand or otherwise) or (ii)
shall otherwise be in breach or default in any of its obligations under any
agreement with respect to any such Indebtedness of the Borrower, if the effect
of such breach or default is to cause such Indebtedness to become due or
redeemed or permit, after giving effect to all applicable grace periods and cure
rights, the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to declare such Indebtedness due or require
such Indebtedness to be redeemed prior to its stated maturity; or
(f) any representation or warranty made by the Borrower under or in
connection with any Loan Document, Financial Statement or certificate delivered
in connection therewith shall prove to have been incorrect in any material
respect when made or deemed made; or
(g) one or more federal tax liens for more than $1,000,000 shall be
filed of record against the Borrower and shall not be stayed, bonded or
discharged within thirty days; or
(h) a Change of Control shall have occurred; or
(i) one or more judgments or orders for the payment of money in excess
of $2,500,000 in the aggregate (other than judgments and orders that are fully
covered by insurance and with respect to which the insurance company has
accepted liability) shall be rendered against the Borrower or any of its
Subsidiaries and shall not be stayed, vacated, bonded or discharged within
thirty days; or
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AMENDED AND RESTATED
(j) any covenant, agreement or obligation of the Borrower referred to
in Section 8.1(a) or (b)(i) shall cease to be enforceable; or
(k) the occurrence of any event that could reasonably be expected to
have a Material Adverse Effect if such event continues to exist more than
forty-five days after the date on which the Lender notified the Borrower in
writing of such event; provided, however, that if such event is susceptible of
reversal but cannot reasonably be expected to be reversed within such
forty-five-day period, and provided further that the Borrower shall have
commenced to reverse such event within such forty-five-day period and thereafter
diligently and expeditiously proceeds to reverse such event, such forty-five-day
period shall be extended for one additional forty-five-day period.
SECTION 8.2 Acceleration and Cash Collateralization. Upon the
occurrence and during the continuance of an Event of Default, the Lender may:
(a) Acceleration. Declare all Obligations immediately due and payable
by written notice to the Borrower (except with respect to any Event of Default
specified in (i) Section 8.1(d), in which case the Obligations shall
automatically become immediately due and payable, and (ii) Section 8.1(e)(ii),
in which case the Lender may not, solely based on such Event of Default, declare
the Obligations immediately due and payable if the holder or holders of the
Indebtedness with respect to which there is a breach or default have not
declared such Indebtedness due or required such Indebtedness to be redeemed)
without presentment, demand, protest or any other action or obligation of the
Lender except as stated in this subsection.
(b) Termination of Commitment. Declare the Commitment immediately
terminated (except with respect to any Event of Default specified in Section
8.1(d), in which case the Commitment shall automatically terminate) and, at all
times thereafter, any Letter of Credit issued or caused to be issued by the
Lender and any Loan made by the Lender pursuant to this Agreement shall be in
the Lender's sole and absolute discretion.
(c) Cash Collateralization. With respect to all Letters of Credit
outstanding at the time of an Event of Default, require the Borrower to make
deposits in the L/C Cash Collateral Account in accordance with Section 2.4(a) up
to an amount equal to 105% of the aggregate then undrawn amount of the
outstanding Letters of Credit. While the Event of Default continues, amounts
held in the L/C Cash Collateral Account shall be under the sole dominion and
control of the Lender and shall be applied by the Lender to the payment of
drafts drawn under such Letters of Credit, and the balance, if any, in the L/C
Cash Collateral Account, after all such Letters of Credit shall have expired or
been fully drawn upon, shall be applied to repay the other Obligations. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Obligations in respect of Letters of Credit shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in the L/C
Cash Collateral Account shall be returned to the Borrower. If the Event of
Default is cured, waived or otherwise ceases, any amounts then on deposit in the
L/C Cash Collateral Account shall be returned to the Borrower within ten
Business Days.
(d) Excess Cash Collateral. If at any time the balance in the L/C Cash
Collateral Account exceeds 105% of the aggregate then undrawn amount of the
outstanding Letters of Credit, then such excess amounts shall be returned to the
Borrower within ten Business Days of the date on which such excess arose.
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AMENDED AND RESTATED
(e) Security Interest. The Lender shall have, and the Borrower hereby
grants to the Lender, a security interest in the L/C Cash Collateral Account
which security interest shall attach and become effective at the time the L/C
Cash Collateral Account is established.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, WHETHER
SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF
NEW YORK.
SECTION 9.2 SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN THE
BORROWER AND THE LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR
OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW
YORK, NEW YORK, AND THE COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN;
PROVIDED, HOWEVER, THAT THE LENDER SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN ANY
LOCATION REASONABLY SELECTED BY THE LENDER IN GOOD FAITH TO ENABLE THE LENDER TO
REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF THE LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH THE LENDER HAS COMMENCED A PROCEEDING, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON FORUM NON
CONVENIENS.
SECTION 9.3 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY
DESIGNATES CT CORPORATION, 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS THE
DESIGNEE AND AGENT OF THE BORROWER TO RECEIVE, FOR AND ON BEHALF OF THE
BORROWER, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. IT IS UNDERSTOOD THAT A COPY OF SUCH
PROCESS SERVED ON SUCH AGENT AT ITS ADDRESS WILL BE PROMPTLY FORWARDED BY MAIL
TO THE BORROWER, BUT THE FAILURE OF THE BORROWER TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 9.4 JURY TRIAL. THE BORROWER AND THE LENDER EACH HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A
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AMENDED AND RESTATED
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY
WAY RELATING TO (I) THIS AGREEMENT, (II) ANY OTHER LOAN DOCUMENT OR OTHER
PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN THE BORROWER AND THE LENDER,
OR (III) ANY CONDUCT, ACT OR OMISSION OF THE BORROWER, THE LENDER OR ANY OF
THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN
EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE.
SECTION 9.5 LIMITATION OF LIABILITY. THE BORROWER HEREBY WAIVES ALL
FUTURE CLAIMS AGAINST THE LENDER FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES UNLESS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE LENDER.
SECTION 9.6 Delays; Partial Exercise of Remedies. No delay or omission
of the Lender to exercise any right or remedy hereunder shall impair any such
right or operate as a waiver thereof. No single or partial exercise by the
Lender of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy.
SECTION 9.7 Notices. Except as otherwise provided herein, all notices
and correspondence hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, by overnight delivery service, with
all charges prepaid, or by telecopier followed by a hard copy sent by regular
mail, if to the Lender, then to United Capital, c/x Xxxxxx United Bank, 00 Xxxx
Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Telecopy: (000) 000-0000, Attention: Xx.
Xxxxxx X. Xxxxxx, Xx., Senior Vice President, with a copy to Luskin, Xxxxx &
Xxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy: (212)
293-2705, Attention: Xxxxxx X. Xxxxxx, Esq., and if to the Borrower, then to
Ormat Nevada Inc., 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx 00000, Telecopy: (775)
356-9039, Attention: President, or, in each case, to such other address
specified by either party in writing to the other party in the manner required
under this Section. All such notices and correspondence shall be deemed given
(i) if sent by certified or registered mail, three Business Days after being
postmarked, (ii) if sent by overnight delivery service, when received at the
above stated addresses or when delivery is refused and (iii) if sent by
telecopier transmission, when such transmission is confirmed.
