-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CnEJkrudLwlP4Mj1Q7V60fGiOtPgg0C+rCmiVEMrYNvbXlhEIg2Z8EiKlbmHmgjv Dfn833X44Zi2DUUpAsEA8A== 0000949149-99-000003.txt : 19990428 0000949149-99-000003.hdr.sgml : 19990428 ACCESSION NUMBER: 0000949149-99-000003 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SALTON SEA FUNDING CORP CENTRAL INDEX KEY: 0000949149 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 470790493 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 033-95538 FILM NUMBER: 99601388 BUSINESS ADDRESS: STREET 1: 302 S 36TH STE 400-A CITY: OMAHA STATE: NE ZIP: 68131 BUSINESS PHONE: 4023414500 MAIL ADDRESS: STREET 1: 302 SOUTH 36TH ST STREET 2: STE 400 A CITY: OMAHA STATE: NE ZIP: 68131 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1998 Commission File No. 33-95538 SALTON SEA FUNDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 47-0790493 (State of (I.R.S. Employer Incorporation) Identification No.) Salton Sea Brine Processing L.P. California 33-0601721 Salton Sea Power Generation L.P. California 33-0567411 Fish Lake Power LLC Delaware 33-0453364 Vulcan Power Company Nevada 95-3992087 CalEnergy Operating Corporation Delaware 33-0268085 Salton Sea Royalty LLC Delaware 47-0790492 VPC Geothermal LLC Delaware 91-1244270 San Felipe Energy Company California 33-0315787 Conejo Energy Company California 33-0268500 Niguel Energy Company California 33-0268502 Vulcan/BN Geothermal Power Company Nevada 33-3992087 Leathers, L.P. California 33-0305342 Del Ranch, L.P. California 33-0278290 Elmore, L.P. California 33-0278294 302 S. 36th Street, Suite 400-A, Omaha, NE 68131 (Address of principal executive offices and Zip Code of Salton Sea Funding Corporation) Salton Sea Funding Corporation's telephone number, including area code: (402) 231-1644 Securities registered pursuant to Section 12(b) of the Act: N/A Securities registered pursuant to Section 12(g) of the Act: N/A Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes X No______ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] All common stock of Salton Sea Funding Corporation is held by Magma Power Company. 100 shares of Common Stock were outstanding on March 30, 1999. Documents incorporated by reference: N/A Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. SALTON SEA FUNDING CORPORATION By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15,1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15, 1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. SALTON SEA BRINE PROCESSING, L.P. a California limited partnership By: Salton Sea Power Company, a California corporation, its general partner By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel* April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15,1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. SALTON SEA POWER GENERATION, L.P., a California limited partnership By: Salton Sea Power Company, a California corporation, its general partner By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. FISH LAKE POWER COMPANY By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. VULCAN POWER COMPANY By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. CALENERGY OPERATING CORPORATION By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. SALTON SEA ROYALTY COMPANY By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. LEATHERS, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ David L.Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. ELMORE L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. DEL RANCH L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. BN GEOTHERMAL INC., a Delaware corporation By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. NIGUEL ENERGY COMPANY, a California corporation By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15, 1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15, 1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15, 1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. CONEJO ENERGY COMPANY, a California corporation By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. SAN FELIPE ENERGY COMPANY, a California corporation By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact Signatures Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska, on April 15, 1999. VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: VULCAN POWER COMPANY, a Nevada corporation, Partner By:/s/ David L. Sokol* David L. Sokol Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this report to be signed on its behalf by the undersigned, each thereunto duly authorized in the City of Omaha, State of Nebraska, on the dates indicated. Signature Date /s/ David L. Sokol* April 15,1999 David L. Sokol Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ Gregory E. Abel * April 15,1999 Gregory E. Abel Director, President and Chief Operating Officer /s/ Steven A. McArthur April 15, 1999 Steven A. McArthur Director, Senior Vice President and Secretary /s/ Patrick J. Goodman* April 15,1999 Patrick J. Goodman Senior Vice President, Chief Financial Officer and Chief Accounting Officer (Principal Accounting Officer) * By: /s/ Steven A. McArthur Steven A. McArthur Attorney-in-fact The undersigned registrant hereby amends and supplements Item 14 of its Annual Report on Form 10-K for the fiscal year ended December 31, 1998, by filing herewith an amended and restated Exhibit Index which shall read as follows and by filing herewith the following Exhibits noted by an asterisk (*): INDEX TO EXHIBITS Exhibit No. Description of Exhibit 3.1 Articles of Incorporation of the Funding Corporation (incorporated by reference to Exhibit 3.1 to the Funding Corporation Registration Statement on Form S-4 dated August 9, 1995, 33-95538 ("Form S-4")). 3.2 By-laws of the Funding Corporation (incorporated by reference to Exhibit 3.2 to the Funding Corporation Form S- 4). 3.3 Limited Partnership Agreement of SSBP (incorporated by reference to Exhibit 3.3 to the Funding Corporation Form S- 4). 3.4 Limited Partnership Agreement of SSPG (incorporated by reference to Exhibit 3.4 to the Funding Corporation Form S- 4). 3.5 Articles of Incorporation of Fish Lake (incorporated by reference to Exhibit 3.5 to the Funding Corporation Form S- 4). 3.6 By-laws of Fish Lake (incorporated by reference to Exhibit 3.6 to the Funding Corporation Form S-4). 3.7 Articles of Incorporation of VPC (incorporated by reference to Exhibit 3.7 to the Funding Corporation Form S-4). 3.8 By-laws of VPC (incorporated by reference to Exhibit 3.8 to the Funding Corporation Form S-4). 3.9 Articles of Incorporation of CEOC (incorporated by reference to Exhibit 3.9 to the Funding Corporation Form S-4). 3.10By-laws of CEOC (incorporated by reference to Exhibit 3.10 to the Funding Corporation Form S-4). 3.11Articles of Incorporation of the Royalty Guarantor (incorporated by reference to Exhibit 3.11 to the Funding Corporation Form S-4). 3.12By-laws of the Royalty Guarantor (incorporated by reference to Exhibit 3.12 to the Funding Corporation Form S-4). 3.13 Certificate of Amendment of Certificate of Incorporation dated as of March 26, 1996 3.14 Articles of Incorporation of BNG (incorporated by reference to Exhibit 3.13 to the Funding Corporation Registration Statement on Form S-4 dated July 2, 1996, 333-07527 ("Funding Corporation II Form S-4")). 3.15 By-laws of BNG (incorporated by reference to Exhibit 3.14 to the Funding Corporation II Form S-4). 3.16 Articles of Incorporation of San Felipe (incorporated by reference to Exhibit 3.15 to the Funding Corporation II Form S- 4). 3.17 By-laws of San Felipe (incorporated by reference to Exhibit 3.16 to the Funding Corporation II Form S-4). 3.18 Articles of Incorporation of Conejo (incorporated by reference to Exhibit 3.17 to the Funding Corporation II Form S-4). 3.19 By-laws of Conejo (incorporated by reference to Exhibit 3.18 to the Funding Corporation II Form S-4). 3.20 Articles of Incorporation of Niguel (incorporated by reference to Exhibit 3.19 to the Funding Corporation II Form S-4). 3.21 By-laws of Niguel (incorporated by reference to Exhibit 3.20 to the Funding Corporation II Form S-4). 3.22 General Partnership Agreement of Vulcan (incorporated by reference to Exhibit 3.21 to the Funding Corporation II Form S-4). 3.23 Limited Partnership Agreement of Leathers (incorporated by reference to Exhibit 3.22 to the Funding Corporation II Form S-4). 3.24 Amended and Restated Limited Partnership Agreement of Del Ranch (incorporated by reference to Exhibit 3.23 to the Funding Corporation II Form S-4). 3.25 Amended and Restated Limited Partnership Agreement of Elmore (incorporated by reference to Exhibit 3.24 to the Funding Corporation II Form S-4). 4.1(a) Indenture, dated as of July 21, 1995, between Chemical Trust Company of California and the Funding Corporation (incorporated by reference to Exhibit 4.1(a) to the Funding Corporation Form S-4). 4.1(b) First Supplemental Indenture, dated as of October 18, 1995, between Chemical Trust Company of California and the Funding Corporation (incorporated by reference to Exhibit 4.1(b) to the Funding Corporation Form S-4). 4.1(c) Second Supplemental Indenture, dated as of June 20, 1996, between Chemical Trust Company of California and the Funding Corporation (incorporated by reference to Exhibit 4.1(c) to the Funding Corporation II Form S-4). 4.1(d) Third Supplemental Indenture between Chemical Trust Company of California and the Funding Corporation (incorporated by reference to Exhibit 4.1(d) to the Funding Corporation II Form S-4). 4.1(e) Fourth Supplemental Indenture between Chemical Trust Company of California and the Funding Corporation. * 4.2 Salton Sea Secured Guarantee, dated as of July 21, 1995, by SSBP, SSPG and Fish Lake in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.2 to the Funding Corporation Form S-4). 4.3(a) Partnership Guarantors Secured Limited Guarantee, dated as of July 21, 1995, by CEOC and VPC in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.3 to the Funding Corporation Form S-4). 4.3(b) Amended and Restated Partnership Guarantors Secured Limited Guarantee, dated as of June 20, 1996 by CEOC, and VPC, Conejo, Niguel, Sal Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.3 to the Funding Corporation II Form S-4). 4.3(c) Second Amended and Restated Partnership Secured Limited Guarantee, dated as of October 13, 1998 by by CEOC, and VPC, Conejo, Niguel, Sal Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan in favor of Chemical Trust Company of California. * 4.4 Royalty Guarantor Secured Limited Guarantee, dated as of July 21, 1995, by the Royalty Guarantor in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.4 to the Funding Corporation Form S-4). 4.5(a) Exchange and Registration Rights Agreement, dated July 21, 1995, by and among CS First Boston Corporation, Lehman Brothers Inc. and the Funding Corporation (incorporated by reference to Exhibit 4.5 to the Funding Corporation Form S- 4). 4.5(b) Exchange and Registration Rights Agreement, dated June 20, 1996, by and between CS First Boston Corporation and the Funding Corporation (incorporated by reference to Exhibit 4.5 to the Funding Corporation II Form S-4). 4.6(a) Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, by and among Credit Suisse, Chemical Trust Company of California, the Funding Corporation and the Guarantors (incorporated by reference to Exhibit 4.6 to the Funding Corporation Form S-4). 4.6(b) First Amendment to the Collateral Agency and Intercreditor Agreement, dated as of June 20, 1996, by and among Credit Suisse, Chemical Trust Company of California, the Funding Corporation and the Guarantors (incorporated by reference to Exhibit 4.6(b) to the Funding Corporation II Form S-4). 4.6(c) Second Amendment to the Collateral Agency and Intercreditor Agreement, dated as of October 13, 1998, by and among Credit Suisse, Chemical Trust Company of California, the Funding Corporation and the Guarantors. * 4.7 Stock Pledge Agreement, dated as of July 21, 1995, by Magma Power Company in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.7 to the Funding Corporation Form S-4). 4.8(a) Purchase Agreement, dated July 18, 1995, by and among CS First Boston Corporation, Lehman Brothers Inc., the Guarantors and the Funding Corporation (incorporated by reference to Exhibit 4.8 to the Funding Corporation Form S- 4). 4.8(b) Purchase Agreement, dated June 17, 1996, by and among CS First Boston Corporation, the Guarantors and the Funding Corporation (incorporated by reference to Exhibit 4.8 to the Funding Corporation II Form S-4). 4.8(c) Purchase Agreement, dated October 13, 1998 by and among CS First Boston Corporation, the Guarantors and the Funding Corporation. * 4.9 Support Letter, dated as of July 21, 1995, by and among Magma Power Company, the Funding Corporation and the Guarantors (incorporated by reference to Exhibit 4.9 to the Funding Corporation Form S-4). 4.37 Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of July 21, 1995, by and among the Funding Corporation, certain banks and Credit Suisse, as agent (incorporated by reference to Exhibit 4.10 to the Funding Corporation Form S-4). 4.10(a) Amendment to Notes and to Amended Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated October 13, 1998, by and among the Funding Corporation, certain banks and Credit Suisse, as agent. * 4.11 Revolving Credit Agreement, dated as of July 21, 1995, by and among Credit Suisse and the Funding Corporation (incorporated by reference to Exhibit 4.11 to the Funding Corporation Form S-4). 4.12Salton Sea Credit Agreement, dated July 21, 1995, by and among SSBP, SSPG and Fish Lake (incorporated by reference to Exhibit 4.12 to the Funding Corporation Form S-4). 4.13Salton Sea Project Note, dated July 21, 1995, by SSBP, SSPG and Fish Lake in favor of the Funding Corporation (incorporated by reference to Exhibit 4.13 to the Funding Corporation Form S-4). 4.13(a) Salton Sea Project Note (SSI), dated October 13, 1998, by SSBP, SSPG and Fish Lake in favor of the Funding Corporation. * 4.13(b) Salton Sea Project Note (SSIII), dated October 13, 1998, by SSBP, SSPG and Fish Lake in favor of the Funding. * 4.14(a) Deposit and Disbursement Agreement, dated as of July 21, 1995, by and among the Funding Corporation, Chemical Trust Company of California and the Guarantors (incorporated by reference to Exhibit 4.14 to the Funding Corporation Form S-4). 4.14(b) Amendment No. 1 to Deposit and Disbursement Agreement, dated as of June 20, 1996, by and among the Funding Corporation, Chemical Trust Company of California and the Guarantors (incorporated by reference to Exhibit 4.14(b) to the Funding Corporation II Form S-4). 4.14(c) Amended and Restated Deposit and Disbursement Agreement, dated as of October 13, 1998, by and among the Funding Corporation, Chemical Trust Company of California and the Guarantors. * 4.15Partnership Interest Pledge Agreement, dated as of July 21, 1995, by Magma Power Company and Salton Sea Power Company in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.15 to the Funding Corporation Form S-4). 4.16Partnership Interest Pledge Agreement, dated as of July 21, 1995, by SSBP and Salton Sea Power Company in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.16 to the Funding Corporation Form S- 4). 4.17Stock Pledge Agreement (Pledge of Stock of Fish Lake by Magma Power Company and the Funding Corporation), dated as of July 21, 1995, by Magma Power Company and the Funding Corporation in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.17 to the Funding Corporation Form S-4). 4.18Cost Overrun Commitment, dated as of July 21, 1995, between MidAmerican, SSPG, SSBP and Fish Lake (incorporated by reference to Exhibit 4.18 to the Funding Corporation Form S- 4). 4.19(a) Partnership Guarantors Credit Agreement, dated July 21, 1995, by and among CEOC, VPC and the Funding Corporation (incorporated by reference to Exhibit 4.19 to the Funding Corporation Form S-4). 4.19(b) Amended and Restated Partnership Guarantors Credit Agreement, dated June 20, 1996, by and among the Partnership Guarantors and the Funding Corporation (incorporated by reference to Exhibit 4.19 to the Funding Corporation II Form S-4). 4.19(c) Second Amended and Restated Partnership Guarantors Credit Agreement, dated October 13, 1998, by and among the Partnership Guarantors and the Funding Corporation. * 4.20Partnership Guarantors Security Agreement and Assignment of Rights, dated as of July 21, 1995, by CEOC and VPC in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.20 to the Funding Corporation Form S- 4). 4.21Stock Pledge Agreement (Pledge of Stock of CEOC by Magma Power Company and the Funding Corporation), dated as of July 21, 1995, by Magma Power Company and Funding Corporation in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.21 to the Funding Corporation Form S-4). 4.22Stock Pledge Agreement (Pledge of Stock of VPC by Magma Power Company and the Funding Corporation), dated as of July 21, 1995, by Magma Power Company and the Funding Corporation in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.22 to the Funding Corporation Form S-4). 4.23Royalty Guarantor Credit Agreement, among the Royalty Guarantor and the Funding Corporation, dated as of July 21, 1995 (incorporated by reference to Exhibit 4.23 to the Funding Corporation Form S-4). 4.24Royalty Project Note, dated as of July 21, 1995, by the Royalty Guarantor in favor of the Funding Corporation (incorporated by reference to Exhibit 4.24 to the Funding Corporation Form S-4). 4.25Royalty Security Agreement and Assignment of Revenues, dated as of July 21, 1995, by the Royalty Guarantor in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.25 to the Funding Corporation Form S- 4). 4.26Royalty Deed of Trust, dated as of July 21, 1995, by the Royalty Guarantor to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 4.26 to the Funding Corporation Form S-4). 4.27Stock Pledge Agreement (Pledge of Stock of Royalty Guarantor by Magma Power Company and the Funding Corporation), dated as of July 21, 1995, by Magma Power Company and the Funding Corporation in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.27 to the Funding Corporation Form S-4). 4.28Collateral Assignment of the Imperial Irrigation District Agreements, dated as of July 21, 1995, by SSBP, SSPG and Fish Lake in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.28 to the Funding Corporation Form S-4). 4.29Collateral Assignments of Certain Salton Sea Agreements, dated as of July 21, 1995, by SSBP, SSPG and Fish Lake in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.29 to the Funding Corporation Form S-4). 4.30Debt Service Reserve Letter of Credit by Credit Suisse in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.30 to the Funding Corporation Form S-4). 4.31Partnership Project Note, dated July 21, 1995, by VPC and CEOC in favor of the Funding Corporation. 4.31(a) Partnership Project Note (SSI), dated October 13, 1998, by VPC and CEOC in favor of the Funding Corporation. * 4.31(b) Partnership Project Note (SSII), dated October 13, 1998, by VPC and CEOC in favor of the Funding Corporation. * 4.31(c) Partnership Project Note (SSIII), dated October 13, 1998, by VPC and CEOC in favor of the Funding Corporation. * 4.32 Collateral Assignment of the Imperial Irrigation District Agreements, dated as of June 20, 1996, by Vulcan, Elmore, Leathers, VPC and Del Ranch in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.29 to the Funding Corporation II Form S-4). 4.33 Collateral Assignments of Certain Partnership Agreements, dated as of June 20, 1996, by Vulcan Elmore, Leathers and Del Ranch in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.31 to the Funding Corporation II Form S-4). 4.34 Debt Service Reserve Letter of Credit by Credit Suisse in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 4.32 to the Funding Corporation II Form S-4). 4.35 Partnership Project Note, dated June 20, 1996, by the Partnership Guarantors in favor of the Funding Corporation in the principal amount of $54,956,000 (incorporated by reference to Exhibit 4.33 to the Funding Corporation II Form S-4). 4.36 Partnership Project Note, dated June 20, 1996, by the Partnership Guarantors in favor of the Funding Corporation in the principal amount of $135,000,000 (incorporated by reference to Exhibit 4.34 to the Funding Corporation II Form S-4). 4.37 Deed of Trust, dated as of June 20, 1996, by Vulcan to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 4.35 to the Funding Corporation II Form S-4). 4.37(a) First Amendment to Deed of Trust, dated October 13, 1998 by Vulcan to Chicago Title Company for the use and benefit of Chemical Trust Company of California. * 4.38 Deed of Trust, dated as of June 20, 1996, by Elmore to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 4.36 to the Funding Corporation II Form S-4). 4.38(a) First Amendment to Deed of Trust, dated October 13, 1998, by Elmore to Chicago Title Company for the use and benefit of Chemical Trust Company of California. * 4.39 Deed of Trust, dated as of June 20, 1996, by Leathers to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 4.37 to the Funding Corporation II Form S-4). 4.39(a) First Amendment to Deed of Trust, dated October 13, 1998, by Leathers to Chicago Title Company for the use and benefit of Chemical Trust Company of California. * 4.40 Deed of Trust, dated as of June 20, 1996, by Del Ranch to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 4.38 to the Funding Corporation II Form S-4). 4.40(a) First Amendment to Deed of Trust, dated October 13, 1998, by Del Ranch to Chicago Title Company for the use and benefit of Chemical Trust Company of California. * 4.41 Stock Pledge Agreement, Dated as of June 20, 1996, by CEOC, pledging the stock of Conejo, Niguel and San Felipe in favor of Chemical Trust Company of California for the benefit of the Secured Parties and the Funding Corporation (incorporated by reference to Exhibit 4.39 to the Funding Corporation II Form S-4). 4.42 Stock Pledge Agreement, dated as of June 20, 1996, by VPC, pledging the stock of BNG in favor of Chemical Trust Company of California for the benefit of the Secured Parties and the Funding Corporation (incorporated by reference to Exhibit 4.40 to the Funding Corporation II Form S-4). 4.43 Partnership Interest Pledge Agreement, dated as of June 20, 1996, by VPC and BNG, pledging the partnership interests in Vulcan in favor of Chemical Trust Company of California for the benefit of the Secured Parties and the Funding Corporation (incorporated by reference to Exhibit 4.41 to the Funding Corporation II Form S-4). 4.44 Partnership Interest Pledge Agreement, dated as of June 20, 1996, by Magma, CEOC and each of Conejo, Niguel, San Felipe, respectively, pledging the partnership interests in Del Ranch, Elmore and Leathers, respectively, in favor of Chemical Trust Company of California for the benefit of the Secured Parties and the Funding Corporation (incorporated by reference to Exhibit 4.42 to the Funding Corporation II Form S-4). 4.45 Agreement regarding Security Documents, dated as of June 20, 1996, by and among the Initial Guarantors, Magma, SSPC, the Funding Corporation and Chemical Trust Company of California (incorporated by reference to Exhibit 4.43 to the Funding Corporation II Form S-4). 10.1(a) Salton Sea Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of July 21, 1995, by SSBP, SSPG and Fish Lake to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 10.1 to the Funding Corporation Form S-4) . 10.1(b) First Amendment to Salton Sea Deed of Trust, Assignment of Rents, Security Agreement and Fixed Filing, dated as of June 20, 1996, by SSBP, SSPG and Fish Lake to Chicago Title Company for the use and benefit of Chemical Trust Company of California (incorporated by reference to Exhibit 10.2 to the Funding Corporation II Form S-4). 10.1(c) Second Amendment to Salton Sea Deed of Trust, Assignment of Rents, Security Agreement and Fixed Filing, dated as of October 13, 1998, by SSBP, SSPG and Fish Lake to Chicago Title Company for the use and benefit of Chemical Trust Company of California. * 10.2Collateral Assignment of Southern California Edison Company Agreements, dated as of July 21, 1995, by SSPG and Fish Lake in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 10.2 to the Funding Corporation Form S-4). 10.3Contract for the Purchase and Sale of Electric Power from the Salton Sea Geothermal Facility, dated May 9, 1987 (the "Unit 1 Power Purchase Agreement"), between Southern California Edison Company and Earth Energy, Inc. (incorporated by reference to Exhibit 10.3 to the Funding Corporation Form S-4). 10.4Amendment No. 1 to the Unit 1 Power Purchase Agreement, dated as of March 30, 1993, between Southern California Edison Company and Earth Energy, Inc. (incorporated by reference to Exhibit 10.4 to the Funding Corporation Form S- 4). 10.5Amendment No. 2 to Unit 1 Power Purchase Agreement, dated November 29, 1994, between Southern California Edison Company and SSPG (incorporated by reference to Exhibit 10.5 to the Funding Corporation Form S-4). 10.6Contract for the Purchase and Sale of Electric Power, dated April 16, 1985 (the "Unit 2 Power Purchase Agreement"), between Southern California Edison Company and Westmoreland Geothermal Associates (incorporated by reference to Exhibit 10.6 to the Funding Corporation Form S-4). 10.7Amendment No. 1 to Unit 2 Power Purchase Agreement, dated as of December 18, 1987, between Southern California Edison Company and Earth Energy, Inc. (incorporated by reference to Exhibit 10.7 to the Funding Corporation Form S-4). 10.8Power Purchase Contract, dated April 16, 1985 (the "Unit 3 Power Purchase Agreement"), between Southern California Edison Company and Union Oil Company of California (incorporated by reference to Exhibit 10.8 to the Funding Corporation Form S-4). 10.9Power Purchase Contract (the "Unit 4 Power Purchase Agreement"), dated November 29, 1994, between Southern California Edison Company, SSPG and Fish Lake (incorporated by reference to Exhibit 10.9 to the Funding Corporation Form S-4). 10.10 Plant Connection Agreement (Unit 2), dated October 3, 1989, between the Imperial Irrigation District and Earth Energy, Inc. (incorporated by reference to Exhibit 10.10 to the Funding Corporation Form S-4). 10.11 Plant Connection Agreement, dated August 2, 1988 (Unit 3), between the Imperial Irrigation District and Desert Power Company (incorporated by reference to Exhibit 10.11 to the Funding Corporation Form S-4). 10.12 Imperial Irrigation District Funding and Construction Agreements as amended (Units 2 and 3), dated as of June 29, 1987, among the Imperial Irrigation District, Earth Energy, Inc., Chevron Geothermal Company of California, Geo East Mesa No. 3, Inc., Magma Power Company, Desert Power Company, Geo East Mesa No. 2, Inc., Heber Geothermal Company, Ormesa Geothermal, Ormesa Geothermal II, Vulcan/BN Geothermal Power Company, Union Oil Company of California, Del Ranch L.P., Elmore L.P., Leathers L.P., Geo East Mesa Limited Partnership and Imperial Resource Recovery Associates, L.P. (incorporated by reference to Exhibit 10.12 to the Funding Corporation Form S-4). 10.13 Transmission Service Agreement, dated as of October 3, 1989 (Unit 2), between the Imperial Irrigation District and Earth Energy, Inc. (incorporated by reference to Exhibit 10.13 to the Funding Corporation Form S-4). 10.14 Transmission Service Agreement, dated as of August 2, 1988 (Unit 3), between the Imperial Irrigation District and Desert Power Company (incorporated by reference to Exhibit 10.14 to the Funding Corporation Form S-4). 10.15 Plant Connection Agreement (Unit 4), dated as of July 14, 1995, by and between the Imperial Irrigation District, SSPG and Fish Lake (incorporated by reference to Exhibit 10.15 to the Funding Corporation Form S-4). 10.16 Letter Agreement, dated February 2, 1995, between Magma Power Company and the Imperial Irrigation District (incorporated by reference to Exhibit 10.16 to the Funding Corporation Form S-4). 10.17 Transmission Service Agreement (Unit 4), dated as of July 14, 1995, by and between the Imperial Irrigation District, SSPG and Fish Lake (incorporated by reference to Exhibit 10.17 to the Funding Corporation Form S-4). 10.18 Transmission Line Construction Agreement (Unit 4), dated July 14, 1995, between the Imperial Irrigation District, SSPG and Fish Lake (incorporated by reference to Exhibit 10.18 to the Funding Corporation Form S-4). 10.19 Funding Agreement, dated June 15, 1988 (Unit 2), between Southern California Edison Company and Earth Energy, Inc. (incorporated by reference to Exhibit 10.19 to the Funding Corporation Form S-4). 10.20 Second Amended and Restated Administrative Services Agreement, by and among CEOC, SSBP, SSPG and Fish Lake, dated as of July 15, 1995 (incorporated by reference to Exhibit 10.20 to the Funding Corporation Form S-4). 10.21 Second Amended and Restated Operating and Maintenance Agreement, dated as of July 15, 1995, by and among Magma Power Company, SSBP, SSPG and Fish Lake (incorporated by reference to Exhibit 10.21 to the Funding Corporation Form S- 4). 10.22 Intentionally Omitted. 10.23 Collateral Assignment of Southern California Edison Company Agreements, dated as of June 20, 1996, by Vulcan, Elmore, Leathers and Del Ranch in favor of Chemical Trust Company of California (incorporated by reference to Exhibit 10.23 to the Funding Corporation II Form S-4). 10.24 Administrative Services Agreement, dated as of June 17, 1996, between CEOC and Vulcan (incorporated by reference to Exhibit 10.24 to the Funding Corporation II Form S-4). 10.25 Amended and Restated Construction, Operating and Accounting Agreement, dated as of June 17, 1996, between VPC and Vulcan (incorporated by reference to Exhibit 10.25 to the Funding Corporation II Form S-4). 10.26 Long Term Power Purchase Contract, dated March 1, 1984, as amended, between SCE and Vulcan, as successor to Magma Electric Company (incorporated by reference to Exhibit 10.26 to the Funding Corporation II Form S-4). 10.27 Transmission Service Agreement, dated December 1, 1988, between VPC and IID (incorporated by reference to Exhibit 10.27 to the Funding Corporation II Form S-4). 10.28 Plant Connection Agreement, dated as of December 1, 1988, between VPC and IID (incorporated by reference to Exhibit 10.28 to the Funding Corporation II Form S-4). 10.29 Amended and Restated Administrative Services Agreement, dated as of June 17, 1996 between CEOC and Elmore (incorporated by reference to Exhibit 10.29 to the Funding Corporation II Form S-4). 10.30 Amended and Restated Operating and Maintenance Agreement, dated as of June 17, 1996, between CEOC and Elmore (incorporated by reference to Exhibit 10.30 to the Funding Corporation II Form S-4). 10.31 Long Term Power Purchase Contract, dated June 15, 1984, as amended, between SCE and Elmore, as successor to Magma Electric Company (incorporated by reference to Exhibit 10.31 to the Funding Corporation II Form S-4). 10.32 Transmission Service Agreement, dated as of August 2, 1988, as amended, between Elmore and IID (incorporated by reference to Exhibit 10.32 to the Funding Corporation II Form S-4). 10.33 Plant Connection Agreement, dated as of August 2, 1988, between Elmore and IID (incorporated by reference to Exhibit 10.33 to the Funding Corporation II Form S-4). 10.34 Amended and Restated Administrative Services Agreement, dated as of June 17, 1996, between CEOC and Leathers (incorporated by reference to Exhibit 10.34 to the Funding Corporation II Form S-4). 10.35 Amended and Restated Operating and Maintenance Agreement, dated as of June 17, 1996, between CEOC and Leathers (incorporated by reference to Exhibit 10.35 to the Funding Corporation II Form S-4). 10.36 Long Term Power Purchase Contract, dated August 16, 1985, as amended, between SCE and Leathers, as successor to Imperial Energy Corporation (incorporated by reference to Exhibit 10.36 to the Funding Corporation II Form S-4). 10.37 Transmission Service Agreement, dated as of October 3, 1989, as amended, between Leathers and IID (incorporated by reference to Exhibit 10.37 to the Funding Corporation II Form S-4). 10.38 Plant Connection Agreement, dated as of October 3, 1989, between Leathers and IID (incorporated by reference to Exhibit 10.38 to the Funding Corporation II Form S-4). 10.39 Amended and Restated Administrative Services Agreement, dated as of June 17, 1996, between CEOC and Del Ranch (incorporated by reference to Exhibit 10.39 to the Funding Corporation II Form S-4). 10.40 Amended and Restated Operating and Maintenance Agreement, dated as of June 17, 1996, between CEOC and Del Ranch (incorporated by reference to Exhibit 10.40 to the Funding Corporation II Form S-4). 10.41 Long Term Power Purchase Contract, dated February 22, 1984, as amended, between SCE and Del Ranch, as successor to Magma (incorporated by reference to Exhibit 10.41 to the Funding Corporation II Form S-4). 10.42 Transmission Service Agreement, dated as of August 2, 1988, as amended, between Del Ranch and IID (incorporated by reference to Exhibit 10.42 to the Funding Corporation II Form S-4). 10.43 Plant Connection Agreement, dated as of August 2, 1988, between Del Ranch and IID (incorporated by reference to Exhibit 10.43 to the Funding Corporation II Form S-4). 10.44 Funding Agreement, dated May 18, 1990, between SCE and Del Ranch (incorporated by reference to Exhibit 10.44 to the Funding Corporation II Form S-4). 10.45 Funding Agreement, dated May 18, 1990, between SCE and Elmore (incorporated by reference to Exhibit 10.45 to the Funding Corporation II Form S-4). 10.46 Funding Agreement, dated June 15, 1990, between SCE and Leathers (incorporated by reference to Exhibit 10.46 to the Funding Corporation II Form S-4). 10.47 Funding Agreement, dated May 18, 1990, between SCE and Leathers (incorporated by reference to Exhibit 10.47 to the Funding Corporation II Form S-4). 10.48 Funding Agreement, dated May 18, 1990, between SCE and Vulcan (incorporated by reference to Exhibit 10.48 to the Funding Corporation II Form S-4). 24. Power of Attorney 27. Financial Data Schedule. EX-4.1(E) 2 EXHIBIT 4.1(e) 1SASM&F Draft No. 1 FOURTH SUPPLEMENTAL INDENTURE This FOURTH SUPPLEMENTAL INDENTURE, dated as of September __, 1998 (this "Supplemental Indenture"), is by and between SALTON SEA FUNDING CORPORATION, a Delaware corporation (the "Funding Corporation"), and CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a banking association organized under the federal laws of the United States of America, as Trustee (together with its successors in such capacity, the "Trustee"). W I T N E S S E T H: WHEREAS, the Funding Corporation and the Trust ee have entered into that certain Trust Indenture dated as of July 21, 1995 (as amended, modified or supplemented by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of [______ __, ____] and this Supplemental Indenture, and as subsequently amended, modified or supplemented, the "Indenture") by and between the Funding Corporation and the Trustee; WHEREAS, the Funding Corporation has been formed for the sole purpose of issuing securities under the Indenture, as principal and as agent for the Guaran tors (as defined in the Indenture), and for entering into those transactions incidental thereto; WHEREAS, the Indenture provides that the terms thereof may be amended or supplemented from time to time by the Funding Corporation and the Trustee, without the consent of the Holders (as defined in the Indenture), pursuant to a supplemental indenture, for one or more of the purposes set forth in Section 8.1 of the Indenture, which purposes include, without limitation, to provide for the issuance of Additional Securities (as defined in the Indenture) on the conditions set forth in Section 2.3 of the Indenture; WHEREAS, the Funding Corporation has determined to issue $278,900,000 principal amount of [ ]% Series F Senior Secured Notes due 2018 (the "Series F Securities"); WHEREAS, $83,550,000 of the proceeds of the Series F Securities will be loaned by the Funding Corporation to the Salton Sea Guarantors (as defined in the Indenture) for the following purposes: (i) to finance the engineering, development, construction and start-up of Salton Sea Unit V (as defined in the Indenture); and (ii) to pay interest and other finance charges during construction of Salton Sea Unit V; and (iii) to pay certain transaction costs incurred in connection with the issuance of the Series F Securities; WHEREAS, $195,450,000 of the proceeds of the Series F Securities will be loaned by the Funding Corporation to the Partnership Guarantors (as defined in the Indenture) for the following purposes: (i) to finance the engineering, development, construction and start-up of the Zinc Project (as defined in the Indenture); (ii) to finance the engineering, development, construction and start-up of the Region 2/Turbo Project (as defined in the Indenture); (iii) to finance the making of certain capital improvements to the existing Salton Sea Projects (as defined in the Indenture) and the existing Partnership Projects (as defined in the Indenture); (iv) to pay interest and other finance charges during construction of the Zinc Project and the Region 2/Turbo Project; and (v) to pay certain transaction costs incurred in connection with the issuance of the Series F Securities; and WHEREAS, the execution and delivery of the Series F Securities and this Supplemental Indenture have been duly authorized and all things necessary to make the Series F Securities, when executed by the Funding Corpo ration and authenticated by the Trustee, valid and bind ing legal obligations of the Funding Corporation and to make this Supplemental Indenture a valid and binding agreement have been done. NOW, THEREFORE, for and in consideration of the premises and of the covenants herein contained and of the purchase of the Series F Securities by the Holders (as defined in the Indenture) thereof, it is mutually covenanted and agreed, for the benefit of the parties hereto and the equal and proportionate benefit of all Holders of the Securities, as follows: SECTION 1. Definitions. Capitalized terms used in this Supplemental Indenture and not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture. SECTION 2. Series F Securities. (a) The Series F Securities to be issued under this Supplemental Indenture and the Indenture are hereby created. The Funding Corporation may issue the Series F Securities, in the form of Exhibit A hereto, upon the execution of this Supplemental Indenture, and the Trustee shall, at the Funding Corporation's written request, authenticate the Series F Securities and deliver them as specified in the request. (b) The Series F Securities shall be dated September __, 1998, shall be issued in the aggregate principal amount of $278,900,000, shall have a final maturity date of [________ __], 2018 and bear interest at a rate per annum of [ ]%; provided that, pursuant to the terms and provisions of the Series F Registration Rights Agreement, the interest rate of the Series F Secu rities shall be increased by [one half of one] percent ([0.50]%) per annum from and after the date that an "Illiquidity Event" (as defined in the Series F Registration Rights Agreement) occurs, and shall accrue to but not including the date on which such Illiquidity Event shall cease to exist. Notwithstanding that an Illiquidity Event may cease to exist, if a Registration Statement (as defined in the Series F Registration Rights Agreement) has not become effective within two (2) years after the initial issuance of the Series F Securities, such increased interest rate shall become permanent, pursuant to the terms and provisions of the Series F Registration Rights Agreement. Notice of the occurrence and cessation of any Illiquidity Event and the date, if any, that a Registration Statement is declared effective shall be set forth in an Officer's Certificate of the Funding Corporation delivered to the Trustee and the Depositary Agent within ten (10) Business Days after the Funding Corporation has obtained knowledge of such event. If an Illiquidity Event occurs subsequent to any Record Date, the Person entitled to receive the increased amount of interest payable as a result of such Illiquidity Event shall receive such additional interest on the Interest Payment Date relating to the next subsequent Record Date. Series F Securities subsequently issued pursuant to Sec tion 2.5(c) of the Indenture shall be dated as of the date of authentication thereof. (c) The principal of, premium (if any) and interest on the Series F Securities shall be payable in any coin or currency of the United States of America which, at the respective dates of payment thereof, is legal tender for the payment of public and private debts. Payment of principal of and interest on the Series F Securities shall be made (i) by check or draft mailed on the Scheduled Payment Date therefor to the registered owner as of the close of business on the Record Date immediately preceding such Scheduled Payment Date, at his address as it appears on the registration books of the Trustee, or (ii) by wire transfer to such registered owner as of the close of business on such Record Date upon written notice of such wire transfer address in the continental United States given not less than fifteen (15) days prior to such Record Date; provided, however, that if and to the extent that there shall be a default in the payment of the interest or principal due on such Scheduled Payment Date, such defaulted interest and/or principal shall be paid to the Holder in whose name any such Security is registered at the close of business on the day determined by the Trustee as provided in Section 2.4 of the Indenture. (d) Interest on the Series F Securities shall be paid in arrears on each May 30th and November 30th, commencing November 30, 1998 and concluding on the Final Maturity Date for the Series F Securities. Interest on the Series F Securities shall be computed upon the basis of a 360-day year, consisting of twelve (12) thirty (30) day months. (e) Principal of the Series F Securities shall be paid in an amount, and on the Scheduled Payment Dates, as set forth with respect to the Series F Securities on Schedule I hereto. (f) The aggregate principal amount of the Series F Securities that may be issued, authenticated and delivered under the Indenture is $278,900,000 (except for Securities issued, authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Series F Securities). (g) The Record Date for the determination of Holders to whom principal and interest is payable shall be as provided in Section 2.4 of the Indenture. (h) Series F Securities may be surrendered for registration of transfer or exchange as provided in Section 2.5 of the Indenture. Notices and demands to or upon the Funding Corporation in respect of the Series F Securities may be served as provided in Section 13.6 of the Indenture. (i) The Series F Securities may be redeemed, pro rata within such series, at the election of the Funding Corporation, as a whole or in part, at any time on any Business Day, subject to the conditions and at the Redemption Price (which will include a Series F Yield Maintenance Premium) specified in the form of Series F Security attached hereto as Exhibit A. (j) The Funding Corporation may elect to redeem the Series F Securities, pro rata within such series, as a whole or in part, at any time on any Business Day, at a redemption price equal to the principal amount thereof with interest on the principal amount thereof accrued through the Redemption Date, if Substantial Completion (without giving effect to the proviso to the definition thereof) of a New Project has not occurred by the Guaranteed Substantial Completion Date for such New Project. Any such redemption shall cause Substantial Completion of such New Project to occur, notwithstanding the failure of such New Project to satisfy the conditions described in clauses (i) through (v) of the definition of Substantial Completion, if, after giving effect to such redemption, (i) the minimum projected Debt Service Coverage Ratio (calculated using the Base Case Projections) for (a) the next four (4) consecutive fiscal quarters, commencing with the quarter in which such redemption is to occur, taken as one (1) annual period, and (b) each subsequent fiscal year until the Final Maturity Date for the Series F Securities, will not be less than 1.4 to 1.0, and (ii) the average projected Debt Service Coverage Ratio (calculated using the Base Case Projections) for all succeeding fiscal years until the Final Maturity Date for the Series F Securities will not be less than 1.7 to 1.0, in each case as certified to the Trustee by an Authorized Officer of the Funding Corporation and confirmed by the [New Project] Independent Engineer and, with respect to the Zinc Project, the Independent Zinc Market Consultant. (k) The Series F Securities shall be subject to mandatory redemption and shall be redeemed, ratably with each other series of Securities, as a whole or in part, prior to maturity, at a redemption price equal to the principal amount thereof with interest on the princi pal amount thereof accrued through the Redemption Date, as provided in Section 3.3 of the Indenture. (l) The Series F Securities shall be redeemed, pro rata within such series, as a whole or in part, prior to maturity, at a redemption price equal to the principal amount thereof with interest on the principal amount thereof accrued through the Redemption Date, if the Salton Sea Guarantors and the Partnership Guarantors receive Total Performance Liquidated Damages of more than $[INSERT DOLLAR AMOUNT EQUAL TO 2% OF SUM OF EPC CONTRACT PRICES], in which case all Performance Liquidated Damages received by the Salton Sea Guarantors and the Partnership Guarantors shall be made available for such redemption, subject to reduction by the amount of such Performance Liquidated Damages used to pay costs associated with the construction of any New Project in accordance with an Approved Completion Plan. Any redemption of Series F Securities made in accordance with this clause (l) shall be deemed an election by the Funding Corporation to redeem Series F Securities in accordance with clause (j) of this Section 2. All monies received by the Trustee from the Depositary Agent pursuant to Section [ ] of the Depositary Agreement shall be deposited in the Mandatory Redemption Fund and applied by the Trustee to a pro rata redemption of the Series F Securities in accordance with this clause (l). The Redemption Date for any such redemption shall be any date, as selected by the Trustee, during the 90-day period following such receipt of monies by the Trustee. (m) If Substantial Completion of any New Project has not occurred by the Guaranteed Substantial Completion Date for such New Project, or if any New Project has been abandoned, in each case evidenced by the certifications specified in Section 5.21 of the Indenture and received by the Trustee, outstanding Series F Securi ties in an aggregate principal amount of (x) in the case of the Zinc Project, $122,500,000, (y) in the case of Salton Sea Unit V, $73,500,000, and (z) in the case of the Region 2/Turbo Project, $38,000,000, shall be re deemed prior to maturity at a redemption price equal to such principal amount, together with interest on such principal amount accrued through the Redemption Date; provided that such redemption will not be required if the Funding Corporation and the Guarantors take such actions as the Rating Agencies require in order for the Rating Agencies to confirm in writing that the Securities will maintain their Investment Grade Ratings notwithstanding the failure of such New Project to achieve Substantial Completion by the Guaranteed Substantial Completion Date therefor or such abandonment, as the case may be, and the Rating Agencies issue such written confirmation. Upon notice by the Trustee to the Funding Corporation of mandatory redemption upon certification of the failure of a New Project to achieve Substantial Completion by the Guaranteed Substantial Completion Date therefor or of abandonment of a New Project, the Funding Corporation shall deposit with the Trustee an amount which equals the applicable principal amount of Series F Securities required to be redeemed, together with interest on such amount accrued through the Redemption Date. Any such moneys deposited with the Trustee shall be applied by the Trustee to the pro rata redemption of the Series F Securi ties pursuant to this clause (m). The Redemption Date for any such redemption shall be any date determined by the Trustee during the 90-day period following the date of the Trustee's receipt of the certifications required by Section 5.21 of the Indenture that the relevant New Project has not been completed by the Guaranteed Substantial Completion Date therefor or has been aban doned, as the case may be (taking into account the notice requirements set forth in Section 3.4 of the Indenture). (n) Restrictions and limitations on the trans fer or exchange of the Series F Securities shall be as provided in the Indenture and the form of Series F Security attached hereto as Exhibit A. (o) The Funding Corporation has entered into the Series F Registration Rights Agreement, pursuant to which it has agreed to use its reasonable best efforts to file and have declared effective a registration statement with respect to an exchange offer to exchange the Series F Securities for a series of securities substantially identical to the Series F Securities. (p) The Trustee shall act as Trustee, Custodi an, Registrar and Paying Agent for the Series F Securi ties, as and to the extent provided in the Indenture. (q) The Series F Securities shall be issuable in denominations of $100,000 and any integral multiple of $1,000 in excess thereof. SECTION 3. Amendments to Indenture. (a) Section 2.5 of the Indenture is hereby amended by deleting the current clause (j) of such Section and replacing it with the following new clause (j): "(j) Any Securities which are presented to the Registrar for exchange pursuant to an Exchange Offer shall be exchanged for Exchange Securities of the same series and of equal principal amount upon surrender to the Registrar of the Securities to be exchanged; provided, however, that the Securities so surrendered for exchange shall be duly endorsed and accompanied by a letter of transmittal or written instrument of transfer in form satisfactory to the Funding Corporation and the Registrar, duly executed by the Holder thereof or its attorney who shall be duly authorized in writing to execute such document. Whenever any Securities are so surrendered for exchange, the Funding Corporation shall execute, and the Trustee shall authenticate and deliver to the Registrar, the same aggregate principal amount of Ex change Securities of the same series that have been surrendered." (b) Section 2.11 of the Indenture is hereby amended by (i) deleting the word "Initial" after the phrase "Net Proceeds of" in the title of such Section and (ii) deleting the word "Initial" after the phrase "from the sale of the" in the text of such Section. (c) Section 3.1 of the Indenture is hereby amended by inserting the following sentence at the end of such Section: "The Series F Securities may be redeemed, pro rata within such series, at the election of the Funding Corporation, as a whole or in part, at any time on any Business Day, subject to the conditions and at the Redemption Price (which will include a Series F Yield Maintenance Premium) specified in the form of Series F Security attached as Exhibit A to that certain Fourth Supplemental Indenture dated as of September __, 1998, by and between the Funding Corporation and the Trustee." (d) Section 4.9 of the Indenture is hereby amended by deleting the phrase "the Partnership Guarantors" after the phrase "including its ownership of 1% of" and replacing it with the terms "CEOC, VPC". (e) Section 4.11 of the Indenture is hereby amended by (i) inserting the word "not" after the phrase "under which they were made, " in the second sentence of such Section and (ii) inserting the following sentence at the end of such Section: "Each of the Series F Preliminary Offering Circular and the Series F Final Offering Circular as of its date did not, and the Series F Final Offering Circular (as the same may have been amended or supplemented) as of the date of the issuance of the Series F Securities will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading." (f) Article V of the Indenture is hereby amended by inserting the following new Section 5.21 at the end of such Article: "SECTION 5.21 New Projects. The Funding Corporation shall deliver to the Trustee, for each New Project, an Officer's Certificate containing customary assumptions and qualifications, substan tially in the form of Exhibit E attached hereto (which, in the case of (i) and (ii) below, will be confirmed as reasonable, based on the material pre sented therein (containing customary assumptions and qualifications), by the [New Project] Independent Engineer), on the earlier of (i) Substantial Com pletion of such New Project, certifying that Substantial Completion of such New Project has occurred, (ii) the Guaranteed Substantial Completion Date for such New Project, certifying that, as of such Guaranteed Substantial Completion Date, Substan tial Completion of such New Project has occurred or not occurred, as the case may be, and (iii) abandon ment of such New Project, certifying that such New Project has been abandoned. The Trustee may conclusively rely on such Officer's Certificate and confirmation of the [New Project] Independent Engineer without further investigation or inquiry." (g) Section 5.2 of the Indenture is hereby amended by inserting the following phrase after the phrase "shall furnish to the Trustee" in the introductory portion of such Section: " and, in the case of clauses (a) and (b) of this Section 5.2, the Rating Agencies and any Holder or any owner of a beneficial interest in a Global Security upon request (which request may indicate that it is a continuing request for such information until further notice from such owner of a beneficial interest in a Global Security to the contrary)". (h) Section 5.4 of the Indenture is hereby amended by (i) inserting the phrase " and the Partnership Credit Agreement" after the phrase "insurance required pursuant to the Salton Sea Credit Agreement" in the first sentence of such Section, (ii) inserting the phrase " and the Partnership Guarantors" after the phrase "will cause the Salton Sea Guarantors" in the second sentence of such Section and (iii) inserting the phrase " and the Partnership Projects" after the phrase "relating to the Salton Sea Projects" in the second sentence of such Section. (i) Section 6.1 of the Indenture is hereby amended by (i) deleting the period (".") at the end of clause (l) of such Section and replacing it with a semicolon (";") followed by the word "or" and (ii) inserting the following clause at the end of such Section: "(m) CalEnergy fails to perform or breaches any of its obligations under the Equity Commitment Agreement and such failure or breach continues for 15 days or more." (j) Section 6.1(i) of the Indenture is hereby amended by (i) deleting the word "or" before the phrase "(iii) at least 51%" and (ii) inserting the following clause after the phrase "Voting Stock of Fish Lake": ", or (iv) at least 50% of the membership voting interests and economic interests in each of CalEnergy Minerals, Salton Sea Power and CE Turbo". (k) Section 7.1(e) of the Indenture is hereby amended by (i) deleting the word "Initial" after the phrase "percentage of Holders of" in clause (i) of the last sentence of such Section and (ii) deleting the word "Initial" after the phrase "manner in which such Holders of" in clause (ii) of the last sentence of such Section. (l) Section 11.12(a) of the Indenture is hereby amended by (i) [replacing the delivery address following the phrase "for delivery by hand:" with the following delivery address: "[The Chase Manhattan Bank] [Corporate Teller] [55 Water Street, Room 234] [2nd Floor, North Building] [New York, New York [_____]]",] and (ii) replacing the delivery address and contact person following the phrase "or for delivery by mail:" with the following delivery address and contact person: "Chase Manhattan Bank and Trust Company, National Association 101 California Street, #2725 San Francisco, California 94111 Attention: Corporate Trust Department". (m) Article XII of the Indenture is hereby amended by inserting the following new Section 12.3 at the end of such Article: "SECTION 12.3 Information to Holders. With respect to the information and documents required to be delivered to the Trustee by the Funding Corporation pursuant to Rule 144A(d) under the Securities Act or pursuant to this Indenture, the Trustee shall deliver, at the expense of the Funding Corporation, any such documents and information (a) to each Holder and (b) to any beneficial holder of Securities who makes a request to the Trustee substantially in the form of Exhibit J-1 hereto (which request may indicate that it is a continuing request for such information until further notice from such owner of a beneficial interest in a Global Security to the contrary) for such documents or information. Upon request (which request may indicate that it is a continuing request for such information until further notice from such owner of a beneficial interest in a Global Security to the contrary) of any owner of a beneficial interest in a Global Security or a Holder of a certificated Security substantially in the form of Exhibit J-2 hereto, the Funding Corporation shall deliver all financial information required to be delivered pursuant to this Indenture directly to such owner of a beneficial interest in a Global Security or Holder. Further, upon request (which request may indicate that it is a continuing request for such information until further notice from such owner of a beneficial interest in a Global Security to the contrary) of any beneficial owner of $2,000,000 aggregate original principal amount or more of Securities, the Funding Corporation shall deliver all reasonable information regarding the payment of all taxes directly to such beneficial owner for informational purposes only; provided that the Funding Corporation shall make available for inspection by the holders of beneficial interests in the Securities or their agents at the principal executive office of the Funding Corporation, upon their request, reasonable information regarding the payment of all taxes." (n) Section 13.6(a) of the Indenture is hereby amended by replacing the delivery address and contact person following the word "Trustee:" with the following delivery address and contact person: "Chase Manhattan Bank and Trust Company, National Association 101 California Street, #2725 San Francisco, California 94111 Telephone: (415) [_______] Fax: (415) [_______] Attention: Corporate Trust Department". (o) The Indenture is hereby amended by adding as Appendix A thereto the Base Case Projections attached as Appendix A hereto. (p) The Indenture is hereby amended by adding as Exhibit E thereto the form of Officer's Certificate attached as Exhibit B hereto. (q) The Indenture is hereby amended by adding as Exhibit F-1 and Exhibit F-2 thereto the forms of requests for information attached as Exhibit C-1 and Exhibit C-2 hereto, respectively. (r) Exhibit A of the Indenture is hereby amended by: (i) deleting the definition of "Agency Agreements" and inserting the following definition in lieu thereof: ""Agency Agreements" means: (i) the separate Agency Agreements, each dated as of the Closing Date, between the Funding Corporation and each of SSBP, SSPG, Fish Lake, VPC, CEOC and the Royalty Guarantor; (ii) the Agency Agreement, dated as of June 20, 1996, among the Funding Corporation, San Felipe, BN/Geothermal, Niguel, Conejo, Leathers, Del Ranch, Elmore and Vulcan; and (iii) the Agency Agreement, dated as of September __, 1998, among the Funding Corporation, CalEnergy Minerals, Salton Sea Power and CE Turbo; in each case as amended or supplemented from time to time."; (ii) (A) deleting the word "and" after the term "Elmore" and replacing it with a comma (",") and (B) inserting the phrase ", CalEnergy Minerals and CE Turbo" after the word "Del Ranch", in each case in clause (b) of the definition of "Available Cash Flow"; (iii) deleting the definition of "CEOC" and inserting the following definition in lieu thereof: ""CEOC" means CalEnergy Operating Corporation, a Delaware corporation."; (iv) deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association," in the definition of "Collateral Agent"; (v) (A) inserting the parenthetical "(if any)" after the phrase "relevant Power Purchase Agreement" and (B) inserting the phrase "or selling electricity or zinc into the market for such product" after the phrase "delivering electricity in accordance therewith", in each case in the definition of "Commercial Operation"; (vi) inserting the word "Agent" after the word "Depositary" in the definition of "Debt Service Reserve Letter of Credit"; (vii) deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association," in the definition of "Depositary Agent"; (viii) deleting the definition of "Depositary Agreement" and inserting the following definition in lieu thereof: ""Depositary Agreement" means the Amended and Restated Deposit and Disbursement Agreement, dated as of September __, 1998, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent."; (ix) inserting the phrase ", the Equity Commitment Agreement" after the term "Guarantees" in the definition of "Financing Documents"; (x) deleting the words "Salton Sea" before the phrase "Guarantors, taken as a whole," in clause (i) of the definition of "Material Adverse Effect"; (xi) (A) inserting the phrase "or membership" after the word "partnership" in clause (ii) and (B) inserting the phrase ", Zinc Construction Fund, Region 2/Turbo Construction Fund, Construction Period Debt Service Fund" after the term "Capital Expenditure Fund" in clause (iii), in each case in the definition of "Partnership Collateral"; (xii) inserting the phrase ", as amended, restated or supplemented from time to time in accordance with the terms thereof" after the term "Partnership Guarantors" in the definition of "Partner ship Credit Agreement"; (xiii) (A) deleting the word "and" before the phrase "(iv) the Deed of Trust" in clause (iii) and (B) inserting the following clauses after the phrase "in favor of the Collateral Agent" in clause (iv), in each case in the definition of "Partnership Deed of Trust": ", (v) the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing by CalEnergy Minerals in favor of the Collateral Agent and (vi) the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing by CE Turbo in favor of the Collateral Agent"; (xiv) deleting the definition of "Partnership Guarantee" and inserting the following definition in lieu thereof: ""Partnership Guarantee" means the Amended and Restated Partnership Secured Limited Guarantee, dated as of September __, 1998, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation."; (xv) (A) deleting the word "and" after the term "Leathers" and replacing it with a comma (",") and (B) inserting the phrase ", CalEnergy Minerals and CE Turbo" after the term "Del Ranch", in each case in the definition of "Partnership Guarantors"; (xvi) (A) deleting the word "and" before the phrase "(viii) the Partnership Interest Pledge Agreement" in clause (vii) and replacing it with a comma (",") and (B) inserting the following clauses after the term "Secured Parties" in clause (viii), in each case in the definition of "Partnership Guarantors Pledge Agreement": ", (ix) the Stock Pledge Agreement by Magma pledging the stock of Minerals Corp., in favor of the Collateral Agent for the benefit of the Secured Parties, (x) the Stock Pledge Agreement by Magma pledging the stock of CE Salton Sea, in favor the Collateral Agent for the benefit of the Secured Parties, (xi) the Membership Interest Pledge Agreement by Magma and Minerals Corp. pledging the membership interests in CalEnergy Minerals, in favor of the Collateral Agent for the benefit of the Secured Parties, and (xi) the Membership Interest Pledge Agreement by Magma and CE Salton Sea pledging the membership interests in CE Turbo, in favor of the Collateral Agent for the benefit of the Secured Parties"; (xvii) (A) deleting the word "and" after the term "Leathers" and replacing it with a comma (",") and (B) inserting the phrase ", CalEnergy Minerals and CE Turbo" after the term "Vulcan", in each case in the definition of "Partnership Project Companies"; (xviii) (A) deleting the word "and" after the phrase "the VPC Agreements" and replacing it with the a comma (",") and (B) inserting the phrase ", the Zinc Agreements and the Region 2/Turbo Agreements" after the phrase "the CEOC Agreements", in each case in the definition of "Partnership Project Documents"; (xix) (A) deleting the word "and" after the phrase "the Del Ranch Project" and replacing it with a comma (",") and (B) inserting the phrase ", the Zinc Project and the Region 2/Turbo Project" after the phrase "the Leathers Project", in each case in the definition of "Partnership Projects"; (xx) inserting the phrase "the Partnership Deed of Trust, the Partnership Collateral Assignments," before the phrase "the Partnership Guarantors Security Agreement" in the definition of "Partnership Security Documents"; (xxi) inserting the phrase ", limited liability company" after the word "partnership" in the definition of "Person"; (xxii) (A) inserting the term ", Salton Sea Unit V" after the term "Salton Sea Unit IV" and (B) inserting the phrase ", Zinc Project, Region 2/Turbo Project" after the term "East Mesa Project", in each case in the definition of "Projects"; (xxiii) deleting the definition of "Registration Rights Agreement" and inserting the following definition in lieu thereof: ""Registration Rights Agreement" means: (i) the Exchange and Registration Rights Agreement, dated as of the Closing Date, between the Funding Corporation and the Initial Purchasers for the benefit of the Holders of the Initial Securities; (ii) the Exchange and Registration Rights Agreement, dated as of June 20, 1996, between the Funding Corporation and the initial purchaser named therein for the benefit of the Holders of the Series D and E Securities; and (iii) the Series F Registration Rights Agreement."; (xxiv) inserting the phrase ", or any similar legend set forth in any form of Security attached to a Supplemental Indenture" in the definition of "Restricted Security"; (xxv) (A) inserting the phrase "or membership" after the word "partnership" in clause (iv) and (B) inserting the phrase "Salton Sea Unit V Construction Fund, Construction Period Debt Service Fund" after the term "Expansion Fund" in clause (v), in each case in the definition of "Salton Sea Collateral"; (xxvi) deleting the definition of "Salton Sea Collateral Assignments" and inserting the following definition in lieu thereof: ""Salton Sea Collateral Assignments" means: (i) the Collateral Assignment (IID Agreements), dated as of the Closing Date, by SSPG in favor of the Collateral Agent for the benefit of the Secured Parties; (ii) the Collateral Assignment (SCE Agreements), dated as of the Closing Date, by SSPG in favor of the Collateral Agent for the benefit of the Secured Parties; (iii) the Collateral Assignment, dated as of the Closing Date, by SSBP, SSPG and Fish Lake in favor of the Collateral Agent for the benefit of the Secured Parties; (iv) the Collateral Assignment (IID Agreements), dated as of September __, 1998, by Salton Sea Power in favor of the Collateral Agent for the benefit of the Secured Parties; and (v) the Collateral Assignment (Other Unit V Project Documents), dated as of September __, 1998, by Salton Sea Power in favor of the Collateral Agent."; (xxvii) deleting the definition of "Salton Sea Credit Agreement" and inserting the following definition in lieu thereof: ""Salton Sea Credit Agreement" means the Credit Agreement between the Funding Corporation and each of the Salton Sea Guarantors, as amended, restated or supplemented from time to time in accordance with the terms thereof." (xxviii) inserting the following phrase after the phrase "in favor of the Collateral Agent" in the definition of "Salton Sea Deed of Trust": ", and the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of September __, 1998, by Salton Sea Power in favor of the Collateral Agent"; (xxix) deleting the definition of "Salton Sea Guarantee" and inserting the following definition in lieu thereof: ""Salton Sea Guarantee" means the Amended and Restated Salton Sea Secured Guarantee, dated as of September __, 1998, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent for the benefit of the Secured Parties."; (xxx) deleting the definition of "Salton Sea Guarantors" and inserting the following definition in lieu thereof: ""Salton Sea Guarantors" means each of SSBP, SSPG, Fish Lake and Salton Sea Power."; (xxxi) inserting the phrase ", the Salton Sea Unit V Agreements" after the term "SSPG IV Technology Transfer Agreement" in the definition of "Salton Sea Project Documents"; (xxxii) (A) deleting the word "and" after the term "Salton Sea Unit III and replacing it with a comma (",") and (B) inserting the phrase ", and Salton Sea Unit V" after the term "Salton Sea Unit IV", in each case in the definition of "Salton Sea Projects"; (xxxiii) deleting the definition of "Salton Sea Security Documents" and inserting the following definition in lieu thereof: ""Salton Sea Security Documents" means the Salton Sea Deed of Trust, the Salton Sea Collateral Assignments, the Salton Sea Guarantors Pledge Agree ments and all other Security Documents securing the obligations of the Salton Sea Guarantors under the Salton Sea Guarantee and the Salton Sea Project Note." (xxxiv) inserting the phrase ", the Securities Account Control Agreement" after the term "Depositary Agreement" in the definition of "Security Documents"; (xxxv) deleting the definition of "Substantial Completion" and inserting the following definition in lieu thereof: ""Substantial Completion" of a Project means that (i) such Project is substantially complete in accordance with the construction con tracts therefor and all applicable laws and permits, (ii) all services and equipment required to be furnished by the contractors for such Project are substantially completed and all material equipment for such Project has been delivered and properly incorporated, (iii) all necessary performance and start-up testing and other pre-commissioning activi ties for such Project have been conducted, (iv) a punchlist of items to be finished or completed for such Project has been prepared, and (v) all events necessary to allow commercial operation of such Project to be declared have been met, in each case as confirmed by the Independent Engineer [or, in the case of a New Project, the New Project Independent Engineer]; provided, however, that Substantial Completion of a New Project shall be deemed to have occurred, notwithstanding such New Project's failure to satisfy the conditions set forth in clauses (i) through (v) above, if the Funding Corporation shall have redeemed an amount of Series F Securities sufficient to cause Substantial Completion of such New Project in accordance with Section 2(j) of the Fourth Supplemental Indenture, dated as of September __, 1998, between the Funding Corporation and the Trustee."; (xxxvi) inserting the phrase "or a Partnership Project" after the term "Salton Sea Project" in the definition of "Title Event"; (xxxvii) deleting the phrase "the Person named as "Trustee" in the Preamble of this Indenture" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association," in the definition of "Trustee"; (xxxviii) deleting the definitions of "Fish Lake Pledge Agreement", "Partnership Interest Pledge Agreement" and "Salton Sea Partnership Interest Pledge Agreement". (s) Exhibit A to the Indenture is hereby amended by inserting the following definitions in the appropriate alphabetical order: ""Approved Completion Plan" means a plan (including budget and schedule) to construct and complete a New Project using liquidated damages payments and/or other funds available to the Funding Corporation and the relevant Guarantor (by borrowing or otherwise), which plan includes: (i) an Officer's Certificate of the relevant Guarantor, confirmed (with customary assumptions and qualifications) as reasonable by the [New Project] Independent Engineer and, in the case of the Zinc Project, the Independent Zinc Market Consultant, stating that (a) the funds available to the relevant Guarantor are reasonably expected to be sufficient to achieve Substantial Completion of such New Project and (b) after achieving Substantial Completion, (1) the minimum projected Debt Service Coverage Ratio (calculated using the Base Case Projections) for (A) the next four (4) consecutive fiscal quarters, commencing with the quarter in which Substantial Completion of such New Project is to occur, taken as one (1) annual period, and (B) each subsequent fiscal year thereafter until the Final Maturity Date for the Series F Securities, will not be less than 1.4 to 1.0, and (2) the average projected Debt Service Coverage Ratio (calculated using the Base Case Projections) for all succeeding fiscal years until the Final Maturity Date for the Series F Securities will not be less than 1.7 to 1.0; or (ii) a confirmation from the Rating Agencies that the Securities will maintain their Investment Grade Ratings after achieving Substantial Completion of such New Project in accordance with such plan." ""Approved Construction Budget and Schedule" means, for each New Project, the construction budget and schedule (containing customary assumptions and qualifications) prepared by the relevant Guarantor and confirmed as reasonable by the [New Project] Independent Engineer as of September __, 1998, as may thereafter be amended in connection with an event of force majeure, an event of default or a change order under the EPC Contract for such New Project, provided that the [New Project] Independent Engineer confirms as reasonable the certification of the relevant Guarantor that (a) such amendment could not reasonably be expected to result in a Material Adverse Effect and (b) the funds available to such Guarantor (from the relevant Construction Fund, under the Equity Commitment Agreement, from liquidated damages payments, from borrowings or otherwise) are reasonably expected to be sufficient to fund the costs of achieving Substantial Completion of such New Project." ""Base Case Projections" means the price projections attached as Appendix A hereto." ""CalEnergy Minerals" means CalEnergy Minerals L.L.C., a Delaware limited liability company." ""CE Salton Sea" means CE Salton Sea Inc., a Delaware corporation." ""CE Turbo" means CE Turbo LLC, a Delaware limited liability company." ""Construction Fund" means each of the Zinc Construction Fund, the Salton Sea Unit V Construction Fund and the Region 2/Turbo Construction Fund." ""Construction Period Debt Service Fund" means the fund of such name created under the Depositary Agreement." ""DVC" means Desert Valley Company, a California corporation." ""EPC Contract" means each of the Zinc EPC Contract, the Salton Sea Unit V EPC Contract the Region 2/Turbo EPC Contract." ""EPC Contractor" means each of the Zinc EPC Contractor, the Salton Sea Unit V EPC Contractor and the Region 2/Turbo EPC Contractor." ""Equity Commitment Agreement" means the Equity Commitment Agreement, dated as of September __, 1998, among CalEnergy, the Funding Corporation, CalEnergy Minerals, Salton Sea Power, CE Turbo and the Collateral Agent for the benefit of the Secured Parties." ""Guaranteed Substantial Completion Date" means (i) with respect to the Zinc Project, July 31, 2001, (ii) with respect to Salton Sea Unit V, June 30, 2001, and (iii) with respect to the Region 2/Turbo Project, January 31, 2001, in each case as may be amended pursuant to an Approved Completion Plan." ""Imperial Magma" means Imperial Magma, a Nevada corporation." ""Independent Zinc Market Consultant" means Resource Strategies International or another widely recognized Independent commodities market consulting firm or consultant retained as independent zinc market consultant by the Funding Corporation." ""Minerals Corp." means Salton Sea Minerals Corp., a Delaware corporation." ""New Project" means each of the Zinc Project, Salton Sea Unit V and the Region 2/Turbo Project." [""New Project Independent Engineer" means Duke/Fluor Daniel or another widely recognized Independent engineering firm or engineer retained as independent engineer for the New Projects by the Funding Corporation."] ""Partnership Collateral Assignments" means: (i) the Collateral Assignment (IID Agreements), dated as of September __, 1998, by CalEnergy Minerals and CE Turbo in favor of the Collateral Agent for the benefit of the Secured Parties; (ii) the Collateral Assignment (Water Supply Agreement), dated as of September __, 1998, by CalEnergy Minerals in favor of the Collateral Agent for the benefit of the Secured Parties; and (iii) the Collateral Assignment (Other Partnership Project Documents), dated as of September __, 1998, by CalEnergy Minerals and CE Turbo in favor of the Collateral Agent for the benefit of the Secured Parties." ""Performance Liquidated Damages" means any liquidated damages payable by an EPC Contractor to one or more Guarantors pursuant to an EPC Contract as a consequence of a New Project's failure to meet the performance guarantees set forth in such EPC Contract." ""Region 2/Turbo Agreements" means, collectively, the Region 2/Turbo Technology Transfer Agreement, the Region 2/Turbo EPC Contract, the Region 2/Turbo EPC Guaranty, the Region 2/Turbo O&M Agreement, the Region 2/Turbo ASA, the Region 2/Turbo Plant Connection Agreement, the Region 2/Turbo Transmission Service Agreement, the Region 2/Turbo Construction Agreement, the Region 2/Turbo Easements, [OTHERS] and any Additional Project Document entered into by CE Turbo with respect to the Region 2/Turbo Project." ""Region 2/Turbo ASA" means the Turbo Expander Administrative Services Agreement, dated as of September __, 1998, between Magma and CE Turbo." ""Region 2/Turbo Construction Agreement" means the Construction Agreement for Turbo Expander Connection Facilities, dated as of September __, 1998, between IID and CE Turbo." ""Region 2/Turbo Construction Fund" means the fund of such name created under the Depositary Agreement." ""Region 2/Turbo Easements"" means (i) the Reciprocal Easement Agreement, dated as of September __, 1998, among Del Ranch, Vulcan and CE Turbo, and (ii) the Easement Agreement, dated as of September __, 1998, between Magma and CE Turbo." ""Region 2/Turbo EPC Contract" means the Engineering, Procurement and Construction Contract, dated as of [________], 1998, between the Region 2/EPC Contractor and CE Turbo." ""Region 2/Turbo EPC Contractor" means Stone & Webster Engineering Corporation, a Massachusetts corporation." ""Region 2/Turbo EPC Guaranty" means the Guaranty, dated as of September __, 1998, between Stone & Webster Inc., a Delaware corporation, and CE Turbo." ""Region 2/Turbo O&M Agreement" means the Turbo Expander Operating and Maintenance Agreement, dated as of September __, 1998, between CEOC and CE Turbo." ""Region 2/Turbo Plant Connection Agreement" means the Plant Connection Agreement for Turbo Expander, dated as of September __, 1998, between IID and CE Turbo." ""Region 2/Turbo Project" means (i) the upgrade of the brine systems at the [________] Projects and (ii) the 10 MW turbo expander 100% owned by CE Turbo, located in the Salton Sea Known Geothermal Resource Area." ""Region 2/Turbo Technology Transfer Agreement" means the Turbo Expander Technology Transfer Agreement, dated as of September __, 1998, between Magma and CE Turbo." ""Region 2/Turbo Transmission Service Agreement" means the Transmission Service Agreement for Turbo Expander, dated as of September __, 1998, between IID and CE Turbo." ""Salton Sea Guarantors Pledge Agreements" means: (i) the Partnership Interest Pledge Agreement, dated as of the Closing Date, by Magma and SSPC, pledging the partnership interests in SSBP in favor of the Collat eral Agent for the benefit of the Secured Parties and the Funding Corporation; (ii) the Partnership Interest Pledge Agreement, dated as of the Closing Date, by SSPC and SSBP, pledging the partnership interests in SSPG, in favor of the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation; (iii) the Stock Pledge Agreement, dated as of the Closing Date, by Magma and the Funding Corporation, pledging the stock of Fish Lake in favor of the Collateral Agent for the benefit of the Secured Parties; (iv) the Stock Pledge Agreement, dated as of September __, 1998, by Magma, pledging of the stock of CE Salton Sea in favor of the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation; and (v) the Membership Interest Pledge Agreement, dated as of September __, 1998, by Magma and CE Salton Sea, pledging the membership interests in Salton Sea Power in favor the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation." ""Salton Sea Power" means Salton Sea Power L.L.C., a Delaware limited liability company." ""Salton Sea Unit V" means the 49 MW contract nameplate geothermal power plant 100% owned by Salton Sea Power, located in the Salton Sea Known Geothermal Resource Area." ""Salton Sea Unit V Agreements" means, collectively, the Salton Sea Unit V Technology Transfer Agreement, the Salton Sea Unit V EPC Contract, the Salton Sea Unit V EPC Guaranty, the Salton Sea Unit V O&M Agreement, the Salton Sea Unit V ASA, the Salton Sea Unit V Plant Connection Agreement, the Salton Sea Unit V Construction Agreement, the Salton Sea Unit V Transmission Service Agreement, the Salton Sea Unit V Waste Disposal Agreement, the Salton Sea Unit V Power Sales Agreement, the Salton Sea Unit V Geothermal Sales Agreement, the Salton Sea Unit V Ground Lease, the Salton Sea Unit V Easement [OTHERS] and any Additional Project Document entered into by Salton Sea Power with respect to Salton Sea Unit V." ""Salton Sea Unit V ASA" means the Unit 5 Administrative Services Agreement, dated as of September __, 1998, between Magma and Salton Sea Power." ""Salton Sea Unit V Construction Agreement" means the Construction Agreement for Salton Sea Unit 5 Connection Facilities, dated as of April 14, 1998, between IID and Salton Sea Power." ""Salton Sea Unit V Construction Fund" means the fund of such name created under the Depositary Agreement." ""Salton Sea Unit V Easement"" means the Reciprocal Easement, dated as of September __, 1998, among SSBP, SSPG and Salton Sea Power." ""Salton Sea Unit V EPC Contract" means the Engineering, Procurement and Construction Contract, dated as of [________], 1998, between the Salton Sea Unit V EPC Contractor and Salton Sea Power." ""Salton Sea Unit V EPC Contractor" means Stone & Webster Engineering Corporation, a Massachusetts corporation." ""Salton Sea Unit V EPC Guaranty" means the Guaranty, dated as of September __, 1998, between Stone & Webster Inc., a Delaware corporation, and Salton Sea Power." ""Salton Sea Unit V Geothermal Sales Agreement" means the Geothermal Sales Contract, dated as of September __, 1998, between SSBP and Salton Sea Power." ""Salton Sea Unit V Ground Lease" means the Ground Lease, dated as of September __, 1998, between Imperial Magma and Salton Sea Power." ""Salton Sea Unit V O&M Agreement" means the Unit 5 Operating and Maintenance Agreement, dated as of September __, 1998, between CEOC and Salton Sea Power." ""Salton Sea Unit V Plant Connection Agreement" means the Plant Connection Agreement for Salton Sea Unit 5, dated as of April 14, 1998, between IID and Salton Sea Power." ""Salton Sea Unit V Power Sales Agreement" means the Power Sales Agreement, dated as of September __, 1998, between CalEnergy Minerals and Salton Sea Power." ""Salton Sea Unit V Technology Transfer Agree ment" means the Unit 5 Technology Transfer Agreement, dated as of September __, 1998, between Magma and Salton Sea Power." ""Salton Sea Unit V Transmission Service Agreement" means the Transmission Service Agreement for Power Generation Facilities, dated as of April 14, 1998, between IID and Salton Sea Power." ""Salton Sea Unit V Waste Disposal Agreement" means the Unit 5 Waste Disposal Agreement, dated as of September __, 1998, between DVC and Salton Sea Power." ""Securities Account Control Agreement" means the Securities Account Control Agreement, dated as of September __, 1998, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent." ""Series F Final Offering Circular" means the confidential offering circular of the Funding Corpora tion, dated September __, 1998, with respect to the Series F Securities." ""Series F Preliminary Offering Circular" means the confidential preliminary offering circular of the Funding Corporation, dated September __, 1998, with respect to the Series F Securities." ""Series F Registration Rights Agreement" means the Exchange and Registration Rights Agreement, dated as of September __, 1998, between the Funding Corporation and Credit Suisse First Boston Corporation, as initial purchaser, for the benefit of the Holders of the Series F Securities." ""Series F Securities" means the Securities issued pursuant to the Fourth Supplemental Indenture, dated as of September __, 1998, between the Funding corporation and the Trustee, in the form of Exhibit A thereto." ""Series F Yield Maintenance Premium" means an amount calculated by the Funding Corporation or any Guarantor as of the Redemption Date as follows: (i) the average life of the remaining scheduled payments of principal in respect of outstanding Series F Securities (the "Series F Remaining Average Life") shall be calculated as of the Redemption Date; (ii) the yield to maturity shall be calculated for the United States Treasury security having an average life equal to the Series F Remaining Average Life and trading in the secondary market at the price closest to par (the "Primary Issue"); provided, however, that if no United States Treasury security has an average life equal to the Series F Remaining Average Life, the yields (the "Other Yields") for the two maturities of United States Treasury securities having average lives most closely corresponding to such Series F Remaining Average Life and trading in the secondary market at the price closest to par shall be calculated, and the yield to maturity for the Primary Issue shall be the yield interpolated or extrapolated from such Other Yields on a straight-line basis, rounding in each of such relevant periods to the nearest month; (iii) the discounted present value of the then remaining scheduled payments of principal and interest (but excluding that portion of any scheduled payment of interest that is actually due and paid on the Redemption Date) in respect of outstanding Series F Securities shall be calculated as of the Redemption Date using a discount factor equal to the sum of (a) the yield to maturity for the Primary Issue, plus (b) fifty (50) basis points; and (iv) the amount of Series F Yield Maintenance Premium in respect of Series F Securities to be redeemed shall be an amount equal to (a) the discounted present value of such Series F Securities to be redeemed determined in accordance with clause (iii) above minus (b) the unpaid principal amount of such Series F Securities; provided, however, that the Series F Yield Maintenance Premium shall not be less than zero." ""Total Performance Liquidated Damages" has the meaning set forth in Section [ ] of the Depositary Agreement." ""Zinc Agreements" means, collectively, the Zinc Technology Transfer Agreements, the Zinc EPC Contract, the Zinc EPC Letter of Credit, the Zinc O&M Agreement, the Zinc ASA, the Zinc Distribution Service Agreement, the Zinc Dow Sales Agreement, the Zinc Water Supply Agreement, the Zinc Processing Agreement, the Zinc Ground Lease, the Zinc Easement, the Zinc Extraction Agreement, the Zinc License Agreements [OTHERS] and any Additional Project Document entered into by CalEnergy Minerals with respect to the Zinc Project." ""Zinc ASA" means the Zinc Facility Administrative Services Agreement, dated as of September __, 1998, between Magma and CalEnergy Minerals." ""Zinc Construction Fund" means the fund of such name created under the Depositary Agreement." ""Zinc Distribution Service Agreement" means the Distribution Service Agreement, dated as of April 14, 1998, between IID and CalEnergy Minerals." ""Zinc Dow Sales Agreement" means the Dow Sales Contract, dated as of September __, 1998, between Dow and CalEnergy Minerals." ""Zinc Easement" means the Agreement Regarding Easements and Subeasements, dated as of September __, 1998, among Magma, Imperial Magma and CalEnergy Minerals." ""Zinc EPC Contract" means the Engineering, Procurement and Construction Contract, dated as of [________], 1998, between the Zinc EPC Contractor and CalEnergy Minerals." ""Zinc EPC Contractor" means Kvaerner U.S. Inc., a Delaware corporation." ""Zinc EPC Letter of Credit" means the Letter of Credit, dated September __, 1998, issued by [________] in favor of CalEnergy Minerals." ""Zinc Extraction Agreement" means the Grant of Zinc Extraction Rights, dated as of September __, 1998, among Magma, Magma Land, SSBP, Del Ranch, Elmore, Leathers, Vulcan and CalEnergy Minerals." ""Zinc Ground Lease" means the Ground Lease, dated as of September __, 1998, between Imperial Magma and CalEnergy Minerals." ""Zinc License Agreements" means (i) the License Agreement, dated as of April 28, 1997, between BHP Minerals International, Inc. and [CalEnergy Minerals], and (ii) the Resin Cleaning Patent/License Agreement, dated as of September __, 1998, between [________] and CalEnergy Minerals." ""Zinc O&M Agreement" means the Zinc Facility Operating and Maintenance Agreement, dated as of September __, 1998, between CEOC and CalEnergy Minerals." ""Zinc Processing Agreement" means the Zinc Processing Agreement, dated as of September __, 1998, among SSBP, Del Ranch, Elmore, Leathers, Vulcan and CalEnergy Minerals." ""Zinc Project" means the 31,000 tons/year zinc recovery facility 100% owned by CalEnergy Minerals, located in the Salton Sea Known Geothermal Resource Area." ""Zinc Technology Transfer Agreements" means (i) the Zinc Facility/CalEnergy Technology Transfer Agreement, dated as of September __, 1998, between CalEnergy and CalEnergy Minerals, and (ii) the Zinc Facility/Magma Power Technology Transfer Agreement, dated as of September __, 1998, between Magma and CalEnergy Minerals." ""Zinc Water Supply Agreement" means the Water Supply Agreement, dated as of September __, 1998, between IID and CalEnergy Minerals." SECTION 4. Schedule I to Indenture. Schedule I to the Indenture shall be supplemented by adding the Amortization Schedule for the Series F Securities set forth on Schedule I hereto to such Schedule I of the Indenture. SECTION 5. Effect of Supplemental Indenture. Upon the execution of this Supplemental Indenture, the Indenture shall be modified in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes; and every Holder of Securi ties previously or thereafter authenticated and delivered under the Indenture shall be bound by the terms hereof. This Supplemental Indenture shall be construed as supple mental to the Indenture and shall form a part thereof, and the Indenture is hereby incorporated by reference herein and hereby ratified, approved and confirmed. From and after the date hereof, whenever referred to in any Financing Document, the Indenture shall mean the Inden ture as modified, amended and supplemented by this Sup plemental Indenture. SECTION 6. Headings for Convenience Only. The descriptive headings in this Supplemental Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provi sions hereof. SECTION 7. Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument. SECTION 8. APPLICABLE LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCOR DANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). IN WITNESS WHEREOF, Salton Sea Funding Corporation has caused this Supplemental Indenture to be executed and its corporate seal to be hereunto affixed, attested by one of its duly authorized officers and Chase Manhattan Bank and Trust Company, National Association, has caused this Supplemental Inden ture to be executed by one of its duly authorized officers, all as of the day and year first above written. [SEAL] SALTON SEA FUNDING CORPORATION, as principal and as agent for the Guarantors By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President Attest: Title: /s/ Steven A. McArthur Steven A. McArthur Executive Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By: /s/ Rose T. Maravilla Name: Rose T. Maravilla Title: Assistant Vice President EX-4.3(C) 3 EXHIBIT 4.3(c) SECOND AMENDED AND RESTATED PARTNERSHIP SECURED LIMITED GUARANTEE This Second Amended and Restated Partnership Secured Limited Guarantee (this "Guarantee ") is entered into as of October __, 1998 by CALENERGY OPERATING CORPORATION, a Delaware corporation ("CEOC"), VULCAN POWER COMPANY, a Nevada corporation ("VPC"), CONEJO ENERGY COMPANY, a California corporation ("Conejo"), NIGUEL ENERGY COMPANY, a California corporation ("Niguel"), SAN FELIPE ENERGY COMPANY, a California corporation ("San Felipe"), BN GEOTHERMAL, INC., a Delaware corporation ("BNG"), DEL RANCH, L.P., a California limited partnership ("Del Ranch"), ELMORE, L.P., a California limited partnership ("Elmore"), LEATHERS, L.P., a California limited partnership ("Leathers"), VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership ("Vulcan"), CALENERGY MINERALS LLC, a Delaware limited liability company ("Minerals LLC"), and CE TURBO LLC, a Delaware limited liability company ("Turbo LLC," and together with CEOC, VPC, Conejo, Niguel, San Felipe, BNG, Del Ranch, Elmore, Leathers, Vulcan, and Minerals LLC, the "Partnership Guarantors"), in favor of and for the benefit of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Trustee ("Trustee") under that certain Trust Indenture dated as of July 21, 1995 by and between Salton Sea Funding Corporation (the "Funding Corporation") and Trustee as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and as Collateral Agent ("Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 by and among the Funding Corporation, the Guarantors and the Secured Parties as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of date even herewith for the benefit of the Secured Parties and the Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). All capitalized terms used herein but not specifically defined shall have the respective meanings given to such terms in Exhibit A to the Indenture, which Exhibit A is hereby incorporated by reference as if set forth in full herein. W I T N E S S E T H: WHEREAS, the Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, the principal and interest payments on the Securities will be serviced by repayment of loans made by the Funding Corporation to the Guarantors and guaranteed by the Guarantors, subject to the conditions set forth in the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475,000,000.00 (the "Initial Securities"); and WHEREAS, the Funding Corporation used a portion of the proceeds from the sale of the Initial Securities to make a loan to CEOC and VPC in the aggregate amount of $75,000,000.00 pursuant to that certain Credit Agreement (Partnership Guarantors) dated as of June 21, 1995; and WHEREAS, in connection with the making of such loan to CEOC and VPC, CEOC and VPC entered into the Partnership Secured Limited Guarantee dated as of July 21, 1995 in favor of the Trustee (the "Original Secured Limited Guarantee") whereby CEOC and VPC guaranteed certain of the obligations of the Funding Corporation under the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities); and WHEREAS, the Funding Corporation used the proceeds from the sale of the Supplemental Securities to make a loan to CEOC, VPC, BNG, Conejo, Del Ranch, Elmore, Leathers, Niguel, San Felipe, and Vulcan pursuant to that certain Amended and Restated Credit Agreement (Partnership Guarantors) dated as of June 20, 1996; and WHEREAS, in connection with the making of such loan to CEOC, VPC, BNG, Conejo, Del Ranch, Elmore, Leathers, Niguel, San Felipe, and Vulcan, such parties entered into the Amended and Restated Partnership Secured Limited Guarantee dated as of June 20,1996 in favor of the Trustee (the "Supplemental Secured Limited Guarantee") whereby such parties agreed to amend and restate the Original Secured Limited Guarantee and guaranteed certain of the obligations of the Funding Corporation under the Initial Securities and the Supplemental Securities (the Original Secured Limited Guarantee as so amended the "Existing Partnership Guarantee"); and WHEREAS, the Funding Corporation has simultaneously with the execution and delivery of this Guarantee issued and sold Securities in the aggregate principal amount of $285,000,000 (the "New Securities") a portion of the net proceeds of which will be loaned to the Partnership Guarantors pursuant to that certain Second Amended and Restated Credit Agreement (Partnership Guarantors) dated as of even date herewith (the "Partnership Credit Agreement"); and WHEREAS, each Partnership Guarantor is an affiliate of the Funding Corporation and anticipates benefiting directly and indirectly from the issuance and sale of the New Securities by the Funding Corporation and continuing to benefit from the issuance and sale of the Initial Securities and the Supplemental Securities by the Funding Corporation, and each Partnership Guarantor (including Minerals LLC and Turbo LLC) has therefore agreed to jointly and severally guarantee certain of the obligations of the Funding Corporation under the Securities (including the Initial Securities and the Supplemental Securities) in accordance with the terms hereof; and WHEREAS, in order to evidence and implement such guarantee by all of the Partnership Guarantors and the joint and several obligations of all of the Partnership Guarantors thereunder, the parties hereto have agreed to amend and restate the Existing Partnership Guarantee as set forth herein. In consideration of the above premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: AGREEMENT 1. From and after the date hereof, the terms of the Existing Partnership Guarantee shall be amended and restated to read in their entirety as set forth herein and the terms hereof shall govern and control the rights and obligations of the parties in and with respect to the matters set forth herein, notwithstanding any conflict between the terms hereof and the terms of the Existing Partnership Guarantee. The Existing Partnership Guarantee is hereby amended and restated in its entirety as follows. 2. As set forth in this Guarantee, each Partnership Guarantor jointly and severally guarantees the payment of the Indebtedness (as hereafter defined) when due, upon maturity, acceleration or otherwise; provided, however, that no obligation to pay all or any portion of the Indebtedness shall exist unless there also shall have occurred and be continuing (a) an Event of Default under the Partnership Credit Agreement, (b) an Event of Default under Section 6.1(a) of the Indenture or (c) an Event of Default under Section 18 of this Guarantee; and provided further that each Partnership Guarantor's obligation hereunder shall be limited to the Available Cash Flow of such Partnership Guarantor. 3. "Indebtedness" as used herein shall mean all principal, interest, premium (if any), fees, charges, penalties, expenses, payments, and all other amounts due with respect to the Securities and all other Senior Debt. 4. Subject to the conditions set forth in Section 2 of this Guarantee, the liability of each Partnership Guarantor under this Guarantee in respect of the Indebtedness shall be absolute and unconditional, and shall not be affected or released in any way, irrespective of: (a) any lack of validity or enforceability of the Securities, the Indenture, the Credit Agreements or any of the other Transaction Documents; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Indebtedness or amendment or waiver of, or any consent to any departure from, any Transaction Document, including, without limitation, any increase in the Indebtedness or other obligations of the Funding Corporation under the Indenture; (c) any enforcement of any Transaction Document, including the taking, holding or sale of any collateral, or any termination or release of any collateral from the liens created by any Transaction Document or the non-perfection of any liens created by any Transaction Document; (d) the failure by any one of the Partnership Guarantors to fulfill its obligations under this Guarantee; (e) any change, restructuring or termination of the corporate structure or existence of the Funding Corporation; or (f) any Event of Default of the Funding Corporation under Sections 6.1(f) or (g) of the Indenture, of the Salton Sea Guarantors under Section 5.1(e) of the Salton Sea Credit Agreement, of the Partnership Guarantors under Section 5.1(e) of the Partnership Credit Agreement or of the Royalty Guarantor under Section 5.1(e) of the Royalty Credit Agreement. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Indebtedness is rescinded or must otherwise be returned by the Trustee or any other Person upon the insolvency, bankruptcy or reorganization of the Funding Corporation or the Partnership Guarantors, or otherwise, all as though such payment had not been made. 5. Except to the extent provided in Section 2 of this Guarantee, the obligations hereunder are independent of the obligations of the Funding Corporation or any other Guarantor, and a separate action or actions may be brought and prosecuted against any of the Partnership Guarantors whether action is brought against either the Funding Corporation or any other Guarantor or whether either the Funding Corporation or any other Guarantor be joined in any such action or actions; and each Partnership Guarantor waives the benefit of any statute of limitations affecting its liability hereunder. 6. The Partnership Guarantors authorize the Trustee, acting pursuant to the Indenture, without notice or demand and without affecting their liability hereunder, from time to time, whether before or after termination of this Guarantee, to (a) renew, compromise, extend, accelerate or otherwise change the time for payment of the obligations of the Funding Corporation under the Indenture or any part thereof; (b) take and hold security for the payment of this Guarantee or the Indebtedness, and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such security; (c) apply such security and direct the order or manner of sale thereof; and (d) release or substitute any one or more of the endorsers or guarantors. 7. The Partnership Guarantors hereby waive and relinquish all rights and remedies accorded by applicable law to sureties or guarantors and agree not to assert or take advantage of any such rights or remedies, including without limitation: Civil Code Section 2856(c) Waiver (a) all rights and defenses that the Partnership Guarantors may have because the obligations of the Funding Corporation or any other guarantor of any or all of the Indebtedness are secured by real property. This means, among other things: (1) Trustee may collect from the Partnership Guarantors without first foreclosing on any real or personal property collateral pledged by the Funding Corporation or any other guarantor; (2) If Trustee forecloses on any real property collateral pledged by the Funding Corporation or any other guarantor: (A) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) Trustee may collect from the Partnership Guarantors even if Trustee, by foreclosing on the real property collateral, has destroyed any right the Partnership Guarantors may have to collect from the Funding Corporation or any other guarantor. This is an unconditional and irrevocable waiver of any rights and defenses the Partnership Guarantors may have because the Indebtedness is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure. Civil Code Section 2856(d) Waiver (b) all rights and defenses arising out of an election of remedies by Trustee, even though that election of remedies such as a nonjudicial foreclosure with respect to security for a guaranteed obligation has destroyed the Partnership Guarantors' right of subrogation and reimbursement against the principal by the operation of Section 580d of the Code of Civil Procedure or otherwise; Other Waivers (c) The Partnership Guarantors hereby waive, to the extent permitted by applicable law: (i) promptness, diligence, notice of acceptance and any other notice with respect to any of the Indebtedness or any other obligations under the Transaction Documents or this Guarantee; (ii) any requirement that the Trustee or any other Person protect, secure or insure any lien or any collateral or other property subject thereto or exhaust any right or take any action against either the Funding Corporation or any other Person or any collateral; (iii) any defense arising by reason of any claim or defense based upon an election of remedies by the Trustee which in any manner impairs, reduces, releases or otherwise adversely affects its subrogation, contribution or reimbursement rights or other rights to proceed against either the Funding Corporation or any other Person or any collateral; (iv) any duty on the part of the Trustee to disclose to the Partnership Guarantors any matter, fact or thing relating to the business, operation or condition of either the Funding Corporation or any other party to any of the Transaction Documents and the Funding Corporation's assets now known or hereafter known by the Trustee; and (v) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guarantee and of the existence, creation, or incurrence of new or additional Indebtedness. 8. The Partnership Guarantors hereby irrevocably waive any claim or other rights which they may now or hereafter acquire against either the Funding Corporation or any other guarantor of any or all of the Indebtedness, whether due or to become due, voluntary or involuntary, absolute or contingent, liquidated or unliquidated, determined or undetermined, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, or indemnification; or any right to participate in any claim or remedy of the Trustee against either the Funding Corporation or any such guarantor or any collateral which the Trustee now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including without limitation, the right to take or receive from the Funding Corporation, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights; and the rights and defenses available to Partnership Guarantors by reason of California Civil Code Sections 2787 to 2855, inclusive; and any and all benefits which might otherwise be available to the Partnership Guarantors under California Civil Code Sections 2809, 2810, 2819, 2839, 2845 through 2847, 2849, 2850, 2899 and 3433. If any amount shall be paid to the Partnership Guarantors in violation of the preceding sentence and the Indebtedness shall not have been paid in full, such amount shall be deemed to have been paid to the Partnership Guarantors for the benefit of, and held in trust for the benefit of, the Trustee and shall forthwith be paid to the Trustee to be credited and applied to the Indebtedness, whether matured or unmatured, in accordance with the terms of the Indenture. The Partnership Guarantors acknowledge that they have received and will receive direct and indirect benefits from the sales of the Securities already completed and the sales of Securities currently contemplated by the Indenture and that the waiver set forth in this Section 8 is knowingly made in contemplation of such benefits. 9. The Partnership Guarantors agree that, to the extent that either the Funding Corporation or any of the Partnership Guarantors makes a payment or payments to the Trustee, or the Trustee receives any proceeds of collateral, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or otherwise required to be repaid to either the Funding Corporation, its estate, trustee, receiver or any other party, including, without limitation, under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such payment or repayment, the obligation or part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred. The Partnership Guarantors shall defend and indemnify the Trustee from and against any claim or loss under this Section 9 (including reasonable attorneys' fees and expenses) in the defense of any such action or suit. 10. The Partnership Guarantors acknowledge and agree that they shall have the sole responsibility for obtaining from the Funding Corporation such information concerning the Funding Corporation's financial conditions or business operations as the Partnership Guarantors may require, and that the Trustee has no duty at any time to disclose to the Partnership Guarantors any information relating to the business operations or financial condition of the Funding Corporation. 11. To the extent that any of the waivers set forth in Sections 7 and 8 is or is deemed to be ineffective or inapplicable, any obligations of the Funding Corporation to the Partnership Guarantors, now or hereafter existing, are hereby subordinated to the Indebtedness. If the Trustee so requests, after the occurrence of an Event of Default under the Indenture, such obligations of the Funding Corporation to the Partnership Guarantors shall be enforced and performance received by the Partnership Guarantors as trustee for the Trustee and the proceeds thereof shall be paid over to the Trustee on account of the Indebtedness, but without reducing or affecting in any manner the maximum liability of the Partnership Guarantors under the other provisions of this Guarantee. 12. The Trustee may, without notice to the Partnership Guarantors and without affecting the Partnership Guarantors' obligations hereunder, assign this Guarantee, in whole or in part in accordance with the provisions of the Indenture. The Partnership Guarantors agree that the Trustee may, subject to the provisions of the Indenture, disclose to any prospective purchaser and any purchaser of all or part of the Indebtedness any and all information in the Trustee's possession concerning the Partnership Guarantors, this Guarantee and any security for this Guarantee. 13. The Partnership Guarantors agree to pay all reasonable attorneys' fees and all other fees and expenses which may be incurred by the Trustee in the enforcement of this Guarantee. 14. The Trustee agrees that no directors, officers, shareholders (other than CEOC, VPC, Conejo, Niguel, San Felipe and BNG) or employees of any Partnership Guarantor shall in any way be liable for the payment of the Securities, the Project Notes or any sums now or hereafter owing under the terms of, or for the performance of any obligation contained in, this Guarantee. 15. This Guarantee shall be governed by and construed according to the laws of the State of California. 16. This Guarantee embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. 17. This Guarantee may be executed in any number of counterparts, all of which together shall constitute one agreement. 18. The Partnership Guarantors shall continue to be bound by and perform all of their obligations under the terms and conditions set forth in the Partnership Credit Agreement for the benefit of the Funding Corporation and its legal successors and assigns, the terms of which are incorporated herein by reference as if set forth in full herein, from and after the date that the Partnership Project Note is repaid and until the payment in full of all obligations under the Salton Sea Project Note and the Royalty Project Note. The Partnership Guarantors' failure to perform such terms and conditions shall, from and after the date that the Partnership Project Note has been repaid, be an Event of Default hereunder. 19. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Partnership Credit Agreement, the provisions of which are hereby incorporated by reference. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] The Partnership Guarantors have executed this Guarantee as of the date and year first written above. VULCAN POWER COMPANY, a Nevada corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALIFORNIA ENERGY OPERATING CORPORATION, a Delaware corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CONEJO ENERGY COMPANY, a California corporation By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President NIGUEL ENERGY COMPANY, a California corporation By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SAN FELIPE ENERGY COMPANY, a California corporation By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President BN GEOTHERMAL INC., a Delaware corporation By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President DEL RANCH, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President ELMORE, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President LEATHERS, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: Vulcan Power Company, a Nevada corporation, its partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY MINERALS LLC, a Delaware limited liability company By: Salton Sea Minerals Corp., a Delaware corporation, its manager By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CE TURBO LLC, a Delaware limited liability company By: Magma Power Company, a Nevada corporation, its manager By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.6(C) 4 EXHIBIT 4.6(c) 1 SECOND AMENDMENT TO COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT SECOND AMENDMENT, dated as of October __, 1998 (this "Amendment"), to the COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT, dated as of July 21, 1995 (as amended by the First Amendment to Collateral Agency and Intercreditor Agreement, dated as of June 20, 1996, the "Intercreditor Agreement"), among SALTON SEA FUNDING CORPORATION, a Delaware corporation (together with its successors and assigns, the "Funding Corporation"), the SALTON SEA GUARANTORS (as defined in the Indenture re ferred to below), the PARTNERSHIP GUARANTORS (as defined in the Indenture referred to below), the ROYALTY GUARAN TOR (as defined in the Indenture referred to below), the DEBT SERVICE RESERVE LOC PROVIDER (as defined in the Intercreditor Agreement), the WORKING CAPITAL AGENT (as defined in the Intercreditor Agreement), the PERMITTED COUNTERPARTY under any Interest Rate Protection Agreement (each as defined in the Indenture referred to below), the TRUSTEE (as defined in the Intercreditor Agreement), the DEPOSITARY AGENT (as defined in the Intercreditor Agree ment) and the COLLATERAL AGENT (as defined in the Intercreditor Agreement). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement. WHEREAS, the Funding Corporation, certain of the Salton Sea Guarantors, certain of the Partnership Guarantors, the Royalty Guarantor, the Debt Service Reserve LOC Provider, the Working Capital Agent, the Trustee, the Depositary Agent and the Collateral Agent have entered into the Intercreditor Agreement; WHEREAS, the Funding Corporation has issued Securities under the Trust Indenture, dated as of July 21, 1995 (as supplemented and amended by the First Sup plemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996 and the Third Supplemental Indenture dated as of July 29, 1996), between the Funding Corporation, as principal and as agent for the Guarantors, and the Trustee (the "Trust Indenture"); WHEREAS, the Funding Corporation has determined to issue $285,000,000 principal amount of [__]% Senior Secured Series F Bonds Due 2018 (the "Series F Securities") pursuant to the Fourth Supplemental Inden ture, dated as of October __, 1998 (the "Fourth Supple mental Indenture"), between the Funding Corporation, as principal and as agent for the Guarantors, and the Trust ee (the Trust Indenture, as so supplemented and as otherwise amended, modified or supplemented from time to time, the "Indenture"); WHEREAS, in connection with the issuance of the Series F Securities, additional parties are becoming Partnership Guarantors under the Indenture and related documents, and additional parties are becoming obligors under the Partnership Credit Agreement; WHEREAS, in connection with the issuance of the Series F Securities, an additional party is becoming a Salton Sea Guarantor under the Indenture and related documents, and an additional party is becoming an obligor under the Salton Sea Credit Agreement; and WHEREAS, the terms of the Intercreditor Agree ment must be amended to reflect the additional Partner ship Guarantors and Salton Sea Guarantor and additional obligors under the Partnership Credit Agreement and Salton Sea Credit Agreement and to effect other changes in connection with the issuance by the Funding Corporation of the Series F Securities. NOW, THEREFORE, in consideration of the premis es and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows. 1. Amendment of the Intercreditor Agreement. As of the date hereof, the Intercreditor Agreement shall be amended as follows: (a) Section 9(a) is hereby amended by deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association," in the first sentence thereof. (b) Section 9(b) is hereby amended by deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association," in the first sentence thereof. (c) Section 18 is hereby amended by: (i) deleting the name, address and contact information for the Debt Service Reserve LOC Provider and replacing it with the following name, address and contact information: "Credit Suisse First Boston Eleven Madison Avenue New York, NY 10010 Attention: [________] Telecopy: 212-325-[____]"; (ii) deleting the name, address and contact information for the Working Capital Agent and replacing it with the following name, address and contact information: "Credit Suisse First Boston Eleven Madison Avenue New York, NY 10010 Attention: [________] Telecopy: 212-325-[____]"; (iii) deleting the name, notice address and contact information for the Trustee and replacing it with the following name, notice address and contact information: "Chase Manhattan Bank and Trust Company, National Association 101 California Street, #2725 San Francisco, CA 94111 Attention: Corporate Trust Administration Telecopy: 415-693-8850"; (iv) adding the following name above the notice address for the Salton Sea Guarantors: "Salton Sea Power L.L.C."; (v) adding the following names above the notice address for Partnership Guarantors: "CalEnergy Minerals LLC CE Turbo LLC"; (vi) deleting the name "California Energy Operating Company" above the notice address for the Partnership Guarantors and replacing it with the name "CalEnergy Operating Corporation"; (vii) deleting the name, notice address and contact information for the Depositary Agent and replacing it with the following name, notice address and contact information: "Chase Manhattan Bank and Trust Company, National Association 101 California Street, #2725 San Francisco, CA 94111 Attention: Corporate Trust Administration Telecopy: 415-693-8850"; and (viii) deleting the name, notice address and contact information for the Collateral Agent and replacing it with the following name, notice address and contact information: "Chase Manhattan Bank and Trust Company, National Association 101 California Street, #2725 San Francisco, CA 94111 Attention: Corporate Trust Administration Telecopy: 415-693-8850". (d) Schedule 8(a) to the Intercreditor Agreement is hereby amended (i) by adding the phrase "and as of October __, 1998" after the phrase "as of June 20, 1996" in the first sentence thereof, (ii) by deleting the words "and by" after the phrase "as of October 18, 1995," in the second sentence thereof, (iii) by adding the word "Second" before the phrase "Supplemental Indenture dated as of June 20, 1996" in the second sentence thereof, (iv) by adding the phrase ", the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of October __, 1998" after the phrase "as of June 20, 1996" in the second sentence thereof and (v) by deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association" in the second sentence thereof. (e) Schedule 9a to the Intercreditor Agreement is hereby amended by adding the phrase "and as of October __, 1998" after the phrase "as of June 20, 1996" in the first paragraph thereof. (f) Schedule 14a to the Intercreditor Agreement is hereby amended by adding the phrase "and as of October __, 1998" after the phrase "as of June 20, 1996" in the first paragraph thereof. (g) The Certificate of Salton Sea Funding Corporation, appearing directly after Schedule 14a to the Intercreditor Agreement, is hereby amended by (i) by deleting the words "and by" after the phrase "as of October 18, 1995," in the first paragraph thereof, (ii) by adding the word "Second" before the phrase "Supplemental Indenture dated as of June 20, 1996" in the first paragraph thereof, (iii) by adding the phrase ", the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of October __, 1998" after the phrase "as of June 20, 1996" in the third paragraph thereof and (iv) by deleting the name "Chemical Trust Company of California" and replacing it with the name "Chase Manhattan Bank and Trust Company, National Association" in the first paragraph thereof. 2. Additional Guarantors. In accordance with the terms of the Fourth Supplemental Indenture, from and after the date hereof (a) Salton Sea Power L.L.C. ("Power LLC") shall be a "Salton Sea Guarantor" under the Intercreditor Agreement, as amended hereby (as so amended, the "Amended Intercreditor Agreement") and (b) each of CalEnergy Minerals LLC ("Minerals LLC") and CE Turbo LLC ("Turbo LLC" and, together with Power LLC and Minerals LLC, the "New Guarantors") shall be "Partnership Guarantors" under the Amended Intercreditor Agreement. Each New Guarantor hereby acknowledges and agrees to the terms of the Amended Intercreditor Agreement and consents to the exercise of remedies by the Collateral Agent con tained therein. 3. Intercreditor Agreement. Except as specif ically amended hereby, the Intercreditor Agreement shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. All references to "this Intercreditor Agreement" in the Intercreditor Agreement shall be deemed to refer to the Amended Intercreditor Agreement. 4. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRIN CIPLES THEREOF RELATING TO CONFLICTS OF LAW (EXCEPT SEC TION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 5. Counterparts. This Amendment may be exe cuted in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an origi nal, but all such counterparts together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed by their duly authorized officers, all as of the date first written above. SALTON SEA FUNDING CORPORATION By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER GENERATION L.P. By: SALTON SEA POWER COMPANY, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA BRINE PROCESSING L.P. By: SALTON SEA POWER COMPANY, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President FISH LAKE POWER COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER L.L.C. By: CE SALTON SEA INC., as its manager By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN POWER COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY OPERATING CORPORATION By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President BN GEOTHERMAL INC. By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY By: VULCAN POWER COMPANY, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SAN FELIPE ENERGY COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President LEATHERS, L.P. By: CALENERGY OPERATING CORPORATION, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CONEJO ENERGY COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President DEL RANCH, L.P. By: CALENERGY OPERATING CORPORATION, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President NIGUEL ENERGY COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President ELMORE, L.P. By: CALENERGY OPERATING CORPORATION, as its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY MINERALS LLC By: SALTON SEA MINERALS CORP., as its manager By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CE TURBO LLC By: MAGMA POWER COMPANY, as its manager By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA ROYALTY COMPANY By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CREDIT SUISSE FIRST BOSTON, as the Debt Service Reserve LOC Provider By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CREDIT SUISSE FIRST BOSTON, as the Working Capital Agent By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as the Trustee By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as the Depositary Agent By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as the Collateral Agent By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.8(C) 5 EXHIBIT 4.8(c) $285,000,000 SALTON SEA FUNDING CORPORATION 7.475% Senior Secured Series F Bonds Due November 30, 2018 PURCHASE AGREEMENT October 7, 1998 Credit Suisse First Boston Corporation Goldman, Sachs & Co. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010-3629 Dear Sirs: 1. Introductory. Salton Sea Funding Corporation, a Delaware corporation (the ?Funding Corporation"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule I hereto (the "Purchasers"), U.S.$285,000,000 principal amount of its 7.475% Senior Secured Series F Bonds Due November 30, 2018 (the "Securities"), to be issued under a Trust Indenture dated as of July 21, 1995, as supplemented by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture to be dated as of the Closing Date (as hereinafter defined) (as so supplement ed, the ?Indenture?), each by and between the Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, as trustee (the "Trustee"), on a private placement basis pursuant to an exemption under Section 4(2) of the United States Securities Act of 1933, as amended (the "Securities Act"). Payments owed under the Securities will be guaranteed by Salton Sea Brine Processing L.P., a California limited partnership ("SSBP"), Salton Sea Power Generation L.P., a California limited partnership ("SSPG"), Fish Lake Power Company, a Delaware corporation ("Fish Lake"), Salton Sea Power L.L.C., a Delaware limited liability company ("Power LLC" and, collectively with SSBP, SSPG and Fish Lake, the "Salton Sea Guarantors"), Vulcan Power Company, a Delaware corporation ("VPC"), CalEnergy Operating Corporation, a Delaware corporation ("CEOC"), BN Geothermal, Inc., a Delaware corporation ("BN/Geothermal"), San Felipe Energy Company, a California corporation ("San Felipe"), Conejo Energy Company, a California corporation ("Conejo"), Niguel Energy Company, a California corporation ("Niguel"), Vulcan/BN Geothermal Power Company, a Nevada general partnership ("Vulcan"), Leathers, L.P., a California limited partnership ("Leathers"), Elmore, L.P., a California limited partnership ("Elmore"), Del Ranch, L.P., a California limited partnership ("Del Ranch"), CalEnergy Minerals LLC, a Delaware limited liability company ("Minerals LLC"), CE Turbo LLC, a Delaware limited liability company ("Turbo LLC" and, collectively with VPC, CEOC, BN/Geothermal, San Felipe, Conejo, Niguel, Vulcan, Leathers, Elmore, Del Ranch and Minerals LLC, the "Partnership Guarantors") and Salton Sea Royalty Company, a Delaware corporation ("SSRC" or the "Royalty Guarantor" and, collec tively with the Salton Sea Guarantors and the Partnership Guarantors, the "Guarantors"). Capitalized terms used herein without being defined herein shall have the meanings ascribed to such terms in the Indenture (as modified by the form of Fourth Supplemental Indenture attached as Annex A hereto). Each of the Funding Corporation and the Guarantors hereby agrees with the Purchaser as follows: 2. Representations and Warranties of the Funding Corporation and the Guarantors. Each of the Funding Corporation and the Guarantors jointly and severally represents and warrants to, and agrees with, the Purchasers that: (a) The Funding Corporation and the Guarantors have prepared a preliminary offering circular dated September 28, 1998 (as it may be amended or supplemented, and together with the letter dated September 28, 1998 included therewith, the "Preliminary Offering Circular") and a final offering circular dated October 7, 1998 (as it may be amended or supplemented, the "Offering Circular") relat ing to the Securities. Copies of the Preliminary Offering Circular and the Offering Circular have been delivered by the Funding Corporation and the Guarantors to the Purchasers. The Preliminary Offering Circular was on the date thereof accurate in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Offering Circular is as of its date (and any amendment or supplement thereto will be as of its date) accurate in all material respects and does not (and will not) contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Funding Corporation and the Guarantors make no representation or warranty as to information contained in or omitted from the Preliminary Offering Circular or the Offering Circular in reliance upon and in conformity with written information furnished to the Funding Corporation by any Purchaser through Credit Suisse First Boston Corporation ("CSFBC") specifically for inclusion therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof. (b) The Funding Corporation has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, and is duly qualified to do business as a foreign corporation, and is a corporation in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). Each of SSBP, SSPG, Leathers, Elmore and Del Ranch is a limited partnership duly formed and validly existing in good standing under the laws of the State of California, and is duly qualified to do business as a foreign limited partnership, and is a foreign limited partnership in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). Each of CEOC, Fish Lake, SSRC and BN/Geothermal has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, and is duly qualified to do business as a foreign corporation, and is a corporation in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). VPC has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Nevada, and is duly qualified to do business as a foreign corporation, and is a corporation in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). Each of San Felipe, Conejo and Niguel has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of California, and is duly qualified to do business as a foreign corporation, and is a corporation in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). Vulcan is a general partnership duly formed and validly existing in good standing under the laws of the State of Nevada, and is duly qualified to do business as a foreign general partnership, and is a foreign general partnership in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). Each of Power LLC, Minerals LLC and Turbo LLC is a limited liability company duly formed and validly existing in good standing under the laws of the State of Delaware, and is duly qualified to do business as a foreign limited liability company, and is a foreign limited liability company in good standing, in each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification (except where the failure to so qualify would not have a material adverse effect on the Funding Corporation and the Guarantors, taken as a whole). The Funding Corporation and each Guarantor have all necessary power and authority to own or lease their respective properties and to conduct the respective businesses in which they are engaged as described in the Offering Circular. All of the outstanding shares of capital stock of the Funding Corporation have been duly authorized and validly issued and are fully paid and nonassessable and are owned by Magma Power Company ("Magma"), free and clear of any claim, lien, encumbrance or agreement, except as contemplated by the Financing Documents; all of the partnership interests of each of SSBP and SSPG represent valid partnership interests in such partnership; all of the general partnership inter ests in SSBP and SSPG are owned by Salton Sea Power Company ("SSPC"), free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the limited partnership interests in SSBP are owned by Magma, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the limited partnership interests in SSPG are owned by SSBP, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; 99% of the outstanding shares of capital stock of SSPC are owned by Magma and 1% of such shares are owned by the Funding Corporation, in each case free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the outstanding shares of capital stock of each of VPC, CEOC, Fish Lake and SSRC have been duly authorized and validly issued and are fully paid and nonassessable; 99% of the outstanding shares of capital stock of each of VPC, CEOC, Fish Lake and SSRC are owned by Magma and 1% of the outstanding shares of capital stock of each of VPC, CEOC, Fish Lake and SSRC are owned by the Funding Corporation, in each case, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the outstanding shares of capital stock of BN/Geothermal, San Felipe, Conejo and Niguel have been duly authorized and validly issued and are fully paid and nonassessable; all of the outstanding shares of capital stock of BN/Geothermal are owned by VPC, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the outstanding shares of capital stock of San Felipe, Conejo and Niguel are owned by CEOC, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the partnership interests in Vulcan represent valid general partnership interests in Vulcan; 50% of such partnership interests in Vulcan are owned by BN/Geothermal and 50% of such partnership interests are owned by VPC, in each case, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the partnership interests in each of Leathers, Del Ranch and Elmore represent valid partnership interests in such partnership; a 40% general partnership interest and a 10% limited partnership interest in Leathers is owned by San Felipe, a 40% general partnership interest in Leathers is owned by CEOC and a 10% limited partnership interest in Leathers is owned by Magma, in each case, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; a 40% general partnership interest and a 10% limited partnership interest in Del Ranch is owned by Conejo, a 40% general partnership interest in Del Ranch is owned by CEOC and a 10% limited partnership interest in Del Ranch is owned by Magma, in each case, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; a 40% general partnership interest and a 10% general partnership interest in Elmore is owned by Niguel, a 40% general partnership interest in Elmore is owned by CEOC and a 10% limited partnership interest in Elmore is owned by Magma, in each case, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the membership interests in each of Power LLC, Minerals LLC and Turbo LLC represent valid membership interests in such limited liability company; 50% of the membership interests in Power LLC, Minerals LLC and Turbo LLC are owned by Magma, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; 50% of the membership interests in Power LLC and Turbo LLC are owned by CE Salton Sea Inc. ("CESS"), free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; 50% of the membership interests in Minerals LLC are owned by Salton Sea Minerals Corp. ("SSMC"), free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents; all of the outstanding shares of capital stock of CESS and SSMC are owned by Magma, free and clear of any claim, lien, encumbrance or agreement except as contemplated by the Financing Documents. (c) Each of the Funding Corporation and the Guarantors has all power and authority necessary to execute and deliver this Agreement and each other Transaction Document to which it is a party and perform its obligations hereunder and thereunder; each of this Agreement and the other Transaction Documents to which the Funding Corporation or the Guarantors is a party has been or on the Closing Date (as hereinafter defined) will have been duly authorized, executed and delivered by such party or parties thereto and constitutes the legal, valid and binding obligation of such party or parties, subject to the qualification that the enforceability of such party's or parties' obligations hereunder or thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity and except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy; the execution, delivery and performance by each of the Funding Corporation and the Guarantors of this Agreement, the Fourth Supplemental Indenture dated as of the Closing Date (the "Supplemental Indenture") by and between the Funding Corporation and the Trustee, the Securities and the other Transaction Documents to which it is a party and its compliance with the provisions hereof and thereof will not breach or (except as contemplated by the Financing Documents) result in the creation or imposition of any lien, charge or encumbrance upon any asset which is material to the Funding Corporation and the Guarantors, taken as a whole (a "Material Asset"), pursuant to the terms of, or constitute a breach of, or default under, the partnership agreement or certificate of limited or general partnership of SSBP, SSPG, Vulcan, Leathers, Elmore or Del Ranch, the corporate charter or by-laws of the Funding Corporation, Fish Lake, VPC, CEOC, BN/Geothermal, San Felipe, Conejo, Niguel or SSRC, the limited liability company agreement or certificate of limited liability company of Power LLC, Minerals LLC or Turbo LLC or any agreement, indenture (including, without limitation, the Indenture) or other in strument to which the Funding Corporation or the Guarantors is a party or by which the Funding Corporation or the Guaran tors is bound (in each case which is material to the Funding Corporation and the Guarantors, taken as a whole) or to which any Material Asset is subject, or any law, order, rule, regulation, judgment or decree of any court or governmental agency having jurisdiction over the Funding Corporation or the Guarantors or any Material Asset of the Funding Corporation or the Guarantors; and, except as completed on or prior to the Closing Date (as hereinafter defined) or as required by applicable state securities laws, no consent, authorization or order of, or filing or registration by the Funding Corporation or any Guarantor with, any court, governmental agency or third party is required in connection with the execution, delivery and performance of each of this Agreement and the other Transaction Documents to which the Funding Corporation or any Guarantor is a party. (d) The execution, delivery and performance by each of the Funding Corporation and the Guarantors of this Agreement and the other Transaction Documents to which it is a party and its compliance with the provisions hereof and thereof will not conflict with, result in the creation or imposition (except as contemplated by the Financing Documents) of any lien, charge or encumbrance upon any asset which is material to the business or financial condition of CalEnergy Company, Inc. ("CalEnergy") or Magma pursuant to the terms of, or constitute a breach of, or default under, the corporate charter or by-laws of CalEnergy or Magma or any agreement, indenture or other instrument material to the business or financial condition of CalEnergy or Magma and to which CalEnergy or Magma is a party or by which CalEnergy or Magma is bound or to which any asset which is material to the business or financial condition of CalEnergy or Magma is subject, or any law, order, rule, regulation, judgment or decree of any court or governmental agency having jurisdiction over CalEnergy or Magma. (e) None of the Funding Corporation, Fish Lake, VPC, CEOC, BN/Geothermal, San Felipe, Conejo, Niguel or SSRC is in violation of its respective corporate charter or by- laws. None of Leathers, Elmore, Del Ranch, SSBP or SSPG is in violation of its respective certificate of limited partnership or partnership agreement. Vulcan is not in violation of its certificate of general partnership or partnership agreement. None of Power LLC, Minerals LLC or Turbo LLC is in violation of its respective certificate of limited liability company or limited liability company agreement. Neither the Funding Corporation nor any Guarantor (i) is in default, and no event has occurred which, with notice or lapse of time or both, would con stitute such a default, in the due performance and obser vance of any material term, representation, covenant or condition contained in any lease, license, indenture, mortgage, deed of trust, note, bank loan or other evidence of indebtedness or any other agreement, understanding or instrument to which the Funding Corporation or any Guarantor is a party or by which the Funding Corporation or any Guarantor or any property of the Funding Corporation or any Guarantor may be bound or affected, which default would have a material adverse effect on the financial condition, business or results of operations of the Funding Corporation and the Guarantors, taken as a whole, or (ii) is in violation of any law, ordinance, governmental rule or regulation or court decree to which it may be subject, which violation would have a material adverse effect on the financial condition, business or results of operations of any Guarantor, which would in turn be reasonably likely to have a material adverse effect on the financial condition, properties, business or results of operations of the Guarantors, taken as a whole. (f) Except as described in or contemplated by the Offering Circular, each Guarantor represents, after due inquiry, that it (i) has properly obtained each license, permit, certificate, franchise or other governmental authorization necessary to the ownership of its property or to the conduct of its business as described in the Offering Circular, and (ii) is in compliance with all terms and conditions of such license, permit, certificate, franchise or other governmental authorization, except (x) in either case where the failure to do so would not have a material adverse effect on the financial condition, business or results of operations of the Funding Corporation and the Guarantors, taken as a whole, (y) permits, consents and approvals that may be required for future drilling or operating activities which are ordinarily deemed to be ministerial in nature and which are anticipated to be obtained in the ordinary course and (z) permits, consents and approvals for developmental or construction activities which have not yet been obtained but which have been or will be applied for in the course of development or construction and which are anticipated to be obtained in the ordinary course. (g) Except as described in or contemplated by the Offering Circular, each of the Funding Corporation and the Guarantors holds, as applicable, good and valid title to, or valid and enforceable leasehold or contractual interests in, all items of real and personal property which are material to the business of the Funding Corporation and the Guarantors, taken as a whole, free and clear of all liens, encumbrances and claims which would materially interfere with the conduct of the business of the Funding Corporation and the Guarantors, taken as a whole, as described in the Offering Circular. Each of Vulcan, Leathers, Elmore, Del Ranch, SSBP, SSPG, Fish Lake, Power LLC, Minerals LLC and Turbo LLC has insurance coverage in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and which is consistent with what is customarily carried by similar companies engaged in similar businesses. Each of the forego ing insurance policies is valid and in full force and effect. The Funding Corporation and the Guarantors are presently conducting their respective businesses as described in the Offering Circular and in substantial compliance with all applicable rules, regulations and laws. (h) Deloitte & Touche LLP, whose report appears in the Offering Circular, is and was, during the period cov ered by such report, independent with respect to the Funding Corporation and the Guarantors within the meaning of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder (the "Exchange Act"). (i) The Supplemental Indenture has been validly authorized and, when executed by the proper officers of the Funding Corporation (assuming the due authorization, execution and delivery thereof by the Trustee) and delivered by the Funding Corporation, will constitute the legal, valid and binding obligation of the Funding Corporation, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity; the Securities have been validly authorized and, upon payment therefor on the Closing Date (as hereinafter defined) as provided herein, will be validly issued and outstanding, and will constitute obligations of the Funding Corporation entitled to the benefits of the Indenture, except as the enforceability thereof may be limited by bankruptcy, insol vency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and by general principles of equity; the summary descriptions contained in the Offering Circular of the Securities, the Indenture and the other Financing Docu ments conform in all material respect to these documents. (j) This Agreement has been duly authorized, exe cuted and delivered by the Funding Corporation and the Guarantors. (k) Each Financing Document to which the Funding Corporation is a party (other than this Agreement, the Supplemental Indenture and the Securities) has been duly authorized, executed and delivered by the Funding Corpo ration and, assuming due authorization, execution and delivery by the other Persons party thereto (other than such Persons which are Guarantors or Affiliates thereof), consti tutes the legal, valid and binding agreement of the Funding Corporation, enforceable in accordance with its terms, except as enforceability thereof may be subject to bank ruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity. (l) Each Financing Document to which any of the Guarantors is a party (other than this Agreement) has been duly authorized, executed and delivered by the Guarantors party thereto and, assuming due authorization, execution and delivery by the other Persons party thereto (other than such Persons which are the Funding Corporation, other Guarantors or Affiliates thereof), constitutes the legal, valid and binding agreement of the Guarantors party thereto, enforce able in accordance with its terms, except as enforceability thereof may be subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity. (m) Each Project Document to which any of the Guarantors is a party has been duly authorized, executed and delivered by the Guarantors party thereto and, assuming due authorization, execution and delivery by the other parties thereto which are not Guarantors or Affiliates thereof, constitutes a legal, valid and binding agreement of such Guarantor, enforceable against such Guarantor in accordance with its respective terms, except as enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally and to general principles of equity. (n) The execution and delivery of each of the Security Documents to which the Funding Corporation or any of the Guarantors is a party or will be a party on the Closing Date (as hereinafter defined) is or will be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties and, in certain circumstances, the Funding Corporation, as security for the payment and performance of the obligations secured thereby, a valid and enforceable security interest in the Collateral covered or purported to be covered thereby. Such security interests granted by the Funding Corporation, SSBP, SSPG, Fish Lake, CEOC, VPC, BN/Geothermal, San Felipe, Conejo, Niguel, Vulcan, Leathers, Elmore, Del Ranch and SSRC have the priority purported to be created by such Security Documents. All filings and recordings necessary to protect, preserve and perfect such security interests have been made and are in full force and effect. Upon recordation of each Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of the Closing Date, entered into by Power LLC, Minerals LLC and Turbo LLC (collectively, the "New Deeds of Trust") and filing of the UCC-1 financing statements naming Power LLC, Minerals LLC and Turbo LLC as debtors and the Collateral Agent as secured party (the "Fi nancing Statements"), such security interests granted by such Guarantors will have the priority purported to be created by such Security Documents. Each New Deed of Trust is, or on the Closing Date will be, in appropriate form for recording as a mortgage of real estate and for filing as a fixture filing financing statement to protect, preserve and perfect the liens and security interests created or to be created by such New Deed of Trust. The Financing Statements on the Closing Date will be in appropriate form for filing (including the description of the Collateral set forth therein) in each office and in each jurisdiction where re quired to create and perfect the lien and security interest described above. (o) Magma, the Funding Corporation, SSPC, CESS, SSMC and the Guarantors will own all of the Funding Corporation Collateral and the Collateral on the Closing Date (as hereinafter defined), free and clear of any Liens other than Permitted Liens. (p) Except as described in the Offering Circular, there is no litigation or proceeding pending before or by any court or governmental agency, authority or body, or any arbitrator or, to the knowledge of the Funding Corporation or any Guarantor, threatened, to which the Funding Corporation or any Guarantor is a party or of which any Material Asset of the Funding Corporation or any Guarantor is the subject, including, without limitation, any audit by the Internal Revenue Service of the federal income tax re turns of the Funding Corporation or any Guarantor, which, if an adverse decision were reached, would be likely to have a material adverse effect on (x) the financial condition, busi ness or results of operations of the Funding Corporation and the Guarantors, taken as a whole, or (y) the ability of any of the Funding Corporation or any Guarantor to perform in any material respect their respective obligations under the Transaction Documents to which any of them is a party. (q) The financial statements (including the related notes) included on pages F-1 through F-58 in the Offering Circular present fairly the financial condition, results of operations and changes in financial position of the entities purported to be shown thereby, at the dates and for the periods indicated, and, except as otherwise described in the Offering Circular, have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, and the capitalization of the Funding Corporation and the Guarantors, as set forth in the column labeled "Actual" under the caption "Capitalization" in the Offering Circular, is accurately described as of the date presented therein. (r) Except as disclosed in the Offering Circular, since the date of the latest audited financial statements included in the Offering Circular there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the financial condition, business or results of operations of the Funding Corporation and the Guarantors, taken as a whole. (s) The factual information provided by the Fund ing Corporation and the Guarantors to Fluor Daniel, Inc. (the "New Project Independent Engineer"), GeothermEx, Inc. (the "Geothermal Resource Consultant"), Henwood Energy Services (the "Independent Power Market Consultant") and Resource Strategies International (the "Independent Zinc Market Consultant") in the preparation of their reports set forth at Appendices B, C, D and E to the Offering Circular (which factual information is referenced in such reports) was provided in good faith; provided that the foregoing does not imply or express any representation or warranty by the Funding Corporation and the Guarantors as to the accuracy of the projections or conclusions contained in such reports and does not constitute any obligation to update such reports. (t) No labor problem or disturbance with the persons employed in connection with the Projects exists or, to the knowledge of the Funding Corporation or any Guarantor, is threatened which might reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of the Funding Corporation and the Guarantors, taken as a whole. (u) Neither the Funding Corporation nor any Guarantor nor any of their respective affiliates nor (assuming the accuracy of the representations of the Purchasers set forth herein) any person acting on their behalf has made offers or sales of securities under circumstances that would require the registration of the Securities under the Securities Act. (v) The Securities meet the eligibility requirements of Rule 144A(d)(3) under the Securities Act. (w) Neither the Funding Corporation nor any Guarantor is an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940, as amended (the "Investment Company Act"), nor is it a closed-end investment company required to be registered, but not registered, thereunder; and neither the Funding Corporation nor any Guarantor is and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Offering Circular, neither the Funding Corporation nor any Guarantor will be an "investment company" as defined in the Investment Company Act. (x) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system. (y) Assuming the accuracy of the representations of the Purchaser herein, the offer and sale of the Securities in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securi ties Act by reason of Section 4(2) thereof, Regulation D thereunder and Regulation S thereunder; and it is not necessary to qualify an indenture in respect of the Securi ties under the United States Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (z) Assuming the accuracy of the representations of the Purchaser herein, neither the Funding Corporation or any Guarantor nor any of their affiliates or any person acting on their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Securities or any security of the same class or series as the Securities (excluding the Exchange Securities) or (ii) has offered or will offer or sell the Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S ("Regulation S") under the Securities Act, by means of any directed sell ing efforts within the meaning of Rule 902(b) of Regulation S. Assuming the accuracy of the representations of the Purchaser herein, the Funding Corporation, the Guarantors and any person acting on their behalf have complied and will comply with the offering restrictions requirement of Regulation S. (aa) The proceeds to the Funding Corporation from the offering of the Securities will not be used to purchase or carry any security, except as contemplated in the Offering Circular. (bb) Each of the Salton Sea Projects and Partnership Projects (other than the Zinc Project) is a "Qualifying Small Power Production Facility," as such term is defined pursuant to the Public Utility Regulatory Poli cies Act of 1978, as amended. None of the Guarantors or the Funding Corporation, will, solely as a result of the participation by the parties separately or as a group in the transactions contemplated by the Financing Documents and the ownership, use or operation of the Projects, be subject to regulation by any Governmental Authority as a "public utility," an "electric utility," an "electric utility holding company," a "public utility holding company," a "holding company" or an "electrical corporation" or a subsidiary or affiliate of any of the foregoing under any Law (including, without limitation, rules and regulations of the California State Energy Resources Conservation and Devel opment Commission, the Public Utility Holding Company Act of 1935, the Federal Power Act of 1920 and the Public Utility Regulatory Policies Act of 1978, each as amended); provided that either Turbo LLC or Power LLC may elect to become an Exempt Wholesale Generator and thereby become a "public utility" subject to regulation by FERC and the FPA. (cc) None of the Funding Corporation or any of the Guarantors is a "party in interest" or a "disqualified person" (within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended) with respect to any "employee benefit plan" (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended). (dd) The proceeds from the sale of Securities will be loaned by the Funding Corporation to the Salton Sea Guarantors and the Partnership Guarantors and utilized by the Salton Sea Guarantors and the Partnership Guarantors as described under the section of the Offering Circular titled "Use of Proceeds." 3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Funding Corporation agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Funding Corporation, at a purchase price of 99.125% of the principal amount of the Securities, plus accrued interest from October 13, 1998 to the Closing Date (as hereinafter defined), the respective principal amounts of the Securities set forth opposite the names of the several Purchasers in Schedule I hereto. The Funding Corporation will deliver against payment of the purchase price the Securities in the form of one or more permanent global Securities in registered form without interest coupons (the "Global Securities"), which will be deposited with the Trustee, as custodian for The Depository Trust Company ("DTC"), and registered in the name of Cede & Co., as nominee for DTC. Interests in any perma nent Global Securities will be held only in book-entry form, except in the limited circumstances described in the Offering Circular. Payment for the Securities shall be made by the Purchasers in federal (same day) funds by official check or checks or wire transfer to an account in New York previously designated to CSFBC by the Funding Corporation drawn to the order of the Funding Corporation, at the office of Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York, 10022 at 10:00 A.M., (New York time), on October 13, 1998 or at such other date and time not later than seven full business days thereafter as CSFBC and the Funding Corporation determine, such time being herein referred to as the "Closing Date", against delivery to the Trustee as custodian for DTC of Global Securities representing all of the Securities. The Global Securities will be made available for checking at the above office of Skadden, Arps, Slate, Meagher & Flom LLP at least 24 hours prior to the Closing Date. Notwithstanding the foregoing, any Securities sold to Institutional Accredited Investors (as hereinafter defined) pursuant to Section 4(e) shall be issued in definitive physical certificates and shall bear the legend relating thereto set forth under "TRANSFER RESTRICTIONS" in the Offering Circular, but shall be paid for in the same manner as any Securities to be purchased by the Purchasers hereunder and to be offered and sold by them in reliance on Rule 144A under the Securities Act. 4. Representations by Purchasers; Resale by Purchaser. (a) Each Purchaser severally represents and warrants to the Funding Corporation that it is an ?accred ited investor? within the meaning of Regulation D under the Securities Act. (b) Each Purchaser severally acknowledges that the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has offered and sold the Securities, and will offer and sell the Securities, only in accordance with Rule 903, Rule 144A under the Securities Act (?Rule 144A?) or to a limited number of Institutional Accredited Investors in accordance with clause (e)(ii) of this Section 4. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Securities, and such Purchaser, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Securities, other than a sale pursuant to Rule 144A or a sale to an Institutional Accredited Investor in accordance with clause (e)(ii) of this Section 4, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Securities from it a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons as part of their distribution at any time, except in either case in accordance with Regulation S (or Rule 144A, if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S." Terms used in this subsection (b) have the meanings given to them by Regulation S. (c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Securities except for any such arrange ments entered into with the prior written consent of the Funding Corporation. (d) Each Purchaser severally agrees that it and each of its affiliates has not offered or sold the Securities and will not offer or sell the Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communica tion published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A. (e) Each Purchaser severally agrees that it will offer to sell the Securities only to, and will solicit offers to buy the Securities from, persons who in purchasing the Securities will be deemed to have represented and agreed that such person (i)(A) is a Qualified Institutional Buyer, (B) is aware that the sale to it is being made in reliance on Rule 144A and (C) is acquiring such Securities for its own account or for the account of a Qualified Institutional Buyer, (ii) is (A) an institutional "accredited investor" (as defined in Rule 501 (a)(1), (2), (3) or (7) under the Securities Act) and (B) concurrently with its purchase executing and delivering the purchaser's letter containing certain representations and agreements in substantially the form attached as Appendix F to the Offering Circular or (iii) is not a U.S. person and is purchasing such Securities in an offshore transaction pursuant to Regulation S. 5. Certain Agreements of the Funding Corporation and the Guarantors. The Funding Corporation and the Guarantors agree with the several Purchasers that: (a) The Funding Corporation and the Guarantors will advise CSFBC promptly of any proposal to amend or supplement the Offering Circular and will not effect such amendment or supplementation without the CSFBC's consent. If, at any time prior to the completion of the resale of the Securities by the Purchasers, any event occurs as a result of which the Offering Circular as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circum stances under which they were made, not misleading, the Funding Corporation and the Guarantors promptly will notify CSFBC of such event and promptly will prepare, at their own expense, an amendment or supplement which will correct such statement or omission. Neither CSFBC's consent to, nor the Purchasers' delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6. (b) The Funding Corporation and the Guarantors will furnish to CSFBC copies of the Preliminary Offering Circular, the Offering Circular and all amendments and supplements to such documents, in each case as soon as available and in such quantities as CSFBC requests, and the Funding Corporation will furnish to CSFBC on the date hereof three copies of the Offering Circular. At any time when the Funding Corporation is not subject to Section 13 or 15(d) of the Exchange Act, the Funding Corporation will promptly furnish or cause to be furnished to the Purchasers and, upon request of holders and prospective purchasers of the Securi ties, to such holders and purchasers, copies of the informa tion required to be delivered to holders and prospective purchasers of the Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Securities. The Funding Corporation and the Guarantors will pay the expenses of printing and distributing to the Purchasers and such holders and purchasers all such documents. (c) The Funding Corporation and the Guarantors will arrange for the qualification of the Securities for sale and the determination of their eligibility for invest ment under the laws of such jurisdictions in the United States and Canada as CSFBC designates and will continue such qualifications in effect so long as required for the resale of the Securities by the Purchasers, provided that the Funding Corporation and the Guarantors will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction. (d) During the period of five years hereafter, the Funding Corporation will furnish to the Purchasers, as soon as available after the end of each fiscal year, a copy of its annual audited financial statements and the annual audited financial statements of the Guarantors (on a combined basis). (e) During the period of two years after the Closing Date, the Funding Corporation will, upon request, furnish to the Purchasers and any holder or beneficial owner of Securities a copy of the restrictions on transfer applicable to the Securities. (f) During the period of two years after the Closing Date, the Funding Corporation and the Guarantors will not, and will not permit any of their affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been reacquired by any of them. (g) During the period of two years after the Closing Date, the Funding Corporation and the Guarantors will not be or become an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act, and none of the Funding Corporation nor any of the Guarantors is or will become a closed-end investment company required to be registered, but not regis tered, under the Investment Company Act. (h) The Funding Corporation and the Guarantors will pay all expenses incidental to the performance of their obligations under this Agreement, the Indenture and the other Financing Documents, including, without limitation (i) the fees and expenses of the Trustee and its professional advisers, and (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Securities, the preparation and printing of this Agreement, the Securities, the Indenture, the Preliminary Offering Circular, the Offering Circular and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Securities. The Funding Corporation and the Guarantors will also pay or reimburse the Purchasers (to the extent incurred by them) for any expenses actually and reasonably incurred by the Purchasers in connection with the purchase and sale of the Securities, including, without limitation, all out- of-pocket expenses incurred by the Purchasers (such as, but not limited to, travel, hotel, telephone and telecopy charges), all fees and disbursements of counsel to the Purchasers, expenses related to qualification of the Securi ties for sale under the laws of such jurisdictions in the United States and Canada as CSFBC designates and the printing of memoranda relating thereto, up to $1,000 ("blue sky fees"), fees charged by investment rating agencies for the rating of the Securities ("rating agency fees"), all travel expenses of the Purchasers' and the Funding Corporation's or the Guarantors' officers and employees and any other expenses of the Purchasers and the Funding Corporation or the Guarantors in connection with attending or hosting meetings with prospective purchasers of the Securities from the Purchasers and for expenses incurred in distributing Preliminary Offering Circulars and Offering Circulars (including any amendments and supplements thereto) to the Purchasers and prospective purchasers of the Securities from the Purchasers; provided that such fees and expenses (other than rating agency fees, blue sky fees and fees and disbursements of counsel to the Purchasers) are estimated to be approximately $175,000 and will be subject to audit and verification by the Funding Corporation and the Guarantors that such fees and expenses were reasonably incurred in connection with the issuance and offering of the Securities. (i) In connection with the offering of the Securities, until the earlier of (x) 180 days following the Closing Date and (y) the date on which CSFBC shall have notified the Funding Corporation of the completion of the resale of the Securities, neither the Funding Corporation, the Guarantors nor any of their affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Securities or attempt to induce any person to purchase any Securities; and neither the Funding Corporation, the Guarantors nor any of their affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Securities. (j) The Funding Corporation will not, until 30 days following the Closing Date, without the prior written consent of CSFBC, pursuant to Rule 144A, Regulation S or an offering registered under the Securities Act, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any debt securities issued or guaranteed by the Funding Corporation or any of the Guarantors (other than the Securities). 