SECTION 9.8 Assignments and Participations.
(a) Borrower Assignment. The Borrower shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Lender.
(b) Lender Assignment. The Lender, with the prior written consent of
the Borrower which shall not be unreasonably withheld or delayed, may assign to
one or more banks or other financial institutions all or a portion of its rights
and obligations under this Agreement, the Note and the other Loan Documents.
SECTION 9.9 Indemnification; Reimbursement of Expenses of Collection.
(a) The Borrower hereby indemnifies and agrees to defend and hold
harmless the Lender and its directors, officers, agents, employees and counsel
(each, an "Indemnified Party") from and against any and all losses, claims,
damages, liabilities, deficiencies, judgments or
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AMENDED AND RESTATED
expenses incurred by any of them (except to the extent that it is finally
judicially determined to have resulted from their own gross negligence or
willful misconduct) arising out of or by reason of (i) any litigations,
investigations, claims or proceedings which arise out of or are in any way
related to (A) this Agreement, any other Loan Document or the transactions
contemplated hereby or thereby, (B) any actual or proposed use by the Borrower
of the Letters of Credit or the proceeds of the Loans or (C) the Lender's
entering into this Agreement, the other Loan Documents or any other agreement or
document relating hereto, including, without limitation, amounts paid in
settlement, court costs and the reasonable fees and disbursements of counsel
incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing and
(ii) any remedial or other action taken by the Borrower or the Lender in
connection with compliance by the Borrower, or any of its properties, with any
federal, state or local Environmental Laws. In addition, the Borrower shall,
upon demand, pay to the Lender all reasonable costs and expenses incurred by the
Lender (including, without limitation, recording costs and the reasonable fees
and disbursements of counsel and other professionals) in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents, and, upon the occurrence and during the continuance of an
Event of Default, pay to the Lender all reasonable costs and expenses
(including, without limitation, the reasonable fees and disbursements of counsel
and other professionals) paid or incurred by the Lender in (A) enforcing or
defending its rights under or in respect of this Agreement, the other Loan
Documents or any other document or instrument now or hereafter executed and
delivered in connection herewith, (B) collecting the Obligations, and (C)
obtaining any legal, accounting or other advice reasonably required in
connection with any of the foregoing. If and to the extent that the Obligations
of the Borrower hereunder are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
Obligations which is permissible under applicable law.
(b) The Borrower's obligations under this Section 9.9 shall survive any
termination of this Agreement and the other Loan Documents and the payment in
full of the Obligations, and are in addition to, and not in substitution of, any
of its other obligations set forth in this Agreement.
SECTION 9.10 Right of Setoff. In addition to and not in limitation of
all rights of offset that the Lender or any of its Affiliates may have under
applicable law, and whether or not the Lender has made any demand or the
Obligations of the Borrower have matured, the Lender and its Affiliates shall
have the right to appropriate and apply to the payment of the Obligations of the
Borrower all (i) deposits of the Borrower or any of its Affiliates held by the
Lender or any of its Affiliates other than deposits in any of the accounts
specified in Schedule 9.10 or any successor or other special account held by the
Lender or any of its Affiliates as a depository for funds on deposit to secure
or support financings provided by other Persons to the Borrower or its
Affiliates and (ii) other obligations then or thereafter owing by the Lender or
any of its Affiliates to the Borrower or any of its Affiliates.
SECTION 9.11 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document shall be effective unless
in writing and signed by the party to be charged thereby.
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AMENDED AND RESTATED
SECTION 9.12 Nonliability of Lender. The relationship between the
Borrower and the Lender shall be solely that of borrower and lender. The Lender
shall not have any fiduciary responsibilities to the Borrower. The Lender
undertakes no responsibility to the Borrower to review or inform the Borrower of
any matter in connection with any phase of the Borrower's business or
operations.
SECTION 9.13 Counterparts; Telecopied Signatures. This Agreement and
any waiver or amendment hereto may be executed in counterparts and by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but both of which shall together constitute one
and the same instrument. This Agreement may be executed and delivered by
telecopier or other facsimile transmission all with the same force and effect as
if the same was a fully executed and delivered original counterpart.
SECTION 9.14 Severability. In case any provision in or obligation under
this Agreement, the Note or any other Loan Document 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 9.15 Maximum Rate. Notwithstanding anything to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Borrower and the Lender hereby agree that all agreements among them under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Lender for the use, forbearance, or detention of the money loaned to the
Borrower and evidenced hereby or thereby or for the performance or payment of
any covenant or obligation contained herein or therein, exceed the maximum
non-usurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations, under
the laws of the State of New York (or the law of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Agreement and the other Loan Documents), or under applicable federal laws which
may presently or hereafter be in effect and which allow a higher maximum
non-usurious interest rate than under New York (or such other jurisdiction's)
law, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Agreement
and the other Loan Documents, and any available exemptions, exceptions and
exclusions (the "Highest Lawful Rate"). If due to any circumstance whatsoever,
fulfillment of any provisions of this Agreement or any of the other Loan
Documents at the time performance of such provision shall be due shall exceed
the Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest to
the Highest Lawful Rate, and if from any such circumstance the Lender should
ever receive anything of value deemed interest by applicable law which would
exceed the Highest Lawful Rate, such excessive interest shall be applied to the
reduction of the principal amount then outstanding hereunder or on account of
any other then outstanding Obligations and not to the payment of interest, or if
such excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall be
refunded to the Borrower. All sums paid or agreed to be paid to the Lender for
the use, forbearance, or detention of the Obligations and other Indebtedness of
the Borrower to the Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread
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AMENDED AND RESTATED
throughout the full term of such Indebtedness, until payment in full thereof, so
that the actual rate of interest on account of all such Indebtedness does not
exceed the Highest Lawful Rate throughout the entire term of such Indebtedness.
The terms and provisions of this Section shall control every other provision of
this Agreement and all agreements between the Borrower and the Lender.
SECTION 9.16 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE
BORROWER AND THE LENDER IN RESPECT OF THE SUBJECT MATTER HEREOF, SUPERSEDE ANY
PRIOR WRITTEN AND VERBAL AGREEMENTS BETWEEN THEM IN RESPECT OF THE SUBJECT
MATTER HEREOF, AND SHALL BIND AND BENEFIT THE BORROWER AND THE LENDER AND THEIR
RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS.
SECTION 9.17 References to Ormat Technologies. No reference to Ormat
Technologies in this Agreement or any of the other Loan Documents shall be
deemed to create any liability of Ormat Technologies for the Obligations,
provided that the Lender hereby reserves any claims it may have against Ormat
Technologies for liability under laws relating to undercapitalization, fraud or
any other acts that could result in liability of a shareholder for the
obligations of its subsidiary.
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AMENDED AND RESTATED
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper and duly authorized officers as of the date first set
forth above.
ORMAT NEVADA INC.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxxxxx
Authorized Representative
XXXXXX UNITED BANK
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
AMENDED AND RESTATED
SCHEDULE 5.1(e)
CONSENTS AND FILINGS
None.