6. Conditions of the Obligations of the Purchaser. The obligations of the Purchasers to purchase and pay for the Securities will be subject to the accuracy of the repre sentations and warranties made by the Funding Corporation and the Guarantors herein, to the accuracy of the statements of officers of the Funding Corporation and the Guarantors made pursuant to the provisions hereof, to the performance by the Funding Corporation and the Guarantors of their obligations hereunder and to the following additional conditions precedent: (a) The Purchasers shall have received a letter, dated the date of this Agreement, of Deloitte & Touche LLP in form and substance reasonably satisfactory to CSFBC con cerning the financial information with respect to the Funding Corporation and the Guarantors set forth in the Offering Circular. (b) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in or affecting the financial condition, business or results of operations of the Funding Corporation or any of the Guarantors which, in the reasonable judgment of the Purchasers, materially impairs the investment quality of the Securities or is material and adverse and makes it impractical or inadvisable to proceed with the offering of the Securities; (ii) any downgrading in the rating of the Securities, the Series A Securities, the Series B Securities, the Series C Securities, the Series D Securities or the Series E Securities by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or any public announcement that such organization has under surveillance or review its rating of the Securities, the Series A Securities, the Series B Securities, the Series C Securities, the Series D Securities or the Series E Securities (other than an announcement with positive implica tions of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange or any suspension of trading of any securities of CalEnergy on any exchange or in the over the counter market; (iv) any banking moratorium declared by U.S. federal or New York authorities; (v) any outbreak or escalation of hostilities in which the United States is involved, any declaration of war by the United States Congress or any other change in financial markets or substantial national calamity or emergency if, in the judgment of the Purchasers, the effect of any such outbreak, escalation, declaration, change, calamity or emergency makes it impractical or inadvisable to proceed with completion of the sale of and payment for the Securities; or (vi) any invalidation of Rule 144A or Regulation S by any court or any amendment or proposed amendment of any rule or regulation under the Securities Act or the Exchange Act by the Commission which in the Purchasers' judgment would materially impair the Purchasers' ability to purchase, hold or effect resales of the Securities as contemplated hereby or the ability of holders of the Securities to effect resales as currently contemplated by Rule 144A and Regulation S. (c) The representations and warranties of each of the Funding Corporation and the Guarantors contained herein and in each Transaction Document to which the Funding Corporation or any of the Guarantors is party shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date, each of the Funding Corporation and the Guarantors shall have complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder or thereunder at or prior to the Closing Date and, subsequent to the respective dates of the most recent financial statements in the Offering Circular, there shall have been no material adverse change in the financial position or results of operation of the Funding Corporation and the Guarantors, taken as a whole, as evidenced by a certificate, dated the Closing Date, of the President or any Vice-President and a principal financial or accounting officer of the Funding Corporation and the Guarantors. (d) CalEnergy shall have duly authorized, executed and delivered the Equity Commitment Agreement, in such form as shall be satisfactory to the Purchasers and their counsel, and the Equity Commitment Agreement shall constitute a valid and legally binding agreement of CalEnergy, enforceable in accordance with its terms, except as enforceability thereof may be subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general principles of equity. (e) On or prior to the Closing Date, the Funding Corporation and the Guarantors, as applicable, shall have entered into the Supplemental Indenture, the Amended and Restated Depositary Agreement, Amendment No. 2 to the Intercreditor Agreement, the Securities Account Control Agreement, the Securities, the Series F Registration Rights Agreement, the Second Amended and Restated Debt Service Reserve LOC Reimbursement Agreement, the Amended and Restated Salton Sea Credit Agreement, the Second Amended and Restated Partnership Credit Agreement, the Amended and Restated Salton Sea Secured Guarantee, the Second Amended and Restated Partnership Secured Limited Guarantee and such additional Financing Documents and amendments, modifications or supplements thereto as may be reasonably required by the Purchasers in connection with the issuance of Securities, all in such form as shall be reasonably satisfactory to the Purchasers and their counsel; and such Financing Documents and such amendments, modifications or supplements shall have been fully executed and delivered and shall remain in full force and effect on the Closing Date; and all conditions precedent under the Second Amended and Restated Debt Service Reserve LOC Reimbursement Agreement to the issuance of one or more Debt Service Reserve Letters of Credit in an aggregate face amount equal to the Debt Service Reserve Fund Required Balance (as defined in the Depositary Agreement) as of the Closing Date shall have been satisfied on the Closing Date and the Funding Corporation shall have delivered to the Purchasers evidence reasonably satisfactory to the Purchasers that the Debt Service Reserve Letter of Credit currently anticipated to be required to be delivered to the Depository Agent in order to fund the Debt Service Reserve Fund at the Debt Service Reserve Fund Required Balance (as defined in the Depositary Agreement) has been obtained and is in existence on the Closing Date or other arrangements with respect to such obligations acceptable to the Pur chasers shall have been made. (f) The Purchasers shall have received copies of all legal opinions rendered in connection with the transactions contemplated by the documents listed in paragraph (e) above and reliance letters in respect thereof. (g) On or prior to the Closing Date, the Funding Corporation or the Guarantors shall have delivered to the Purchasers evidence satisfactory to the Purchasers and their counsel that a title policy or policies in the aggregate amount of $100,000,000 insuring the New Deeds of Trust has been obtained, each of which title policies shall be satisfactory in form and substance to the Purchasers and their counsel. (h) On or prior to the Closing Date, each New Deed of Trust shall have been delivered to Commonwealth Land Title Company (the "Title Company") for due recordation as a mortgage of real estate, and any required filings with respect to personal property and fixtures subject to the liens of such New Deed of Trust shall have been delivered to the Title Company for filing, in each place in which such recording or filing is required to protect, preserve and perfect the liens of such New Deed of Trust as a valid and enforceable lien on the real estate and as a valid and enforceable security interest in the personal property and fixtures covered or purported to be covered by such New Deed of Trust, with the priority purported to be created thereby, in each case subject only to Permitted Liens, and except for such recordation or filing no further action shall be re quired to create, preserve or perfect such liens and secu rity interests. The Financing Statements and such other UCC- 1 financing statements shall have been delivered for filing, recordation and/or registration in each office and in each jurisdiction where required to create and perfect a valid and enforceable security interest in the Collateral and the Funding Corporation Collateral covered or purported to be covered by the Security Documents, with the priority purported to be created thereby. All taxes and recording and filing fees required to be paid with respect to the execution, recording or filing of the New Deeds of Trust and the Financing Statements and such other UCC-1 financing statements shall have been paid or provided for. All Collateral and Funding Corporation Collateral shall be subject to no Liens other than Permitted Liens. (i) On or prior to the Closing Date, each of the Project Documents, in the forms as previously delivered to the Purchasers or their counsel and as they exist as executed versions as of the date of this Agreement or in such forms as shall be reasonably satisfactory in form and substance to the Purchasers and their counsel, shall have been executed and delivered, shall remain in full force and effect, no default shall have occurred thereunder, all conditions precedent thereunder shall be satisfied and there shall not have occurred any event of force majeure thereunder as of the Closing Date. (j) The Purchasers shall have received a letter, dated the Closing Date, of Deloitte & Touche LLP that meets the requirements of subsection (a) of this Section 6, except that the specified date referred to in such subsection will be a date not more than five days prior to the Closing Date for the purposes of this subsection. (k) The New Project Independent Engineer shall have consented to the references to it in the Offering Circular and the use of the Independent Engineer's Report (as defined in the Offering Circular) prepared by the New Project Independent Engineer and contained in Appendix B to the Offering Circular; and since the date of the Independent Engineer's Report, no event affecting the Independent Engineer's Report or the matters referred to therein shall have occurred (A) which shall make untrue or incorrect in any material respect, as of the Closing Date, any information or statement contained in the Independent Engineer's Report or in the Offering Circular relating to matters referred to in the Independent Engineer's Report, or (B) which shall not be reflected in the Offering Circular but should be reflected therein in order to make the statements and information contained in the Independent Engi neer's Report, or in the Offering Circular relating to matters referred to in the Independent Engineer's Report, in light of the circumstances under which they were made, not misleading, as evidenced by a certificate reasonably satisfactory to the Purchasers of an authorized officer of the New Project Independent Engineer, dated the Closing Date. (l) The Geothermal Resource Consultant shall have consented to the references to it in the Offering Circular and the use of the Geothermal Resource Consultant's Report (as defined in the Offering Circular) prepared by the Geothermal Resource Consultant and contained in Appendix D to the Offering Circular; and since the date of the Geothermal Resource Consultant's Report, no event affecting the Geothermal Resource Consultant's Report or the matters referred to therein shall have occurred (A) which shall make untrue or incorrect in any material respect, as of the Closing Date, any information or statement contained in the Geothermal Resource Consultant's Report or in the Offering Circular relating to matters referred to in the Geothermal Resource Consultant's Report, or (B) which shall not be reflected in the Offering Circular but should be reflected therein in order to make the statements and information contained in the Geothermal Resource Consultant's Report, or in the Offering Circular relating to matters referred to in the Geothermal Resource Consultant's Report, in light of the circumstances under which they were made, not misleading, as evidenced by a certificate reasonably satisfactory to the Purchasers of an authorized officer of the Geothermal Resource Consultant, dated the Closing Date. (m) The Independent Power Market Consultant shall have consented to the references to it in the Offering Circular and the use of the Independent Power Market Consultant's Report (as defined in the Offering Circular) prepared by the Independent Power Market Consultant and contained in Appendix C to the Offering Circular; and since the date of the Independent Power Market Consultant's Report, no event affecting the Independent Power Market Consultant's Report or the matters referred to therein shall have occurred (A) which shall make untrue or incorrect in any material respect, as of the Closing Date, any information or statement contained in the Independent Power Market Consultant's Report or in the Offering Circular relating to matters referred to in the Independent Power Market Consultant's Report, or (B) which shall not be reflected in the Offering Circular but should be reflected therein in order to make the statements and information contained in the Independent Power Market Consultant's Report, or in the Offering Circular relating to matters referred to in the Independent Power Market Consultant's Report, in light of the circumstances under which they were made, not misleading, as evidenced by a certificate reasonably satisfactory to the Purchasers of an authorized officer of the Independent Power Market Consultant, dated the Closing Date. (n) The Independent Zinc Market Consultant shall have consented to the references to it in the Offering Circular and the use of the Independent Zinc Market Consultant's Report (as defined in the Offering Circular) prepared by the Independent Zinc Market Consultant and contained in Appendix F to the Offering Circular; and since the date of the Independent Zinc Market Consultant's Report, no event affecting the Independent Zinc Market Consultant's Report or the matters referred to therein shall have occurred (A) which shall make untrue or incorrect in any material respect, as of the Closing Date, any information or statement contained in the Independent Zinc Market Consultant's Report or in the Offering Circular relating to matters referred to in the Independent Zinc Market Consultant's Report, or (B) which shall not be reflected in the Offering Circular but should be reflected therein in order to make the statements and information contained in the Independent Zinc Market Consultant's Report, or in the Offering Circular relating to matters referred to in the Independent Zinc Market Consultant's Report, in light of the circumstances under which they were made, not misleading, as evidenced by a certificate reasonably satisfactory to the Purchasers of an authorized officer of the Independent Zinc Market Consultant, dated the Closing Date. (o) The Purchasers shall have received a certificate, dated the Closing Date, of any President or Vice President of the Funding Corporation and the Guarantors, certifying, based on customary assumptions, that there are sufficient geothermal resources to operate the Salton Sea Projects and the Partnership Projects through the Final Maturity Date. (p) The Purchasers shall have received opinions, dated the Closing Date, of Willkie Farr & Gallagher, Latham & Watkins, Lionel Sawyer & Collins and White & Case, each counsel for the Funding Corporation and the Guarantors, and Steven A. McArthur, Esq., Executive Vice President and General Counsel for the Funding Corporation and the Guarantors, to the effect as set forth in Annexes B, C, D, E and F hereto and reasonably satisfactory in all respects to CSFBC and its counsel. (q) The Purchasers shall have received an opinion, dated the Closing Date, from Lillick & Charles, counsel to the Trustee, the Collateral Agent and the Depositary Agent, in respect of the enforceability of the Financing Documents to which the Trustee, the Collateral Agent and the Depositary Agent are parties and the authentication of the Securities by the Trustee, which opinion shall be satisfactory in all respects to CSFBC and its counsel. (r) The Purchasers shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Purchasers, such opinion or opinions as CSFBC may reasonably request, dated the Closing Date, with respect to the Offering Circular, and the Funding Corporation and the Guarantors shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (s) The Purchasers shall have received, in form and substance satisfactory to CSFBC, copies of such opinions, certificates, letters and documents as CSFBC reasonably requests. 7. Indemnification and Contribution. (a) The Funding Corporation and the Guarantors will indemnify and hold harmless each Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any breach of any of the representations and warranties of the Funding Corporation and the Guarantors contained herein or any untrue statement or alleged untrue statement of any material fact contained in the Offering Circular, or any amendment or supplement thereto, or any related Preliminary Offering Circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Funding Corporation and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Funding Corporation by any Purchaser through CSFBC specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; and provided, further that, with respect to any untrue statement or omission in the Preliminary Offering Circular, this indemnity agreement shall not inure to the benefit of any Purchaser on account of any loss, claim, damage, liability or action arising from the sale of any Securities to any person by such Purchaser if such Purchaser failed to send or give a copy of the Offering Circular, as the same may be amended or supple mented, to that person within the time required by the Securities Act, and the untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact in the Preliminary Offering Circu lar was corrected in the Offering Circular and the Offering Circular was made available to such Purchaser prior to the sale of the Securities. (b) Each Purchaser will severally and not jointly indemnify and hold harmless the Funding Corporation and the Guarantors against any losses, claims, damages or liabilities to which the Funding Corporation and the Guarantors may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Circular, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Funding Corporation by such Purchaser through CSFBC specifically for use therein, and will reimburse for any legal or other expenses reasonably incurred by the Funding Corporation in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Purchaser consists of the following information in the Offering Circular: the last paragraph at the bottom of the cover page concerning the terms of the offering by the Purchasers, the legend concerning stabiliz ing on the inside front cover page and the third paragraph, the fifth paragraph, the second sentence of the seventh paragraph, the eighth paragraph and the ninth paragraph under the caption "PLAN OF DISTRIBUTION." (c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the indemnified party shall have the right to employ counsel to represent the indemnified party and its controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified party against the indemnifying party under this Section 7 if the employment of such counsel shall have been authorized in writing by the indemnifying party in connection with the defense of such action or, if in the written opinion of counsel to either the indemnifying party or the indemnified party, representation of both parties by the same counsel would be inappropriate due to actual or likely conflicts of interest between them, and in that event the fees and expenses of one firm of separate counsel (in addition to the fees and expenses of local counsel) shall be paid by the indemnifying party. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. (d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Funding Corporation and the Guarantors on the one hand and the Purchasers on the other from the offering of the Securi ties or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Funding Corporation and the Guarantors on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Funding Corporation and the Guarantors on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Funding Corporation and the Guarantors bear to the total discounts and commissions received by the Purchasers from the Funding Corporation under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Funding Corporation or the Guarantors, on the one hand, or the Purchasers, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it were resold exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. (e) The obligations of the Funding Corporation and the Guarantors under this Section 7 shall be in addition to any liability which the Funding Corporation and the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who con trols any Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer, director, employee, agent or shareholder of the Funding Corporation and each Guarantor and to each officer, director, employee, agent or shareholder of each person, if any, who controls the Funding Corporation and the Guarantors within the meaning of the Securities Act or the Exchange Act. 8. Default by Purchasers. If any Purchaser defaults in its obligations to purchase Securities hereunder and the aggregate principal amount of Securities that such defaulting Purchaser agreed but failed to purchase does not exceed 10% of the total principal amount of Securities, the remaining Purchaser may make arrangements satisfactory to the Funding Corporation for the purchase of such Securities by other persons, including itself, but if no such arrangements are made by the Closing Date, the non- defaulting Purchaser shall be obligated to purchase the Securities that such defaulting Purchaser agreed but failed to purchase. If any Purchaser so defaults and the aggregate principal amount of Securities with respect to which such default occurs exceeds 10% of the total principal amount of Securities and arrangements satisfactory to the remaining Purchaser and the Funding Corporation for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of the non-defaulting Purchaser or the Funding Corporation, except as provided in Section 9. As used in this Agreement, the term "Purchaser" includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default. 9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Funding Corporation and the Guarantors or their officers and of the Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of the Purchaser, the Funding Corporation and the Guarantors or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Securities. If for any reason the purchase of the Securi ties by the Purchaser is not consummated, the Funding Corporation and the Guarantors shall remain responsible for the expenses to be paid or reimbursed by them pursuant to Section 5 and the respective obligations of the Funding Corporation, the Guarantors and the Purchaser pursuant to Section 7 shall remain in effect; provided that, notwithstanding the foregoing, in such circumstances the Funding Corporation and the Guarantors shall not be obligated to reimburse the Purchaser for its out-of-pocket expenses (excluding fees and disbursements of counsel and rating agency fees) in excess of $175,000; and provided, further that if the purchase of the Securities is not consummated solely because of the occurrence of an event specified in Section 6(b)(iv), (v) or (vi), then the Funding Corporation and the Guarantors shall have no obligation to reimburse the Purchaser for its out-of-pocket expenses (including fees and disbursements of counsel), except for rating agency fees. 10. Notices. All communications hereunder will be in writing and, if sent to the Purchaser will be mailed, delivered or telegraphed and confirmed to the Purchaser, at Credit Suisse First Boston Corporation, Eleven Madison Avenue, New York, New York 10010, Attention: Investment Banking Department-Transactions Advisory Group, or, if sent to the Funding Corporation and the Guarantors, will be mailed, delivered or telegraphed and confirmed to them at 302 South 36th Street, Suite 400-A, Omaha, Nebraska 68131, Attention: General Counsel. 11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder. 12. Representation of Purchasers. CSFBC will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by CSFBC will be binding upon all the Purchasers. 13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement. 14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of laws (other than Section 5-1401 of the New York General Obligations Law). The Funding Corporation and the Guarantors hereby submit to the non-exclusive jurisdiction of the federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If the foregoing is in accordance with the Purchaser's understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Funding Corporation, each of the Guarantors and the Purchaser in accordance with its terms. Very truly yours, SALTON SEA FUNDING CORPORATION By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA BRINE PROCESSING L.P. By: SALTON SEA POWER COMPANY, as Managing General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER GENERATION L.P. By: SALTON SEA POWER COMPANY, as Managing General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President FISH LAKE POWER COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER L.L.C. By: CE SALTON SEA INC., as Manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY OPERATING CORPORATION By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN POWER COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President NIGUEL ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SAN FELIPE ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CONEJO ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President BN GEOTHERMAL, INC. By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President ELMORE, L.P. By: CALENERGY OPERATING COR PORATION, as General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President LEATHERS, L.P. By: CALENERGY OPERATING CORPORATION, as General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President DEL RANCH, L.P. By: CALENERGY OPERATING CORPORATION, as General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY By: VULCAN POWER COMPANY, as General Partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY MINERALS LLC By: SALTON SEA MINERALS CORP., as Manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CE TURBO LLC By: MAGMA POWER COMPANY, as Manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA ROYALTY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.10(A) 6 SECURITIES AND EXCHANGE COMMISSION EXHIBIT 4.10(a) AMENDMENT TO NOTES AND TO AMENDED AND RESTATED DEBT SERVICE RESERVE LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT This AMENDMENT TO NOTES AND TO AMENDED AND RESTATED DEBT SERVICE RESERVE LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT dated as of October 13, 1998 (this "Amendment") by and among SALTON SEA FUNDING CORPORATION, a Delaware corporation (the "Borrower"); CREDIT SUISSE FIRST BOSTON, New York Branch (formerly known as Credit Suisse)(in its individual capacity as "Initial Bank"); CREDIT SUISSE FIRST BOSTON, New York Branch (formerly known as Credit Suisse), DRESDNER BANK, A.G., New York Branch, PARIBAS (formerly known as Banque Paribas), New York Branch and THE FUJI BANK, LIMITED (each a "Bank" and collectively the "Banks"); and CREDIT SUISSE FIRST BOSTON, New York Branch (formerly known as Credit Suisse), as Agent (in such capacity, together with its successors in such capacity, the "Agent") for the Banks. W I T N E S S E T H : WHEREAS, Pursuant to an Indenture dated as of July 21, 1995 (as amended, supplemented or modified by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Supplemental Indenture referred to below, the "Indenture") among the Borrower and Chase Manhattan Bank and Trust Company, National Association, as trustee (in such capacity, together with its successors in such capacity, the "Trustee"), the Borrower has authorized the creation of issues of nonrecourse bonds, debentures, promissory notes and other evidences of indebtedness to be issued in one or more series (collectively, the "Securities"), the sale proceeds of which are to be advanced to the Borrower pursuant to the Indenture. WHEREAS, the Borrower and the Trustee have entered into that certain Fourth Supplemental Indenture dated as of October 13, 1998 (the "Supplemental Indenture") to provide for the issuance of one additional series of bonds in accordance with Article 2 of the Indenture. WHEREAS, on July 21, 1995 and on June 20, 1996 the Borrower issued securities (the "Existing Securities") under the Indenture. On the date of this Amendment, pursuant to the terms of the Supplemental Indenture, the Borrower will issue the additional securities described therein (the "Offered Securities"). WHEREAS, in connection with the issuance of the Existing Securities, the Borrower and the Initial Bank entered into the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of June 20, 1996, together with a Supplement dated concurrently therewith (the "Agreement") pursuant to which the Initial Bank issued a letter of credit (the "Original Debt Service Reserve Letter of Credit"). WHEREAS, in connection with the issuance of the Offered Securities, the Borrower has requested that the Banks increase the Commitment and that the Initial Bank issue and exchange for the Original Debt Service Reserve Letter of Credit, and the Banks participate in, and Initial Bank is willing to issue and the Banks are willing to participate in, the Debt Service Reserve Letter of Credit upon the terms and conditions hereinafter set forth, it being the intention of the Banks to amend and modify the Agreement as herein provided. NOW, THEREFORE, in consideration of the foregoing, and subject to the terms and conditions herein set forth, the parties hereto agree as follows: A. Definitions. Terms used in the preamble and recitals and capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to them in the Agreement. B. Amendments 1. The definition of "Outstanding Amount" is hereby amended and restated to read in its entirety as follows: "'Outstanding Amount' means, for any applicable period, the amount for such period set forth in Annex I or, at any time that the interest rate on the Securities has been adjusted pursuant to Section 2.2(b) of the Indenture, Annex II hereto, as the case may be, in the column under the caption 'Total Commitments,' and as the same may be reduced, increased or reinstated from time to time in accordance with the terms and provisions hereof." 2. Each of the Banks hereby consents to the incorporation pursuant to Section 1.1 of the Agreement of amendments to definitions under the Indenture as set forth in the Supplemental Indenture which is attached hereto as Exhibit 1. Section 1.1(a) is hereby amended by adding the following sentence at the end thereof: "The following terms have the meanings assigned to them in the Depository Agreement: 'Debt Service Reserve Required Balance', 'Debt Service Reserve Fund', 'Interest Payment Date', 'Principal Fund' and 'Principal Payment Date'. 3. Section 2.1 is hereby amended by deleting the words "opposite such Bank's name on the signature pages hereof" in the sixth line of such section and substituting therefor "in Annex I or Annex II hereto, as applicable". Annex I hereto is hereby added to the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement as Annex I. Annex II hereto is hereby added to the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement as Annex II. 4. Section 2.2(a) is hereby amended by deleting the amount "$70,430,000" in the sixth line thereof and substituting therefor "69,053,313". Section 2.2(a) is hereby further amended by deleting the words "Closing Date" in the two places they appear and substituting therefore "October 13, 1998". Section 2.2(a) is hereby further amended by adding the following sentence at the end thereof: "Within each period set forth in Annex I or Annex II, as applicable, neither the Commitment of any Bank nor the total Commitments shall exceed that set forth for each such Bank or the total Commitments, respectively, in each such period." 5. Section 2.2(e) is hereby amended by deleting the amount "$70,429,065" in the eighth line thereof and substituting therefor "$69,053,313". 6. Section 2.3 is hereby amended by adding the following new paragraph to the end of such section: "In order to maintain the anticipated reductions in the Commitment of The Fuji Bank, Limited, prior to the issuance of the Offered Securities and related amendments to the Financing Documents resulting therefrom, the Commitment and Commitment percentages for each Bank shall be as set forth in Annex I or Annex II, as applicable, hereto for each respective period described therein." 7. Section 2.5(c) is hereby amended by adding the following to the end of such section: "in addition, for the period from and including December 1, 1998 to and including December 31, 1999, the Borrower shall pay to the Agent for the respective accounts of the Banks, quarterly in arrears on the same payment dates described in the immediately preceding clause, a fee equal to that described in the letter from the Borrower to the Agent dated June 20, 1996." 8. Section 2.6(a) is hereby amended by correcting "3.5(j)" to read "3.5(i)". 9. Section 2.7(f) is hereby amended by deleting the word "Bonds" and substituting therefor "Securities". 10. Section 2.8(c) is hereby amended by deleting clauses (i) and (ii) thereof and substituting therefor "on a pro-rata basis among all such Loans. 11. Section 6.1(i) is hereby amended by adding "(d)" between "(c)" and "(e)" in the fifth line thereof. 12. Section 9.1 is hereby amended by deleting the word "or" at the end of clause (d)(ii), substituting a "," therefor and adding the following clause (d)(iv) after (d)(iii): "or (iv) reduction in Commitments set forth in Annex I or Annex II hereto". 13. Section 9.2 is hereby amended by deleting the address (i) "One Liberty Plaza, 165 Broadway, New York, New York 10006, telephone (212) 238-2000, telecopier (212) 238-2121" and replacing it with "5 World Trade Center, 8th Floor, New York, New York 10048, telephone (212) 322-0047, telecopier (212) 803-2079" and (ii) by deleting the address "12 East 49th Street, 43rd Floor, New York, New York, 10017, telephone (212) 238- 2000, telecopier (212) 238-5350" and replacing it with "Eleven Madison Avenue, New York, New York, 10010, telephone (212) 325-2000, telecopier (212) 325-8049" 14. Exhibit A is hereby amended and restated in its entirety to read as Exhibit A hereto. 15. Clause (i) of the first paragraph of the Note issued on September 13, 1996 to Credit Suisse is hereby amended in its entirety to read as follows: "The principal sum of Twenty Five Million Three Hundred Thirty Thousand Seven Hundred Seventy Three dollars ($25,330,773) and". 16. Clause (i) of the first paragraph of the Note issued on September 13, 1996 to Dresdner Bank A.G., New York Branch, is hereby amended in its entirety to read as follows: "The principal sum of Twenty Million Eight Hundred Sixty Nine Thousand Four Hundred Seventy One dollars ($20,869,471) and". 17. Clause (i) of the first paragraph of the Note issued on September 13, 1996 to Paribas (formerly known as Banque Paribas), New York Branch is hereby amended in its entirety to read as follows: "The principal sum of Sixteen Million Eight Hundred Fifty Five Thousand Eight Hundred Eighty Seven dollars ($16,855,887) and". 18. Clause (i) of the first paragraph of the Note issued on September 13, 1996 to The Fuji Bank, Limited, is hereby amended in its entirety to read as follows: "The principal sum of Nine Million Six Hundred Ninety Seven Thousand Two Hundred Seventy Eight dollars ($9,697,278) and". 19. Pursuant to Section 8.1 of the Agreement, each Bank hereby authorizes and instructs the Agent to execute the Second Amendment to the Collateral Agency and Intercreditor Agreement substantially in the form attached hereto as Exhibit 2. C. Conditions Precedent. The obligation of the Initial Bank to issue the Debt Service Reserve Letter of Credit and the effectiveness of this Amendment is subject to the following conditions precedent: (a) The Agent shall have received the following, each dated on or before the date of this Amendment, unless otherwise specified below, in form and substance satisfactory to the Agent and in the number of originals or photostatic copies reasonably required by the Agent: (i) this Amendment, duly executed by the Borrower and the Banks; (ii) The Supplemental Indenture, as amended, supplemented or modified, duly executed by the parties thereto, in form and substance reasonably satisfactory to the Agent; (iii) the Amended and Restated Deposit and Disbursement Agreement, dated as of October 13, 1998, duly executed by the parties thereto, in form and substance reasonably satisfactory to the Agent; (iv) the Second Amendment, dated as of October 13, 1998, to the Intercreditor Agreement, duly executed by the parties thereto, in form and substance reasonably satisfactory to the Agent; (v) the Second Agreement Regarding Security Documents, dated as of October 13, 1998, duly executed by the parties thereto, in form and substance reasonably satisfactory to the Agent; (vi) written opinions of counsel, as to such matters as the Agent may reasonably request, in form and substance satisfactory to the Agent; and (vii) a certificate of the Depositary Agent as to the incumbency and specimen signatures of the officers of the Depositary Agent authorized to make drawings, to execute and present certificates under the Debt Service Reserve Letter of Credit, and otherwise communicate with the Agent with respect thereto; (b) all agreements referred to in Sections 3.1(a)(ii), (iii) and (iv) remain in full force and effect and any conditions precedent to the amendments or supplements referred to therein shall have been satisfied; (c) the Borrower shall have paid to the Agent for the benefit of Credit Suisse First Boston, New York Branch, Dresdner Bank, A.G., New York Branch and Paribas, (formerly known as Banque Paribas), New York Branch $50,841, $58,497 and $47,247, respectively, as an amendment fee; (d) the Borrower shall have paid all accrued fees and expenses (as provided in Sections 2.5 and 9.4 of the Agreement) of the Agent and the Banks (including the reasonable accrued fees and disbursements of counsel to the Agent and the Banks), to the extent that one or more statements for such fees and expenses have been presented for payment; (e) (i) all conditions precedent under the Purchase Agreement, dated October 7, 1998, have been satisfied; (ii) not less than $285,000,000 (less underwriting fees and transaction costs) in proceeds from the Offered Securities shall have been received by the Borrower thereunder; and (iii) the Offered Securities shall have received investment grade ratings from both Rating Agencies; (f) no Default or Event of Default shall have occurred and be continuing; (g) all agreements and documents the delivery of which was made a condition precedent to issuance of the Debt Service Reserve Letter of Credit, as they may have been amended, supplemented or modified, remain in full force and effect except as contemplated herein or as otherwise required by the transactions contemplated herein; (h) the Agent shall have received for cancellation, on or before the date of this Amendment, the Original Debt Service Reserve Letter of Credit; (i) the Agent shall have received certified copies of the charter and bylaws of the Borrower or, in lieu thereof, a certificate from the Secretary of the Borrower certifying that such documents previously delivered to the Agent are true, correct and complete as of the date hereof; (j) the Agent shall have received a certificate from the Secretary of the Borrower in respect of all corporate action taken by the Borrower in approving the execution, delivery and performance of this Amendment and stating that the resolutions previously adopted which authorized and approved the execution, delivery and performance of the Agreement are in full force and effect and have not been amended, rescinded or otherwise modified; (k) the Agent shall have received a certificate of the Secretary of the Borrower which certifies the names and offices of the officers of the Borrower who are authorized to sign this Amendment, together with the true signatures of such officers; (l) the Agent shall have received a good standing certificate with respect to the Borrower, as of a recent date prior to the effective date of this Amendment, from the Secretary of State of each of Delaware and California; and (m) the Agent shall have received such other approvals, opinions, evidence and documents as it may reasonably request and which are customary for transactions of the type contemplated by this Amendment. D. Representations and Warranties. In order to induce the Agent, the Initial Bank and the Banks to enter into this Amendment, the Borrower represents and warrants to the Agent, the Initial Bank and the Banks that (a) the execution, delivery and performance of this Amendment and the documents contemplated hereby are within the Borrower's power, have been duly authorized by all necessary or proper action, are not in contravention of, do not result in a breach of, or constitute (with due notice or lapse of time or both) a default under, any contractual obligation to which the Borrower is a party or by which the property of the Borrower is bound, do not and will not result in or require the creation or imposition of any material Lien upon any of the properties or assets of the Borrower, are not in contravention of any provision of any law, do not require the consent or approval of any governmental body, agency, authority or any other person that has not been obtained and a copy thereof furnished to the Agent, and (b) no Event of Default or Default exists as of the date hereof and no Event of Default or Default would result from the execution, delivery or consummation of the transactions contemplated by this Amendment. The Borrower hereby makes for the benefit of the Agent and the Banks all of the representations and warranties of the Borrower made in the Indenture, in the form of such representations and warranties as they exist on the date of this Amendment and as they may hereafter be amended from time to time, but only to the extent that the incorporation of any such amendments has been consented to in accordance with Section 9.1 of the Agreement. Such representations and warranties are incorporated herein by reference as if set forth at length in this Amendment; provided that any reference to the Funding Corporation shall be deemed to be a reference to Borrower; each reference to the term "Securities" shall be deemed to include the Obligations; and each reference to the term "Indenture" shall be deemed to be a reference to the Agreement, as amended by this Amendment. E. Miscellaneous. 1. This Amendment shall be subject to the provisions of Section 9.1 of the Agreement. Without limiting the generality of the foregoing, all of the terms and conditions of the Agreement shall remain in full force and effect except as specifically set forth herein. The Agreement shall, as the context so requires, be read and construed throughout so as to incorporate this Amendment. All references to the Agreement in the Notes shall be deemed to include the Agreement as amended by this Amendment. 2. Each of the agreements and amendments set forth herein shall be effective only in the specific instances described herein and for the specific purpose for which it was given, and nothing contained herein shall be construed to limit or bar any rights or remedies of the undersigned which they may have on any other occasion. 3. The Borrower reaffirms its obligations (pursuant to Section 9.4 of the Agreement) and agrees to pay, on the date hereof or promptly thereafter, the reasonable costs and expenses (including attorneys' fees and expenses) incurred by the Agent in connection with the consummation of the transactions contemplated under this Amendment, including, without limitation, the negotiation, preparation, execution and delivery of this Amendment and all other related documents. 4. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW. 5. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written, and by their signature evidence their consent to the effectiveness of the modifications and amendments to the provisions of the Agreement which are made herein, and further, consent to the modifications and amendments to Schedule I to the Depositary Agreement as they shall be in effect on the date hereof. SALTON SEA FUNDING CORPORATION By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CREDIT SUISSE FIRST BOSTON, New York Branch (formerly known as Credit Suisse), as Agent, Initial Bank and as a Bank By: Name: Title: By: Name: Title: DRESDNER BANK AG, New York Branch, as a Bank By: Name: Title: By: Name: Title: PARIBAS (formerly known as Banque Paribas) New York Branch, as a Bank By: Name: Title: By: Name: Title: THE FUJI BANK, LIMITED, as a Bank By: Name: Title: By: Name: Title: EX-4.13(A) 7 EXHIBIT 4.13 (a) SALTON SEA PROJECT NOTE (SSI) $246,483,000 October ___, 1998 For value received, the undersigned, SALTON SEA POWER GENERATION L.P., a California limited partnership, SALTON SEA BRINE PROCESSING L.P., a California limited partnership, FISH LAKE POWER COMPANY, a Delaware corporation, and SALTON SEA POWER L.L.C., a Delaware limited liability company (collectively, the "Salton Sea Guarantors"), by this promissory note jointly and severally promise to pay to the order of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), at the office of Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, located at 101 California Street, Number 2725, San Francisco, California 94111, in lawful currency of the United States of America and in immediately available funds, the principal amount of $246,483,000, or if less, the aggregate unpaid and outstanding principal amount of this Salton Sea Project Note advanced by Funding Corporation to the Salton Sea Guarantors pursuant to that certain Amended and Restated Credit Agreement (the "Salton Sea Credit Agreement"), dated as of the date hereof by and among the Salton Sea Guarantors and Funding Corporation, and as the same may be amended from time to time, and all other amounts owed by the Salton Sea Guarantors to Funding Corporation hereunder. This Salton Sea Project Note is entered into pursuant to the Salton Sea Credit Agreement and is entitled to the benefits thereof and is subject to all terms, provisions and conditions thereof. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A to that certain Trust Indenture, dated as of July 21, 1995 (as the same may be amended, modified or supplemented, including pursuant to the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996, and the Fourth Supplemental Indenture dated as of the date hereof, the "Indenture"), by and between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee. Reference is hereby made to the Salton Sea Credit Agreement, the Indenture and the Security Documents for the provisions, among others, with respect to the custody and application of the Collateral, the nature and extent of the security provided thereunder, the rights, duties and obligations of the Salton Sea Guarantors and the rights of the holder of this Salton Sea Project Note. The principal amount hereof is payable in accordance with the Salton Sea Credit Agreement, and such principal amount may be prepaid solely in accordance with the Salton Sea Credit Agreement. The Salton Sea Guarantors further agree to pay, in lawful currency of the United States of America and in immediately available funds, interest from the date hereof on the unpaid and outstanding principal amount hereof until such unpaid and outstanding principal amount shall become due and payable (whether at stated maturity, by acceleration or otherwise) at the rates of interest and at the times set forth in the Salton Sea Credit Agreement, and the Salton Sea Guarantors agree to pay other fees and costs as stated in the Salton Sea Credit Agreement. Upon the occurrence of any one or more Credit Agreement Events of Default (as defined in Section 5.1 of the Salton Sea Credit Agreement), all amounts then remaining unpaid under this Salton Sea Project Note may become or be declared to be immediately due and payable as provided in the Salton Sea Credit Agreement, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Salton Sea Guarantors. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Salton Sea Credit Agreement, the provisions of which are hereby incorporated by reference. This Salton Sea Project Note shall be construed and interpreted in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] SALTON SEA POWER GENERATION L.P., a California limited partnership By: SALTON SEA POWER COMPANY, a Nevada corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA BRINE PROCESSING L.P., a California limited partnership By: SALTON SEA POWER COMPANY, a Nevada corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President FISH LAKE POWER COMPANY, a Delaware corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER L.L.C., a Delaware limited liability company By: CE SALTON SEA INC., a Delaware corporation, its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.13(B) 8 EXHIBIT 4.13(b) SALTON SEA PROJECT NOTE (SSIII) $83,272,000 October ___, 1998 For value received, the undersigned, SALTON SEA POWER GENERATION L.P., a California limited partnership, SALTON SEA BRINE PROCESSING L.P., a California limited partnership, FISH LAKE POWER COMPANY, a Delaware corporation, and SALTON SEA POWER L.L.C., a Delaware limited liability company (collectively, the "Salton Sea Guarantors"), by this promissory note jointly and severally promise to pay to the order of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), at the office of Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, located at 101 California Street, Number 2725, San Francisco, California 94111, in lawful currency of the United States of America and in immediately available funds, the principal amount of $83,272,000, or if less, the aggregate unpaid and outstanding principal amount of this Salton Sea Project Note advanced by Funding Corporation to the Salton Sea Guarantors pursuant to that certain Amended and Restated Credit Agreement (the "Salton Sea Credit Agreement"), dated as of the date hereof by and among the Salton Sea Guarantors and Funding Corporation, and as the same may be amended from time to time, and all other amounts owed by the Salton Sea Guarantors to Funding Corporation hereunder. This Salton Sea Project Note is entered into pursuant to the Salton Sea Credit Agreement and is entitled to the benefits thereof and is subject to all terms, provisions and conditions thereof. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A to that certain Trust Indenture, dated as of July 21, 1995 (as the same may be amended, modified or supplemented, including pursuant to the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996, and the Fourth Supplemental Indenture dated as of the date hereof, the "Indenture"), by and between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee. Reference is hereby made to the Salton Sea Credit Agreement, the Indenture and the Security Documents for the provisions, among others, with respect to the custody and application of the Collateral, the nature and extent of the security provided thereunder, the rights, duties and obligations of the Salton Sea Guarantors and the rights of the holder of this Salton Sea Project Note. The principal amount hereof is payable in accordance with the Salton Sea Credit Agreement, and such principal amount may be prepaid solely in accordance with the Salton Sea Credit Agreement. The Salton Sea Guarantors further agree to pay, in lawful currency of the United States of America and in immediately available funds, interest from the date hereof on the unpaid and outstanding principal amount hereof until such unpaid and outstanding principal amount shall become due and payable (whether at stated maturity, by acceleration or otherwise) at the rates of interest and at the times set forth in the Salton Sea Credit Agreement, and the Salton Sea Guarantors agree to pay other fees and costs as stated in the Salton Sea Credit Agreement. Upon the occurrence of any one or more Credit Agreement Events of Default (as defined in Section 5.1 of the Salton Sea Credit Agreement), all amounts then remaining unpaid under this Salton Sea Project Note may become or be declared to be immediately due and payable as provided in the Salton Sea Credit Agreement, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Salton Sea Guarantors. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Salton Sea Credit Agreement, the provisions of which are hereby incorporated by reference. This Salton Sea Project Note shall be construed and interpreted in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] SALTON SEA POWER GENERATION L.P., a California limited partnership By: SALTON SEA POWER COMPANY, a Nevada corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA BRINE PROCESSING L.P., a California limited partnership By: SALTON SEA POWER COMPANY, a Nevada corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President FISH LAKE POWER COMPANY, a Delaware corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER L.L.C., a Delaware limited liability company By: CE SALTON SEA INC., a Delaware corporation, its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.14(C) 9 EXHIBIT 4.14(c) AMENDED AND RESTATED DEPOSIT AND DISBURSEMENT AGREEMENT among SALTON SEA FUNDING CORPORATION, SALTON SEA BRINE PROCESSING L.P., SALTON SEA POWER GENERATION L.P., FISH LAKE POWER COMPANY, SALTON SEA POWER L.L.C., VULCAN POWER COMPANY, CALIFORNIA ENERGY OPERATING CORPORATION, BN GEOTHERMAL, INC., SAN FELIPE ENERGY COMPANY, CONEJO ENERGY COMPANY, NIGUEL ENERGY COMPANY, VULCAN/BN GEOTHERMAL POWER COMPANY, DEL RANCH, L.P., ELMORE, L.P., LEATHERS, L.P., CALENERGY MINERALS LLC, CE TURBO LLC, SALTON SEA ROYALTY COMPANY, and Chase Manhattan Bank and Trust Company, National Association, as Collateral Agent and Chase Manhattan Bank and Trust Company, National Association, as Depositary Agent Dated as of October 13, 1998 AMENDED AND RESTATED DEPOSIT AND DISBURSEMENT AGREEMENT (this "Depositary Agreement"), dated as of October 13, 1998, among Salton Sea Funding Corporation, a Delaware corporation (the "Funding Corporation"), Salton Sea Brine Processing L.P., a California limited partnership ("SSBP"), Salton Sea Power Generation L.P., a California limited partnership ("SSPG"), Fish Lake Power Company, a Delaware corporation ("Fish Lake"), Salton Sea Power L.L.C., a Delaware limited liability company ("Power LLC" and, collectively with SSBP, SSPG and Fish Lake, the "Salton Sea Guarantors"), Vulcan Power Company, a Nevada corporation ("VPC"), California Energy Operating Corporation, a Delaware corporation ("CEOC"), BN Geothermal, Inc., a Nevada corporation ("BN Geothermal"), San Felipe Energy Company, a California corporation ("San Felipe"), Conejo Energy Company, a California corporation ("Conejo"), Niguel Energy Company, a California corporation ("Niguel"), Vulcan/BN Geothermal Power Company, a Nevada general partnership ("Vulcan"), Del Ranch, L.P., a California limited partnership ("Del Ranch"), Elmore, L.P., a California limited partnership ("Elmore"), Leathers, L.P., a California limited partnership ("Leathers"), CalEnergy Minerals LLC, a Delaware limited liability company ("Minerals LLC"), and CE Turbo LLC, a Delaware limited liability company ("Turbo LLC" and, collectively with VPC, CEOC, BN Geothermal, San Felipe, Conejo, Niguel, Vulcan, Del Ranch, Elmore, Leathers and Minerals LLC, the "Partnership Guarantors"), Salton Sea Royalty Company, a Delaware corporation (the "Royalty Guarantor" and, collec tively with the Salton Sea Guarantors and the Partnership Guarantors, the "Guarantors"), Chase Manhattan Bank and Trust Company, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the "Collateral Agent"), and Chase Manhattan Bank and Trust Company, National Association, in its capacity as depositary agent (together with its successors and permitted assigns in such capacity, the "Depositary Agent"). WHEREAS, the Funding Corporation was formed for the sole purpose of issuing its bonds, debentures, promissory notes or other evidences of indebtedness under the Trust Indenture dated as of July 21, 1995 (the "Original Indenture") (as amended and supplemented by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996 (the "Second Supplemental Indenture"), the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of the date hereof (the "Fourth Supplemental Indenture"), and as further amended, supplemented or otherwise modified from time to time, the "Indenture"), between the Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, as trustee (the "Trustee"); WHEREAS, pursuant to the Original Indenture, the Funding Corporation issued $232,750,000 of its 6.69% Series A Senior Secured Notes Due 2000 (the "Series A Securities"), $133,000,000 of its 7.37% Series B Senior Secured Bonds Due 2005 (the "Series B Securities") and $109,250,000 of its 7.84% Series C Senior Secured Bonds Due 2010 (the "Series C Securities" and, collectively with the Series A Securities and the Series B Securities, the "Original Securities"); WHEREAS, the Funding Corporation used the proceeds of the Original Securities to make three separate loans to (i) SSPB, SSPG and Fish Lake (the "Original Salton Sea Guarantors"), (ii) VPC and CEOC (the "Original Partnership Guarantors") and (iii) the Royalty Guarantor, each pursuant to a separate credit agreement (each a "Credit Agreement") entered into between the Funding Corporation and each of the Original Salton Sea Guarantors, the Original Partnership Guarantors and the Royalty Guarantor; WHEREAS, in connection with the issuance of the Original Securities, the Funding Corporation, the Original Salton Sea Guarantors, the Original Partnership Guarantors, the Royalty Guarantor, the Collateral Agent and the Depositary Agent entered into the Deposit and Disbursement Agreement dated as of July 21, 1995 (the "Original Depositary Agreement") in order to appoint the Depositary Agent as depositary agent to hold and administer monies deposited into various funds established pursuant to the Original Depositary Agreement and funded with, among other things, the proceeds of the Original Securities, proceeds of drawings under the Working Capital Facility, casualty insurance, condemnation and title insurance proceeds, and revenues, equity cash flows and royalties received by the Guarantors; WHEREAS, pursuant to the Second Supplemental Indenture, the Funding Corporation issued $70,000,000 of its 7.02% Series D Senior Secured Notes Due 2000 (the "Series D Securities") and $65,000,000 of its 8.30% Series E Senior Secured Bonds Due 2011 (the "Series E Securities" and, together with the Series D Securities, the "Second Offering Securities"); WHEREAS, the Funding Corporation used the proceeds of the Second Offering Securities to make a loan to (i) the Original Partnership Guarantors and (ii) BN Geothermal, San Felipe, Conejo, Niguel, Vulcan, Del Ranch, Elmore and Leathers (Leathers, collectively with BN Geothermal, San Felipe, Conejo, Niguel, Vulcan, Del Ranch and Elmore, the "Additional Partnership Guarantors") pursuant to the Partnership Credit Agreement; WHEREAS, in connection with the issuance of the Second Offering Securities, the Original Salton Sea Guarantors, the Original Partnership Guarantors, the Additional Partnership Guarantors and the Royalty Guarantor entered into Amendment No. 1 to Deposit and Disbursement Agreement dated as of June 20, 1996 ("Amendment No. 1") in order to, among other things, add the Additional Partnership Guarantors as parties to the Depositary Agreement and establish the Capital Expenditure Fund and set forth the mechanics for making withdrawals therefrom; WHEREAS, the Funding Corporation has determined to issue $285,000,000 of its 7.475% Senior Secured Series F Bonds Due 2018 (the "Series F Securities") pursuant to the Fourth Supplemental Indenture; WHEREAS, the Funding Corporation will use the proceeds of the Series F Securities to (i) make a loan to the Original Salton Sea Guarantors and Power LLC pursuant to the Salton Sea Credit Agreement and (ii) make a loan to the Original Partnership Guarantors, the Additional Partnership Guarantors, Minerals LLC and Turbo LLC pursuant to the Partnership Credit Agreement; and WHEREAS, in connection with issuance of the Series F Securities, the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent would like to amend and restate the Original Depositary Agreement, as amended by Amendment No. 1, to, among other things, add Power LLC, Minerals LLC and Turbo LLC as parties to the Depositary Agreement and establish the Construction Funds and set forth the mechanics for making withdrawals therefrom. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Original Depositary Agreement, as amended by Amendment No. 1, is hereby amended and restated in its entirety as follows: ARTICLE I DEFINITIONS SECTION I.1 Capitalized Terms. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Indenture. SECTION I.2 Definitions; Construction. For all purposes of this Depositary Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) all terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; (b) all references in this Depositary Agreement to designated "Articles," "Sections," "Exhibits" and other subdivisions are to the designated Articles, Sections, Exhibits and other subdivisions of this Depositary Agreement; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Depositary Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision; (d) unless otherwise expressly specified, any agreement, contract or document defined or referred to herein shall mean such agreement, contract or document as in effect as of the date hereof, as the same may thereafter be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and of the Indenture and the other Financing Documents and including any agreement, contract or document in substitution or replacement of any of the foregoing; (e) unless the context clearly intends to the contrary, pronouns having a masculine or feminine gender shall be deemed to include the other; and (f) any reference to any Person shall include its successors and assigns. "Additional Partnership Project Note" shall mean the promissory note dated October 13, 1998 in the amount of $201,728,000 executed by the Partnership Guarantors in favor of the Funding Corporation pursuant to the Partnership Credit Agreement. "Additional Salton Sea Project Note" shall mean the promissory note dated October 13, 1998 in the amount of $83,272,000 executed by the Salton Sea Guarantors in favor of the Funding Corporation pursuant to the Salton Sea Credit Agreement. "Administrative Costs" means all obligations of the Funding Corporation and the Guarantors, now or hereafter existing, to pay administrative fees, costs and expenses to any trustee or agent of any Secured Party, including the Collateral Agent, the Depositary Agent, any party that becomes the agent for the Working Capital Facility Provider, the Debt Service Reserve LOC Provider and the Trustee. "Allocation Certificate" means each certificate provided by the Funding Corporation, one of the Guarantors, or, pursuant to Section 6(d) of the Intercreditor Agreement, the Required Secured Parties (as defined in the Intercreditor Agreement), as applicable, setting forth the allocation of Loss Proceeds, Eminent Domain Proceeds, Title Event Proceeds or cash proceeds resulting from liquidation of the Collateral and Funding Corporation Collateral, as the case may be, among the Secured Parties (to the extent the Secured Obligations of such Secured Parties may be redeemed or prepaid under the applicable Financing Documents). "Capital Expenditure Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187F. "Capital Expenditure Requisition" has the meaning specified in Section 3.14(c). "Cash Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at Bank of America: Account No. 2335309075. "Combined Exposure" means, as of any date of calculation, the sum (calculated without duplication) of the following, to the extent the same is held by or represented by a Creditor: (i) the aggregate principal amount of all Outstanding Securities, (ii) the aggregate principal amount of all Permitted Debt outstanding (other than the Securities and Subordinated Debt), (iii) the aggregate amount of all available undrawn financing commitments under the documents governing the Permitted Debt (other than the Securities and Subordinated Debt) which the creditors party to such documents have no right to terminate, (iv) the maximum amount available to be drawn under the Debt Service Reserve Letter of Credit issued pursuant to the Debt Service Reserve LOC Reimbursement Agreement (if any) and (v) the termination payment due and owing as of such calculation date or which the Permitted Counterparty thereunder has a right to cause to be due and owing as of such calculation date under any Interest Rate Protection Agreements. "Construction Debt Service" shall mean any payments, due prior to Final Completion of the New Projects and final completion of the Permitted Capital Expenditures in accordance with the plans and specifications therefor, of interest on, or other amounts due in respect of (if any), the principal amount of Series F Securities and (without duplication) interest on, or other amounts due in respect of (if any), the Additional Partnership Project Note and the Additional Salton Sea Project Note. "Construction Funds" means, collectively, the Zinc Construction Fund, the Salton Sea Unit V Construction Fund, the Region 2/Turbo Construction Fund and the Construction Period Debt Service Fund. "Construction Period Debt Service Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186G. "Construction Requisition" has the meaning specified in Section 3.1.1(c). "Creditors" means the Funding Corporation, the Trustee, the Collateral Agent, the Depositary Agent, the Debt Service Reserve LOC Provider (and the "Agent" and "Banks" as each such term is defined in the Debt Service Reserve LOC Reimbursement Agreement), any party that becomes the agent for the Working Capital Facility Provider, any Permitted Counterparty under any Interest Rate Protection Agreement and any party that becomes a Secured Party under the Intercreditor Agreement. "Debt Service Reserve Bond" means each bond issued by the Funding Corporation in exchange for a Debt Service Reserve LOC Loan in accordance with, and pursuant to the terms and provisions of, the Debt Service Reserve LOC Reimbursement Agreement. "Debt Service Reserve Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187A. "Debt Service Reserve Bond Sub-Fund" means the sub-fund of such name established pursuant to Section 2.2. "Debt Service Reserve LOC Loan" means each loan made to the Funding Corporation pursuant to the Debt Service Reserve LOC Reimbursement Agreement. "Debt Service Reserve LOC Loan Interest Sub- Fund" means the sub-fund of such name established pursuant to Section 2.2. "Debt Service Reserve LOC Loan Principal Sub- Fund" means the sub-fund of such name established pursuant to Section 2.2. "Debt Service Reserve LOC Credit Amount" has the meaning specified in Section 3.2. "Debt Service Reserve Required Balance" means the amount set forth on Schedule I hereto, as such amount may be adjusted from time to time in accordance with the provisions set forth on such Schedule. "Disbursement Date" means the date specified in a Requisition as the date on which monies are requested by a Guarantor to be withdrawn and transferred from the Fund to which such Requisition relates for the purpose set forth in such Requisition. "Distribution Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187B. "Distribution Suspense Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187C. "Equity Contributions" has the meaning specified in Section 1 of the Equity Commitment Agreement. "Fund Collateral" has the meaning specified in Section 2.3. "Funding Date" means any day from the 10th through the 15th day of each month, as determined by the Funding Corporation or any Guarantor in an officer's certificate received by the Depositary Agent at least three (3) Business Days prior to such Funding Date, provided that there shall only be a single Funding Date for any month (except in the case of an emergency referred to below), or if no earlier date is so determined, then the 15th day of each month, or in each case if such day is not a Business Day the next succeeding Business Day, or in the case of an emergency related to funding Operating and Maintenance Costs, any Business Day of the month. "Funds" has the meaning specified in Section 2.2. "Indemnified Depositary Agent Party" has the meaning specified in Section 5.2. "Independent Engineer Construction Certificate" has the meaning specified in Section 3.1.1(c). "Interest Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186C. "Interest Payment Date" means with respect to any (i) Security, each May 30th and November 30th, commencing November 30, 1995 and concluding on the Final Maturity Date, (ii) Debt Service Reserve LOC Loan, each May 30th and November 30th, or any other date as may be agreed from time to time by the Funding Corporation and the agent under the Debt Service Reserve LOC Reimbursement Agreement, commencing on the first such date after the applicable drawing, and any date on which interest on such Debt Service Reserve LOC Loan becomes due and payable at redemption, the final maturity date or declaration of acceleration, or otherwise, and (iii) Debt Service Reserve Bond, each May 30th and November 30th, commencing on the first such date after the applicable conversion date, and any date on which interest on such Debt Service Reserve Bond becomes due and payable at redemption, the final maturity date or declaration of acceleration, or otherwise. "Liquidated Damages Sub-Funds" means, collectively, the Zinc LD Sub-Fund, the Salton Sea Unit V LD Sub-Fund, the Region 2/Turbo LD Sub-Fund and the LD Holding Sub-Fund. "Loss Proceeds Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187D. "Non-Budgeted Operating and Maintenance Costs Certificate" has the meaning specified in Section 3.2(c)(i)(A). "Permitted Capital Expenditures" has the meaning specified in Section 3.14(b). "Permitted Investments" means investments in securities that are: (i) direct obligations of the United States or any agency thereof; (ii) obligations fully guaranteed by the United States or any agency thereof; (iii) certificates of deposit or bankers acceptances issued by commercial banks (including the Trustee or any of its Affiliates) organized under the laws of the United States or of any political subdivision thereof or under the laws of Canada, Japan, Switzerland or any country that is a member of the European Economic Community having a combined capital and surplus of at least $250,000,000 and having long-term unsecured debt securities then rated "A" or better by S&P or "A-2" or better by Moody's (but at the time of investment not more than $25,000,000 may be invested in such certificates of deposit from any one bank); (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (i) and (ii) above, entered into with any financial institution meeting the qualifications specified in clause (iii) above; (v) open market commercial paper of any corporation incorporated or doing business under the laws of the United States or of any political subdivision thereof having a rating of at least "A-1" from S&P and "P- 1" from Moody's (but at the time of investment not more than $25,000,000 may be invested in such commercial paper from any one company); (vi) auction rate securities or money market preferred stock having one of the two highest ratings obtainable from either S&P or Moody's (or, if at any time neither S&P nor Moody's may be rating such obligations, then from another nationally recognized rating service acceptable to the Trustee); or (vii) investments in money market funds or money market mutual funds sponsored by any securities broker dealer of recognized national standing (or an Affiliate thereof), having an investment policy that requires substantially all the invested assets of such fund to be invested in investments described in any one or more of the foregoing clauses having a rating of "A" or better by S&P or "A-2" or better by Moody's (including money market funds for which the Depositary Agent in its individual capacity, its parent or any of its affiliates is investment manager or adviser). "Principal Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186B. "Principal Payment Date" means with respect to (i) any Security, the date on which all or a portion of the principal of such Security becomes due and payable as provided therein or in the Indenture, whether on a scheduled date for payment of principal at a Redemption Date, the Final Maturity Date, a date of declaration of acceleration or otherwise, (ii) any Debt Service Reserve LOC Loan, each May 30th and November 30th, or any other date as may be agreed from time to time by the Funding Corporation and the agent under the Debt Service Reserve LOC Reimbursement Agreement, commencing on the first such date after the applicable drawing, and the date on which all or a portion of the principal of such Debt Service Reserve LOC Loan becomes due and payable at redemption, the final maturity date or declaration of acceleration, or otherwise, and (iii) any Debt Service Reserve Bond, each May 30th and November 30th, commencing on the first such date after the applicable conversion date, and any date on which principal of such Debt Service Reserve Bond becomes due and payable at redemption, the final maturity date or declaration of acceleration, or otherwise. "Redemption Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28187E. "Region 2/Turbo Construction Costs" has the meaning specified in Section 3.1.3(b). "Region 2/Turbo Construction Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186F. "Required Secured Parties" means, at any time, Persons that at such time hold at least 33-1/3% of the Combined Exposure, provided that for purposes of directing actions of the Collateral Agent, (i) the Funding Corporation shall convey, transfer and assign its right to vote on all matters under the Intercreditor Agreement to the Trustee and (ii) the Trustee shall be entitled to vote on all matters under the Intercreditor Agreement according to the aggregate principal amount of the Outstanding Securities, subject, however, in all events, to the terms and provisions of the Indenture. "Requisition" means a Construction Requisition, a Capital Expenditure Requisition, a Non-Budgeted Operating and Maintenance Costs Certificate, a Restoration Requisition or a Title Event Requisition. "Responsible Officer" means the president or any vice president, assistant vice president or the trust officer of the Trustee to whom any matter has been referred because of such officer's knowledge and familiarity with the particular subject. "Restoration Budget" has the meaning specified in Section 3.8. "Restoration Progress Payment Schedule" has the meaning specified in Section 3.8. "Restoration Requisition" has the meaning specified in Section 3.8. "Restoration Sub-Fund" means the sub-fund of such name established pursuant to Section 2.2. "Revenue Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186A. "Salton Sea Unit V Construction Costs" has the meaning specified in Section 3.1.2(b). "Salton Sea Unit V Construction Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186E. "Senior Debt" means all of the Permitted Debt of the Funding Corporation other than Subordinated Debt. "Series F Closing Date" means the date of issuance and delivery of the Series F Securities. "Title Event Requisition" has the meaning specified in Section 3.8. "Title Event Sub-Fund" means the sub-fund of such name established pursuant to Section 2.2. "Trigger Event" means (a)(i) an "Event of Default" under the Indenture and an acceleration of all or a portion of the indebtedness issued thereunder, (ii) an "Event of Default" under the Debt Service Reserve LOC Reimbursement Agreement and an acceleration of all or a portion of the indebtedness incurred thereunder, (iii) an "Event of Default" under a Senior Debt instrument and an acceleration of all or a portion of the Debt issued thereunder in an aggregate principal amount in excess of $10,000,000 or (iv) there shall have occurred and be continuing any Guarantee Event of Default under (x) the Partnership Guarantee at a time when the Partnership Project Note shall have been paid in full or (y) the Royalty Guarantee at a time when the Royalty Project Note shall have been paid in full, and such Guarantee Event of Default, if it had been a Credit Agreement Event of Default at a time prior to the payment in full of any such Project Note, would have resulted in the acceleration of such Project Note (assuming the exercise by the Funding Corporation of its rights of acceleration in respect of such Project Note pursuant to the terms of the relevant Credit Agreement and the giving of any applicable notices and passage of any applicable time requirements thereunder); and in each case, the Collateral Agent shall have, upon direction from the Required Secured Parties (as defined in the Intercreditor Agreement), declared such event to be a Trigger Event. "Trigger Event Date" has the meaning specified in Section 3.13. "Zinc Construction Costs" has the meaning specified in Section 3.1.1(b). "Zinc Construction Fund" means the Fund of such name established pursuant to Section 2.2 and having the following account number at the Depositary Agent: C28186D. ARTICLE II APPOINTMENT OF DEPOSITARY AGENT; ESTABLISHMENT OF FUNDS SECTION II.1 Acceptance of Appointment of Depositary Agent. (a) The Depositary Agent hereby agrees to act as such and to accept all cash, payments, other amounts and Permitted Investments to be delivered to or held by the Depositary Agent pursuant to the terms of this Depositary Agreement and the Indenture. The Depositary Agent shall hold and safeguard the Funds during the term of this Depositary Agreement and shall treat the cash, instruments and securities in the Funds as monies, instruments and securities pledged by the Guarantors to the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation to be held in the custody of the Depositary Agent, as agent solely for the Collateral Agent, in accordance with the provisions of this Depositary Agreement. In performing its functions and duties under this Depositary Agreement, the Depositary Agent shall act solely as agent for the Collateral Agent and, except in such capacity, does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for the Funding Corporation or any of the Guarantors. (b) Neither the Funding Corporation nor any of the Guarantors shall have any rights against or to monies held in the Funds, as third party beneficiary or otherwise, except the right to receive or make requisitions of monies held in the Funds, as permitted by this Depositary Agreement and the Indenture, and to direct the investment of monies held in the Funds as permitted by Section 3.10. SECTION II.2 Establishment of Funds and Sub- Funds. The Depositary Agent hereby establishes the following funds (the "Funds") in the form of interest bearing accounts and sub-accounts thereof, which shall be maintained at all times until the termination of this Depositary Agreement (provided that the Construction Period Debt Service Fund shall terminate after all required deposits into and withdrawals from such Fund shall have been made in accordance with Section 3.1.4 and each of the other Construction Funds shall terminate upon Final Completion of the relevant New Project): (a) Zinc Construction Fund; (b) Salton Sea Unit V Construction Fund; (c) Region 2/Turbo Construction Fund; (d) Construction Period Debt Service Fund; (e) Revenue Fund; (f) Principal Fund; (g) Interest Fund; (h) Debt Service Reserve Fund; (i) Distribution Fund; (j) Distribution Suspense Fund; (k) Loss Proceeds Fund; (l) Redemption Fund; (m) Capital Expenditure Fund; and (n) Cash Fund. The Funds referred to in clauses (f), (g), (i) and (j) are not required to be separate accounts but may be maintained as subaccounts of the Revenue Fund. To the extent the Debt Service Reserve Fund is fully funded or the amounts in such Fund, together with the Debt Service Reserve Letter of Credit, equal the Debt Service Reserve Required Balance, interest on the amounts in such Funds shall be transferred to the Revenue Fund. The following six sub-funds are hereby established and created within the Loss Proceeds Fund: (i) Restoration Sub-Fund; (ii) Title Event Sub-Fund; (iii) Zinc LD Sub-Fund; (iv) Salton Sea Unit V LD Sub-Fund; (v) Region 2/Turbo LD Sub-Fund; and (vi) LD Holding Sub-Fund. The following three sub-funds are hereby established and created within the Debt Service Reserve Fund: (i) Debt Service Reserve Bond Sub-Fund; (ii) Debt Service Reserve LOC Loan Interest Sub-Fund; and (iii) Debt Service Reserve LOC Loan Principal Sub-Fund. Certain additional sub-funds within certain of the Funds may be established and created from time to time in accordance with this Depositary Agreement. All amounts from time to time held in each Fund (other than amounts in the Debt Service Reserve Fund and the Liquidated Damages Sub-Funds) shall be held (a) in the name of the Depositary Agent, as agent for the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation and (b) in the custody of the Depositary Agent for the purposes and on the terms set forth in this Depositary Agreement, the Indenture and the Intercreditor Agreement and all such amounts shall constitute a part of the Collateral and shall not constitute payment of any Debt or any other obligation of the Funding Corporation or any Guarantor until applied as hereinafter provided. All amounts held from time to time in the Debt Service Reserve Fund shall be held in the name of the Depositary Agent, as agent for the Collateral Agent, for the sole benefit of the Trustee, except for those amounts (up to a maximum aggregate of $5,000,000 per fiscal year) available to be drawn in favor of the Debt Service Reserve LOC Provider in respect of interest due and payable, but unpaid, on outstanding Debt Service Reserve LOC Loans, as set forth in Section 3.5(g). All amounts held from time to time in the Liquidated Damages Sub-Funds shall be held in the name of the Depositary Agent, as agent for the Collateral Agent, for the sole benefit of the Trustee. SECTION II.3 Security Interest. (a) As collateral security for the prompt and complete payment and performance when due of all its obligations, each Guarantor has pledged, assigned, hypothecated and transferred to the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation, and has granted to the Collateral Agent a Lien on and security interest in and to, and in furtherance thereof hereby pledges, assigns, hypothecates and transfers to the Depositary Agent for the benefit of the Secured Parties and the Funding Corporation, and hereby grants to the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation a Lien on and security interest in and to, (i) each Fund and (ii) all cash, investments and securities at any time on deposit in any Fund, including all income or gain earned thereon and any proceeds thereof (collectively, the "Fund Collateral"). The Depositary Agent is the agent of the Collateral Agent for the purpose of receiving payments contemplated hereunder and for the purpose of perfecting the Lien of the Collateral Agent for the benefit of the Secured Parties and the Funding Corporation in and to the Funds and all cash, investments and securities and any proceeds thereof at any time on deposit in the Funds; provided that the Depositary Agent shall not be responsible to take any action to perfect such Lien except through the performance of its express obligations hereunder or upon the written direction of the Collateral Agent complying with this Depositary Agreement and the Intercreditor Agreement. Each of the Funds shall at all times be in the exclusive possession of, and under the exclusive domain and control of, the Depositary Agent, as agent for the Collateral Agent. SECTION II.4 Termination. This Depositary Agreement shall remain in full force and effect until the termination of the Intercreditor Agreement pursuant to Section 27 thereof. ARTICLE III THE FUNDS SECTION III.1 Construction Funds. 3.1.1 Zinc Construction Fund. (a) On the Series F Closing Date, $126,317,000 shall be delivered to the Depositary Agent and deposited in the Zinc Construction Fund from the net proceeds of the sale of the Series F Securities. The following amounts shall (subject to Section 3.8) be delivered to the Depositary Agent directly for deposit into the Zinc Construction Fund, or if received by Minerals LLC, as soon as practicable upon receipt: (i) all Equity Contributions made by CalEnergy pursuant to Sections 2(a) of the Equity Commitment Agreement; (ii) all revenues actually received by Minerals LLC from the Zinc Project prior to Substantial Completion of the Zinc Project; (iii) all income from the investment of monies in the Zinc Construction Fund pursuant to Section 3.10; (iv) all amounts required to be transferred to the Zinc Construction Fund pursuant to Section 3.8(iii); and (v) all other amounts required to be transferred to the Zinc Construction Fund from any other Funds pursuant to this Depositary Agreement. (b) Until Final Completion of the Zinc Project, amounts on deposit in the Zinc Construction Fund shall be applied solely for the payment of (i) costs (or reimbursement to the extent the same have been previously paid or satisfied by or on behalf of Minerals LLC) incurred in connection with the engineering, development, construction and start-up of the Zinc Project and (ii) any Operating and Maintenance Costs for the Zinc Project prior to Final Completion thereof (collectively, "Zinc Construction Costs") and for the payment of Zinc Construction Costs reasonably expected to be incurred during the 30-day period following the relevant Disburse ment Date. All amounts withdrawn from the Zinc Construction Fund shall be withdrawn in accordance with the disbursement procedure hereinafter described in this Section 3.1.1. (c) As a condition precedent to any withdrawal and transfer from the Zinc Construction Fund there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, (i) an appropriately completed requisition in the form attached hereto as Exhibit A-1 (a "Construction Requisition") signed by an Authorized Representative of Minerals LLC and (ii) an appropriately completed certificate of the Independent Engineer in the form attached hereto as Exhibit A-2 (an "Independent Engineer's Construction Certificate") signed by an authorized representative of the Independent Engineer, in each case dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Construction Requisition). (d) On the Disbursement Date referred to in clause (c) of this Section 3.1.1, or as soon thereafter as possible following receipt of the Construction Requisi tion referred to in such clause, the Depositary Agent shall make payments in accordance with such Construction Requisition. The Depositary Agent may conclusively rely on any Construction Requisition in making any disbursements under this clause (d). (e) Upon Final Completion of the Zinc Project, as evidenced by an Officer's Certificate delivered to the Depositary Agent, amounts remaining in the Zinc Construction Fund, if any, shall be transferred to the Revenue Fund, the Salton Sea Unit V Construction Fund or the Region 2/Turbo Construction Fund, as directed in such Officer's Certificate. 3.1.2 Salton Sea Unit V Construction Fund. (a) On the Series F Closing Date, $74,854,000 shall be delivered to the Depositary Agent and deposited in the Salton Sea Unit V Construction Fund from the net proceeds of the sale of the Series F Securities. The following amounts shall (subject to Section 3.8) be delivered to the Depositary Agent directly for deposit into the Salton Sea Unit V Construction Fund, or if received by Power LLC, as soon as practicable upon receipt: (ii) all Equity Contributions made by CalEnergy pursuant to Section 2(b) of the Equity Commitment Agreement; (iii) all revenues actually received by Power LLC from Salton Sea Unit V prior to Substantial Completion of Salton Sea Unit V; (iv) all income from the investment of monies in the Salton Sea Unit V Construction Fund pursuant to Section 3.10; (v) all amounts required to be transferred to the Salton Sea Unit V Construction Fund pursuant to Section 3.8(iii); and (vi) all other amounts required to be transferred to the Salton Sea Unit V Construction Fund from any other Funds pursuant to this Depositary Agreement. (b) Until Final Completion of Salton Sea Unit V, amounts on deposit in the Salton Sea Unit V Construction Fund shall be applied solely for the payment of (i) costs (or reimbursement to the extent the same have been previously paid or satisfied by or on behalf of Power LLC) incurred in connection with the engineering, development, construction, start-up and operation of Salton Sea Unit V and (ii) any Operating and Maintenance Costs for Salton Sea Unit V prior to Final Completion thereof (collectively, "Salton Sea Unit V Construction Costs") and for the payment of Salton Sea Unit V Construction Costs reasonably expected to be incurred during the 30-day period following the relevant Disbursement Date. All amounts withdrawn from the Salton Sea Unit V Construction Fund shall be withdrawn in accordance with the disbursement procedure hereinafter described in this Section 3.1.2. (c) As a condition precedent to any withdrawal and transfer from the Salton Sea Unit V Construction Fund there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, (i) an appropriately completed Construction Requisition signed by an Authorized Representative of Power LLC and (ii) an appropriately completed Independent Engineer's Construction Certificate signed by an authorized representative of the Independent Engineer, in each case dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Construction Requisition). (d) On the Disbursement Date referred to in clause (c) of this Section 3.1.2, or as soon thereafter as possible following receipt of the Construction Requisi tion referred to in such clause, the Depositary Agent shall make payments in accordance with such Construction Requisition. The Depositary Agent may conclusively rely on any Construction Requisition in making any disbursements under this clause (d). (e) Upon Final Completion of Salton Sea Unit V, as evidenced by an Officer's Certificate delivered to the Depositary Agent, amounts remaining in the Salton Sea Unit V Construction Fund, if any, shall be transferred to the Revenue Fund, the Zinc Construction Fund or the Region 2/Turbo Construction Fund, as directed in such Officer's Certificate. 3.1.3 Region 2/Turbo Construction Fund. (a) On the Series F Closing Date, $40,076,000 shall be delivered to the Depositary Agent and deposited in the Region 2/Turbo Construction Fund from the net proceeds of the sale of the Series F Securities. The following amounts shall (subject to Section 3.8) be delivered to the Depositary Agent directly for deposit into the Region 2/Turbo Construction Fund, or if received by Turbo LLC, Vulcan or Del Ranch, as soon as practicable upon receipt: (ii) all Equity Contributions made by CalEnergy pursuant to Section 2(c) of the Equity Commitment Agreement; (iii) all revenues actually received by Turbo LLC from the Region 2/Turbo Project prior to Substantial Completion of the Region 2/Turbo Project; (iv) all income from the investment of monies in the Region 2/Turbo Construction Fund pursuant to Section 3.10; (v) all amounts required to be transferred to the Region 2/Turbo Construction Fund pursuant to Section 3.8(iii); and (vi) all other amounts required to be transferred to the Region 2/Turbo Construction Fund from any other Funds pursuant to this Depositary Agreement. (b) Until Final Completion of the Region 2/Turbo Project, amounts on deposit in the Region 2/Turbo Construction Fund shall be applied solely for the payment of (i) costs (or reimbursement to the extent the same have been previously paid or satisfied by or on behalf of Turbo LLC, Vulcan or Del Ranch) incurred in connection with the engineering, development, construction, start-up and operation of the Region 2/Turbo Project and (ii) any Operating and Maintenance Costs for the Region 2/Turbo Project prior to Final Completion thereof (collectively, "Region 2/Turbo Construction Costs") and for the payment of Region 2/Turbo Construction Costs reasonably expected to be incurred during the 30-day period following the relevant Disbursement Date. All amounts withdrawn from the Region 2/Turbo Construction Fund shall be withdrawn in accordance with the disbursement procedure hereinafter described in this Section 3.1.3. (c) As a condition precedent to any withdrawal and transfer from the Region 2/Turbo Construction Fund there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, an appropriately completed Construction Requisition signed by an Authorized Representative of Turbo LLC, Vulcan or Del Ranch and dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Construction Requisition). (d) On the Disbursement Date referred to in clause (c) of this Section 3.1.3, or as soon thereafter as possible following receipt of the Construction Requisi tion referred to in such clause, the Depositary Agent shall make payments in accordance with such Construction Requisition. The Depositary Agent may conclusively rely on any Construction Requisition in making any disbursements under this clause (d). (e) Upon Final Completion of the Region 2/Turbo Project, as evidenced by an Officer's Certificate delivered to the Depositary Agent, amounts remaining in the Region 2/Turbo Construction Fund, if any, shall be transferred to the Revenue Fund, the Zinc Construction Fund or the Salton Sea Unit V Construction Fund, as directed in such Officer's Certificate. 3.1.4 Construction Period Debt Service Fund. (a) On the Series F Closing Date, $23,575,000 shall be delivered to the Depositary Agent and deposited in the Construction Period Debt Service Fund from the net proceeds of the sale of the Series F Securities. All amounts received by the Depositary Agent pursuant to Section 2(e) of the Equity Commitment Agreement shall be deposited into the Construction Period Debt Service Fund. All income from the investment of monies in the Construction Period Debt Service Fund pursuant to Section 3.10 shall be redeposited into the Construction Period Debt Service Fund. (b) Until Final Completion of the New Projects and final completion of the Permitted Capital Expenditures in accordance with the plans and specifications therefor, amounts on deposit in the Construction Period Debt Service Fund shall be applied solely for the payment of interest on, and other amounts due in respect of (if any), the principal amount of the Securities, at times and in amounts equal to the amounts due and payable for Construction Debt Service. On any date on which any Construction Debt Service is due, as set forth in an Officer's Certificate delivered to the Depositary Agent three (3) Business Days prior to such date, the Depositary Agent shall withdraw from the Construction Period Debt Service Fund an amount of monies (as certified in such Officer's Certificate) sufficient to pay such interest or other amounts and remit such monies to the Persons entitled thereto for the payment of such interest or other amounts. Upon Final Completion of each of the New Projects and final completion of the Permitted Capital Expenditures in accordance with the plans and specifications therefor, as evidenced by an Officer's Certificate delivered to the Depositary Agent, amounts remaining in the Construction Period Debt Service Fund, if any, shall be transferred to the Revenue Fund. SECTION III.2 Revenue Fund. (a) The following amounts shall (subject to Section 3.8) be delivered to the Depositary Agent directly for deposit into the Revenue Fund, or if received by a Guarantor, as soon as practicable upon receipt, in either case in accordance with this Section 3.2(a): (i) subject to Section 3.1, all revenues actually received by the Salton Sea Guarantors from the Salton Sea Projects and all revenues actually received by the Partnership Project Companies from the Partnership Projects; (ii) all Equity Cash Flows and Royalties received by CEOC and VPC; (iii) to the extent not included in clause (ii), all Equity Cash Flows and Royalties received by CEOC under the Magma Services Agreement and by VPC in respect of the Vulcan Project; (iv) all Royalties received by the Royalty Guarantor; (v) all amounts from any Construction Fund, to the extent that, following Final Completion of the relevant New Project, there are excess funds in such Construction Fund and the Funding Corporation has not elected to deposit such excess funds into another Construction Fund; (vi) other than amounts required to be deposited into a Construction Fund pursuant to Section 3.10 and to the extent the Debt Service Reserve Fund is fully funded or the amounts in such Fund (not including any funds held in the Debt Service Reserve Bond Sub-Fund, the Debt Service Reserve LOC Loan Interest Sub-Fund or the Debt Service Reserve LOC Loan Principal Sub-Fund), together with the Debt Service Reserve Letter of Credit, equals the Debt Service Reserve Required Balance, any income from the investment of the monies in any of the Funds pursuant to Section 3.10; and (vii) all amounts required to be transferred to the Revenue Fund from any other Funds as contemplated under this Depositary Agreement or as provided in Section 7 of the Intercreditor Agreement. If any of the foregoing amounts required to be deposited with the Depositary Agent in accordance with the terms of this Depositary Agreement are received by any Guarantor (or any Affiliate of such Guarantor), such Guarantor shall (or shall cause any such Affiliate to) hold such payments in trust for the Collateral Agent and shall promptly remit such payments to the Depositary Agent for deposit in the Revenue Fund, in the form received, with any necessary endorsements. (b) In the event the Depositary Agent receives monies without adequate instruction with respect to the proper Fund in which such monies are to be deposited, the Depositary Agent shall deposit such moneys into the Revenue Fund, segregate such monies from all other amounts on deposit in the Revenue Fund and notify the Guarantors of the receipt of such monies. Upon receipt of written instructions from any Guarantor, the Depositary Agent shall transfer such monies from the Revenue Fund to the Fund specified by such instructions (other than the Distribution Fund). (c) The Funding Corporation and each Guarantor hereby irrevocably authorizes the Depositary Agent to make withdrawals and transfers of monies on each Funding Date (via wire transfer or otherwise in the discretion of the Depositary Agent) to the extent then available in the Revenue Fund, upon the delivery of an officer's certificate of such Guarantor or the Funding Corporation (or any of their duly authorized agents for such purposes) to the Depositary Agent three (3) Business Days prior to such Funding Date setting forth the amounts to be withdrawn from the Revenue Fund and the amounts to be transferred pursuant to this clause (c) pursuant to the terms of this Depositary Agreement in the following order of priority: (i) First: To pay when due the amount of Operating and Maintenance Costs (including principal, interest and commitment fees due and payable with respect to Working Capital Debt and Debt incurred in connection with Interest Rate Protection Agreements) of any Guarantor or the Funding Corporation or otherwise in respect of any Project as set forth in the officer's certificate of such Guarantor or the Funding Corporation (or any of their duly authorized agents for such purposes) and certified by such officer's certificate to be the good faith estimate of the amounts payable for Operating and Maintenance Costs, and stating that the proviso immediately below does not apply to such withdrawal; provided that if the cumulative Operating and Maintenance Costs of such Guarantor in any fiscal year, including the amounts set forth in such officer's certificate, exceed the projected Operating and Maintenance Costs in the applicable annual operating budget of such Guarantor by more than 25%, then no amounts may be withdrawn on behalf of such Guarantor to pay non-budgeted operating costs unless there shall be filed with the Depositary Agent: (A) an officer's certificate of such Guarantor substantially in the form attached hereto as Exhibit B (the "Non-Budgeted Operating and Maintenance Costs Certificate"), dated not more than three (3) Business Days prior to such requested Disbursement Date; or (B) if the relevant Guarantor does not certify that (i) such additional non- budgeted costs are reasonably designed to permit such Guarantor to satisfy its obligations in respect of its Project Note and maximize its revenue and net income and (ii) it is reasonable to expect that (A) a Debt Service Coverage Ratio of at least 1.4 to 1 will be maintained for the next 12-month period if such period ends prior to 2000 or (B) a Debt Service Coverage Ratio of at least 1.5 to 1 will be maintained for the next 12-month period if such period ends after January 1, 2000, an Independent Engineer's Certificate, in substan tially the form attached as Appendix I to Exhibit B, dated not more than three (3) Business Days prior to such requested Disbursement Date; (ii) Second: After making each applicable withdrawal and transfer specified in clause (i) above, withdraw and transfer from the Revenue Fund on each Funding Date, to the Depositary Agent, the Trustee, the agent under the Debt Service Reserve LOC Reimbursement Agreement, the agent for the Working Capital Facility Provider and the Collateral Agent any amounts set forth in an officer's certificate of the Funding Corporation or any Guarantor then due and payable to each of the Depositary Agent, the Trustee, the Collateral Agent, the agent under the Debt Service Reserve LOC Reimbursement Agreement or the agent for the Working Capital Facility Provider as Administrative Costs; provided, however, that if monies in the Revenue Fund are insufficient on any date to make the payments specified in this clause (ii), distribution of monies shall be made ratably to the specified recipients based on the respective amounts owed such recipients; (iii) Third: After making each applicable withdrawal and transfer specified in clauses (i) and (ii) above, transfer an amount set forth in an officer's certificate of the Funding Corporation or any Guarantor from the Revenue Fund on each Funding Date (A) to the Interest Fund an amount which, together with the amount then in such Fund and the amount in the Construction Period Debt Service Fund which is allocated to pay interest on the next succeeding Interest Payment Date pursuant to Section 3.1.4, equals all of the interest due or becoming due on the Securities and (without duplication) the Project Notes, on the next succeeding Interest Payment Date, (B) to the Principal Fund an amount which, together with the amount then in such Fund, equals all of the principal and premium (if any) due or becoming due on the Securities and (without duplication) the Project Notes, on the next succeeding Principal Payment Date, (C) to the agent under the Debt Service Reserve LOC Reimbursement Agreement an amount which equals all of the commitment, letter of credit and fronting fees becoming due and payable under the Debt Service Reserve LOC Reimbursement Agreement on the next succeeding payment date, (D) to the Debt Service Reserve LOC Loan Interest Sub- Fund an amount which, together with the amount then in such Sub-Fund, equals all of the interest due or becoming due on any Debt Service Reserve LOC Loans on the next succeeding Interest Payment Date, and (E) to the Debt Service Reserve Bond Sub-Fund an amount which, together with the amount then in such Sub-Fund, equals all of the principal, premium (if any) and interest due or becoming due on all of the Debt Service Reserve Bonds on the next succeeding Scheduled Payment Date; provided, however, that if monies in the Revenue Fund are insufficient on any date to make the payments specified in this clause (iii), distribution of monies shall be made ratably to the specified recipients based on the respective amounts owed such recipients; (iv) Fourth: After making each applicable withdrawal and transfer specified in clauses (i), (ii) and (iii) above, withdraw from the Revenue Fund on each Funding Date, as set forth in an officer's certificate of the Funding Corporation or any Guarantor, and transfer (A) to the Debt Service Reserve LOC Loan Principal Sub-Fund an amount which, together with the amount then in such Sub-Fund, equals all of the principal outstanding on any Debt Service Reserve LOC Loans on the next succeeding Principal Payment Date, (B) to the agent under the Debt Service Reserve LOC Reimbursement Agreement (1) any direct loss (but excluding any indirect, consequential or incidental loss or damage), cost or out-of-pocket expense which the Debt Service Reserve LOC Provider or such other financial institution providing a Debt Service Reserve LOC Loan incurs as a result of a prepayment of any Debt Service Reserve LOC Loan bearing interest at a London interbank offered rate on a date which is not the last day of the applicable interest period, to the extent that such loss, cost or expense is required to be paid to the Debt Service Reserve LOC Provider and such other financial institutions under the agreement evidencing such Debt Service Reserve LOC Loan, and (2) any amounts certified by the Debt Service Reserve LOC Provider or any financial institution providing a Debt Service Reserve LOC Loan to be required to compensate such lender for amounts due under Sections 2.15, 2.16 and/or 2.17 of the Debt Service Reserve LOC Reimbursement Agreement (as in effect on the Closing Date, or any such corresponding section of any similar agreement refinancing or replacing such Debt Service Reserve LOC Reimbursement Agreement) and (C) if no Debt Service Reserve Letter of Credit is outstanding, to the Debt Service Reserve Fund an amount as necessary to fund the Debt Service Reserve Fund up to the Debt Service Reserve Required Balance; provided, however, that if monies in the Revenue Fund are insufficient on any date to make the payments specified in this clause (iv), distribution of monies shall be made ratably to the specified recipients based on the respective amounts owed such recipients; (v) Fifth: After making each applicable withdrawal and transfer specified in clauses (i), (ii), (iii) and (iv) above, withdraw from the Revenue Fund on each Funding Date, as set forth in an officer's certificate of the Funding Corporation or any Guarantor, any indemnification expenses or other amounts heretofore not paid and required to be paid to any of the Secured Parties, to the extent then due and payable, including, without limitation amounts due under Section 2.7(i) of the Debt Service Reserve LOC Reimbursement Agreement (as in effect on the Closing Date, or any such corresponding section of any similar agreement refinancing or replacing such Debt Service Reserve LOC Reimbursement Agreement); provided, however, that if monies in the Revenue Fund are insufficient on any date to make the payments specified in this clause (v), distribution of monies shall be made ratably to the specified recipients based on the respective amounts owed such recipients; (vi) Sixth: After making each applicable withdrawal and transfer specified in clauses (i), (ii), (iii), (iv) and (v) above, transfer from the Revenue Fund on each Funding Date any remaining amounts, as set forth in an officer's certificate of the Funding Corporation or any Guarantor, for transfer to the Distribution Fund; and (vii) Seventh: After making each applicable withdrawal and transfer specified in clauses (i), (ii), (iii), (iv), (v) and (vi) above, transfer from the Distribution Fund any amounts, as set forth in an officer's certificate of the Funding Corporation or any Guarantor, in the Distribution Fund which cannot be distributed because of the failure to satisfy certain conditions to distributions as set forth in Section 3.6(b), to the Distribution Suspense Fund. In the event the Securities are accelerated and no foreclosure occurs within 180 days thereafter, then principal of the Debt Service Reserve LOC Loans shall be paid equally and ratably in priority Third in lieu of priority Fourth above until such time as such foreclosure has occurred or such acceleration has been rescinded or otherwise remedied. Notwithstanding the foregoing provisions of clause (iv) above, if the Debt Service Reserve Letter of Credit has not been renewed or reinstated by a date 3.5 years prior to its stated expiration date, monies withdrawn and transferred as specified in clause (iv) above for application in priority Fourth shall, during such 3.5 year period and until either (1) the Outstanding Amount (as defined in the Debt Service Reserve LOC Reimbursement Agreement) of the Debt Service Reserve Letter of Credit is reduced to zero and no Debt Service Reserve LOC Loans are outstanding or (2) a replacement Debt Service Reserve Letter of Credit issued by a Debt Service Reserve LOC Provider is provided to the Depositary Agent and the commitments of the lenders providing such original Debt Service Reserve Letter of Credit which has not been renewed or reinstated are terminated in accordance with Section 2.21 of the Debt Service Reserve LOC Reimbursement Agreement (as in effect on the Closing Date, or such corresponding section of any similar agreement refinancing or replacing such Debt Service Reserve LOC Reimbursement Agreement), be distributed (after making any distribution in sub-clause (B) of clause (iv) above) ratably as follows: (a) to the Debt Service Reserve LOC Loan Principal Sub-Fund for application against the principal of any Debt Service Reserve LOC Loans due or becoming due on the next succeeding Principal Payment Date; and (b) to the Debt Service Reserve Fund until the amount deposited therein equals the Debt Service Reserve Required Balance (such amount deposited under this clause (b), the "Debt Service Reserve LOC Credit Amount"). The Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent hereby acknowledge that amounts paid by the Guarantors and transferred to the Principal Fund and Interest Fund pursuant to the terms hereof and applied by the Depositary Agent for payment of principal and interest owed from time to time on any series of Securities shall reduce by the amount paid by each such Guarantor the outstanding principal amount of the respective Project Note of such Guarantor. SECTION III.3 Principal Fund. (a) Monies deposited in the Principal Fund on any Funding Date shall be allocated ratably among sub-funds of the Principal Fund established for each series of Securities and (without duplication) each Project Note based on the principal and premium, if any, due and payable on the Securities and Project Notes at the next succeeding Principal Payment Date falling on or within six months following such Funding Date. Except as otherwise provided in this Depositary Agreement, monies in such sub- funds shall be used for the payment (without duplication), when due and payable (whether at the Principal Payment Date or otherwise), of principal and premium, if any, with respect to the related series of Securities. (b) On any Funding Date that amounts for the payment of principal of and premium, if any, on any given series or any specific notes or bonds within a particular series of Securities and (without duplication) any Project Note are due and payable and have been requisitioned in accordance with Section 3.2(c), the Depositary Agent shall withdraw the monies on deposit in the sub-fund of the Principal Fund allocated for such series of Securities, and remit such monies to the Persons entitled thereto for the payment of such principal and premium, if any; provided, however, that the Depositary Agent shall segregate such amounts from any other amounts on deposit in the Principal Fund until such time as payment is made to Persons entitled thereto. (c) In the event that monies in the Principal Fund exceed the amount of money required by this Depositary Agreement to be deposited therein after giving effect to the payment made on such Principal Payment Date, the Depositary Agent shall transfer such excess monies from the Principal Fund to the Revenue Fund on such Principal Payment Date. SECTION III.4 Interest Fund. (a) On any date that amounts for the payment of interest on any given series of Securities and (without duplication) any Project Note (after giving effect to and without duplication of interest