AMENDED AND RESTATED
SCHEDULE 5.1(f)
MATERIAL TRANSACTIONS
Each of the following has occurred since December 31, 2003:
1. The acquisition by ORNI 8 LLC, a subsidiary of the Borrower, of 100% of
the interests in CE Puna Limited Partnership, a Maryland general
partnership and Puna Geothermal Venture, a Hawaii general partnership,
pursuant to the Purchase and Sale Agreement, dated as of April 22,
2004, by and among Constellation Power, Inc., a Maryland corporation,
as seller, COSI Puna, Inc., a Maryland corporation, ORNI 8 LLC, a
Delaware limited liability company, as purchaser, and Borrower, as
purchaser's parent.
2. The acquisition by ORNI 11 LLC and ORNI 12 LLC, each a subsidiary of
the Borrower, of 100% of the general and limited partnership interests
of Yankee Caithness Joint Venture, L.P., a Delaware limited
partnership, pursuant to the Purchase and Sale Agreement, dated as of
May 20, 2004, by and among Nevada Power Holdings, LLC, a Delaware
limited liability company, and Steamboat Finance Holdings, LLC, a
Delaware limited liability company, as sellers, and ORNI 11 LLC, a
Delaware limited liability company, and ORNI 12 LLC, a Delaware limited
liability company, as purchasers.
3. The application of the Financial Accounting Standards Board's
guidelines, FASB FIN 46, Consolidation of Variable Interest Entities,
to the Borrower and the Borrower's Affiliates.
AMENDED AND RESTATED
SCHEDULE 5.1(h)
JOINT VENTURES OR PARTNERSHIPS
None.
AMENDED AND RESTATED
SCHEDULE 5.1(o)
TAXES AND TAX RETURNS
None.
AMENDED AND RESTATED
SCHEDULE 5.1(p)
JUDGMENTS OR LITIGATION
None.
AMENDED AND RESTATED
SCHEDULE 5.1(s)
ERISA
Ormat Nevada Inc., a Delaware corporation, maintains or contributes to the
following plans:
1. Ormat 401(k) Plan
2. Short Term Disability Plan
3. Long Term Disability Plan
4. Group Term Life Insurance
5. Guardian Dental
6. VSP Vision Care Benefits
7. CBSA Group Medical Plan
AMENDED AND RESTATED
SCHEDULE 5.1(x)
CONTRACTS, ORDERS, ETC.
None.
AMENDED AND RESTATED
SCHEDULE 9.10
EXCLUDED ACCOUNTS
--------------------------------------------------------------------------------
Name of Account Account Number
--------------------------------------------------------------------------------
OrCal Geothermal Revenue Account 2897400361
--------------------------------------------------------------------------------
OrCal Geothermal O&M Account 2897400370
--------------------------------------------------------------------------------
OrCal Geothermal Debt Service Reserve Account 2897400389
--------------------------------------------------------------------------------
OrCal Geothermal Lease Suspense Account 0000000000
--------------------------------------------------------------------------------
OrCal Geothermal Capital Expenditures Payment Account 2897400405
--------------------------------------------------------------------------------
OrCal Geothermal Distribution Suspense Account 0000000000
--------------------------------------------------------------------------------
OrCal Geothermal Loss Proceeds Account 2897400423
--------------------------------------------------------------------------------
OrCal Geothermal Funding Account 2897400432
--------------------------------------------------------------------------------
Ormesa Revenue Account 2897400272
--------------------------------------------------------------------------------
Ormesa Debt Service Reserve Account 0000000000
--------------------------------------------------------------------------------
Ormesa Restoration Sub-Account 2897400316
--------------------------------------------------------------------------------
Ormesa Loss Proceeds Account 0000000000
--------------------------------------------------------------------------------
Ormesa O&M Account 2897400290
--------------------------------------------------------------------------------
AMENDED AND RESTATED
EXHIBIT A
PROMISSORY NOTE
New York, New York
---- --, ----
FOR VALUE RECEIVED, Ormat Nevada Inc., a Delaware corporation having
its chief executive office and principal place of business at 000 Xxxx Xxxxxx,
Xxxxxx, Xxxxxx 00000 (the "Borrower"), hereby unconditionally promises to pay to
the order of Xxxxxx United Bank, a bank organized under the laws of the State of
New Jersey (the "Lender"), at the Lender's office at 00 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 or at such other location as the Lender may from
time to time designate in writing, in lawful money of the United States of
America and in immediately available funds, the principal amount of each Loan
made by the Lender to the Borrower under Section 2.1(d) of the Credit Agreement
(as defined below) in four consecutive quarterly installments, commencing on the
last Business Day of the calendar quarter immediately following the making of
such Loan in accordance with Section 2.4(a) of the Credit Agreement, provided
that the amount of each Loan shall be repaid in full on the earlier of (i)
twelve months after the date on which such Loan was made and (ii) the
Availability Expiration Date. The Borrower further promises to pay interest in
like money and funds to the Lender at the aforementioned address (or at such
other location as the Lender may from time to time designate in writing) on the
unpaid principal amount of each Loan from time to time outstanding from and
including the date hereof until paid in full at the rates and on the dates
determined in accordance with Sections 3.1 and 3.2 of the Credit Agreement. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Letter of Credit and Loan Agreement of
even date herewith (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") between the Borrower and the Lender.
This Note is the Note referred to in the Credit Agreement and shall be
entitled to the benefit of all terms and conditions of, and the security of all
security interests, liens and rights granted under or in connection with, the
Credit Agreement and the other Loan Documents, and is subject to optional and
mandatory prepayment as provided in the Credit Agreement. Upon the occurrence of
any one or more of the Events of Default specified in the Credit Agreement, all
amounts then remaining unpaid on this Note may be declared to be or may
automatically become immediately due and payable as provided in the Credit
Agreement.
The Borrower acknowledges that the holder of this Note may assign,
transfer or sell all or a portion of its rights and interests in, to and under
this Note to one or more Persons as provided in the Credit Agreement and that
such Persons shall thereupon become vested with all of the rights and benefits
of the Lender in respect hereof as to all or that portion of this Note which is
so assigned, transferred or sold.
In the event of any conflict between the terms hereof and the terms and
provisions of the Credit Agreement, the terms and provisions of the Credit
Agreement shall control.
The Borrower waives presentment, demand for payment, protest and notice
of dishonor of this Note and authorizes the holder hereof, without notice, to
increase or decrease the
rate of interest on any amount owing under this Note in accordance with the
Credit Agreement. The Borrower shall make all payments hereunder without setoff,
recoupment, deduction or counterclaim. No failure to exercise and no delay in
exercising any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights. This Note may not be changed or modified orally, but
only by an agreement in writing, which is signed by the party or parties against
whom enforcement of any waiver, change or modification is sought.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS NOTE AND ANY
DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS
(AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.
EACH OF THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE LENDER HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO
THIS NOTE OR ANY CONDUCT, ACTS OR OMISSIONS OF THE BORROWER, THE LENDER OR ANY
OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR OTHER
AFFILIATES, IN EACH CASE WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR
OTHERWISE.
ORMAT NEVADA INC.
By:
----------------------------
Xxxxxx Xxxxxxxx
Authorized Representative
2
EXHIBIT B
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT dated as of ____ __, ____ (this "Agreement")
between Ormat Technologies, Inc., a Delaware corporation (together with its
successors and assigns, the "Junior Lender"), and Xxxxxx United Bank, a bank
organized under the laws of the State of New Jersey (together with its
successors and assigns, "Xxxxxx United").
W I T N E S S E T H :
WHEREAS, Ormat Nevada Inc., a Delaware corporation ("Ormat Nevada"), is
a wholly owned Subsidiary of the Junior Lender and has intercompany indebtedness
to the Junior Lender which is evidenced by the Credit Facility dated December
18, 2003 in an amount up to $80,000,000 (as amended, supplemented or otherwise
modified from time to time, the "Junior Credit Facility") from Ormat Nevada in
favor of the Junior Lender; and
WHEREAS, it is a condition precedent to the effectiveness of the Letter
of Credit and Loan Agreement of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "HUB Credit Agreement") between Ormat
Nevada and Xxxxxx United that the Junior Lender and Ormat Nevada shall have
executed and delivered this Agreement subordinating the Junior Lender's rights
with respect to the Junior Obligations (as defined below) to the rights of
Xxxxxx United with respect to the HUB Obligations (as defined below);
NOW, THEREFORE, in consideration of the promises contained herein and
to induce Xxxxxx United to enter into the HUB Credit Agreement and to issue, or
cause to be issued, letters of credit and to make term loans thereunder, the
Junior Lender agrees as follows:
SECTION 1. DEFINITIONS.
(a) "Pro Rata Share", as used herein, means, at any time, a fraction
(expressed as a percentage) (i) the numerator of which is the sum of the amount
of all undrawn Letters of Credit and the outstanding amount of the Loans at such
time and (ii) the denominator of which is the aggregate unsecured Indebtedness
of the Borrower including, without limitation, the amount of all undrawn Letters
of Credit and the outstanding amount of the Loans at such time.
(b) All other capitalized terms not otherwise defined herein shall have
the meanings set forth in the HUB Credit Agreement, and the rules of usage set
forth therein shall apply hereto.
SECTION 2. SUBORDINATION.
(a) All Junior Obligations, and all rights and remedies of the Junior
Lender with respect thereto, are and shall at all times continue to be subject,
subordinate and junior in right of payment in the manner provided herein to the
HUB Obligations including, without limitation, all interest on the HUB
Obligations at the applicable rates stated in the HUB Credit
Agreement from the date of the filing by or against Ormat Nevada of a petition
under any bankruptcy, insolvency or similar law to the date of the indefeasible
payment in full of the HUB Obligations, in each case whether or not such
interest is an allowable claim under any such law or in any case or proceeding
thereunder ("Postpetition Interest"). The term "Junior Obligations," as used in
this Agreement, shall mean the Liabilities of Ormat Nevada to the Junior Lender
under the Junior Credit Facility (including extensions, modifications,
refinancings, renewals and refundings thereof). The term "HUB Obligations," as
used in this Agreement, shall mean the principal amount of and premium, if any,
and interest (including, without limitation, Postpetition Interest) on all
Obligations of Ormat Nevada to Xxxxxx United under the HUB Credit Agreement
together with all fees, costs and expenses relating thereto, whether direct or
contingent, now or hereafter existing, due or to become due to, or held or to be
held by, Xxxxxx United (including extensions, modifications, refinancings,
renewals and refundings thereof).
(b) The Junior Lender shall not receive or accept any payment on the
Junior Obligations, whether as principal, premium, interest or otherwise
(including by setoff or right of recoupment) if, and for so long as, a Default
has occurred under the HUB Credit Agreement or a Default would occur under the
HUB Credit Agreement as a result of any such payment, unless and until all the
HUB Obligations including, without limitation, all Post-petition Interest have
been paid in full in cash.
(c) The Pro Rata Share of any amounts received by the Junior Lender as
payment on the Junior Obligations in violation of this Agreement shall be held
in trust for Xxxxxx United and, as soon as possible, turned over to Xxxxxx
United and applied against the HUB Obligations until the Commitment has been
terminated, the HUB Obligations have been paid in full in cash and all Letters
of Credit have (at Ormat Nevada's option or if required by the HUB Credit
Agreement) been fully cash collateralized or have terminated or expired.
(d) The Junior Lender will not commence any action or proceeding
against Ormat Nevada to recover all or any part of the Junior Obligations or
join with any creditor, unless Xxxxxx United shall also have joined, in bringing
against Ormat Nevada any such proceeding including, without limitation, any
proceeding under any bankruptcy, insolvency or similar law or any other
proceeding the result of which could give rise to an Insolvency Event until the
date on which the Commitment has been terminated, the HUB Obligations have been
paid in full in cash and all Letters of Credit have (at Ormat Nevada's option or
if required by the HUB Credit Agreement) been fully cash collateralized or have
terminated or expired.
(e) Upon the occurrence of any Insolvency Event of Ormat Nevada or in
the event of a sale of all or substantially all of the assets or any other
marshaling of the assets and liabilities, or any recapitalization, refinancing
or reorganization of Ormat Nevada, the HUB Obligations shall first be paid in
full in cash before the Junior Lender shall be entitled to receive any money,
distributions or other assets in any such proceeding. In any such event, Xxxxxx
United may (without having any obligation to do so), and is hereby irrevocably
authorized and granted an exclusive power (which power is coupled with an
interest), but without imposing any obligation upon Xxxxxx United, to demand,
xxx for, collect or receive the Pro Rata Share of every such payment or
distribution of cash, property, stock or obligations, and to give acquittance
therefor, to file claims and proofs of claim in any statutory or nonstatutory
proceeding, to exercise the rights of the Junior Lender arising under or
relating to the Junior
-2-
Credit Facility and to vote the claim under the Junior Credit Facility in its
sole discretion in connection with any such event, including, without
limitation, the right to participate in any composition of creditors and to vote
at creditors' meetings for the election of trustees, acceptances of plans of
reorganization and any other matter upon which the Junior Lender is entitled to
vote, in each case to the extent of the Pro Rata Share of such claims and
rights. In furtherance of the foregoing, at the request of Xxxxxx United, the
Junior Lender shall execute and deliver to Xxxxxx United a power of attorney and
such further powers and instruments as Xxxxxx United may request to enable the
Xxxxxx United to enforce its rights under this subsection.
(f) Xxxxxx United may, at any time and from time to time, without the
consent of or notice to the Junior Lender, without incurring responsibility or
liability to the Junior Lender and without impairing or releasing any right or
remedy of Xxxxxx United hereunder:
(i) With the written consent of Ormat Nevada, change the manner, place
or terms of payment or change or extend the time of payment of, or renew,
increase or alter the HUB Obligations, amend the HUB Credit Agreement or any
other Loan Document in any manner or enter into or amend in any manner any
other agreement relating to the HUB Obligations;
(ii) Exchange, release, dispose of or otherwise deal with any cash
collateral or other property by whomsoever at any time pledged to secure, or
howsoever securing, the HUB Obligations, in each case in accordance with the
terms of the HUB Credit Agreement or with the written consent of, or at the
request of, Ormat Nevada;
(iii) Release any Person liable in any manner for the payment or
collection of any of the HUB Obligations;
(iv) Exercise or refrain from exercising any rights against Ormat
Nevada or any other Person; or
(v) Apply any sums by whomsoever paid or however realized to the HUB
Obligations.