to be paid pursuant to Section 3.1.4) are due and payable and have been requisitioned in accordance with Section 3.2(c) (or if such day is not a Business Day, then on the next succeeding Business Day), the Depositary Agent shall withdraw the monies on deposit in the sub-fund of the Interest Fund allocated for such series of Securities, and remit such monies to the Persons entitled thereto for the payment of such interest, as requisitioned pursuant to Section 3.2(c); provided, however, that the Depositary Agent shall segregate such amounts from any other amounts on deposit in the Interest Fund until such time as payment is made to Persons entitled thereto. (b) In the event that monies in the Interest Fund exceed the amount of money required by this Depositary Agreement to be deposited therein after giving effect to the payment made on such Interest Payment Date, the Depositary Agent shall transfer such excess monies from the Interest Fund to the Revenue Fund on such Interest Payment Date. SECTION III.5 Debt Service Reserve Fund. (a) On the Series F Closing Date the Funding Corporation and the Guarantors will furnish to the Depositary Agent a Debt Service Reserve Letter of Credit in an amount equal to the Debt Service Reserve Required Balance from a commercial bank or other financial institution whose long- term unsecured debt obligations are rated at least "A" by S&P and "A2" by Moody's, or otherwise make available to the Depositary Agent for deposit in the Debt Service Reserve Fund an amount equal to the Debt Service Reserve Required Balance. Any Debt Service Reserve Letter of Credit will be issued pursuant to the Debt Service Reserve LOC Reimbursement Agreement. Notwithstanding anything to the contrary set forth in this Depositary Agreement, amounts in the Debt Service Reserve Bond Sub- Fund, Debt Service Reserve LOC Loan Interest Sub-Fund and Debt Service Reserve LOC Loan Principal Sub-Fund shall not be included in determining the amount held in the Debt Service Reserve Fund. (b) On each date on which the Depositary Agent is required to withdraw or transfer monies from the Revenue Fund, the Principal Fund, the Interest Fund, the Debt Service Reserve LOC Loan Interest Sub-Fund and the Debt Service Reserve LOC Loan Principal Sub-Fund to meet principal and interest payments on the Securities and interest payments on the Debt Service Reserve LOC Loans, the Depositary Agent shall first withdraw or transfer (for and only for the above mentioned purposes and after giving effect to the application of monies available in any other Fund pursuant to this Agreement) monies then held in such relevant Fund. To the extent that monies then held in such relevant Funds are insufficient to fund such withdrawal and transfer, as evidenced by the officer's certificate in connection with such withdrawal and transfer, one (1) Business Day prior to such date, the Depositary Agent shall deliver to the Debt Service Reserve LOC Provider on such date (i) a draft on the Debt Service Reserve LOC Provider in an amount equal to the lesser of (A) the Outstanding Amount (as defined in the Debt Service Reserve LOC Reimbursement Agreement) of the Debt Service Reserve Letter of Credit or (B) the amount of such insufficiency and (ii) an appropriate certificate with respect thereto if required by the Debt Service Reserve Letter of Credit. The Depositary Agent shall deposit the monies received from the Debt Service Reserve LOC Provider in the relevant Fund or Funds. (c) A determination as to the monies held in the Debt Service Reserve Fund (not including any funds held in the Debt Service Reserve Bond Sub-Fund, the Debt Service Reserve LOC Loan Interest Sub-Fund or the Debt Service Reserve LOC Loan Principal Sub-Fund) and/or the aggregate maximum amount at the time available to be drawn under the Debt Service Reserve Letter of Credit, the then-current Debt Service Reserve Required Balance, the ordinary course settlement amounts with respect to all Interest Rate Protection Agreements and the interest rate for all Additional Securities with a floating interest rate which are not subject to Interest Rate Protection Agreements (which interest rate for such Additional Securities in effect at the time of calculation shall be assumed to apply) shall be made by the Funding Corporation or any Guarantor prior to each Funding Date and immediately following any withdrawal of amounts in the Debt Service Reserve Fund pursuant to clause (b) above. As soon as practicable after making any such determination, the Funding Corporation or any Guarantor shall deliver to the Depositary Agent and the Collateral Agent an officer's certificate setting forth such determination and the then-current Debt Service Reserve Required Balance. If such determination indicates that the amount of the monies held in the Debt Service Reserve Fund (not including any funds held in the Debt Service Reserve Bond Sub-Fund, the Debt Service Reserve LOC Loan Interest Sub-Fund or the Debt Service Reserve LOC Loan Principal Sub-Fund) plus the aggregate maximum amount at the time available to be drawn under the outstanding Debt Service Reserve Letter of Credit exceeds the then-current Debt Service Reserve Required Balance after giving effect to a payment on any date, the Depositary Agent shall transfer such excess monies held in the Debt Service Reserve Fund to the Revenue Fund on such date. (d) Forty-five (45) days prior to the expiration of the Debt Service Reserve Letter of Credit delivered to the Depositary Agent in respect of the Debt Service Reserve Fund, provided that the Debt Service Reserve Letter of Credit has not been previously renewed, extended or replaced, or if such day is not a Business Day, on the next succeeding Business Day, the Depositary Agent shall deliver to the Debt Service Reserve LOC Provider on such date (i) a draft on the Debt Service Reserve LOC Provider in an amount equal to the maximum amount available to be drawn under the expiring Debt Service Reserve Letter of Credit and (ii) an appropriate certificate with respect thereto if required by the Debt Service Reserve Letter of Credit. The Depositary Agent shall deposit the monies received from the Debt Service Reserve LOC Provider in payment of such draft in the Debt Service Reserve Fund to be applied in accordance with this Section 3.5. (e) Forty-five (45) days after receipt of notice from the Debt Service Reserve LOC Provider that the long-term debt securities of such Debt Service Reserve LOC Provider are rated less than "A" as determined by S&P or "A2" as determined by Moody's, or if such day is not a Business Day, the next succeeding Business Day, provided that the Debt Service Reserve Letter of Credit has not been replaced with a Debt Service Reserve Letter of Credit issued by a new Debt Service Reserve LOC Provider, the Depositary Agent shall deliver to the Debt Service Reserve LOC Provider on such date (i) a draft on the Debt Service Reserve LOC Provider in an amount equal to the maximum amount available to be drawn under the Debt Service Reserve Letter of Credit and (ii) an appropriate certificate with respect thereto if required by the Debt Service Reserve Letter of Credit. The Depositary Agent shall deposit the monies received from the Debt Service Reserve LOC Provider in payment of such draft in the Debt Service Reserve Fund to be applied in accordance with this Section 3.5. (f) Upon receipt of a written notice from the Debt Service Reserve LOC Provider that the Debt Service Reserve Letter of Credit delivered to the Depositary Agent will be terminated prior to its stated expiration date, if, not less than five (5) Business Days prior to the termination date as provided in such notice of termination, the Debt Service Reserve Letter of Credit has not been replaced with a Debt Service Reserve Letter of Credit issued by a new Debt Service Reserve LOC Provider, or other security reasonably acceptable to the Depositary Agent, the Depositary Agent shall deliver to the Debt Service Reserve LOC Provider (i) a draft on the Debt Service Reserve LOC Provider in an amount equal to the maximum amount available to be drawn under the terminating Debt Service Reserve Letter of Credit and (ii) an appropriate certificate with respect thereto if required by the Debt Service Reserve Letter of Credit. The Depositary Agent shall deposit the monies received from the Debt Service Reserve LOC Provider in payment of such draft in the Debt Service Reserve Fund to be applied in accordance with this Section 3.5. (g) Upon receipt of a written notice from the Debt Service Reserve LOC Provider that interest is due and payable, but unpaid, with respect to outstanding Debt Service Reserve LOC Loans, the Depositary Agent shall deliver to the Debt Service Reserve LOC Provider on the date of such notice or as soon as practicable thereafter (i) a draft on the Debt Service Reserve LOC Provider in an amount equal to the amount of interest due and payable (which, together with all drawings under the Debt Service Reserve Letter of Credit in the current fiscal year, shall not exceed $5,000,000 in the aggregate) and (ii) an appropriate certificate with respect thereto if required by the Debt Service Reserve Letter of Credit. The Depositary Agent shall apply monies received from the Debt Service Reserve LOC Provider in payment of such amount of interest due and payable. (h) Monies deposited in the Debt Service Reserve Bond Sub-Fund on any Funding Date shall be used for the payment, when due and payable (whether at the Scheduled Payment Date or otherwise), of principal and interest with respect to any outstanding Debt Service Reserve Bond at the next succeeding Scheduled Payment Date falling on or within six (6) months following such Funding Date. On any Funding Date that amounts for the payment of principal and interest with respect to the Debt Service Reserve Bond are due and payable and have been requisitioned in accordance with Section 3.2(c), the Depositary Agent shall withdraw the monies on deposit in the Debt Service Reserve Bond Sub-Fund and remit such monies to the agent under the Debt Service Reserve LOC Reimbursement Agreement for such payments. In the event that monies in the Debt Service Reserve Bond Sub-Fund exceed the amount of money required by this Depositary Agreement to be deposited therein after giving effect to the payment made on such Scheduled Payment Date, the Depositary Agent shall transfer such excess monies from the Debt Service Reserve Bond Sub-Fund to the Revenue Fund on such Scheduled Payment Date. (i) Monies deposited in the Debt Service Reserve LOC Loan Interest Sub-Fund on any Funding Date shall be used for the payment, when due and payable (whether at the Interest Payment Date or otherwise), of interest with respect to any outstanding Debt Service Reserve LOC Loans at the next succeeding Interest Payment Date falling on or within six (6) months following such Funding Date. On any Funding Date that amounts for the payment of interest with respect to any Debt Service Reserve LOC Loans are due and payable and have been requisitioned in accordance with Section 3.2(c), the Depositary Agent shall withdraw the monies on deposit in the Debt Service Reserve LOC Loan Interest Sub-Fund and remit such monies to the agent under the Debt Service Reserve LOC Reimbursement Agreement for the payment of such interest. In the event that monies in the Debt Service Reserve LOC Loan Interest Sub-Fund exceed the amount of money required by this Depositary Agreement to be deposited therein after giving effect to the payment made on such Interest Payment Date, the Depositary Agent shall transfer such excess monies from the Debt Service Reserve LOC Loan Interest Sub-Fund to the Revenue Fund on such Interest Payment Date. (j) Monies deposited in the Debt Service Reserve LOC Loan Principal Sub-Fund on any Funding Date shall be used for the payment, when due and payable (whether at the Principal Payment Date or otherwise), of principal with respect to any outstanding Debt Service Reserve LOC Loans at the next succeeding Principal Payment Date falling on or within six (6) months following such Funding Date. On any Funding Date that amounts for the payment of principal with respect to any Debt Service Reserve LOC Loans are due and payable and have been requisitioned in accordance with Section 3.2(c), the Depositary Agent shall withdraw the monies on deposit in the Debt Service Reserve LOC Loan Principal Sub-Fund and remit such monies to the Debt Service Reserve LOC Provider for the payment of such principal. In the event that monies in the Debt Service Reserve LOC Loan Principal Sub-Fund exceed the amount of money required by this Depositary Agreement to be deposited therein after giving effect to the payment made on such Principal Payment Date, the Depositary Agent shall transfer such excess monies from the Debt Service Reserve LOC Loan Principal Sub-Fund to the Revenue Fund on such Principal Payment Date. SECTION III.6 Distribution Fund. (a) On any Funding Date that all of the conditions set forth in Section 3.6(b) are satisfied, the Depositary Agent shall make payments from the Distribution Fund to such Persons as may be directed in writing by the Guarantors. (b) The Distribution Fund will be funded from monies transferred from the Revenue Fund after all other then-required amounts have been paid as provided in Section 3.2(c). Distributions may be made only from and to the extent of monies on deposit in the Distribution Fund. Such distributions are subject to the prior satisfaction of the following conditions: (i) the amounts contained in the Principal Fund and Interest Fund shall be equal to or greater than the aggregate principal and interest payments next due on the Securities and (without duplication) the Project Notes (without duplication of interest to be paid pursuant to Section 3.1.4); (ii) no Default or Event of Default under the Indenture shall have occurred and be continuing; (iii) the Debt Service Coverage Ratio for the preceding four (4) fiscal quarters, measured as one (1) annual period (or, with respect to any proposed distribution date prior to the first anniversary of the Closing Date, for the period commencing with the Closing Date and ending on the first anniversary of the Closing Date, projected results for any portion of such period (certified by an officer of the Funding Corporation) shall be used when actual results are not available), is equal to or greater than 1.4 to 1.0, if such distribution date occurs prior to the year 2000, and, if such distribution date occurs in or subsequent to the year 2000, is equal to or greater than 1.5 to 1.0, as certified by an Authorized Officer of the Funding Corporation; (iv) the projected Debt Service Coverage Ratio for the succeeding four (4) fiscal quarters, measured as one (1) annual period, is equal to or greater than 1.4 to 1.0, if such distribution date occurs prior to the year 2000, and, if, such distribution date occurs in or subsequent to the year 2000, is equal to or greater than 1.5 to 1.0, as certified by an Authorized Officer of the Funding Corporation; (v) the Debt Service Reserve Fund shall have a balance equal to or greater than the Debt Service Reserve Required Balance or a Debt Service Reserve Letter of Credit in an amount at least equal to (collectively with the balance, if any, then in such Debt Service Reserve Fund) the Debt Service Reserve Required Balance shall be outstanding and available; (vi) an Authorized Officer of the Funding Corporation certifies (containing customary assumptions and qualifications) that there are sufficient geothermal resources to operate (A) the Salton Sea Projects and the Partnership Projects (other than the Zinc Project) at contract capacity and (B) the Zinc Project at a level not materially lower than the level contemplated in the Base Case Projections (as adjusted pursuant to (x) an Approved Completion Plan, (y) Section 2(j) of the Fourth Supplemental Indenture or (z) Section 2(m) of the Fourth Supplemental Indenture, if applicable), in each case through the Final Maturity Date; and (vii) Substantial Completion of each New Project has occurred on or prior to the Guaranteed Substantial Completion Date for such New Project, as certified by an Authorized Officer of the Funding Corporation; provided that, notwithstanding that such condition is not satisfied, distributions may be made if (A) (x) if such condition is not satisfied with respect to the Zinc Project, Series F Securities having an aggregate principal amount of $140,520,000 have been redeemed pursuant to Section 2(m) of the Fourth Supplemental Indenture, (y) if such condition is not satisfied with respect to Salton Sea Unit V, Series F Securities having an aggregate principal amount of $83,272,000 have been redeemed pursuant to Section 2(m) of the Fourth Supplemental Indenture, and (z) if such condition is not satisfied with respect to the Region 2/Turbo Project, Series F Securities having an aggregate principal amount of $44,581,000 have been redeemed pursuant to Section 2(m) of the Fourth Supplemental Indenture, or (B) for each New Project with respect to which such condition is not satisfied, the Funding Corporation and the Guarantors take such actions as the Rating Agencies require in order for the Rating Agencies to confirm in writing to the Trustee that such failure of such New Project to achieve Substantial Completion by the Guaranteed Substantial Completion Date therefor or such abandonment, as the case may be, will not result in a Rating Downgrade, and the Rating Agen cies issue such written confirmation; provided, further, that this condition to distribution shall apply with respect to any New Project only (x) after the Guaranteed Substantial Completion Date for such New Project, or (y) if the construction of such New Project has been abandoned, in each case as set forth in the Officer's Certificate delivered to the Trustee pursuant to Section 5.21 of the Indenture. SECTION III.7 Distribution Suspense Fund. On any Funding Date on which any of the conditions precedent to distributions in Section 3.6(b) are not satisfied, the Depositary Agent shall transfer all monies held in the Distribution Fund to the Distribution Suspension Fund; provided, however, that, after application of the last sentence of this Section 3.7, the Depositary Agent shall transfer any remaining monies which were transferred to the Distribution Suspense Fund solely because of a failure to satisfy the condition precedent to distributions set forth in Section 3.6(b)(vii) to one or more of the Construction Funds for application in accordance with Section 3.1, if so directed in an Officer's Certificate of the Funding Corporation delivered to the Depositary Agent. On any Business Day thereafter on which the conditions to distributions set forth in Section 3.6(b) are satisfied, upon delivery to the Trustee, the Collateral Agent and the Depositary Agent of an Officer's Certificate of the Funding Corporation certifying that all such conditions to distribution are now satisfied, the Depositary Agent shall withdraw and transfer monies in the Distribution Suspense Fund designated for such Funding Date to such Persons as may be directed in writing by the Guarantors. The Depositary Agent may conclusively rely on such Officer's Certificate certifying that all conditions for disbursement from the Distribution Fund have been met. At any time that funds in the Revenue Fund are not sufficient to pay any amounts which are due and payable (other than by acceleration) and required to be paid with proceeds of the Revenue Fund, then funds in the Distribution Suspense Fund shall be transferred to the Revenue Fund for distribution as provided therein. SECTION III.8 Loss Proceeds Fund. (i) All Loss Proceeds and Eminent Domain Proceeds received by any Salton Sea Guarantor or, as the case may be, Partnership Guarantor, shall be deposited in the Loss Proceeds Fund. The Depositary Agent shall separately segregate such Loss Proceeds and Eminent Domain Proceeds for distribution in the manner as set forth below: (A) In the event that the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, determine that the affected Salton Sea Project or, as the case may be, Partnership Project, cannot be rebuilt, repaired or restored to permit operation of all or a portion of such Project on a commercially reasonable basis following an Event of Eminent Domain or Event of Loss, or that the Loss Proceeds or the Eminent Domain Proceeds, together with any other amounts that the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, are willing to commit or cause to be committed to such rebuilding, repair or restoration, are not sufficient to permit such rebuilding, repair or restoration, upon delivery to the Depositary Agent and Collateral Agent of an officer's certificate of the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors (containing customary assumptions and qualifications), certifying to the foregoing then, if such Loss Proceeds or Eminent Domain Proceeds exceed $15,000,000, the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate. Upon receipt of the Allocation Certificate, the Depositary Agent shall withdraw, transfer or distribute the monies representing the Loss Proceeds or the Eminent Domain Proceeds in the Loss Proceeds Fund to the Redemption Fund. (B) In the event that the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, determine not to rebuild, repair or restore the affected Salton Sea Project or, as the case may be, Partnership Project, following an Event of Eminent Domain or Event of Loss, and such Loss Proceeds or Eminent Domain Proceeds exceed $15,000,000, upon delivery to the Depositary Agent and Collateral Agent of an officer's certificate of the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, certifying that the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, have determined not to rebuild, repair or restore the affected Project, the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate. Upon receipt of the Allocation Certificate, the Depositary Agent shall withdraw, transfer or distribute the monies representing the Loss Proceeds or the Eminent Domain Proceeds in the Loss Proceeds Fund to the Redemption Fund. (C) (1) In the event that the Salton Sea Guarantors or, as the case may be, the Partnership Guarantors, have determined to rebuild, repair or restore all or a portion of the affected Salton Sea Project or, as the case may be, Partnership Project, upon delivery to the Depositary Agent and Collateral Agent of an officer's certificate of the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, certifying that all or a portion, as applicable, of the Project will be rebuilt, repaired or restored, the Depositary Agent shall transfer the applicable Loss Proceeds or Eminent Domain Proceeds, as the case may be, in the Loss Proceeds Fund to the Restoration Sub-Fund. Amounts held in the Restoration Sub-Fund shall be applied solely for the payment of the costs of rebuilding, restoration or repair of the affected Salton Sea Project or, as the case may be, Partnership Project, as set forth below or as otherwise contemplated herein. If the amount initially deposited in the Restoration Sub-Fund with respect to any Event of Loss or Event of Eminent Domain exceeds $15,000,000 per Event of Loss or Event of Eminent Domain, the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, shall deliver to the Depositary Agent, the Collateral Agent and the Trustee (x) a restora tion budget (as amended, modified or supplemented from time to time, the "Restoration Budget") prepared by the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, identifying all categories and approximate amounts reasonably anticipated to be incurred in connection with the rebuilding, restoration or repair, together with a statement of uses of proceeds of the Restoration Sub-Fund and any other monies necessary to complete the rebuilding, restoration or repair, and (y) a restoration progress payment schedule (as amended, modified or supplemented from time to time, the "Restoration Progress Payment Schedule") determined by the Guarantors for the projected requisitions to be made from the Restoration Sub-Fund. (2) Before any withdrawal or transfer shall be made from the Restoration Sub-Fund, there shall be filed with the Depositary Agent with respect to each Disbursement Date: (I) a requisition from the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, substantially in the form attached hereto as Exhibit C (a "Restoration Requisition"), dated not more than three (3) Business Days prior to such Disbursement Date as set forth therein on which such withdrawal and transfer is requested to be made, signed by an Authorized Representative of the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor; (II) if the amount requested in any consecutive twelve-month period with respect to any Event of Loss or Event of Eminent Domain exceeds $30,000,000 in the aggregate for all Projects affected by such occurrence, an Independent Engineer's Certifi cate in the form attached hereto as Appendix I to Exhibit C, dated not more than three (3) Business Days prior to the Disbursement Date; and (III) if clause (II) above does not apply, the Restoration Requisition shall so state. (3) On the Disbursement Date referred to in Section 3.8(i)(C)(2) or as soon thereafter as practicable following receipt of the documents described in Sections 3.8(i)(C)(2)(I) through (III) above, the Depositary Agent shall withdraw and transfer from the Restoration Sub-Fund and shall pay to the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, or to Persons directed by it in writing the amounts set forth in the Restoration Requisition. (4) Upon completion of any rebuilding, restoration or repair of all or a portion of the affected Salton Sea Project or, as the case may be, Partnership Project, there shall be filed with the Depositary Agent and the Collateral Agent an officer's certificate of the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, certifying that the completion of the rebuilding, restoration or repair has been performed in accordance with standard industry practices and the amount, if any, required in its opinion to be retained in the Restoration Sub-Fund for the payment of any remaining costs of rebuilding, restoration or repair not then due and payable or the liability for payment of which is being contested or disputed by the Salton Sea Guarantors or the Partnership Guarantors, as the case may be, and for the payment of reasonable contingencies following completion of the rebuilding, restoration or repair. Upon receipt of such officer's certificate, the Depositary Agent shall transfer the amount remaining in the Restoration Sub-Fund in excess of the amounts to remain in the Restoration Sub-Fund as stated in the officer's certificate of the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, first, to the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, or to Persons directed by them in writing to the extent of any amounts which have been expended in connection with such rebuilding, restoration or repair (as set forth in such officer's certificate) and not previously reimbursed, and second, segregate the remaining excess in the Restoration Sub-Fund from any other amounts therein. If such remaining excess exceeds $15,000,000, the Depositary Agent shall transfer all of such monies in the Restoration Sub-Fund to the Redemption Fund for the uses set forth in Section 3.8(i) and Section 3.9. If the remaining excess is equal to or less than $15,000,000, the Depositary Agent shall transfer such monies to the Revenue Fund. Thereafter, upon receipt of an officer's certificate of the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, certifying payment of all costs of rebuilding, restoration or repair of the affected Project, the Depositary Agent shall transfer any amounts remaining in the Restoration Sub- Fund to the Revenue Fund. (D) In the event that the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, determine (x) in accordance with Section 3.8(i)(A) that such affected Salton Sea Project or, as the case may be Partnership Project, cannot be rebuilt, repaired or restored to permit operation of all or a portion of such Project on a commercially reasonable basis following an Event of Loss or Event of Eminent Domain, or (y) in accordance with Section 3.8(i)(B), not to rebuild, repair or restore the affected Salton Sea Project or, as the case may be, Partnership Project, and in either case such Loss Proceeds or Eminent Domain Proceeds are equal to or less than $15,000,000, the Depositary Agent shall withdraw and transfer such monies to the Revenue Fund. (ii) All Title Event Proceeds received by the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, shall be deposited in the Loss Proceeds Fund. The Depositary Agent shall separately segregate such Title Event Proceeds for distribution in the manner set forth below: (A) Title Event Proceeds in respect of any particular Title Event shall be transferred by the Depositary Agent as follows: (i) the first $25,000,000 of Title Event Proceeds shall be transferred to the Title Event Sub-Fund; and (ii) Title Event Proceeds exceeding $25,000,000 in respect of such Title Event shall (a) be transferred to the Revenue Fund (to the extent such excess proceeds do not exceed $5,000,000) and (b) be transferred to the Redemption Fund (to the extent such excess proceeds exceed $5,000,000). Amounts held in the Title Event Sub-Fund shall be applied in an effort to remedy the Title Event and for payment of expenses incurred in connection therewith, as set forth below. (B) Before any withdrawal and transfer shall be made from the Title Event Sub-Fund, there shall be filed with the Depositary Agent and the Collateral Agent with respect to each Disbursement Date a requisition from the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor, substantially in the form attached hereto as Exhibit D (a "Title Event Requisition"), dated not more than three (3) Business Days prior to such Disbursement Date as set forth therein on which such withdrawal and transfer is requested to be made, signed by an Authorized Representative of the relevant Salton Sea Guarantor or, as the case may be, Partnership Guarantor. (C) On the Disbursement Date referred to in Section 3.8(ii)(B) or as soon thereafter as practicable following receipt of the Title Event Requisition described in Section 3.8(ii)(B) above, the Depositary Agent shall withdraw and transfer from the Title Event Sub-Fund and shall pay to the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, or Persons directed by them in writing the amounts set forth in such Title Event Requisition. (D) Upon completion of the effort to remedy the Title Event there shall be filed with the Depositary Agent and the Collateral Agent an officer's certificate of the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, certifying the result of the effort to remedy the Title Event and the amount, if any, required in their opinion to be retained in the Title Event Sub- Fund for the payment of any remaining expenses. Upon receipt of the officer's certificate described in the immediately preceding sentence, the Depositary Agent shall transfer the amount remaining in the Title Event Sub-Fund in excess of the amounts to remain in the Title Event Sub-Fund, as stated in such officer's certificate, first, to the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, or Persons directed by them in writing to the extent of any amounts expended in connection with such effort to remedy and not previously reimbursed, and second, segregate the remaining excess in the Title Event Sub-Fund from any other amounts therein. If such excess exceeds $5,000,000, the Depositary Agent shall transfer all of such monies in the Title Event Sub-Fund to the Redemption Fund. If the remaining excess is equal to or less than $5,000,000, the Depositary Agent shall transfer such monies to the Revenue Fund. Thereafter, upon receipt of an officer's certificate of the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, certifying payment of all costs of remedying the Title Event, the Depositary Agent shall transfer any amounts remaining in the Title Event Sub-Fund to the Revenue Fund. (iii) All Performance Liquidated Damages received by or on behalf of Minerals LLC, Power LLC, Turbo LLC, Vulcan and Del Ranch shall be deposited in the Loss Proceeds Fund. The Depositary Agent shall separately segregate such Performance Liquidated Damages for distribution in the manner set forth below: (A) All Performance Liquidated Damages received by or on behalf of Minerals LLC shall be deposited into the Zinc LD Sub-Fund. If, within 90 days after any date on which any Performance Liquidated Damages are deposited into the Zinc LD Sub-Fund, the Depositary Agent shall have received an officer's certificate of Minerals LLC stating that Minerals LLC has elected to use all or a specified portion of such Performance Liquidated Damages to pay costs associated with the construction of the Zinc Project in accordance with an Approved Completion Plan, together with a copy of such Approved Completion Plan, the Depositary Agent shall (1) transfer the amount of Performance Liquidated Damages specified in such officer's certificate to the Zinc Construction Fund for application in accordance with Section 3.1.1 and such Approved Completion Plan and (2) transfer the remaining portion of such Performance Liquidated Damages (if any) to (a) if the amount of such portion is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such proceeds is less than or equal to $6,000,000, to the LD Holding Sub-Fund. If, within 90 days after the date on which any Performance Liquidated Damages are deposited into the Zinc LD Sub-Fund, the Depositary Agent shall not have received an officer's certificate of Minerals LLC stating that Minerals LLC has elected to use all or a specified portion of such Performance Liquidated Damages to pay costs associated with the construction of the Zinc Project in accordance with an Approved Completion Plan, the Depositary Agent shall transfer such Performance Liquidated Damages (a) if the amount of such Performance Liquidated Damages is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such Performance Liquidated Damages is less than or equal to $6,000,000, to the LD Holding Sub-Fund. (B) All Performance Liquidated Damages received by or on behalf of Power LLC shall be deposited into the Salton Sea Unit V LD Sub-Fund. Prior to the date (the "Unit V LD Refund End Date") on which the Salton Sea Unit V EPC Contractor shall no longer have any rights granted by Power LLC to receive a refund of Performance Liquidated Damages pursuant to Section 16.6 of the Salton Sea Unit V EPC Contract, as evidenced by an officer's certificate of Power LLC delivered to the Depositary Agent, all amounts on deposit in or credited to the Salton Sea Unit V LD Sub-Fund shall be applied solely to refund Performance Liquidated Damages to the Salton Sea Unit V EPC Contractor in accordance with Section 16.6 of the Salton Sea Unit V EPC Contract. All amounts withdrawn from the Salton Sea Unit V LD Sub-Fund to refund Performance Liquidated Damages to the Salton Sea Unit V EPC Contractor shall be withdrawn in accordance with the disbursement procedure described below: (1) As a condition precedent to any withdrawal and transfer from the Salton Sea Unit V LD Sub-Fund to refund Performance Liquidated Damages to the Salton Sea Unit V EPC Contractor there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, an appropriately completed requisition in the form attached hereto as Exhibit F (a "Liquidated Damages Refund Requisition") signed by an Authorized Representative of Power LLC and dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Liquidated Damages Refund Requisition). (2) On the Disbursement Date referred to in clause (1) of this Section 3.8(iii)(B), or as soon thereafter as possible following receipt of the Liquidated Damages Refund Requisition referred to in such clause, the Depositary Agent shall make payments in accordance with such Liquidated Damages Refund Requisition. The Depositary Agent may conclusively rely on any Liquidated Damages Refund Requisition in making any disbursements under this clause (2). If, within 90 days after the Unit V LD Refund End Date, the Depositary Agent shall have received an officer's certificate of Power LLC stating that Power LLC has elected to use all or a specified portion of such Performance Liquidated Damages to pay costs associated with the construction of Salton Sea Unit V in accordance with an Approved Completion Plan, together with a copy of such Approved Completion Plan, the Depositary Agent shall (1) transfer the amount of Performance Liquidated Damages specified in such officer's certificate to the Salton Sea Unit V Construction Fund for applica tion in accordance with Section 3.1.2 and such Approved Completion Plan and (2) transfer the remaining portion of such Performance Liquidated Damages (if any) to (a) if the amount of such portion is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such proceeds is less than or equal to $6,000,000, to the LD Holding Sub-Fund. If, within 90 days after the Unit V LD Refund End Date, the Depositary Agent shall not have received an officer's certificate of Power LLC stating that Power LLC has elected to use all or a specified portion of such Performance Liquidated Damages to pay costs associated with the construction of Salton Sea Unit V in accordance with an Approved Completion Plan, the Depositary Agent shall transfer such Performance Liquidated Damages (a) if the amount of such Performance Liquidated Damages is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such Performance Liquidated Damages is less than or equal to $6,000,000, to the LD Holding Sub-Fund. (C) All Performance Liquidated Damages received by or on behalf of Turbo LLC, Vulcan or Del Ranch shall be deposited into the Region 2/Turbo LD Sub-Fund. Prior to the date (the "Region 2/Turbo LD Refund End Date") on which the Region 2/Turbo EPC Contractor shall no longer have any rights granted by Turbo LLC, Vulcan or Del Ranch to receive a refund of Performance Liquidated Damages pursuant to Section 16.6 of the Region 2/Turbo EPC Contract, as evidenced by an officer's certificate of Turbo LLC, Vulcan and Del Ranch delivered to the Depositary Agent, all amounts on deposit in or credited to the Region 2/Turbo LD Sub-Fund shall be applied solely to refund Performance Liquidated Damages to the Region 2/Turbo EPC Contractor in accordance with Section 16.6 of the Region 2/Turbo EPC Contract. All amounts withdrawn from the Region 2/Turbo LD Sub- Fund to refund Performance Liquidated Damages to the Region 2/Turbo EPC Contractor shall be withdrawn in accordance with the disbursement procedure described below: (1) As a condition precedent to any withdrawal and transfer from the Region 2/Turbo LD Sub-Fund to refund Performance Liquidated Damages to the Region 2/Turbo EPC Contractor there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, an appropriately completed Liquidated Damages Refund Requisition signed by an Authorized Representative of Turbo LLC, Vulcan or Del Ranch and dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Liquidated Damages Refund Requisition). (2) On the Disbursement Date referred to in clause (1) of this Section 3.8(iii)(C), or as soon thereafter as possible following receipt of the Liquidated Damages Refund Requisition referred to in such clause, the Depositary Agent shall make payments in accordance with such Liquidated Damages Refund Requisition. The Depositary Agent may conclusively rely on any Liquidated Damages Refund Requisition in making any disbursements under this clause (2). If, within 90 days after the Region 2/Turbo LD Refund End Date, the Depositary Agent shall have received an officer's certificate of Turbo LLC, Vulcan or Del Ranch stating that Turbo LLC, Vulcan or Del Ranch, as the case may be, has elected to use all or a specified portion of such Performance Liqui dated Damages to pay costs associated with the construction of the Region 2/Turbo Project in accordance with an Approved Completion Plan, together with a copy of such Approved Completion Plan, the Depositary Agent shall (1) transfer the amount of Performance Liquidated Damages specified in such officer's certificate to the Region 2/Turbo Construction Fund for application in accordance with Section 3.1.3 and such Approved Completion Plan and (2) transfer the remaining portion of such Performance Liquidated Damages (if any) to (a) if the amount of such portion is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such proceeds is less than or equal to $6,000,000, to the LD Holding Sub-Fund. If, within 90 days after the Region 2/Turbo LD Refund End Date, the Depositary Agent shall not have received an officer's certificate of Turbo LLC, Vulcan or Del Ranch stating that Turbo LLC, Vulcan or Del Ranch has elected to use all or a specified portion of such Performance Liquidated Damages to pay costs associated with the construction of the Region 2/Turbo Project in accordance with an Approved Completion Plan, the Depositary Agent shall transfer such Performance Liquidated Damages (a) if the amount of such Performance Liquidated Damages is greater than $6,000,000, to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture, or (b) if the amount of such Performance Liquidated Damages is less than or equal to $6,000,000, to the LD Holding Sub-Fund. (D) As soon as possible after the date on which all Performance Liquidated Damages required to be transferred to the LD Holding Sub-Fund in accordance with this Section 3.8(iii) have been so transferred, as evidenced by an officer's certificate of Minerals LLC, Power LLC, Turbo LLC, Vulcan and Del Ranch delivered to the Depositary Agent, the Depositary Agent shall calculate the aggregate amount of Performance Liquidated Damages then on deposit in the LD Holding Sub-Fund. If such aggregate amount of Performance Liquidated Damages is greater than $6,000,000, the Depositary Agent shall transfer such Performance Liquidated Damages to the Mandatory Redemption Fund held by the Trustee under the Indenture for the pro rata redemption of Series F Securities Outstanding in accordance with Section 2(l) of the Fourth Supplemental Indenture. If such aggregate amount of Performance Liquidated Damages is less than or equal to $6,000,000, the Depositary Agent shall transfer such Performance Liquidated Damages to the Revenue Fund for application in accordance with Section 3.2(c). SECTION III.9 Redemption Fund. (a) The following amounts shall be delivered to the Depositary Agent directly for deposit into the Redemption Fund, or if received by a Guarantor, as soon as practicable upon receipt, in either case in accordance with this Section 3.9(a), to the extent such amounts are available for redemption of Securities under the Indenture: (i) certain amounts from the Loss Proceeds Fund received by the Salton Sea Guarantors or, as the case may be, Partnership Guarantors, in connection with an Event of Loss, an Event of Eminent Domain or a Title Event, to the extent such amounts are required to be transferred to the Redemption Fund in accordance with Section 3.8; and all Loss Proceeds and Eminent Domain Proceeds received as Equity Cash Flows by CEOC or VPC; (ii) proceeds realized in connection with a Permitted Power Contract Buy-Out; (iii) any net cash proceeds actually received by Magma or any of its subsidiaries from (i) any settlement or buy-out agreement between Magma and SCE, regarding the BRPU Award, or between Magma and San Diego Gas and Electric, a California corporation, regarding the BRPU Award, or (ii) a lump sum settlement payment (whether payable in one payment or a series of lump sum installments) of claims made by Magma and certain of its Affiliates in the SCE Litigation, to the extent that any such proceeds are required to be deposited in the Redemption Fund pursuant to the Support Letter; (iv) proceeds of Debt which is incurred by the Partnership Project Companies to fund an equity distribution to any of the Partner ship Guarantors other than the Partnership Project Companies; and (v) proceeds received as a result of foreclosure on the Collateral securing the obligations of the Guarantors following a Trigger Event caused by an event of default under a Credit Agreement or a Guarantee. If any of the foregoing amounts required to be deposited with the Depositary Agent in the Redemption Fund are received by any Guarantor (or any Affiliate of such Guarantor), such Guarantor shall (or shall cause any such Affiliate to) hold such payments in trust for the Collateral Agent and shall promptly remit such payments to the Depositary Agent for deposit in the Redemption Fund, in the form received, with any necessary endorsements. (b) The Depositary Agent shall segregate the amounts referred to in Section 3.9(a)(i) through (v) above for distribution in the manner set forth below: (i) Upon the receipt of those amounts from the Loss Proceeds Fund described in Section 3.9(a)(i), the Depositary Agent shall so notify the Collateral Agent and the Trustee and shall separately segregate such monies, and the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate. Upon receipt of the Allocation Certificate described in the immediately preceding sentence, the Depositary Agent shall withdraw, transfer or distribute the amounts described in Section 3.9(a)(i) no later than one (1) Business Day prior to the Redemption Date established pursuant to Section 3.2 of the Indenture, (x) in the case of the Securities being redeemed, as instructed by the Allocation Certificate referred to above, to the Mandatory Redemption Fund held by the Trustee, for the pro- rata redemption of Securities Outstanding by the Trustee in accordance with Section 3.3 of the Indenture, and (y) in the case of other Senior Debt then being redeemed or prepaid, as instructed by the Allocation Certificate referred to above. (ii)(A) Upon the receipt of those amounts described in Section 3.9(a)(ii) and, within ninety (90) days of such receipt, an Officer's Certificate of the Funding Corporation certifying that the Rating Agencies have confirmed that such Permitted Power Contract Buyout will not result in a Ratings Downgrade, the Depositary Agent shall transfer such amounts to the Revenue Fund. (B) Other than as described in Section 3.9(b)(ii)(A), upon the receipt of those amounts described in Section 3.9(a)(ii), the Depositary Agent shall so notify the Collateral Agent and the Trustee and separately segregate such monies, and the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate. Upon receipt of the Allocation Certificate described in the immediately preceding sentence and if an officer's certificate as described in Section 3.9(b)(ii)(A) has not been received within ninety (90) days after receipt of the Permitted Power Contract Buy-Out proceeds, the Depositary Agent shall withdraw, transfer or distribute the amounts described in Section 3.9(a)(ii) no later than one (1) Business Day prior to the Redemption Date established pursuant to Section 3.2 of the Indenture, (x) in the case of the Securities being redeemed, as instructed by the Allocation Certificate referred to above, to the Mandatory Redemption Fund held by the Trustee, for the pro rata redemption of Securities Outstanding by the Trustee in accordance with Section 3.3 of the Indenture, and (y) in the case of other Senior Debt then being redeemed or prepaid, as instructed by the Allocation Certificate referred to above. (iii) Upon the receipt of those amounts described in Section 3.9(a)(iii), the Depositary Agent shall transfer such amounts to the Revenue Fund. (iv) (A) Upon the receipt of those amounts described in Section 3.9(a)(iv) and, within ninety (90) days of such receipt, an officer's certificate of the Partnership Guarantors certifying that the Rating Agencies have confirmed that such incurrence of Debt and distribution of proceeds as an equity distribution will not result in a Ratings Downgrade, the Depositary Agent shall transfer such amounts to the Revenue Fund. (B) Other than as described in Section 3.9(b)(iv)(A), upon the receipt of those amounts described in Section 3.9(a)(iv), the Depositary Agent shall so notify the Collateral Agent and the Trustee and separately segregate such monies, and the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate. Upon receipt of the Allocation Certificate described in the immediately preceding sentence, the Depositary Agent shall withdraw, transfer or distribute the amounts described in Section 3.9(a)(iv) hereof, no later than one (1) Business Day prior to the Redemption Date established pursuant to Section 3.2 of the Indenture, (x) in the case of the Securities being redeemed, as instructed by the Allocation Certificate referred to above, to the Mandatory Redemption Fund held by the Trustee, for the pro-rata redemption of Securities Outstanding by the Trustee in accordance with Section 3.3 of the Indenture, and (y) in the case of other Senior Debt then being redeemed or prepaid, as instructed by the Allocation Certificate referred to above. (v) Upon the receipt of those amounts described in Section 3.9(a)(v), the Depositary Agent shall so notify the Collateral Agent and the Trustee and separately segregate such monies, and the Collateral Agent shall deliver to the Depositary Agent an Allocation Certificate which sets forth the priorities established pursuant to Section 6(d) of the Intercreditor Agreement. Upon receipt of the Allocation Certificate described in the immediately preceding sentence, the Depositary Agent shall withdraw, transfer or distribute the amounts described in Section 3.9(a)(v), no later than one (1) Business Day prior to the Redemption Date established pursuant to Section 3.2 of the Indenture, (x) in the case of the Securities being redeemed, as instructed by the Allocation Certificate referred to above, to the Mandatory Redemption Fund held by the Trustee, for the pro- rata redemption of Securities Outstanding by the Trustee in accordance with Section 3.3 of the Inden ture, and (y) in the case of other Senior Debt then being redeemed or prepaid, as instructed by the Allocation Certificate referred to above; provided that if the amounts described in Section 3.9(a)(v) do not exceed $5,000,000, then such amounts shall be transferred to the Revenue Fund. SECTION III.10 Investment of Funds. Monies held in any Fund created by and held under this Depositary Agreement shall be invested and reinvested in Permitted Investments at the written direction (which may be in the form of a standing instruction) of an Authorized Representative of the Funding Corporation or any of the Guarantors; provided, however, that at any time when (a) a Responsible Officer of the Depositary Agent has received written notice that an Event of Default under the Indenture shall have occurred and be continuing or (b) an Authorized Representative of the Funding Corporation or the Guarantors has not timely fur nished such a written direction or, after a request by the Depositary Agent, has not so confirmed a standing instruction to the Depositary Agent, the Depositary Agent shall invest such monies only in Permitted Investments described in clause (i) of such definition of a maturity of thirty (30) days or less. Such investments shall mature in such amounts and have maturity dates or be subject to redemption at the option of the holder thereof on or prior to maturity as needed for the purposes of such Funds, but in no event shall such investments mature more than one (1) year after the date acquired. The Depositary Agent shall at any time and from time to time liquidate any or all of such investments prior to the maturity as needed in order to effect the transfers and withdrawals contemplated by this Depositary Agreement in accordance with an officer's certificate of the Funding Corporation or the Guarantors; provided that, in the absence of timely receipt of such an officer's certificate, the Depositary Agent shall liquidate any or all such investments as so needed. In the event any such investments are redeemed prior to the maturity thereof, the Depositary Agent shall not be liable for any loss or penalties relating thereto in the absence of gross negli gence or willful misconduct. Any income or gain realized from such investments shall be deposited (i) first, into the Debt Service Reserve Fund until amounts in the Debt Service Reserve Fund, together with the Debt Service Reserve Letter of Credit, equal the Debt Service Reserve Required Balance, and (ii) second, if amounts in the Debt Service Reserve Fund, together with the Debt Service Reserve Letter of Credit, equal the Debt Service Reserve Required Balance, into the Revenue Fund; provided, however, that any income or gain realized from investments made with monies on deposit in any Construction Fund shall be redeposited into such Construction Fund. Any loss shall be charged to the applicable Fund. The Depositary Agent shall not be liable for any such loss other than by reason of its willful misconduct or gross negligence. For purposes of any income tax payable on account of any income or gain on an investment, such income or gain shall be for the account of the Guarantors or the Funding Corporation. SECTION III.11 Disposition of Funds Upon Retirement of Securities and Additional Securities. (a) Upon the payment in full of the principal of, premium, if any, and interest on any series of Securities, any Project Note or issuance of Additional Securities such that such series of Securities, such Project Note or issuance of Additional Securities is no longer outstanding, all amounts held in the Interest Fund, the Principal Fund and the Debt Service Reserve Fund allocated to such series of Securities, such Project Note or issuance of Additional Securities, as the case may be, shall upon the written direction of the Funding Corporation or any Guarantor be transferred to the Revenue Fund. (b) Upon termination of the Intercreditor Agreement and after payment in full of the principal of, premium, if any, and interest on and all other amounts due in respect of all the additional Permitted Debt, each Project Note, all Securities Outstanding, all amounts payable under the Working Capital Facility, the Debt Service Reserve LOC Reimbursement Agreement and termination of the Debt Service Reserve Letter of Credit and all amounts payable to the Permitted Counterparties under the Interest Rate Protection Agreements and after payment in full of all Administrative Costs, and all other amounts required to be paid hereunder, all amounts remaining in any Fund established in Section 2.2 shall at the written direction of the Funding Corporation be paid by the Depositary Agent to the Funding Corporation. SECTION III.12 Fund Balance Statements. The Depositary Agent shall, on a monthly basis and at such other times as the Collateral Agent or the Funding Corporation may from time to time reasonably request, provide to the Collateral Agent, the Guarantors and the Funding Corporation fund balance statements in respect of each of the Funds, sub-funds and amounts segregated in any of the Funds. Such balance statements shall also include deposits, withdrawals and transfers from and to each Fund, sub-fund and segregated amount. SECTION III.13 Trigger Events. (a) On and after any date on which the Depositary Agent receives written notice from the Collateral Agent pursuant to Section 6 of the Intercreditor Agreement that a Trigger Event has occurred (the date of receipt of such notice, the "Trigger Event Date"), the Depositary Agent shall thereafter accept all notices and instructions required to be given to the Depositary Agent pursuant to the terms of this Depositary Agreement only from the Collateral Agent and not from any other Person and the Depositary Agent shall not withdraw, transfer, pay or otherwise distribute any monies in any of the Funds except pursuant to such notices and instructions from the Collateral Agent. (b) On the Trigger Event Date, the Depositary Agent shall render an accounting of all monies in the Funds as of the Trigger Event Date to the Collateral Agent. (c) On and after the Trigger Event Date, the Depositary Agent shall distribute all monies then held in any Fund to the Collateral Agent for disposition pursuant to Section 6 of the Intercreditor