(g) The Junior Lender waives notice of acceptance of this Agreement.
(h) The Junior Lender will cause the Credit Facility and any other
instrument that evidences any Junior Obligations to bear upon its face a
statement or legend to the effect that such instrument is subordinated to the
HUB Obligations in the manner and to the extent set forth in this Agreement. The
Junior Lender shall reflect on its financial statements that the Junior
Obligations are so subordinated to the Senior Obligations.
(i) Subject to the payment in full of the HUB Obligations in
immediately available funds, the Junior Lender shall be subrogated to Xxxxxx
United's rights to receive payments or distributions in cash or property
applicable to the HUB Obligations, and no payment or distribution made to Xxxxxx
United by virtue of this Agreement that otherwise would have been made to the
Junior Lender shall be deemed to be a payment by Ormat Nevada
-3-
on account of the Junior Obligations, it being understood that the provisions of
this Section 2 are intended solely for the purpose of defining the relative
rights of the Junior Lender, on the one hand, and Xxxxxx United, on the other
hand.
(j) The Junior Lender will not sell, assign, transfer or otherwise
dispose of all or any part of the Junior Obligations to any Person without
having first obtained such Person's agreement in writing to be bound as the
Junior Lender's successor by the terms of this Agreement.
Nothing contained in this Agreement is intended to or shall impair, as
between Ormat Nevada, its creditors (other than Xxxxxx United) and the Junior
Lender, the obligation of Ormat Nevada, which is absolute and unconditional, to
pay to the Junior Lender the principal of and the premium, if any, and the
interest on the Junior Obligations as and when the same shall become due and
payable in accordance with, and subject to, the terms of this Agreement and the
Junior Credit Facility, or to affect the relative rights of the Junior Lender
and the creditors of Ormat Nevada (other than Xxxxxx United).
Nothing contained in this Agreement is intended to subordinate or shall
be construed as subordinating, to any obligation whatsoever, including the HUB
Obligations, any payment or obligation now or hereafter due and payable from
Ormat Nevada to the Junior Lender, other than the Junior Obligations.
Xxxxxx United hereby acknowledges that the rights of the Junior Lender
under the Junior Credit Facility may be subordinated in the future to the rights
of other creditors of Ormat Nevada.
SECTION 3. TERMINATION. This Agreement shall terminate and cease to be
of further effect upon the termination of the Commitment, the payment in full in
cash of the HUB Obligations and the termination or expiration or (at Ormat
Nevada's request or if required by the HUB Credit Agreement) cash
collateralization in full of all Letters of Credit.
SECTION 4. BENEFIT OF AGREEMENT. Nothing in this Agreement, expressed
or implied, shall give or be construed to give to any Person including, without
limitation, Ormat Nevada (but excluding Junior Lender and Xxxxxx United) any
legal or equitable right, remedy or claim under this Agreement, or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of Xxxxxx United or the Junior Lender, as applicable.
SECTION 5. NOTICES. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, by overnight delivery service, with
all charges prepaid, or by telecopier followed by a hard copy sent by regular
mail, if to Xxxxxx United, then to Xxxxxx United Bank, 00 Xxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Telecopy: (000) 000 0000, Attention: Xx. Xxxxxx X.
Xxxxxx, Xx., Senior Vice President, with a copy to Luskin, Xxxxx & Xxxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy: (000) 000 0000,
Attention: Xxxxxx X. Xxxxxx, Esq., and if to the Junior Lender or Ormat Nevada,
then to c/o Ormat Technologies, Inc., 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx 00000,
Telecopy: (000) 000-0000, Attention: President,
-4-
or, in each case, to such other address as a party may specify to the other
parties in the manner required hereunder. All such notices and correspondence
shall be deemed given (i) if sent by certified or registered mail, three
Business Days after being postmarked, (ii) if sent by overnight delivery
service, when received at the above stated addresses or when delivery is refused
and (iii) if sent by telecopier transmission, when such transmission is
confirmed.
SECTION 6. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement, or consent to any departure by the Junior Lender or
Ormat Nevada therefrom, shall in any event be effective unless the same shall be
in writing and signed by the party to be charged thereby.
SECTION 7. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or omission
of Xxxxxx United to exercise any right or remedy hereunder shall impair any such
right or operate as a waiver thereof. No single or partial exercise by Xxxxxx
United of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy.
SECTION 8. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement and any
waiver or amendment hereto may be executed in counterparts and by the parties
hereto in 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. This Agreement may be executed and delivered by telecopier or
other facsimile transmission all with the same force and effect as if the same
was a fully executed and delivered original manual counterpart.
SECTION 9. SEVERABILITY. In case any provision 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 10. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS; CONFLICT. This
Agreement constitutes the entire agreement among the parties in respect of the
subject matter hereof, supersedes any prior written and verbal agreements among
them in respect of the subject matter hereof and shall bind and benefit the
parties (including, without limitation, Xxxxxx United) and their respective
successors and permitted assigns. In the event of any express conflict between
any term, covenant or condition of this Agreement and any term, covenant or
condition of any of the HUB Credit Agreement or the Loan Documents or the Junior
Credit Facility, the provisions of this Agreement shall control.
SECTION 11. SPECIFIC PERFORMANCE. XXXXXX UNITED IS HEREBY AUTHORIZED TO
DEMAND SPECIFIC PERFORMANCE OF THIS AGREEMENT AT ANY TIME WHEN THE JUNIOR LENDER
SHALL HAVE FAILED TO COMPLY WITH ANY OF THE PROVISIONS OF THIS AGREEMENT
APPLICABLE TO IT. THE JUNIOR LENDER HEREBY IRREVOCABLY WAIVES ANY DEFENSE BASED
ON THE ADEQUACY OF A REMEDY AT LAW THAT MIGHT BE ASSERTED AS A BAR TO SUCH
REMEDY OF SPECIFIC PERFORMANCE.
SECTION 12. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS AGREEMENT AND ANY DISPUTE ARISING OUT OF
-5-
OR IN CONNECTION WITH THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR
EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) AND DECISIONS OF THE STATE OF NEW YORK.
SECTION 13. SUBMISSION TO JURISDICTION. ALL DISPUTES BETWEEN THE JUNIOR
LENDER AND XXXXXX UNITED ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
WHETHER SOUNDING IN CONTRACT, TORT OR EQUITY OR OTHERWISE, SHALL BE RESOLVED
ONLY BY STATE AND FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, AND THE COURTS
TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT XXXXXX UNITED
SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED
AGAINST THE JUNIOR LENDER IN ANY LOCATION REASONABLY SELECTED BY XXXXXX UNITED
IN GOOD FAITH TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF XXXXXX
UNITED. THE JUNIOR LENDER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH XXXXXX UNITED HAS COMMENCED A PROCEEDING CONSISTENT WITH
THIS SECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON FORUM NON CONVENIENS.
SECTION 14. JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO (I) THIS
AGREEMENT OR (II) ANY CONDUCT, ACTS OR OMISSIONS OF THE JUNIOR LENDER, ORMAT
NEVADA, XXXXXX UNITED OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR OTHER AFFILIATES, IN EACH CASE WHETHER SOUNDING IN
CONTRACT, TORT OR EQUITY OR OTHERWISE.
-6-
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed by its proper and duly authorized officer as of the date first
set forth above.
ORMAT TECHNOLOGIES, INC.
By:
-------------------------------
Xxxxxx Xxxxxxxx
Authorized Representative
XXXXXX UNITED BANK
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
Senior Vice President
-7-
ACKNOWLEDGEMENT
Ormat Nevada Inc. hereby acknowledges the provisions of the foregoing
Subordination Agreement and agrees to abide by the terms thereof.
ORMAT NEVADA INC.
By:
------------------------------
Xxxxxx Xxxxxxxx
Authorized Representative
EXHIBIT C
[Form of Letter of Credit Request]
----------, ----
Xxxxxx United Bank
00 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, Xx.
Ladies and Gentlemen:
The undersigned, Ormat Nevada Inc. (the "Borrower"), refers to the
Letter of Credit and Loan Agreement dated as of June __, 2004 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement) between the Borrower and Xxxxxx
United Bank (the "Lender"), and hereby irrevocably requests that the Lender
[issue] [use its best efforts to cause a Fronting Bank to issue] a Letter of
Credit for the account of [the Borrower] [_________, a wholly owned Subsidiary
of the Borrower] (the "Proposed Issuance") containing the following terms:
1. Date of Issuance:
--------------------------
2. Face Amount: US$
---------------------------
3. Expiration Date:
---------------------------
4. Beneficiary: [Name and Address]
------------------------------
------------------------------
------------------------------
------------------------------
The undersigned hereby certifies that the following statements will be
true and correct on the date of the Proposed Issuance:
(A) the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct on and
as of the date of the Proposed Issuance as if then made, other
than representations and warranties that expressly relate solely
to an earlier date (in which case they were true and correct on
and as of such earlier date);
(B) no Default has occurred and is continuing or would result from
such Proposed Issuance;
(C) except for the transactions specified in Schedule 5.1(f) to the
Credit Agreement, no Material Adverse Effect has occurred or is
reasonably likely to occur after giving effect to the Proposed
Issuance; and
(D) the Proposed Issuance may be issued in accordance with and will
not violate any of the requirements of Section 2.1 of the Credit
Agreement).
ORMAT NEVADA INC.
By:
------------------------------------
Name:
Title:
2
EXHIBIT D
[Xxxxxxxxxx & Xxxxx LLP Letterhead]
June __, 2004
Xxxxxx United Bank
00 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as special New York counsel to (a) Ormat Nevada Inc., a
Delaware corporation (the "Borrower") in connection with the preparation,
execution and delivery of the Letter of Credit and Loan Agreement of even date
herewith (the "Credit Agreement") between the Borrower and Xxxxxx United Bank
(the "Lender") and (b) Ormat Technologies, Inc., a Delaware corporation ("Ormat
Technologies") in connection with the preparation, execution and delivery of the
Subordination Agreement of even date herewith (the "Subordination Agreement")
between Ormat Technologies and the Lender. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. This opinion is delivered pursuant to Section 4.1(a)(iv) of
the Credit Agreement.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents, each of which is dated the date hereof unless otherwise noted:
A. The Credit Agreement;
B. The Note;
C. The Subordination Agreement;
D. Each of the agreements, instruments, and other documents listed on
Schedule 1 hereto;
E. The Certificate of Incorporation of each of the Borrower and Ormat
Technologies (together, the "Corporations"), as amended, certified on June 23,
2004 by the Secretary of State of the State of Delaware, and the By-Laws of each
of the Corporations, as amended, certified as in effect on the date hereof by
the Secretaries of the Corporations, as applicable; and
F. The long-form good standing certificate, dated as of June 18,
2004, from the Secretary of State of the State of Delaware for each of the
Corporations.
The documents referenced in paragraphs A through C above are
hereinafter referred to as the "Loan Documents." The documents referenced in
paragraphs A through F above are hereinafter referred to as the "Examined
Documents."
-2-
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements,
documents, and other instruments, and such certificates and comparable documents
of public officials and of officers and representatives of the Corporations, as
we have deemed necessary or appropriate as a basis for the opinions set forth
below.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, and the conformity to original documents of all
documents submitted to us as certified, conformed, photostatic copies, or
facsimiles. In rendering the opinions set forth below, we have relied, to the
extent we deemed necessary or appropriate as a basis for such opinions, on
certificates, orders, decrees, correspondence, and other documents from public
officials as to the matters stated in such documents. As to questions of fact
material to the opinions set forth below, we have relied, to the extent we
deemed necessary or appropriate as a basis for such opinions, upon the
representations and warranties of the Corporations contained in the Loan
Documents and other certificates of their respective officers and other
representatives, and of public officials.
In such examination, we have assumed, without investigation, (a) the
due execution and delivery pursuant to due authorization on behalf of each of
the parties to each of the Loan Documents (other than the Corporations), (b)
that each party to each Loan Document (other than the Corporations) is duly
organized or formed, validly existing, and in good standing under the law of the
jurisdiction of its organization or formation and has full power and authority
to enter into and carry out its obligations under such Loan Document, and (c)
that each Loan Document is valid and binding on, and enforceable against, each
party thereto (other than the Corporations).
Based on the foregoing, having regard for such legal considerations as
we deem relevant, and subject to the qualifications and limitations contained
herein, it is our opinion that:
1. Each of the Corporations is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
2. Neither the execution and delivery of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof, (a) violates the General Corporation Law of the State of
Delaware (the "DGCL") or those laws, rules, and regulations of the State of New
York and the United States of America that, in our experience, are normally
applicable to transactions of the type contemplated by the Loan Documents
(collectively, "Applicable Laws"), (b) violates, results in the breach of, or
constitutes a default under any Examined Document, or (c) results in the
creation or imposition pursuant to the provisions of any Examined Document of
any lien, charge, or encumbrance upon any of the property of any Corporation
(except as specifically contemplated under the Loan Documents). Neither the
issuance of the Letters of Credit nor the making of the Loans and the
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application of the proceeds thereof as provided in the Credit Agreement will
violate Regulations T, U or X of the Board of Governors of the Federal Reserve
System.
3. No authorization, consent, waiver, approval, or other action or
consideration by, and no notice to or filing with, any governmental or
regulatory authority, body, or instrumentality under New York or federal laws or
the DGCL, is required for the due execution and delivery by each Corporation of
the Loan Documents to which it is a party or the performance by each Corporation
of all of its obligations under the Loan Documents to which it is a party.
4. Each of the Loan Documents has been duly executed and delivered by
the Borrower, and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms. The
Subordination Agreement has been duly executed and delivered by Ormat
Technologies, and constitutes the legal, valid and binding obligation of Ormat
Technologies, enforceable against Ormat Technologies in accordance with its
terms.
5. To the best of our knowledge, there is no pending or threatened
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against the Borrower or Ormat Technologies that (i)
individually or in the aggregate could reasonably be expected to have a material
adverse effect on the business, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower or Ormat
Technologies or (ii) purports to affect the legality, validity or enforceability
of the Loan Documents.