Agreement. The proceeds of any sale, disposition or other realization with respect to Collateral or Funding Corporation Collateral held for the benefit of some but not all of the Secured Parties shall be applied to the payment of obligations owed to the parties for whose benefit the specific Collateral or Funding Corporation Collateral was held. SECTION III.14 Capital Expenditure Fund. (a) On the Series F Closing Date, $14,946,000 shall be delivered to the Depositary Agent and deposited in the Capital Expenditure Fund from the net proceeds of the sale of the Series F Securities. All Equity Contributions received by the Depositary Agent pursuant to Section 2(d) of the Equity Commitment Agreement shall be deposited into the Capital Expenditure Fund. (b) Amounts held in the Capital Expenditure Fund shall be applied solely for the payment (or reimbursement to the extent the same shall have been previously paid or satisfied by the relevant Guarantor) of costs (including any interest paid) incurred in connection with the modification, improvement, reworking, maintenance and replacement from time to time of wells, pipelines, gathering systems, equipment, facilities and other capital expenditures in connection with or located at the Partnership Projects (other than the Zinc Project and the Region 2/Turbo Project) or the Salton Sea Projects (other than Salton Sea Unit V) (collectively, the "Permitted Capital Expenditures") and for the payment of Permitted Capital Expenditures reasonably expected to be incurred during the 30-day period following an applicable Disbursement Date. All monies shall be withdrawn in accordance with the disbursement procedure hereinafter described in this Section 3.14. (c) As a condition precedent to any withdrawal and transfer from the Capital Expenditure Fund there shall be filed with the Depositary Agent, with respect to each Disbursement Date on which any such withdrawal and transfer is requested to be made, an appropriately completed requisition in the form attached hereto as Exhibit E (a "Capital Expenditure Requisition") signed by an Authorized Representative of the relevant Guarantor and dated not more than five (5) days prior to, and received by the Depositary Agent not less than three (3) Business Days prior to, such Disbursement Date (as such date is set forth in such Capital Expenditure Requisition). (d) On the Disbursement Date referred to in clause (c) of this Section 3.14, or as soon thereafter as possible following receipt of the Capital Expenditure Requisition referred to in such clause, the Depositary Agent shall make payments in accordance with such Capital Expenditure Requisition. The Depositary Agent may conclusively rely on any Capital Expenditure Requisition in making any disbursements under this clause (d). ARTICLE IV DEPOSITARY AGENT SECTION IV.1 Appointment of Depositary Agent, Powers and Immunities. The Collateral Agent, on behalf of the Secured Parties and the Funding Corporation under the Intercreditor Agreement, hereby appoints the Depositary Agent to act as its agent hereunder, with such powers as are expressly delegated to the Depositary Agent by the terms of this Depositary Agreement, together with such other powers as are reasonably incidental thereto. The Depositary Agent shall not have any duties or responsibilities except those expressly set forth in this Depositary Agreement. Without limiting the generality of the foregoing, the Depositary Agent shall take all actions as the Collateral Agent shall direct it to perform in accordance with the express provisions of this Depositary Agreement or as the Collateral Agent may otherwise direct it to perform in accordance with the provisions of this Depositary Agreement. Notwithstanding anything to the contrary contained herein, the Depositary Agent shall not be required to take any action which is contrary to this Depositary Agreement or applicable law. Neither the Depositary Agent nor any of its Affiliates shall be responsible to any Secured Party for any recitals, statements, representations or warranties made by the Funding Corporation or the Guarantors contained in this Depositary Agreement or any other Transaction Document or in any certificate or other document referred to or provided for in, or received by any Secured Party under, the Indenture, this Depositary Agreement or any other Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Depositary Agreement or any other Transaction Document or any other document referred to or provided for herein or therein or for any failure by the Funding Corporation or any Guarantor to perform its obligations hereunder or thereunder. The Depositary Agent shall not be required to ascertain or inquire as to the performance by the Funding Corporation or the Guarantors of any of its obligations under the Indenture, this Depositary Agreement, any other Financing Document or any other document or agreement contemplated hereby or thereby. The Depositary Agent shall not be (a) required to initiate or conduct any litigation or collection proceeding hereunder or under any other Security Document or (b) responsible for any action taken or omitted to be taken by it hereunder (except for its own gross negligence or willful misconduct) or in connection with any other Security Document. Except as otherwise provided under this Depositary Agreement, the Depositary Agent shall take action under this Depositary Agreement only as it shall be directed in writing by the Collateral Agent. Whenever in the administration of this Depositary Agreement the Depositary Agent shall deem it necessary or desirable that a factual matter be proved or established in connection with the Depositary Agent taking, suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of any Authorized Representative of the Funding Corporation or the Guarantors, or the Collateral Agent, if appropriate. The Depositary Agent shall have the right at any time to seek instructions concerning the administration of this Depositary Agreement from the Collateral Agent or any court of competent jurisdiction. The Depositary Agent shall have no obligation to expend or risk its own funds or otherwise incur any financial liability in the perfor mance of any of its duties hereunder. SECTION IV.2 Reliance by Depositary Agent. The Depositary Agent shall be entitled to rely upon and shall not be bound to make any investigation into the facts or matters stated in any certificate, officer's certificate of the Funding Corporation or the Guarantors, Independent Engineer's certificate, Collateral Agent's certificate or any other notice or other document (including any cable, telegram, telecopy or telex) believed by it to be genuine and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statement of legal counsel, independent accountants and other experts selected by the Depositary Agent and shall have no liability for its actions taken thereupon, unless due to the Depositary Agent's willful misconduct or gross negligence. Without limiting the foregoing, the Depositary Agent shall be required to make payments to the Secured Parties only as set forth herein. The Depositary Agent shall be fully justified in failing or refusing to take any action under this Depositary Agreement or the Intercreditor Agreement (i) if such action would, in the reasonable opinion of the Depositary Agent, be contrary to applicable law or the terms of this Depositary Agreement or the Intercreditor Agreement, (ii) if such action is not specifically provided for in this Depositary Agreement or the Intercreditor Agreement, it shall not have received any such advice or concurrence of the Collateral Agent as it deems appropriate, or (iii) if, in connection with the taking of any such action that would constitute an exercise of remedies under this Depositary Agreement or the Intercreditor Agreement (whether such action is or is intended to be an action of the Depositary Agent or the Collateral Agent), it shall not first be indemnified to its satisfaction by the Secured Parties (other than the Trustee (in its individual capacity) or the Collateral Agent (in its individual capacity) or any other agent or trustee under any of the Financing Documents (in their respective individual capacities)) against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Depositary Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Depositary Agreement or the Intercreditor Agreement in accordance with a request of the Collateral Agent (to the extent that the Collateral Agent is expressly authorized to direct the Depositary Agent to take or refrain from taking such action), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Secured Parties. SECTION IV.3 Court Orders. The Depositary Agent is hereby authorized, in its exclusive discretion, to obey and comply with all writs, orders, judgments or decrees issued by any court or administrative agency affecting any money, documents or things held by the Depositary Agent. The Depositary Agent shall not be liable to any of the parties hereto or any other Secured Party, their successors, heirs or personal representatives by reason of the Depositary Agent's compliance with such writs, orders, judgments or decrees, notwithstanding that such writ, order, judgment or decree is later reversed, modified, set aside or vacated. SECTION IV.4 Resignation or Removal. Subject to the appointment and acceptance of a successor Depositary Agent as provided below, the Depositary Agent may resign at any time by giving thirty (30) days written notice thereof to the Collateral Agent and the Funding Corporation or the Guarantors, provided that in the event the Depositary Agent is also the Collateral Agent and Trustee, it must also at the same time resign as Collateral Agent and Trustee. The Depositary Agent may be removed at any time with cause by the Collateral Agent. The Funding Corporation shall have the right to remove the Depositary Agent upon thirty (30) days' notice to the Secured Parties with or without cause, effective upon the appointment of a successor Depositary Agent under this Section 4.4, which is reasonably acceptable to the Trustee. In the event that the Depositary Agent shall decline to take any action without first receiving adequate indemnity from the Funding Corporation or the Guarantors, the Secured Parties or the Collateral Agent, as the case may be, and, having received an indemnity, shall continue to decline to take such action, the Collateral Agent shall be deemed to have sufficient cause to remove the Depositary Agent. In the event that the Depositary Agent is also the Trustee, the Collateral Agent shall have the right to remove the Depositary Agent with or without cause. Upon any such resignation or removal, the Collateral Agent shall have the right to appoint a successor Depositary Agent, which Depositary Agent shall be reasonably acceptable to the Funding Corporation. If no successor Depositary Agent shall have been appointed by the Collateral Agent and shall have accepted such appointment within thirty (30) days after the retiring Depositary Agent's giving of notice of resignation or the removal of the retiring Depositary Agent, then the retiring Depositary Agent may appoint a successor Depositary Agent, which shall be a bank or trust company reasonably acceptable to the Collateral Agent and the Funding Corporation. Upon the acceptance of any appointment as Depositary Agent hereunder by the successor Depositary Agent, (a) such successor Depositary Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Depositary Agent, and the retiring Depositary Agent shall be discharged from its duties and obligations hereunder, and (b) the retiring Depositary Agent shall promptly transfer all Funds within its possession or control to the possession or control of the successor Depositary Agent and shall execute and deliver such notices, instructions and assignments as may be necessary or desirable to transfer the rights of the retiring Depositary Agent with respect to the Funds to the successor Depositary Agent. After the retiring Depositary Agent's resignation or removal hereunder as Depositary Agent, the provisions of this Article IV and of Article V shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Depositary Agent. ARTICLE V EXPENSES; INDEMNIFICATION; FEES SECTION V.1 Expenses. The Funding Corporation agrees to pay or reimburse all out-of-pocket expenses of the Depositary Agent (including reasonable fees and expenses for legal services) in respect of, or incident to, the administration or enforcement of any of the provisions of this Depositary Agreement or in connection with any amendment, waiver or consent relating to this Depositary Agreement. SECTION V.2 Indemnification. The Funding Corporation agrees to indemnify the Depositary Agent in its capacity as such, and, in their capacity as such, its officers, directors, shareholders, controlling persons, employees, agents and servants (each an "Indemnified Depositary Agent Party") from and against any and all claims, losses, liabilities and expenses (including the reasonable fees and expenses of counsel) growing out of or resulting from this Depositary Agreement (including, without limitation, performance under or enforcement of this Depositary Agreement, but excluding any such claims, losses or liabilities resulting from the Indemnified Depositary Agent Party's gross negligence or willful misconduct). This indemnity shall survive the termination of this Depositary Agreement, and the resignation or removal of the Depositary Agent. This indemnity is extended in addition to, and not in derogation or limitation of, the provisions of Section 12 of the Intercreditor Agreement. SECTION V.3 Fees. On the Closing Date, and on each anniversary of the Closing Date to and including the Final Maturity Date, the Funding Corporation shall pay the Depositary Agent an annual fee in an amount mutually agreed on by the Funding Corporation and the Depositary Agent. ARTICLE VI MISCELLANEOUS SECTION VI.1 Amendments; Etc. No amendment or waiver of any provision of this Depositary Agreement nor consent to any departure by the Funding Corporation or the Guarantors herefrom shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent, the Depositary Agent, the Funding Corporation and the Guarantors. Any such amendment, waiver or consent shall be effective only in the specific instance and for the specified purpose for which given. SECTION VI.2 Addresses for Notices. All notices, requests and other communications provided for hereunder shall be in writing and, except as otherwise required by the provisions of this Depositary Agreement, shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by overnight delivery, telecopy, telegram or telex, addressed to the parties as follows: The Funding Corporation: Salton Sea Funding Corporation 302 South 36th Street Suite 400-A Omaha, Nebraska 68131 Telephone: (402) 341-4500 Fax: (402) 231-1658 Attention: Chief Financial Officer and a copy to: General Counsel Fax: (402) 231-1658 The Salton Sea Guarantors: c/o Salton Sea Power Company 302 South 36th Street Suite 400-B Omaha, Nebraska 68131 Telephone: (402) 341-4500 Fax: (402) 231-1658 Attention: Chief Financial Officer and a copy to: General Counsel Fax: (402) 231-1658 The Partnership Guarantors: c/o CalEnergy Operating Corporation 302 South 36th Street Suite 400-C Omaha, Nebraska 68131 Telephone: (402) 341-4500 Fax: (402) 231-1658 Attention: Chief Financial Officer and a copy to: General Counsel Fax: (402) 231-1658 The Royalty Guarantor: Salton Sea Royalty Company 302 South 36th Street Suite 400-D Omaha, Nebraska 68131 Telephone: (402) 341-4500 Fax: (402) 231-1658 Attention: Chief Financial Officer and a copy to: General Counsel Fax: (402) 231-1658 Collateral Agent: Chase Manhattan Bank and Trust Company,National Association 101 California Street, #2725 San Francisco, California 94111 Telephone: (415) 954-9508 Fax: (415) 693-8850 Attention: Corporate Trust Department Depositary Agent: Chase Manhattan Bank and Trust Company,National Association 101 California Street, # 2725 San Francisco, California 94111 Telephone: (415) 954-9508 Fax: (415) 693-8850 Attention: Corporate Trust Department SECTION VI.3 Governing Law; Terms. THIS DEPOSITARY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA. SECTION VI.4 Headings. Headings used in this Depositary Agreement are for convenience of reference only and do not constitute part of this Depositary Agreement for any purpose. SECTION VI.5 No Third Party Beneficiaries. The agreements of the parties hereto are solely for the benefit of the Funding Corporation, the Guarantors, the Collateral Agent, the Depositary Agent and the Secured Parties and their respective successors and assigns and no Person (other than the parties hereto and such Secured Parties) shall have any rights hereunder. SECTION VI.6 No Waiver. No failure on the part of the Depositary Agent, the Collateral Agent or any Secured Party or any of their nominees or representatives to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Depositary Agent, the Collateral Agent or any Secured Party or any of their nominees or representatives of any right, power or remedy preclude any further exercise thereof, or the exercise of any other right, power or remedy. SECTION VI.7 Severability. If any provision of this Depositary Agreement or the application thereof shall be invalid or unenforceable to any extent, (a) the remainder of this Depositary Agreement and the application of such remaining provisions shall not be affected thereby and (b) each such remaining provision shall be enforced to the greatest extent permitted by law. SECTION VI.8 Successors and Assigns. All covenants, agreements, representations and warranties in this Depositary Agreement by the Depositary Agent, the Collateral Agent, the Funding Corporation and the Guarantors shall bind and, to the extent permitted hereby, shall inure to the benefit of and be enforceable by their respective successors and assigns, whether so expressed or not. SECTION VI.9 Execution in Counterparts. This Depositary Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION VI.10 Appointment of Agent. CEOC is hereby appointed as agent and attorney-in-fact for each Guarantor to take all actions, to give all notices and to deliver all certificates and requisitions and the like hereunder. SECTION VI.11 Consequential Damages. In no event (other than with respect to its own gross negligence or willful misconduct) shall the Depositary Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Depositary Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. SECTION VI.12 Limitation of Liability. Notwithstanding anything to the contrary contained in this Depositary Agreement and the other Transaction Documents, the liability and obligation of the Funding Corporation or the Guarantors to perform and observe and make good the obligations contained in this Depositary Agreement and the other Security Documents shall not be enforced by any action or proceeding wherein damages or any money judgment or any deficiency judgment or any judgment establishing any personal obligation or liability shall be sought, collected or otherwise obtained against any officer, director or shareholder or related Person of the Funding Corporation or any of the Guarantors or any Secured Party, and the Collateral Agent, for itself and its successors and assigns, and on behalf of the Secured Parties and the Funding Corporation, irrevocably waives any and all right to sue for, seek or demand any such damages, money judgment, deficiency judgment or personal judgment against any officer, director or shareholder or related Person of the Funding Corporation or any of the Guarantors under or by reason of or in connection with this Depositary Agreement and agrees to look solely to the Funding Corporation and the Guarantors and the security and Collateral and Funding Corporation Collateral held under or in connection with the Security Documents for the enforcement of such liability and obligation of the Funding Corporation and the Guarantors. Notwithstanding the foregoing, the obligations of CalEnergy under the Equity Commitment Agreement and of Magma under the Support Letter, the Magma Assignment Agreement and the Magma Services Agreement shall be recourse to each such party, subject to the limitations, qualifications and other terms of such documents. IN WITNESS WHEREOF, the parties hereto have caused this Depositary Agreement to be duly executed as of the day and year first above written. SALTON SEA FUNDING CORPORATION By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER GENERATION L.P. By: SALTON SEA POWER COMPANY, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA BRINE PROCESSING L.P. By: SALTON SEA POWER COMPANY, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President FISH LAKE POWER COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA POWER L.L.C. By: CE SALTON SEA INC., as its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN POWER COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY OPERATING CORPORATION By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President BN GEOTHERMAL INC. By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY By: VULCAN POWER COMPANY, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SAN FELIPE ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President LEATHERS, L.P. By: CALENERGY OPERATING CORPORATION, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CONEJO ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President DEL RANCH, L.P. By: CALENERGY OPERATING CORPORATION, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President NIGUEL ENERGY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President ELMORE, L.P. By: CALENERGY OPERATING CORPO RATION, as its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY MINERALS LLC By: SALTON SEA MINERALS CORP., as its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CE TURBO LLC By: MAGMA POWER COMPANY, as its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SALTON SEA ROYALTY COMPANY By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as Depositary Agent By: Name: Title: CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as Collateral Agent By: Name: Title: TABLE OF CONTENTS Page ARTICLE I DEFINITIONS 4 SECTION 1.1Capitalized Terms 4 SECTION 1.2Definitions; Construction 4 ARTICLE II APPOINTMENT OF DEPOSITARY AGENT;ESTABLISHMENT OF FUNDS 12 SECTION 2.1Acceptance of Appointment of Depositary Agent 12 SECTION 2.2Establishment of Funds and Sub-Funds 13 SECTION 2.3Security Interest 14 SECTION 2.4Termination 15 ARTICLE III THE FUNDS 15 SECTION 3.1Construction Funds 15 SECTION 3.2Revenue Fund 21 SECTION 3.3Principal Fund 27 SECTION 3.4Interest Fund 28 SECTION 3.5Debt Service Reserve Fund 29 SECTION 3.6Distribution Fund 33 SECTION 3.7Distribution Suspense Fund 35 SECTION 3.8Loss Proceeds Fund 35 SECTION 3.9Redemption Fund 41 SECTION 3.10 Investment of Funds 45 SECTION 3.11 Disposition of Funds Upon Retirement of Securities and Additional Securities 46 SECTION 3.12 Fund Balance Statements 47 SECTION 3.13 Trigger Events 47 SECTION 3.14 Capital Expenditure Fund 47 ARTICLE IV DEPOSITARY AGENT 48 SECTION 4.1Appointment of Depositary Agent, Powers and Immunities 48 SECTION 4.2Reliance by Depositary Agent 50 SECTION 4.3Court Orders 50 SECTION 4.4Resignation or Removal 51 ARTICLE VEXPENSES; INDEMNIFICATION; FEES 52 SECTION 5.1Expenses 52 SECTION 5.2Indemnification 52 SECTION 5.3Fees 52 ARTICLE VI MISCELLANEOUS 53 SECTION 6.1Amendments; Etc 53 SECTION 6.2Addresses for Notices 53 SECTION 6.3Governing Law; Terms 55 SECTION 6.4Headings 55 SECTION 6.5No Third Party Beneficiaries 55 SECTION 6.6No Waiver 55 SECTION 6.7Severability 55 SECTION 6.8Successors and Assigns 55 SECTION 6.9Execution in Counterparts 56 SECTION 6.10 Appointment of Agent 56 SECTION 6.11 Consequential Damages 56 SECTION 6.12 Limitation of Liability 56 EX-4.19(C) 10 EXHIBIT 4.19(c) SECOND AMENDED AND RESTATED CREDIT AGREEMENT (PARTNERSHIP GUARANTORS) This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October __, 1998 (this "Second Amendment") is by and between SALTON SEA FUNDING CORPORATION, a Delaware corporation ("Funding Corporation"), as lender, and CALENERGY OPERATING CORPORATION, a Delaware corporation (formerly known as CalEnergy Operating Company) ("CEOC"), VULCAN POWER COMPANY, a Nevada corporation ("VPC"), CONEJO ENERGY COMPANY, a California corporation ("Conejo"), NIGUEL ENERGY COMPANY, a California corporation ("Niguel"), SAN FELIPE ENERGY COMPANY, a California corporation ("San Felipe"), BN GEOTHERMAL INC., a Delaware corporation ("BNG"), DEL RANCH, L.P., a California limited partnership ("Del Ranch"), ELMORE, L.P., a California limited partnership ("Elmore"), LEATHERS, L.P., a California limited partnership ("Leathers"), VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership ("Vulcan"), CALENERGY MINERALS LLC, a Delaware limited liability company ("Minerals LLC"), and CE TURBO LLC, a Delaware limited liability company ("Turbo LLC", and together with CEOC, VPC, Conejo, Niguel, San Felipe, BNG, Del Ranch, Elmore, Leathers, Vulcan, and Minerals LLC, the "Partnership Guarantors") as borrowers. W I T N E S S E T H: WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors of proceeds from the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Trust Indenture, dated as of July 21, 1995, between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee ("Trustee"), as the same may be amended, modified or supplemented (as so amended, modified or supplemented, including, pursuant to that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Indenture dated as of even date herewith, the "Indenture"); and WHEREAS, the principal and interest payments on the Securities will be serviced by repayment of loans made by Funding Corporation to the Guarantors and guaranteed by the Guarantors, subject to the conditions set forth in the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475,000,000 (the "Initial Securities"); and WHEREAS, Funding Corporation used a portion of the proceeds from the sale of the Initial Securities to make a loan to CEOC and VPC pursuant to that certain Credit Agreement (Partnership Guarantors) dated as of July 21, 1995 between Funding Corporation, CEOC and VPC (the "Initial Partnership Credit Agreement") in the aggregate amount of $75,000,000 (the "Initial Partnership Project Loan") portions of which were used: (a) to repay certain non-recourse indebtedness incurred by CalEnergy in connection with the acquisition of Magma Power Company; and (b) to pay certain costs of issuing the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000 (the "Supplemental Securities"); and WHEREAS, Funding Corporation used a portion of the proceeds from the sale of the Supplemental Securities to make a loan to the Initial Partnership Guarantors and Conejo, Niguel, San Felipe, BNG, Del Ranch, Elmore, Leathers and Vulcan (collectively, the "Supplemental Partnership Guarantors") in the aggregate amount of $135,000,000 (the "Supplemental Partnership Project Loan"), portions of which were used for the following purposes: (a) approximately $96,000,000 to refinance all existing project-level indebtedness of the Partnership Project Companies, (b) approximately $15,000,000 to fund certain capital improvements to the Partnership Projects and the Salton Sea Projects, and (c) approximately $23,000,000 to fund a portion of the purchase price for the acquisition by certain of the Partnership Guarantors of the 50% interest in each of the Partnership Projects previously owned by a third party; and WHEREAS, in connection with the making of the Supplemental Partnership Project Loan, each Initial Partnership Guarantor and each Supplemental Partnership Guarantor agreed to become jointly and severally liable with each other for the entire amount of the Initial Partnership Project Loan; and WHEREAS, in order to evidence and implement the making of the Supplemental Partnership Project Loan and the addition of the Supplemental Partnership Guarantors as borrowers under the Initial Partnership Project Loan, Funding Corporation, the Initial Partnership Guarantors and the Supplemental Partnership Guarantors entered into that certain Amended and Restated Credit Agreement (Partnership Guarantors) dated as of June 20, 1996 (the "Supplemental Partnership Credit Agreement") to amend and restate the Initial Partnership Credit Agreement (the Initial Partnership Credit Agreement, as so amended, the "Existing Partnership Credit Agreement"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Second Amendment issued and sold Securities in the aggregate principal amount of $285,000,000 (the "New Securities"); and WHEREAS, Funding Corporation intends to use the proceeds from the New Securities to make a loan to the Partnership Guarantors in the amount of $201,728,000 (the "Additional Partnership Project Loan," and together with the Initial Partnership Project Loan and the Supplemental Partnership Project Loan, the "Partnership Project Loan"), portions of which will be used for the following purposes: (a) approximately $140,520,000 to finance the construction of an approximately 30,000 metric tonnes/year zinc recovery facility (the "Zinc Recovery Project") which will extract and process metallic zinc from the geothermal brine used by the Salton Sea Projects and the Partnership Projects, to be owned and operated by Minerals LLC, (b) approximately $36,617,000 to finance an upgrade of the brine processing facilities at the Vulcan Project and the Del Ranch Project (the "Region 2 Brine Facilities Construction"), (c) approximately $7,964,000 to finance the construction of a turbo expander (the "TurboExpander Project") to be owned by Turbo LLC which will produce approximately 10MW of electricity from geothermal energy, and (d) approximately $16,627,000 to fund certain capital improvements to the Partnership Projects and the Salton Sea Projects. WHEREAS, in connection with the making of the Additional Partnership Project Loan, each Partnership Guarantor (including Minerals LLC and Turbo LLC) has agreed to become jointly and severally liable with each other Partnership Guarantor for the entire amount of the Initial Partnership Project Loan and the Supplemental Partnership Project Loan; and WHEREAS, in order to evidence and implement the making of the Additional Partnership Project Loan and the addition of Minerals LLC and Turbo LLC as borrowers under the Initial Partnership Project Loan and the Supplemental Partnership Project Loan, the parties hereto have agreed to amend and restate the Existing Partnership Credit Agreement as set forth herein. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter contained, the parties hereto formally covenant, agree and bind themselves as follows: ARTICLE 1. DEFINITIONS AND AMENDMENT Section 1.1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in Exhibit A to the Indenture, which Exhibit A is hereby incorporated by this reference. Section 1.2. Second Amendment and Restatement. From and after the date hereof, the terms of the Existing Partnership Credit Agreement shall be amended to read in their entirety as set forth in this Second Amendment and the terms of this Second Amendment shall govern and control the rights and obligations of the parties in and with respect to the Partnership Project Loan, notwithstanding any conflict between the terms of this Second Amendment and the terms of the Existing Partnership Credit Agreement. As amended and restated by this Second Amendment, the Existing Partnership Credit Agreement shall be referred to herein as the "Agreement." ARTICLE 2. DESCRIPTION OF THE LOAN Section 2.1. Acknowledgments of the Partnership Guarantors; Partnership Project Loan. The Partnership Guarantors hereby acknowledge and agree that: (a) The Partnership Guarantors are indebted to Funding Corporation for all principal, interest, and other amounts currently outstanding on the Initial Partnership Project Loan and the Supplemental Partnership Project Loan; (b) Pursuant to this Agreement, Funding Corporation does hereby lend to the Partnership Guarantors and the Partnership Guarantors do hereby borrow from Funding Corporation the principal amount of the Additional Partnership Project Loan; (c) The Partnership Project Loan shall be evidenced by a promissory note or notes issued by the Partnership Guarantors in favor of Funding Corporation (collectively, the "Partnership Project Note"); and (d) If proceeds from the issuance of any Additional Securities are loaned to the Partnership Guarantors, the outstanding principal balance on the Partnership Project Loan shall be increased by the amount of such proceeds and the Partnership Project Loan shall include the loan to the Partnership Guarantors of such proceeds, as evidenced by a promissory note issued by the Partnership Guarantors. Section 2.2. Term of This Agreement. This Agreement shall remain in full force and effect from the date hereof until payment in full of all amounts due under this Agreement. Section 2.3. Interest. Interest hereunder shall be paid in arrears on each May 30th and November 30th commencing on November 30, 1998 until all principal hereunder is paid in full. Interest shall be computed on the basis of a three hundred sixty (360) day year, consisting of twelve (12) thirty (30) day months and at the applicable rate per annum specified on Schedule 1 hereto. Principal shall be payable hereunder in an amount and on the dates set forth on Schedule 1 hereto. Section 2.4. Repayment. The Partnership Guarantors shall repay the Partnership Project Loan in installments to Funding Corporation on the dates, at the times and in the amounts set forth on Schedule 1 attached hereto (as the same may be modified pursuant to Section 8.3 of the Indenture). Section 2.5. Prepayment. (a) Optional Prepayment . The Partnership Guarantors shall have the optional right to prepay the Partnership Project Loan in such amounts and at such times as may be appropriate to permit Funding Corporation to (i) redeem the Securities pursuant to the optional redemption provisions set forth in Section 3.1 of the Indenture and Sections 2(i) and 2(j) of the Fourth Supplemental Indenture, dated as of even date herewith (the "Fourth Supplemental Indenture"), between the Funding Corporation and the Trustee, or (ii) defease the Securities pursuant to the optional defeasance provisions set forth in Section 10.1 of the Indenture. (b) Mandatory Prepayment. The Partnership Guarantors shall be required to prepay principal, and to pay accrued interest on such prepaid principal, on the Partnership Project Loan in such amounts and at such times as may be required (i) to permit the Funding Corporation to redeem the Securities pursuant to the mandatory redemption provisions set forth in Section 3.3 of the Indenture and (ii) to permit the Funding Corporation to redeem the New Securities pursuant to the mandatory redemption provisions set forth in Sections 2(l) and 2(m) of the Fourth Supplemental Indenture, in each case as such provisions apply specifically to the Partnership Guarantors, the Partnership Projects and/or the Partnership Project Documents. Section 2.6. Obligations of the Partnership Guarantors Hereunder Unconditional. The obligations of the Partnership Guarantors to make the payments required in Sections 2.3 and 2.4 hereof shall be absolute and unconditional; and the Partnership Guarantors shall not discontinue such payments for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction from the Partnership Projects, destruction of or damage to the Partnership Projects, including commercial frustration of purpose, or change in the tax or other laws or administrative rulings of or administrative actions by the United States of America or the State of California or any political subdivision of either. The Partnership Guarantors may, however, at their own cost and expense and in their own name or in the name of Funding Corporation, prosecute or defend any action or proceeding or take any other action involving third persons which the Partnership Guarantors deem reasonably necessary in order to secure or protect their rights with respect to the Partnership Projects. Section 2.7. General Terms of Payment. (a) All sums payable to Funding Corporation hereunder shall be deemed paid to the extent the Depositary Agent shall apply amounts held by the Depositary Agent in accordance with the Depositary Agreement to the payment of principal of or interest on the Partnership Project Loan and the Securities in accordance with the Depositary Agreement. (b) Whenever any payment hereunder shall be due, or any calculation shall be made, on a day which is not a Business Day, the date for payment or calculation, as the case may be, shall be extended to the next succeeding Business Day, and any interest on any payment shall be payable for such extended time at the specified rate. (c) If no due date is specified for the payment of any amount payable by the Partnership Guarantors hereunder, such amount shall be due and payable not later than ten (10) days after receipt of written demand by Funding Corporation to the Partnership Guarantors for payment thereof. Section 2.8. Security. The obligations of the Partnership Guarantors hereunder shall be secured as set forth herein and under the Security Documents. ARTICLE 3. REPRESENTATIONS AND WARRANTIES The Partnership Guarantors represent and warrant to Funding Corporation as follows: Section 3.1. Organization, Power and Status of the Partnership Guarantors. (a) CEOC and BNG are corporations duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) VPC is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, (c) Conejo, Niguel and San Felipe are corporations duly organized, validly existing and in good standing under the laws of the State of California, (d) Del Ranch, Elmore and Leathers are limited partnerships, duly organized, validly existing and in good standing under the laws of the State of California, (e) Vulcan is a general partnership, duly organized, validly existing and in good standing under the laws of the State of Nevada, (f) Minerals LLC and Turbo LLC are limited liability companies, duly organized, validly existing and in good standing under the laws of the State of Delaware, and (g) each of the Partnership Guarantors is duly qualified in the State of California and is duly authorized to do business in each other jurisdiction where the nature of its activities makes such qualification necessary. Each of the Partnership Guarantors has all requisite power and authority to carry on its business as now being conducted and as proposed to be conducted. Section 3.2. Authorization; Enforceability; Execution and Delivery. (a) Each of the Partnership Guarantors has all necessary power and authority to execute, deliver and perform its obligations under this Agreement, the Partnership Project Note and each other Financing Document to which it is a party. (b) All action on the part of each of the Partnership Guarantors that is required for the authorization, execution, delivery and performance of this Agreement, the Partnership Project Note and each other Financing Document to which such Partnership Guarantor is a party have been duly and effectively taken; and the execution, delivery and performance of this Agreement, the Partnership Project Note and each such other Financing Document to which any of the Partnership Guarantors is a party does not require the approval or consent of any holder or trustee of any Debt or other material obligations of the Partnership Guarantors which has not been obtained. (c) This Agreement, the Partnership Project Note and each other Financing Document to which any of the Partnership Guarantors is a party have been duly authorized, executed and delivered by the Partnership Guarantors. Each of this Agreement, the Partnership Project Note and each other Financing Document to which any of the Partnership Guarantors is a party constitutes a legal, valid and binding obligation of such Partnership Guarantor enforceable against such Partnership Guarantor in accordance with the terms hereof and thereof, except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally, and subject to general principles of equity. Section 3.3. No Conflicts; Laws and Contracts; No Default; Representations and Warranties. (a) Neither the execution, delivery and performance of this Agreement, the Partnership Project Note or any other Financing Document to which any of the Partnership Guarantors is a party, nor the consummation of any of the transactions contemplated hereby or thereby (i) contravenes any provision of Law applicable to any of the Partnership Guarantors or any of the Collateral, except any contravention which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (ii) conflicts or is inconsistent with or constitutes a default under the articles of incorporation, by-laws, certificate of formation, limited liability company operating agreement, or partnership agreement of any of the Partnership Guarantors, or of any other terms of any Partnership Project Document, Financing Document or any other agreement or instrument to which the Partnership Guarantors may be subject except any such conflict, inconsistency, default or violation which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect or (iii) results in the creation or imposition of (or the obligation to create or impose) any Liens (other than Permitted Liens) on the Partnership Collateral. (b) Each of the Partnership Guarantors is in compliance with any and all Laws applicable to it, except any such noncompliance which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Section 3.4. Litigation. There are no claims, actions, suits, investigations or proceedings at law or in equity (including any Environmental Claims) or by or before any arbitrator or Governmental Authority now pending against any of the Partnership Guarantors or, to the best knowledge of any of the Partnership Guarantors after due inquiry, threatened against any of the Partnership Guarantors or any property or other assets or rights of the Partnership Guarantors that could reasonably be expected to result in a Material Adverse Effect. Section 3.5. Environmental Matters. To the best knowledge of the Partnership Guarantors after due inquiry, the Partnership Projects are in compliance with all existing applicable Environmental Laws and there are no facts, circumstances or conditions under any existing Environmental Law which could, individually or in the aggregate with all other circumstances or conditions, reasonably be expected to result in a Material Adverse Effect. Section 3.6. Employee Benefit Plans. Each Plan (including without limitation each Plan of a Commonly Controlled Entity) as to which the Partnership Guarantors may have any liability complies with all applicable requirements of Law and regulations, and (i) no "reportable event" (as defined in Section 4043 of ERISA (other than an event not subject to the notice requirement of the PBGC)) has occurred with respect to any such Plan, (ii) there has been no withdrawal from any Multiemployer Plan or steps taken to do so that have resulted or could reasonably be expected to result in material liability for the Partnership Guarantors, (iii) no Plan has been terminated or has commenced to be terminated which could reasonably be expected to result in material liability for the Partnership Guarantors, (iv) no contribution failure has occurred with respect to any Plan sufficient to give rise to a lien under Section 302(f) of ERISA or Section 412 of the Code and (v) no condition exists or event or transaction has occurred with respect to any Plan that, in each case, could reasonably be expected to result in a Material Adverse Effect. Section 3.7. Business of the Partnership Guarantors. Except as otherwise permitted in this Agreement and the other Financing Documents, none of the Partnership Guarantors is engaged in any business other than the development, acquisition, construction, operation and financing of the Projects and transactions related thereto or as permitted under Section 4.7 hereof. Section 3.8. Valid Title. Each of the Partnership Guarantors has valid legal title to all of its assets. Section 3.9. Security Interests. The security interests to be transferred to and/or to be created in favor of Funding Corporation hereunder and under the Security Documents will be, to the extent provided herein and therein, valid and perfected first priority security interests in and liens on the collateral described therein. Section 3.10. Utility Regulation. None of the Partnership Guarantors is subject to regulation by any Governmental Authority under PUHCA as a "public utility company" or an "affiliate," or "subsidiary company" of a "registered holding company" or a company subject to registration under PUHCA. Section 3.11. Qualifying Facility. The Partnership Projects (other than the Zinc Recovery Project and the TurboExpander Project) are Qualifying Facilities. The TurboExpander Project is (a) a Qualifying Facility or (b) an Eligible Facility owned by an Exempt Wholesale Generator. Section 3.12. Investment Company Act. None of the Partnership Guarantors is, and following the execution of the Partnership Project Note, will be, an "investment company" or, to its knowledge, an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended. Section 3.13. No Defaults. None of the Partnership Guarantors is in default under any Project Documents or other material project contract which could reasonably be expected to result in a Material Adverse Effect. To the best of the Partnership Guarantors' knowledge, no material default exists by any other party to the Project Documents or other material project contracts. Section 3.14. Governmental Approvals. All Governmental Approvals which are required to be obtained by, in the name of or on behalf of any of the Partnership Guarantors or, to the knowledge of any of the Partnership Guarantors, any other party to any Financing Document, in connection with (a) the issuance of the Partnership Project Note and (b) the execution, delivery and performance by the Partnership Guarantors and any other party to any Financing Document of the Financing Documents, have been duly obtained or made, are validly issued and are in full force and effect. Section 3.15. Margin Stock. None of the Partnership Guarantors is engaged, directly or indirectly, principally, or as one of its important activities, in the business of extending, or arranging for the extension of, credit for the purposes of purchasing or carrying any margin stock, within the meaning of Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. No part of the proceeds of any loan made under this Agreement will be used for "purchasing" or "carrying" any "margin stock" as so defined, or for extending credit to others for the purpose of purchasing or carrying margin stock, or for any purpose which would violate, or cause a violation of, any such regulation. Section 3.16. Taxes. The Partnership Guarantors have filed all federal and state tax returns, to date, required to be filed by applicable laws and have paid all federal and state taxes due under such tax returns except to the extent that such taxes are being contested in good faith and by appropriate proceedings and adequate reserves, bonds or other security have been established with respect thereto. Section 3.17. Ownership of Partnership Guarantors. As of the date of this Agreement, (a) Magma and Funding Corporation are the sole shareholders of CEOC and VPC, (b) CEOC and Conejo are the sole general partners of Del Ranch, and Magma and Conejo are the sole limited partners of Del Ranch, (c) CEOC and Niguel are the sole general partners of Elmore, and Magma and Niguel are the sole limited partners of Elmore, (d) CEOC and San Felipe are the sole general partners of Leathers, and Magma and San Felipe are the sole limited partners of Leathers, (e) VPC and BNG are the sole general partners of Vulcan, (f) CEOC is the sole shareholder of each of Conejo, Niguel, and San Felipe, (g) VPC is the sole shareholder of BNG, (h) SSMC and Magma are the sole members of Minerals LLC, and (i) CESS and Magma are the sole members of Turbo LLC. Section 3.18. Disclosure. Each of the Series D and E Preliminary Offering Circular and the Series D and E Final Offering Circular as of its date did not, and the Series D and E Final Offering Circular (as the same may have been amended or supplemented) as of the date of the issuance of the Series D and E Securities did not, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each of the Series F Preliminary Offering Circular and the Series F Final Offering Circular as of its date did not, and the Series F Final Offering Circular (as the same may have been amended or supplemented) as of the date of the issuance and delivery of the New Securities will not, contain any untrue statement of a material fact with respect to the Partnership Guarantors or omit to state any material fact necessary to make the statements made therein with respect to the Partnership Guarantors, in the light of the circumstances under which they were made, not misleading. ARTICLE 4. COVENANTS AND AGREEMENTS OF THE PARTNERSHIP GUARANTORS Each Partnership Guarantor hereby covenants and agrees that from the date of this Agreement, it shall faithfully observe and fulfill, and shall cause to be fulfilled and observed, each of the following covenants that is applicable to such Partnership Guarantor until all amounts due under the Securities and the Indenture shall have been repaid. Section 4.1. Reporting Requirements. Each of the Partnership Guarantors shall provide to Funding Corporation (a) unaudited quarterly reports for the first three quarters of each fiscal year containing condensed financial information within forty-five (45) days of the end of each quarter and audited annual reports within ninety (90) days of the end of each fiscal year, (b) all other information in respect of the Partnership Guarantors requested by Funding Corporation to enable Funding Corporation to meet its obligations under the Indenture, (c) copies of material notices delivered in connection with any Partnership Project Documents, and (d) written notice of any Credit Agreement Default or Event of Default under this Agreement or any event or condition that could reasonably be expected to result in a Material Adverse Effect. Section 4.2. Sale of Assets. Except as contemplated by the Partnership Project Documents, none of the Partnership Guarantors shall sell, lease (as lessor) or transfer (as transferor) any property or assets material to the operation of the Partnership Projects except in the ordinary course of business to the extent that such property is no longer useful or necessary in connection with the operation of the Partnership Projects; provided, however, without limiting the generality of the foregoing, that the Partnership Guarantors shall be allowed to lend useful spare parts to the Salton Sea Guarantors for use in the Salton Sea Projects or to other Permitted Facilities financed with Permitted Debt for use in such Permitted Facilities. Section 4.3. Sale of Partnership Interests. Neither CEOC nor VPC shall sell, transfer or convey any of their partnership interests in the Partnership Project Companies. Section 4.4. Insurance. Except as set forth below, the Partnership Project Companies shall maintain or cause to be maintained (a) on the date hereof the insurance in effect with respect to the Partnership Projects on the date hereof and (b) insurance as is generally carried by companies engaged in similar businesses and owning similar properties in the same general areas and financed in a similar manner. The Partnership Project Companies have business interruption insurance, casualty insurance, including flood and earthquake coverage, and primary and excess liability insurance, as well as customary worker's compensation and automobile insurance. The Partnership Project Companies shall not reduce or cancel such insurance coverages (or permit any such coverages to be reduced or canceled) if the Insurance Consultant determines that (i) such reduction or cancellation would not be reasonable under the circumstances and (ii) the insurance coverages sought to be reduced or canceled are available on commercially reasonable terms or that another level of coverage greater than that proposed by the Partnership Project Companies is available on commercially reasonable terms (in which case such coverage may be reduced to such greater available levels). Section 4.5. QF Status. The Partnership Project Companies shall operate and maintain the Partnership Projects (other than the Zinc Recovery Project and the TurboExpander Project) as Qualifying Facilities unless the failure to do so operate and maintain such Projects as Qualifying Facilities would not cause or result in (a) a breach of the power purchase agreements that the Partnership Project Companies are party to or (b) an adverse effect on the revenues to be received under such power purchase agreements. The Partnership Guarantors shall operate and maintain the TurboExpander Project as a Qualifying Facility or as an Eligible Facility owned by one or more Exempt Wholesale Generators unless the failure to so maintain or operate the TurboExpander Project could not reasonably be expected to have a Material Adverse Effect. Section 4.6. Governmental Approvals; Title. Each of the Partnership Guarantors shall at all times (a) obtain and maintain in full force and effect all material Governmental Approvals and other consents and approvals required at any time in connection with its business and (b) preserve and maintain good and valid title to its properties and assets (subject to no liens other than Permitted Liens), except in each case where the failure to do so in clause (a) or (b) could not reasonably be expected to have a Material Adverse Effect. Section 4.7. Nature of Business. None of the Partnership Guarantors shall engage in any business other than their existing businesses and, in the case of the Partnership Project Companies, the development, acquisition, construction, operation and financing of the Partnership Projects as contemplated by the Transaction Documents; provided, however, that (a) CEOC shall be permitted to enter into agreements to provide operating and maintenance services, administrative services, technical services or related services for Permitted Facilities owned in whole or in part by CalEnergy (directly or indirectly) and located in Imperial County, California and (b) the Partnership Guarantors may engage in Permitted Facilities at the SSKGRA (i)(A) for which Permitted Debt may be incurred and (B) if the Independent Engineer certifies that such other projects could not reasonably be expected to have an adverse impact on the geothermal resources for the Salton Sea Projects or the Partnership Projects or (ii) if Funding Corporation and the Guarantors take such action as the Rating Agencies require to confirm the Investment Grade Rating of the Securities. Section 4.8. Compliance With Laws. Each of the Partnership Guarantors shall comply with all applicable laws, except where non-compliance could not reasonably be expected to have a Material Adverse Effect. Section 4.9. Prohibition on Fundamental Changes. None of the Partnership Guarantors shall enter into any transaction of merger or consolidation, change its form of organization or its business, liquidate or dissolve itself (or suffer any liquidation or dissolution); provided, however, that any Guarantor shall be able to merge with or into any other Guarantor so long as no Default or Event of Default exists or shall occur as a result thereof and in the event that any of the Partnership Guarantors is not the surviving entity (i) the surviving entity shall, simultaneously with such merger, assume all the obligations of such Partnership Guarantor under this Agreement and under the other Financing Documents to which such Partnership Guarantor was a party, (ii) Funding Corporation shall have received appropriate amendments to this Agreement and the other Financing Documents to which such Partnership Guarantor was a party, all financing statements necessary to preserve its valid, perfected, first priority security interest in the Partnership Collateral, each in form and substance reasonably satisfactory to Funding Corporation, (iii) after giving effect to such