Our opinions contained in paragraph 4 above with respect to the
enforceability of the Loan Documents are subject to the following
qualifications:
(a) the enforceability of the Loan Documents may be limited by the
effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
or other similar laws relating to or affecting the rights of creditors
generally, including, without limitation, laws relating to fraudulent
transfers or conveyances, preferences, and equitable subordination;
(b) the enforceability of the Loan Documents may be limited by
statutory requirements with respect to good faith, fair dealing, and
commercial reasonableness, by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and by
the effect of judicial decisions that have held that certain provisions are
unenforceable where their enforcement would violate the implied covenant of
good faith and fair dealing, or would be commercially unreasonable, or where
a default is not material;
(c) certain remedial provisions of the Loan Documents are or may
be unenforceable in whole or in part under the laws of the State of New
York, but the inclusion of such provisions does not make the remedies
afforded by the Loan
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Documents inadequate for the practical realization of the rights and
benefits purported to be provided thereby;
(d) the availability of equitable remedies, including, without
limitation, specific enforcement and injunctive relief, is subject to the
discretion of the court before which any proceedings therefor may be
brought; and
(e) notwithstanding certain language of the Loan Documents, the
Lender may be limited to recovering only reasonable compensation for funding
losses, increased costs, or yield protection.
In giving the opinions set forth in paragraph 4 above, we express no
opinion as to:
(a) the enforceability of any provisions contained in the Loan
Documents that purport to establish (or may be construed to establish)
evidentiary standards;
(b) the enforceability of forum selection clauses in federal
courts;
(c) the legality, validity, binding effect, or enforceability of
any provision of any of the Loan Documents insofar as they provide for the
payment or reimbursement of costs and expenses or indemnification for
claims, losses, or liabilities in excess of a reasonable amount determined
by any court or other tribunal;
(d) the enforceability under certain circumstances of provisions
indemnifying a party against liability for its own wrongful or negligent
acts;
(e) the compliance or non-compliance, or the effect of
non-compliance, with any financial tests, ratios, or covenants in the Loan
Documents;
(f) the effect of the compliance or noncompliance of the Lender
with any state or federal laws or regulations (including, without
limitation, any unpublished order, decree, or directive issued by any
Governmental Authority) applicable to Lender because of its legal or
regulatory status, the nature of its business, or its authority to conduct
business in any jurisdiction;
(g) the enforceability of provisions in the Loan Documents that
may be rendered unenforceable or ineffective by operation of Sections 9-401
or 9-409 of the NY-UCC;
(h) the enforceability of any provision that provides that the
assertion or employment of any right or remedy shall not prevent the
concurrent assertion or employment of any other right or remedy, or that
each and every remedy shall be cumulative and in addition to every other
remedy or that any delay or omission to
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exercise any right or remedy shall not impair any other right or remedy or
constitute a waiver thereof;
(i) the enforceability of any provisions providing for indemnification
or contribution to the extent such indemnification or contribution violates
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, or the securities laws of any state or is against public policy;
(j) the creation, validity, perfection, the effect of perfection or
nonperfection, or the priority of any lien or security interest;
(k) the enforceability under certain circumstances of contractual
provisions respecting various self-help or summary remedies without notice
or opportunity for hearing or correction, especially if their operation
would work a forfeiture or impose a penalty upon the burdened party; or
(l) the enforceability of (i) restrictions upon non-written
modifications and waivers, (ii) provisions authorizing or validating
conclusive or discretionary determinations, (iii) grants of setoff rights,
(iv) proxies, powers, and trusts, and (v) provisions for liquidated damages,
default interest, late charges, monetary penalties, prepayment or make-whole
premiums.
Our opinion set forth in paragraph 4 regarding the enforceability of
choice-of-law and forum selection provisions in the Loan Documents is rendered
in reliance upon the Act of July 19, 1984, ch. 421, 1984 XxXxxxxx'x Sess. Laws
of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law Sections 5.1401, 5.1402 (XxXxxxxx
1989) and N.Y. CPLR 327(b) (XxXxxxxx 1990)) and is subject to the qualifications
that such enforceability may be limited by public policy considerations of any
jurisdiction in which enforcement of such provisions, or of a judgment upon an
agreement containing such provisions, is sought.
Our opinions set forth in paragraphs 2 and 3 are based on our review of
Applicable Laws (as defined in paragraph 2), without having made any
investigation concerning any other laws, rules, or regulations. Our opinions do
not address (a) ministerial or immaterial filings and registrations required to
be made by the Corporations in the ordinary course of business with any
Governmental Authority, (b) any approval of any federal, state, regional,
county, municipal, or local governmental authority (other than the approvals
required to be obtained by the Corporations for the execution, delivery, and
performance of the Loan Documents), (c) any consents, approvals, notices,
registrations, or governmental approvals by or in respect of any Governmental
Authority in connection with the construction, use, ownership, or operation of
the Facilities, or (d) any laws, rules, or regulations relating to antitrust,
tax, health, safety, or the environment. Furthermore, with respect to our
opinions contained in paragraphs 2 and 3, we give no opinion as to any violation
by any Corporation of any federal, Delaware, or New York court order, writ,
judgment, or decree.
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When in this opinion we have used the phrase "to the best of our
knowledge", "known to us" or similar phrases we have not made any independent
investigation of the relevant facts for purposes of this opinion, but we have
relied on the representations made in the Loan Documents and in certificates of
public officials and of officers and other agents of the Corporations and the
principal attorneys involved in the review of the Loan Documents are not aware
of any facts inconsistent therewith.
We do not express any opinion with respect to the law of any
jurisdiction other than the federal law of the United States, the law of the
State of New York, and, in the case of our opinions set forth in paragraphs 1,
2, and 3, the DGCL. Without limiting the generality of the foregoing, we express
no opinion concerning the law of any other jurisdiction in which the Lender may
be located or in which enforcement of the Loan Documents may be sought that
limits the amount of interest that may be legally charged or collected.
Furthermore, we express no opinion as to the effect of any change in law,
circumstance, or the occurrence of any event, after the date hereof.
This opinion is rendered to you solely in your capacity as the Lender
and may not be relied upon by any other person, other than permitted assignees
of the Lender pursuant to Section 9.8 of the Credit Agreement, or for any other
purpose without our prior written consent. This opinion may be relied upon
solely as of the date hereof, and we undertake no obligation to update or
supplement this opinion after the date hereof.
Very truly yours,
SCHEDULE 1
ADDITIONAL EXAMINED DOCUMENTS
ORMESA LLC
1. Credit Agreement, dated as of December 31, 2002, among Ormesa LLC, a
Delaware limited liability company ("Ormesa"), each of the lenders that
is a party thereto, United Capital, a division of Xxxxxx United Bank, a
New Jersey banking corporation ("United"), as Administrative Agent, and
United, as Collateral Agent (the "Ormesa Credit Agreement").
Capitalized terms used in this Section of Schedule 1 and not otherwise
defined herein shall have the meanings ascribed to such terms in
Schedule I to the Ormesa Credit Agreement.
2. Initial Term Loan Note, dated December 31, 2002, by Ormesa in favor of
United.
3. Borrower Security Agreement, dated as of December 31, 2002, between
Ormesa and Collateral Agent.
4. Borrower Equity Interest Pledge, dated as of December 31, 2002, between
Ormat Funding Corp. and Collateral Agent.
5. Depositary Agreement, dated as of December 31, 2002, among Ormesa,
Administrative Agent, Collateral Agent, and Depositary Bank.
6. Consent to Assignment of Agreement, dated as of December 31, 2002,
among the Borrower, Collateral Agent, and Ormesa.
7. Deed of Trust, dated as of December 31, 2002, by Ormesa in favor of the
Collateral Agent.
ORMAT NEVADA INC.
1. Amended and Restated Bridge Loan Agreement, dated as of October 2,
2003, between the Borrower and Bank Leumi USA ("Bank Leumi") (the "Bank
Leumi Loan Agreement"). Capitalized terms used in this Section of
Schedule 1 and not otherwise defined herein shall have the meanings
ascribed to such terms in the Bank Leumi Loan Agreement.
2. Restated Promissory Note (GRID), dated October 2, 2003, by the Borrower
in favor of Bank Leumi.
ORCAL GEOTHERMAL INC.
1. Credit Agreement, dated as of December 18, 2003, among OrCal Geothermal
Inc., a Delaware corporation ("OrCal"), each of the financial
institutions that is a party thereto, and Xxxx Bank, S.S.B., as
Administrative Agent (the "OrCal Credit Agreement"). Capitalized terms
used in this Section of Schedule 1 and not otherwise defined herein
shall have the meanings ascribed to such terms in Exhibit A to the
OrCal Credit Agreement.
2. Note, dated December 18, 2003, by OrCal in favor of Xxxx Bank, S.S.B.
3. Depositary Agreement, dated as of December 18, 2003, among OrCal, each
Guarantor, Administrative Agent, and Depositary Agent.
4. Joinder Agreement, dated as of December 18, 2003, among HGC, Depositary
Agent, and Administrative Agent.
5. Joinder Agreement, dated as of December 18, 2003, among HFC, Depositary
Agent, and Administrative Agent.
6. Security Agreement, dated as of December 18, 2003, between OrCal and
Administrative Agent.
7. Pledge Agreement, dated as of December 18, 2003, among the Borrower,
OrCal, and Administrative Agent.
8. Pledge Agreement, dated as of December 18, 2003, among OrCal, OrHeber
1, and Administrative Agent.
9. Pledge Agreement, dated as of December 18, 2003, among OrCal, OrHeber
1, HFC, HGC, and Administrative Agent.
10. Consent, dated as of December 18, 2003, among the Borrower, OrHeber 1,
HGC, HFC, and Administrative Agent.
11. Subordination Agreement, dated as of December 18, 2003, among the
Borrower, OrCal, and Administrative Agent.
ORMAT FUNDING CORP.
1. Indenture, dated as of February 13, 2004, among Ormat Funding Corp., a
Delaware corporation ("Ormat Funding"), Xxxxx Power Partners, a Nevada
general partnership ("Xxxxx"), Steamboat Development Corp., a Utah
Corporation ("Steamboat
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Development"), Steamboat Geothermal LLC, a Delaware limited liability
company ("Steamboat Geothermal"), OrMammoth Inc., a Delaware
corporation ("OrMammoth"), ORNI 1 LLC, a Delaware limited liability
company ("ORNI 1"), ORNI 2 LLC, a Delaware limited liability company
("ORNI 2"), ORNI 7 LLC, a Delaware limited liability company ("ORNI
7"), Ormesa LLC, a Delaware limited liability company ("Ormesa"), and
Union Bank of California, N.A., as Trustee (the "Ormat Funding
Indenture"). Capitalized terms used in this Section of Schedule 1 and
not otherwise defined herein shall have the meanings ascribed to such
terms in the Ormat Funding Indenture.
2. Registration Rights Agreement, dated as of February 13, 2004, among
Ormat Funding and the Guarantors and the other parties named on the
signature pages thereof.
3. Note Purchase Agreement, dated as of February 6, 2004, among Ormat
Funding, the Guarantors, and the Initial Purchaser.
4. Global Note, dated February 13, 2004, by Ormat Funding in favor of Cede
& Co.
5. Regulation S Temporary Global Note, dated February 13, 2004, by Ormat
Funding in favor of Cede & Co.
6. Depositary Agreement, dated as of February 13, 2004, among Ormat
Funding, Xxxxx, Steamboat Geothermal, Steamboat Development, OrMammoth,
ORNI 1, ORNI 2, ORNI 7, Collateral Agent, and Depositary.
7. Collateral Agency Agreement, dated as of February 13, 2004, among Ormat
Funding, ORNI 1, ORNI 2, ORNI 7, Xxxxx, Steamboat Development,
Steamboat Geothermal, Collateral Agent, and Trustee.
8. Pledge and Security Agreement, dated as of February 13, 2004, between
the Borrower and Collateral Agent.
9. Pledge and Security Agreement, dated as of February 13, 2004, between
Ormat Funding and Collateral Agent.
10. Amended and Restated Credit Facility, dated as of December 1, 2003,
between the Borrower and Ormat Funding, as amended by the First
Amendment to Amended and Restated Credit Facility, dated as of February
5, 2004, between the Borrower and Ormat Funding.
11. Consent and Agreement, dated as of February 13, 2004, among the
Borrower, Steamboat Development, Steamboat Geothermal, and Collateral
Agent.
12. Consent and Agreement, dated as of February 13, 2004, among the
Borrower, Xxxxx, and Collateral Agent.
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EXHIBIT E
CERTIFICATE
Reference is made to the Letter of Credit and Loan Agreement dated as
of June __, 2004 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement) between Ormat Nevada Inc. (the "Borrower") and Xxxxxx United Bank
(the "Lender"). Pursuant to Section 6.1(i)(ii) of the Credit Agreement, the
undersigned Responsible Officer of the Borrower hereby certifies to the Lender
as follows:
1. Financial Statements. The Financial Statements attached hereto for
the fiscal quarter ended ____________, ____ have been prepared in accordance
with GAAP and present fairly in all material respects the financial condition
and results of operations of the Borrower and its Subsidiaries and Consolidated
Persons for the period specified (subject to normal year-end audit adjustments
and the absence of footnotes).
2. Events of Default. As of the date of this Certificate, no Default or
Event of Default has occurred and is continuing [except (describe any Default or
Event of Default and the action which the Borrower proposes to take with respect
thereto)].
3. Section 7.1. The Tangible Net Worth of the Borrower as of ________,
____, calculated in accordance with the Credit Agreement (which calculation is
attached), was $_________.
4. Section 7.2. The Leverage Ratio as of __________, ____, calculated
in accordance with the Credit Agreement (which calculation is attached), was
____ to 1.00.
5. Section 7.3. The Minimum Coverage Ratio for the calendar quarter or
year _________, ____, through _________, ____, calculated in accordance with the
Credit Agreement (which calculation is attached), was ____________ .
-----------------------------------
Name:
Dated: __________, ____
SCHEDULE 1
[Calculations]