merger, the merger shall not result in a Material Adverse Effect and (iv) after giving effect to such merger, no Credit Agreement Event of Default or Event of Default shall have occurred or be continuing. None of the Partnership Guarantors shall purchase or otherwise acquire all or substantially all of the assets of any other Person, except for the purchase or acquisition by the Partnership Guarantors of the partnership interests or assets of the Partnership Projects not currently owned by the Partnership Guarantors; provided, however, that the Partnership Guarantors may engage in Permitted Facilities at the SSKGRA (a) for which Permitted Debt may be incurred or (b) if the Independent Engineer certifies that such other projects could not reasonably be expected to have an adverse impact on the geothermal resources for the Salton Sea Projects or the Partnership Projects or (c) if Funding Corporation and the Guarantors take such action as the Rating Agencies require to confirm the Investment Grade Rating of the Securities. Section 4.10. Revenue Fund. Each of the Partnership Guarantors shall take all actions as may be necessary to cause revenues of the Partnership Guarantors to be deposited in the Revenue Fund, the Zinc Construction Fund or the Region 2/Turbo Construction Fund, as applicable, in each case in accordance with the terms of the Depositary Agreement. Section 4.11. Transactions With Affiliates. None of the Partnership Guarantors shall enter into any transaction or agreement with any Affiliate of the Partnership Guarantors other than (a) as contemplated under the Transaction Documents or (b) transactions in the ordinary course of business and on terms no less favorable to the Partnership Guarantors than the Partnership Guarantors would obtain in an arms length transaction with a Person that is not an Affiliate of the Partnership Guarantors. Section 4.12. Restricted Payments. The Partnership Guarantors shall not make any Restricted Payments except (a) as permitted under the Depositary Agreement or as contemplated in the Offering Circular to occur on the Closing Date and (b) in respect of Operating and Maintenance Costs. Section 4.13. Exercise of Rights Under Partnership Project Documents. None of the Partnership Guarantors shall exercise, or fail to exercise, their rights under the partnership agreements of each of the Partnership Project Companies (other than Minerals LLC and Turbo LLC) or any of the Partnership Project Documents in a manner which could reasonably be expected to result in a Material Adverse Effect. Section 4.14. Amendments to Contracts. Neither CEOC nor VPC shall terminate, amend, replace or modify (other than immaterial amendments or modifications as certified by the Partnership Gurantors) the partnership agreement of any of the Partnership Project Companies or the Partnership Project Documents to which it is a party unless such termination, amendment, replacement or modification (a) could not reasonably be expected to have a Material Adverse Effect or (b) is required under applicable law or to maintain the Qualifying Facility status of a Project. In addition, none of the Partnership Guarantors shall terminate, amend, replace or modify (other than immaterial amendments or modifications as certified by the Partnership Guarantors) any of the Partnership Project Documents to which it is a party (other than a Permitted Power Contract Buy- Out) unless (i)(A) such Partnership Guarantor certifies that such termination, amendment, replacement or modification could not reasonably be expected to have a Material Adverse Effect and (B) in the case of any amendment, termination or modification of any Power Purchase Agreement which affects the revenues derived by any of the Partnership Guarantors, the Independent Engineer certifies that such amendment, termination or modification could not reasonably be expected to have a Material Adverse Effect, (b) the Partnership Guarantors provide a letter from the Rating Agencies confirming that such amendment, termination or modification shall not result in a Rating Downgrade, or (c) such amendment, termination or modification is required under applicable law or to maintain the Qualifying Facility status of a Project. Section 4.15. Limitations on Debt/Liens. The Partnership Guarantors shall not create or incur or suffer to exist any Debt except Permitted Guarantor Debt. The Partnership Guarantors shall not grant, create, incur or suffer to exist any Liens upon any of their properties, except for Permitted Liens. Section 4.16. Books and Records. The Partnership Guarantors shall maintain their books and records and give the Funding Corporation, the Trustee, the Collateral Agent and the Independent Engineer inspection rights. Section 4.17. Additional Project Documents. The Partnership Guarantors shall perform and observe their respective covenants and obligations under all of the Partnership Project Documents in all material respects except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. The Partnership Project Companies shall not enter into any Additional Project Document if entering into such document could reasonably be expected to result in a Material Adverse Effect. Section 4.18. Maintenance of Existence. The Partnership Guarantors shall at all times preserve and maintain in full force and effect (a) their existence as limited partnerships, limited liability companies, corporations or a general partnership, as applicable, in good standing under the laws of the State of California, Nevada or Delaware, as applicable, (b) their qualification to do business in each jurisdiction in which the character of the properties owned or leased by them or in which the transaction of their business as conducted or proposed to be conducted makes such qualification necessary, and (c) all of their powers, rights, privileges and franchises which are necessary for the ownership and operation of their respective businesses. Section 4.19. Taxes. The Partnership Guarantors shall pay and discharge all taxes, assessments and governmental charges upon them, their income and their properties prior to the date on which penalties are attached thereto, unless and to the extent only that (a) such taxes, assessments and governmental charges shall be contested in good faith and by appropriate proceedings, and (b) adequate reserves, bonds or other security are established with respect thereto. Section 4.20. Additional Documents; Filings and Recordings. The Partnership Guarantors shall execute and deliver, as requested by Funding Corporation, such other documents as shall reasonably be necessary or advisable in order to effect or protect the rights and remedies of Funding Corporation granted or provided for by this Agreement or the other Financing Documents to which the Partnership Guarantors are party and to consummate the transactions contemplated therein. The Partnership Guarantors shall, at their own expense, take all reasonable actions (a) that are requested by Funding Corporation or (b) that an Authorized Officer of the Partnership Guarantors has actual knowledge are necessary as a legal matter, to establish, maintain and perfect the first priority security interests of Funding Corporation. Without limiting the generality of the foregoing, the Partnership Guarantors shall execute or cause to be executed and shall file or cause to be filed such Financing Statements, continuation statements, and fixture filings and such mortgages, or deeds of trust in all places necessary or advisable (in the opinion of counsel for Funding Corporation) to establish, maintain and perfect such security interests. Section 4.21. Information and Access to Independent Engineer. The Partnership Guarantors shall provide the Independent Engineer with information regarding the Zinc Recovery Project, the Region 2 Brine Facilities Construction and the TurboExpander Project which is reasonably requested by the Independent Engineer. The Partnership Project Companies shall provide the Independent Engineer with access to the Zinc Recovery Project, the Region 2 Brine Facilities Construction and the TurboExpander Project as reasonably requested by the Independent Engineer. ARTICLE 5. DEFAULT AND REMEDIES Section 5.1. Events of Default. Each of the following events and occurrences shall constitute a Credit Agreement Event of Default under this Agreement: (a) the failure by the Partnership Guarantors to pay or cause to be paid any principal of, premium, if any, or interest, fees or any other obligations on the Partnership Project Note for fifteen (15) or more days after the same becomes due and payable, whether by scheduled maturity or required prepayment or by acceleration or otherwise, after application by the Trustee, in accordance with the provisions of the Indenture, of any amounts in Funding Corporation's account in the Debt Service Reserve Fund (as defined in the Depositary Agreement) and amounts otherwise advanced by other Guarantors for the benefit of the Partnership Guarantors. (b) any representation or warranty made by the Partnership Guarantors under this Agreement shall prove to have been untrue or misleading in any material respect as of the time made, confirmed or furnished and the fact, event or circumstance that gave rise to such inaccuracy could reasonably be expected to result in a Material Adverse Effect and such fact, event or circumstance shall continue to be uncured for thirty (30) or more days from the date an Authorized Officer of the Partnership Guarantors has actual knowledge thereof; provided, however, that if the Partnership Guarantors commence efforts to cure such fact, event or circumstance within such thirty (30) day period, the Partnership Guarantors may continue to effect such cure and such misrepresentation shall not be deemed a Credit Agreement Event of Default for an additional sixty (60) days so long as the Partnership Guarantors are diligently pursuing such cure; (c) the failure by any of the Partnership Guarantors to perform or observe any covenant contained in Sections 4.2, 4.4, 4.7, 4.9, 4.12, 4.13, 4.14, 4.16, or 4.19 hereof, if any, and such failure shall continue uncured for thirty (30) or more days after an Authorized Officer of such Partnership Guarantor obtains actual knowledge of such failure; (d) the failure by any of the Partnership Guarantors to perform or observe any of the other covenants contained in this Agreement or in the other Financing Documents the Partnership Guarantors are party to (other than such failures described in Sections 5.1(c) above) and such failure shall continue uncured for sixty (60) or more days after an Authorized Officer of the Partnership Guarantors has actual knowledge of such failure; provided, however, that if the Partnership Guarantors commence efforts to cure such default within such sixty (60) day period, the Partnership Guarantors may continue to effect such cure of the default and such default shall not be deemed a Credit Agreement Event of Default for an additional thirty (30) days so long as the Partnership Guarantors are diligently pursuing such cure; (e) any of the Partnership Guarantors: (1) does not pay its Debts as they become due or admits in writing its inability to pay its Debts or makes a general assignment for the benefit of creditors; or (2) commences any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, adjustment, insolvency, reorganization or similar laws affecting the rights or remedies of creditors generally, as in effect from time to time (collectively, "Debtor Relief Law"); or (3) in any involuntary case, proceeding or other action commenced against it which seeks to have an order for relief (injunctive or otherwise) entered against it, as debtor, or seeks reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its Debts under any Debtor Relief Law, (A) fails to obtain a dismissal of such case, proceeding or other action within sixty (60) days of its commencement, or (B) converts the case from one chapter of the Bankruptcy Reform Act of 1978, as amended, to another chapter, or (C) is the subject of an order for relief; or (4) has a trustee, receiver, custodian or other official appointed for or take possession of all or any part of its property or has any court take jurisdiction of any of its property, which action remains undismissed for a period of sixty (60) days; (f) the entry of one or more final and non- appealable judgment or judgments for the payment of money in excess of Ten Million Dollars ($10 Million) (exclusive of judgment amounts fully covered by insurance or indemnity) against the Partnership Guarantors, which remain unpaid or unstayed for a period of ninety (90) or more consecutive days; (g) an event of default under any Permitted Guarantor Debt of the Partnership Guarantors in excess of Ten Million Dollars ($10 Million) occurs and such debt becomes due and payable prior to its stated maturity; (h) the Partnership Guarantors fail to perform any of their respective payment obligations under the Partnership Guarantee for fifteen (15) or more days after the same becomes due and payable; (i) any Governmental Approval required for the operation of a Project owned by the Partnership Project Companies is revoked, terminated, withdrawn or ceases to be in full force and effect if such revocation, termination, withdrawal or cessation could reasonably be expected to have a Material Adverse Effect and such revocation, termination, withdrawal or cessation is not cured for sixty (60) days following the occurrence thereof; (j) any Partnership Project Document ceases to be valid and binding and in full force and effect other than as a result of an amendment, termination or Permitted Power Contract Buy-Out permitted under this Agreement, and any such event results in a Material Adverse Effect; provided, however, that no such event shall be a Credit Agreement Event of Default if within one hundred eighty (180) days from the occurrence of any such event, the Partnership Guarantors (1) cause the third party to resume performance or cure such misrepresentation or (2) enter into an Additional Project Document in replacement thereof, as permitted under this Agreement; (k) the failure of any of the Partnership Guarantors to perform or observe any of its covenants or obligations contained in any of the Partnership Project Documents to which it is a party if such failure shall result in the termination of such Partnership Project Document or otherwise result in a Material Adverse Effect; provided, however that such event shall not be a Credit Agreement Event of Default if within one hundred eighty (180) days from the occurrence of any such event, the Partnership Guarantors enter into an Additional Project Document in replacement thereof as permitted under this Agreement; (l) any of the Partnership Security Documents ceases to be effective or any Lien granted therein ceases to be a valid and perfected Lien in favor of the Collateral Agent on the Collateral described therein with the priority purported to be created thereby; provided, however, that the Partnership Guarantors shall have ten (10) days to cure any such impairment or cessation or to furnish to the Trustee, the Collateral Agent or the Depositary Agent all documents or instruments required to cure any such cessation; or (m) an Event of Default under Section 6.1 (c), (d), (e), (f), (g), (h), (i), (j), (k) or (l) of the Indenture occurs. Section 5.2. Consequences of Event of Default. If one or more Credit Agreement Events of Default under this Agreement have occurred and are continuing, then: (a) in the case of a Credit Agreement Event of Default under Section 5.1(e) hereof, the entire outstanding principal amount of the Partnership Project Note, all interest accrued and unpaid thereon, and all premium and other amounts payable under the Partnership Project Note and this Agreement, if any, shall automatically become due and payable, without presentment, demand, protest or notice of any kind; or (b) in the case of a Credit Agreement Event of Default under: (1) Sections 5.1(a) or (h) hereof, upon the written and unrescinded direction of the Holders of no less than thirty three and one-third percent (33 1/3%) in aggregate principal amount of the Outstanding Securities, Funding Corporation shall declare the outstanding principal amount of the Partnership Project Note to be accelerated and due and payable and all interest accrued and unpaid thereon, and all premium and other amounts payable under this Agreement, if any to be due and payable, and (2) Sections 5.1(b), (c), (d), (f), (g), (i), (j), (k), (l) and (m) hereof, upon the written and unrescinded direction of the Holders of no less than fifty percent (50%) in aggregate principal amount of the Outstanding Securities, Funding Corporation shall declare the outstanding principal amount of the Partnership Project Note to be accelerated and due and payable and all interest accrued and unpaid thereon, and all premium and other amounts payable under this Agreement, if any to be due and payable. Section 5.3. Continuing Lien. (a) The liens and security interests granted in this Agreement, the other Financing Documents to which the Partnership Guarantors are party and the Security Documents to which the Partnership Guarantors are party secure all indebtedness and all obligations of the Partnership Guarantors owed to Funding Corporation in connection with the Partnership Project Loan of whatever kind or character, whether now owing, hereafter arising or hereafter to be performed. (b) Notwithstanding anything to the contrary in this Agreement, the other Financing Documents to which the Partnership Guarantors are party or the Security Documents to which the Partnership Guarantors are party, if at the time the principal balance of the Securities is fully paid (the "Pay-off Date"), any other amounts owed by the Partnership Guarantors hereunder remain to be paid, Funding Corporation shall not be obligated to release any collateral remaining subject to the Security Documents, and such collateral shall continue to secure the payment of such amounts remaining as of the Pay-off Date. Section 5.4. Defense of Actions. Upon the occurrence of a Credit Agreement Event of Default, Funding Corporation may (but shall not be obligated to) commence, appear in or defend any action or proceeding purporting to affect the Partnership Project Loan, the Partnership Projects or the respective rights and obligations of Funding Corporation and any other person pursuant to this Agreement, any other Financing Document to which the Partnership Guarantors are party or any Security Document to which the Partnership Guarantors are party. Funding Corporation may (but shall not be obligated to) pay all necessary expenses, including reasonable attorneys' fees and expenses, incurred in connection with such proceedings or actions, which expenses the Partnership Guarantors hereby agree to repay to Funding Corporation promptly upon demand. ARTICLE 6. GENERAL TERMS AND CONDITIONS Section 6.1. Notices. All notices, requests, complaints, demands, communications or other papers shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, or sent by telegram or telex, addressed to the parties as follows: If to the Partnership Guarantors: CalEnergy Operating Corporation 302 South 36th Street, Suite 400-C Omaha, Nebraska 68131 Attention: General Counsel Vulcan Power Company 302 South 36th Street, Suite 400-E Omaha, Nebraska 68131 Attention: General Counsel Conejo Energy Company 302 South 36th Street, Suite 400-G Omaha, Nebraska 68131 Attention: General Counsel Niguel Energy Company 302 South 36th Street, Suite 400-H Omaha, Nebraska 68131 Attention: General Counsel San Felipe Energy Company 302 South 36th Street, Suite 400-I Omaha, Nebraska 68131 Attention: General Counsel BN Geothermal Inc. 302 South 36th Street, Suite 400-J Omaha, Nebraska 68131 Attention: General Counsel Del Ranch, L.P. 302 South 36th Street, Suite 400-C Omaha, Nebraska 68131 Attention: General Counsel Elmore, L.P. 302 South 36th Street, Suite 400-C Omaha, Nebraska 68131 Attention: General Counsel Leathers, L.P. 302 South 36th Street, Suite 400-C Omaha, Nebraska 68131 Attention: General Counsel Vulcan/BN Geothermal Power Company 302 South 36th Street, Suite 400-E Omaha, Nebraska 68131 Attention: General Counsel CalEnergy Minerals LLC 302 South 36th Street, Suite 400-L Omaha, Nebraska 68131 Attention: General Counsel CE Turbo LLC 302 South 36th Street, Suite 400-M Omaha, Nebraska 68131 Attention: General Counsel If to Funding Corporation: Salton Sea Funding Corporation 302 South 36th Street, Suite 400-A Omaha, Nebraska 68131 Attention: Chief Financial Officer If to Moody's: Moody's Investors Service 99 Church Street New York, New York 10007 Attention: Corporate Utilities Department If to S & P: Standard & Poor's Corporation 25 Broadway New York, New York 10004 Attention: Corporate Finance Department Electric Utilities Group The above parties may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Section 6.2. Amendments and Waivers. This Agreement may only be amended by a document signed by Funding Corporation and the Partnership Guarantors. No waiver of any provision of this Agreement nor consent by Funding Corporation to any departure by the Partnership Guarantors therefrom shall in any event be effective unless the same shall be in writing and signed by Funding Corporation. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of Funding Corporation to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof (except as provided above) nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. This Agreement shall be binding upon the Partnership Guarantors, its successors and any permitted assigns. Section 6.3. Election of Remedies. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Funding Corporation shall have all of the rights and remedies granted in the Financing Documents and available at law or in equity, and these same rights and remedies may be pursued separately, successively or concurrently against the Partnership Guarantors, or any collateral under the Financing Documents, at the sole discretion of Funding Corporation. Section 6.4. Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization, without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. Section 6.5. Third-Party Beneficiaries; Prior Agreements. It is intended that the Trustee, the Collateral Agent and the Depositary Agent be, and the Trustee, the Collateral Agent and the Depositary Agent are hereby made, third-party beneficiaries of this Agreement. This Agreement is for the sole benefit of Funding Corporation, the Trustee, the Holders and the Partnership Guarantors and is not for the benefit of any other third party. Notwithstanding the two preceding sentences, no Holder shall have any right to pursue any remedy hereunder except through the Trustee as permitted under Sections 6.5 and 6.6 of the Indenture. This Agreement supersedes all prior agreements among the parties with respect to the matters addressed herein. Section 6.6. Partnership Guarantors in Control. In no event shall Funding Corporation's or the Trustee's rights and interests under this Agreement and the other Financing Documents be construed to give Funding Corporation or the Trustee, or be deemed to indicate that Funding Corporation or the Trustee has, control of the business, management or properties of the Partnership Guarantors or power over the daily management functions and operating decisions made by the Partnership Guarantors. Section 6.7. Number and Gender. Whenever used herein, the singular number shall include the plural and the plural the singular, and the use of any gender shall be applicable to all genders. Section 6.8. Captions. The captions, headings, table of contents and arrangements used in this Agreement are for convenience only and do not and shall not be deemed to affect, limit, amplify or modify the terms and provisions hereof. Section 6.9. Applicable Law and Jurisdiction. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California. Section 6.10. Consent. Whenever the consent or approval of Funding Corporation or the Partnership Guarantors is required herein, such consent or approval shall not be unreasonably withheld or delayed. Section 6.11. No Recourse. Funding Corporation agrees that no general partner (except CEOC, VPC, Conejo, Niguel, San Felipe and BNG), limited partner (except Conejo, Niguel and San Felipe), member, officer, director, employee or shareholder of the Partnership Guarantors or any Affiliate of any such party (collectively, the "Nonrecourse Parties") shall be personally liable under this Agreement for the payment of any sums now or hereafter owing Funding Corporation under the terms of, or for the performance of any obligation contained in, this Agreement. Funding Corporation agrees that its rights shall be limited to proceeding against the Partnership Guarantors and the security provided or intended to be provided pursuant to the Security Documents and that it shall have no right to proceed against the Nonrecourse Parties for (a) the satisfaction of any monetary obligation of, or enforcement of any monetary claim against, the Partnership Guarantors, (b) the performance of any obligation, covenant or agreement arising under this Agreement, or (c) any deficiency judgment remaining after foreclosure of any property securing the obligations hereunder. Section 6.12. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Section 6.13. Successors and Assigns. All the covenants, promises and agreements in this Agreement contained by or on behalf of the Partnership Guarantors, or by or on behalf of Funding Corporation, shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not. Section 6.14. Joint and Several Obligations. The obligations of the Partnership Guarantors are joint and several. Section 6.15. Maximum Interest Rate. Notwithstanding any provision to the contrary contained herein or in the Partnership Project Note, at no time shall the Partnership Guarantors be obligated or required to pay interest on the principal balance due hereunder or thereunder at a rate which could be in excess of the maximum interest rate permitted by law to be contracted or agreed to be paid. If by the terms hereof or of the Partnership Project Note, the Partnership Guarantors are at any time required or obligated to pay interest in excess of such maximum rate, then the rate of interest applicable hereunder shall be deemed to be immediately reduced to such maximum rate and the interest payable shall be computed at such maximum rate. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written. PARTNERSHIP GUARANTORS: CALENERGY OPERATING CORPORATION, a Delaware corporation By:/s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President VULCAN POWER COMPANY, a Nevada corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President CONEJO ENERGY COMPANY, a California corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President NIGUEL ENERGY COMPANY, a California corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President SAN FELIPE ENERGY COMPANY, a California corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President BN GEOTHERMAL INC., a Delaware corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President DEL RANCH, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President ELMORE, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President LEATHERS, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: Vulcan Power Company, a Nevada corporation, its general partner By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President CALENERGY MINERALS LLC, a Delaware limited liability company By: Salton Sea Minerals Corp., a Delaware corporation, its manager By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President CE TURBO LLC, a Delaware limited liability company By: Magma Power Company, a Nevada corporation, its manager By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President FUNDING CORPORATION: SALTON SEA FUNDING CORPORATION, a Delaware corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President EX-4.31(A) 11 EXHIBIT 4.31(a) PARTNERSHIP PROJECT NOTE (SSI) $24,579,000 October ____, 1998 For value received, the undersigned, CALENERGY OPERATING CORPORATION, a Delaware corporation, VULCAN POWER COMPANY, a Nevada corporation, CONEJO ENERGY COMPANY, a California corporation, NIGUEL ENERGY COMPANY, a California corporation, SAN FELIPE ENERGY COMPANY, a California corporation, BN GEOTHERMAL INC., a Delaware corporation, DEL RANCH, L.P., a California limited partnership, ELMORE, L.P., a California limited partnership, LEATHERS, L.P., a California limited partnership, VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership, CALENERGY MINERALS LLC, a Delaware limited liability company, and CE TURBO LLC, a Delaware limited liability company (collectively, the "Partnership Guarantors"), by this promissory note jointly and severally promise to pay to the order of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), at the office of Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, located at 101 California Street, Number 2725, San Francisco, California 94111, in lawful currency of the United States of America and in immediately available funds, the principal amount of $24,579,000, or if less, the aggregate unpaid and outstanding principal amount of this Partnership Project Note advanced by Funding Corporation to the Partnership Guarantors pursuant to that certain Second Amended and Restated Credit Agreement (Partnership Guarantors) dated as of the date hereof (the "Partnership Credit Agreement") by and among the Partnership Guarantors and Funding Corporation, as the same may be amended from time to time, and all other amounts owed by the Partnership Guarantors to Funding Corporation hereunder. This Partnership Project Note is entered into pursuant to the Partnership Credit Agreement and is entitled to the benefits thereof and is subject to all terms, provisions and conditions thereof. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A to that certain Trust Indenture, dated as of July 21, 1995 (as the same may be amended, modified or supplemented, including pursuant to the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996, and the Fourth Supplemental Indenture dated as of the date hereof, the "Indenture"), by and between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee. Reference is hereby made to the Partnership Credit Agreement, the Indenture and the Security Documents for the provisions, among others, with respect to the custody and application of the Collateral, the nature and extent of the security provided thereunder, the rights, duties and obligations of the Partnership Guarantors and the rights of the holder of this Partnership Project Note. The principal amount hereof is payable in accordance with the Partnership Credit Agreement, and such principal amount may be prepaid solely in accordance with the Partnership Credit Agreement. The Partnership Guarantors further agree to pay, in lawful currency of the United States of America and in immediately available funds, interest from the date hereof on the unpaid and outstanding principal amount hereof until such unpaid and outstanding principal amount shall become due and payable (whether at stated maturity, by acceleration or otherwise) at the rates of interest and at the times set forth in the Partnership Credit Agreement, and the Partnership Guarantors agree to pay other fees and costs as stated in the Partnership Credit Agreement. Upon the occurrence of any one or more Credit Agreement Events of Default (as defined in Section 5.1 of the Partnership Credit Agreement), all amounts then remaining unpaid under this Partnership Project Note may become or be declared to be immediately due and payable as provided in the Partnership Credit Agreement, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Partnership Guarantors. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Partnership Credit Agreement, the provisions of which are hereby incorporated by reference. This Partnership Project Note shall be construed and interpreted in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] CALENERGY OPERATING CORPORATION, a Delaware corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN POWER COMPANY, a Nevada corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CONEJO ENERGY COMPANY, a California corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President NIGUEL ENERGY COMPANY, a California corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President SAN FELIPE ENERGY COMPANY, a California corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President BN GEOTHERMAL INC., a Delaware corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President DEL RANCH, L.P., a California limited partnership By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President ELMORE, L.P., a California limited partnership By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President LEATHERS, L.P., a California limited partnership By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CALENERGY MINERALS LLC, a Delaware limited liability company By: Salton Sea Minerals Corp., a Delaware corporation, its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CE TURBO LLC, a Delaware limited liability company By: Magma Power Company, a Nevada corporation, its manager By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President EX-4.31(B) 12 EXHIBIT 4.31(b) PARTNERSHIP PROJECT NOTE (SSII) $93,150,000 October 13, 1998 For value received, the undersigned, CALENERGY OPERATING CORPORATION, a Delaware corporation, VULCAN POWER COMPANY, a Nevada corporation, CONEJO ENERGY COMPANY, a California corporation, NIGUEL ENERGY COMPANY, a California corporation, SAN FELIPE ENERGY COMPANY, a California corporation, BN GEOTHERMAL INC., a Delaware corporation, DEL RANCH, L.P., a California limited partnership, ELMORE, L.P., a California limited partnership, LEATHERS, L.P., a California limited partnership, VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership, CALENERGY MINERALS LLC, a Delaware limited liability company, and CE TURBO LLC, a Delaware limited liability company (collectively, the "Partnership Guarantors"), by this promissory note jointly and severally promise to pay to the order of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), at the office of Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, located at 101 California Street, Number 2725, San Francisco, California 94111, in lawful currency of the United States of America and in immediately available funds, the principal amount of $93,150,000, or if less, the aggregate unpaid and outstanding principal amount of this Partnership Project Note advanced by Funding Corporation to the Partnership Guarantors pursuant to that certain Second Amended and Restated Credit Agreement (Partnership Guarantors) dated as of the date hereof (the "Partnership Credit Agreement") by and among the Partnership Guarantors and Funding Corporation, as the same may be amended from time to time, and all other amounts owed by the Partnership Guarantors to Funding Corporation hereunder. This Partnership Project Note is entered into pursuant to the Partnership Credit Agreement and is entitled to the benefits thereof and is subject to all terms, provisions and conditions thereof. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A to that certain Trust Indenture, dated as of July 21, 1995 (as the same may be amended, modified or supplemented, including pursuant to the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996, and the Fourth Supplemental Indenture dated as of the date hereof, the "Indenture"), by and between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee. Reference is hereby made to the Partnership Credit Agreement, the Indenture and the Security Documents for the provisions, among others, with respect to the custody and application of the Collateral, the nature and extent of the security provided thereunder, the rights, duties and obligations of the Partnership Guarantors and the rights of the holder of this Partnership Project Note. The principal amount hereof is payable in accordance with the Partnership Credit Agreement, and such principal amount may be prepaid solely in accordance with the Partnership Credit Agreement. The Partnership Guarantors further agree to pay, in lawful currency of the United States of America and in immediately available funds, interest from the date hereof on the unpaid and outstanding principal amount hereof until such unpaid and outstanding principal amount shall become due and payable (whether at stated maturity, by acceleration or otherwise) at the rates of interest and at the times set forth in the Partnership Credit Agreement, and the Partnership Guarantors agree to pay other fees and costs as stated in the Partnership Credit Agreement. Upon the occurrence of any one or more Credit Agreement Events of Default (as defined in Section 5.1 of the Partnership Credit Agreement), all amounts then remaining unpaid under this Partnership Project Note may become or be declared to be immediately due and payable as provided in the Partnership Credit Agreement, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Partnership Guarantors. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Partnership Credit Agreement, the provisions of which are hereby incorporated by reference. This Partnership Project Note shall be construed and interpreted in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] CALENERGY OPERATING CORPORATION, a Delaware corporation By: Name: Title: VULCAN POWER COMPANY, a Nevada corporation By: Name: Title: CONEJO ENERGY COMPANY, a California corporation By: Name: Title: NIGUEL ENERGY COMPANY, a California corporation By: Name: Title: SAN FELIPE ENERGY COMPANY, a California corporation By: Name: Title: BN GEOTHERMAL INC., a Delaware corporation By: Name: Title: DEL RANCH, L.P., a California limited partnership By: Name: Title: ELMORE, L.P., a California limited partnership By: Name: Title: LEATHERS, L.P., a California limited partnership By: Name: Title: VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: Name: Title: CALENERGY MINERALS LLC, a Delaware limited liability company By: Salton Sea Minerals Corp., a Delaware corporation, its manager By: Name: Title: CE TURBO LLC, a Delaware limited liability company By: Magma Power Company, a Nevada corporation, its manager By: Name: Title: EX-4.31(C) 13 EXHIBIT 4.31(c) PARTNERSHIP PROJECT NOTE (SSIII) $201,728,000 October ____, 1998 For value received, the undersigned, CALENERGY OPERATING CORPORATION, a Delaware corporation, VULCAN POWER COMPANY, a Nevada corporation, CONEJO ENERGY COMPANY, a California corporation, NIGUEL ENERGY COMPANY, a California corporation, SAN FELIPE ENERGY COMPANY, a California corporation, BN GEOTHERMAL INC., a Delaware corporation, DEL RANCH, L.P., a California limited partnership, ELMORE, L.P., a California limited partnership, LEATHERS, L.P., a California limited partnership, VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership, CALENERGY MINERALS LLC, a Delaware limited liability company, and CE TURBO LLC, a Delaware limited liability company (collectively, the "Partnership Guarantors"), by this promissory note jointly and severally promise to pay to the order of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), at the office of Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, located at 101 California Street, Number 2725, San Francisco, California 94111, in lawful currency of the United States of America and in immediately available funds, the principal amount of $201,728,000, or if less, the aggregate unpaid and outstanding principal amount of this Partnership Project Note advanced by Funding Corporation to the Partnership Guarantors pursuant to that certain Second Amended and Restated Credit Agreement (Partnership Guarantors) dated as of the date hereof (the "Partnership Credit Agreement") by and among the Partnership Guarantors and Funding Corporation, as the same may be amended from time to time, and all other amounts owed by the Partnership Guarantors to Funding Corporation hereunder. This Partnership Project Note is entered into pursuant to the Partnership Credit Agreement and is entitled to the benefits thereof and is subject to all terms, provisions and conditions thereof. Capitalized terms used and not defined herein shall have the meanings set forth in Exhibit A to that certain Trust Indenture, dated as of July 21, 1995 (as the same may be amended, modified or supplemented, including pursuant to the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996, and the Fourth Supplemental Indenture dated as of the date hereof, the "Indenture"), by and between Funding Corporation and Chase Manhattan Bank and Trust Company, National Association, a national banking association organized under the laws of the United States, successor in interest to Chemical Trust Company of California, as trustee. Reference is hereby made to the Partnership Credit Agreement, the Indenture and the Security Documents for the provisions, among others, with respect to the custody and application of the Collateral, the nature and extent of the security provided thereunder, the rights, duties and obligations of the Partnership Guarantors and the rights of the holder of this Partnership Project Note. The principal amount hereof is payable in accordance with the Partnership Credit Agreement, and such principal amount may be prepaid solely in accordance with the Partnership Credit Agreement. The Partnership Guarantors further agree to pay, in lawful currency of the United States of America and in immediately available funds, interest from the date hereof on the unpaid and outstanding principal amount hereof until such unpaid and outstanding principal amount shall become due and payable (whether at stated maturity, by acceleration or otherwise) at the rates of interest and at the times set forth in the Partnership Credit Agreement, and the Partnership Guarantors agree to pay other fees and costs as stated in the Partnership Credit Agreement. Upon the occurrence of any one or more Credit Agreement Events of Default (as defined in Section 5.1 of the Partnership Credit Agreement), all amounts then remaining unpaid under this Partnership Project Note may become or be declared to be immediately due and payable as provided in the Partnership Credit Agreement, without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or notices or demands of any kind, all of which are expressly waived by the Partnership Guarantors. The obligations hereunder are subject to the limitations set forth in Section 6.11 of the Partnership Credit Agreement, the provisions of which are hereby incorporated by reference. This Partnership Project Note shall be construed and interpreted in accordance with and governed by the laws of the State of California without regard to the conflicts of laws rules thereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] CALENERGY OPERATING CORPORATION, a Delaware corporation By: Name: Title: VULCAN POWER COMPANY, a Nevada corporation By: Name: Title: CONEJO ENERGY COMPANY, a California corporation By: Name: Title: NIGUEL ENERGY COMPANY, a California corporation By: Name: Title: SAN FELIPE ENERGY COMPANY, a California corporation By: Name: Title: BN GEOTHERMAL INC., a Delaware corporation By: Name: Title: DEL RANCH, L.P., a California limited partnership By: Name: Title: ELMORE, L.P., a California limited partnership By: Name: Title: LEATHERS, L.P., a California limited partnership By: Name: Title: VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: Name: Title: CALENERGY MINERALS LLC, a Delaware limited liability company By: Salton Sea Minerals Corp., a Delaware corporation, its manager By: Name: Title: CE TURBO LLC, a Delaware limited liability company By: Magma Power Company, a Nevada corporation, its manager By: Name: Title: EX-4.37(A) 14 EXHIBIT 4.37(a) RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN ) TO: ) ) Skadden, Arps, Slate, ) Meagher & Flom ) 919 Third Avenue ) New York, New York 10022 ) Attention: Jennifer ) Frederick ) FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") is made as of October __, 1998 by VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership ("Vulcan"), whose address is 302 South 36th Street, Suite 400-E, Omaha, Nebraska 68181, and VULCAN POWER COMPANY, a Nevada corporation ("VPC"), whose address is 302 South 36th Street , Suite 400-E, Omaha Nebraska 68131, as trustor (collectively, "Trustor"), to CHICAGO TITLE COMPANY, a California corporation, whose address is 925 B Street, San Diego, California 92101, as trustee ("Trustee") and in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, a California corporation, whose address is 101 California Street, #2725, San Francisco, California 94111, as beneficiary ("Beneficiary") acting in its capacity (a) as trustee (as successor in interest to Chemical Trust Company of California) for and on behalf of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), and the Secured Parties (the "Secured Parties") under that certain Trust Indenture dated as of July 21, 1995 by and between Funding Corporation and Beneficiary, as trustee, as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and (b) as collateral agent (in such capacity, the "Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of even date herewith for the benefit of the Secured Parties and Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). Capitalized terms used and not defined herein shall have the meanings set forth in the Indenture. RECITALS WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475, 000,000.00 (the "Initial Securities"); and WHEREAS, in connection with the issuance and sale of the Initial Securities, Trustor entered into the Partnership Secured Limited Guarantee (the "Initial Partnership Guarantee") whereby Trustor guaranteed certain of the obligations of Funding Corporation under the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities"); and WHEREAS, in connection with the issuance and sale of the Supplemental Securities Trustor entered into various agreements and amendments to the Financing Documents including (a) that certain Deed of Trust, Assignment of Rents, Security Agreement, and Fixture Filing in favor of Trustee and for the benefit of the Secured Parties dated as of June 20, 1996 which was recorded on June 21, 1996 as instrument no. 96013775 in the official records of Imperial County, California, (b) that certain Amended and Restated Partnership Secured Limited Guarantee dated as of June 20, 1996 (the "Supplemental Partnership Guarantee") and (c) that certain Agreement Regarding Security Documents in favor of Collateral Agent and for the benefit of the Secured Parties dated as of June 20, 1996 (the "First Agreement Regarding Security Documents"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Amendment issued and sold Securities in the aggregate principal amount of $285,000,000.00 (the "Additional Securities"); and WHEREAS, in connection with the issuance and sale of the Additional Securities, Trustor entered into various agreements and amendments to the Financing Documents, including (a) that certain Second Amended and Restated Partnership Guarantee (the "Additional Partnership Guarantee," together with the Initial Partnership Guarantee and the Supplemental partnership Guarantee, the "Partnership Guarantee") and (b) that certain Second Agreement Regarding Security Documents dated as of the date hereof, by and among Trustor, Beneficiary and the other parties named therein (the "Second Agreement Regarding Security Documents") supplementing the Partnership Guarantee and acknowledging that the obligations guaranteed by the Partnership Guarantee include the obligations of Funding Corporation under the Additional Securities; and WHEREAS, the parties wish to amend the Deed of Trust to expressly provide that it secures Trustor's obligations under the Partnership Guarantee and the other Financing Documents, as so amended, modified or supplemented, including pursuant to the Second Agreement Regarding Security Documents. AGREEMENT NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Financing Documents. The term Financing Documents, as used in the Deed of Trust, is hereby expressly made to include (to the extent it does not now so include), without limitation: (a) the Trust Indenture, dated as of July 21, 1995, as amended by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of even date herewith; (b) the $285,000,000 7.475% Senior Secured Series F Bonds issued as of even date herewith by the Funding Corporation; (c) the Exchange and Registration Rights Agreement, dated as of even date herewith, among the Funding Corporation, Credit Suisse First Boston Corporation and Goldman, Sachs & Co.; (d) the Amended and Restated Deposit and Disbursement Agreement, dated as of even date herewith, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent; (e) the Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, as amended by the First Amendment to Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and the Second Amendment to Collateral Agency and Intercreditor Agreement dated as of even date herewith, among the Funding Corporation, the Guarantors, the Secured Parties named therein, the Depositary Agent and the Collateral Agent; (f) the Equity Commitment Agreement, dated as of even date herewith, among CalEnergy, the Guarantors and the Collateral Agent; (g) the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of June 20, 1996, as amended by the Amendment to Notes and to Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of even date herewith, among the Funding Corporation, the Debt Service LOC Provider and the other banks named therein; (h) the Amended and Restated Credit Agreement (Salton Sea Guarantors), dated as of even date herewith, among the Funding Corporation and the Salton Sea Guarantors; (i) the Second Amended and Restated Credit Agreement (Partnership Guarantors), dated as of even date herewith, among the Funding Corporation and the Partnership Guarantors; (j) the promissory note in the amount of $246,483,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (k) the promissory note in the amount of $83,272,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (l) the promissory note in the amount of $24,579,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (m) the promissory note in the amount of $93,150,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (n) the promissory note in the amount of $201,728,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (o) the Amended and Restated Salton Sea Secured Guarantee, dated as of even date herewith, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent; and (p) the Second Amended and Restated Partnership Secured Limited Guarantee, dated as of even date herewith, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent. 2. Effect of This Amendment. On and after the date of this Amendment, each reference in the Deed of Trust to the Deed of Trust, shall mean the Deed of Trust as amended hereby. Except as specifically amended above, the Deed of Trust shall remain in full force and effect and is hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Beneficiary or any of the Secured Parties nor constitute a waiver of any provision of the Deed of Trust. 3. Headings. The headings, titles and captions of various Sections of this Amendment are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. 4. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, and this Amendment shall be effective, as of the day and year first above written. VULCAN POWER COMPANY, a Nevada corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President VULCAN/BN GEOTHERMAL POWER COMPANY, a Nevada general partnership By: Vulcan Power Company, a Nevada corporation By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Collateral Agent By: /s/ Rose T. Maravilla Name: Rose T. Maravilla Title: Assistant Vice President EX-4.38(A) 15 EXHIBIT 4.38(a) RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN ) TO: ) ) Skadden, Arps, Slate, ) Meagher & Flom ) 919 Third Avenue ) New York, New York 10022 ) Attention: Jennifer ) Frederick ) FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") is made as of October __, 1998 by ELMORE L.P., a California limited partnership ("Elmore") as trustor ("Trustor"), to CHICAGO TITLE COMPANY, a California corporation, whose address is 925 B Street, San Diego, California 92101, as trustee ("Trustee") and in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, whose address is 101 California Street, #2725, San Francisco, California 94111, as beneficiary ("Beneficiary") acting in its capacity (a) as trustee (as successor in interest to Chemical Trust Company of California) for and on behalf of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), and the Secured Parties (the "Secured Parties") under that certain Trust Indenture dated as of July 21, 1995 by and between Funding Corporation and Beneficiary, as trustee, as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and (b) as collateral agent (in such capacity, the "Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of even date herewith for the benefit of the Secured Parties and Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). Capitalized terms used and not defined herein shall have the meanings set forth in the Indenture. RECITALS WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475, 000,000.00 (the "Initial Securities"); and WHEREAS, in connection with the issuance and sale of the Initial Securities, Trustor entered into the Partnership Secured Limited Guarantee (the "Initial Partnership Guarantee") whereby Trustor guaranteed certain of the obligations of Funding Corporation under the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities"); and WHEREAS, in connection with the issuance and sale of the Supplemental Securities Trustor entered into various agreements and amendments to the Financing Documents including (a) that certain Deed of Trust, Assignment of Rents, Security Agreement, and Fixture Filing in favor of Trustee and for the benefit of the Secured Parties dated as of June 20, 1996 which was recorded on June 21, 1996 as instrument no. 96013777 in the official records of Imperial County, California, (b) that certain Amended and Restated Partnership Secured Limited Guarantee dated as of June 20, 1996 (the "Supplemental Partnership Guarantee") and (c) that certain Agreement Regarding Security Documents in favor of Collateral Agent and for the benefit of the Secured Parties dated as of June 20, 1996 (the "First Agreement Regarding Security Documents"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Amendment issued and sold Securities in the aggregate principal amount of $285,000,000.00 (the "Additional Securities"); and WHEREAS, in connection with the issuance and sale of the Additional Securities, Trustor entered into various agreements and amendments to the Financing Documents, including (a) that certain Second Amended and Restated Partnership Guarantee (the "Additional Partnership Guarantee," together with the Initial Partnership Guarantee and the Supplemental partnership Guarantee, the "Partnership Guarantee") and (b) that certain Second Agreement Regarding Security Documents dated as of the date hereof, by and among Trustor, Beneficiary and the other parties named therein (the "Second Agreement Regarding Security Documents") supplementing the Partnership Guarantee and acknowledging that the obligations guaranteed by the Partnership Guarantee include the obligations of Funding Corporation under the Additional Securities; and WHEREAS, the parties wish to amend the Deed of Trust to expressly provide that it secures Trustor's obligations under the Partnership Guarantee and the other Financing Documents, as so amended, modified or supplemented, including pursuant to the Second Agreement Regarding Security Documents. AGREEMENT NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Financing Documents. The term Financing Documents, as used in the Deed of Trust, is hereby expressly made to include (to the extent it does not now so include), without limitation: (a) the Trust Indenture, dated as of July 21, 1995, as amended by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of even date herewith; (b) the $285,000,000 7.475% Senior Secured Series F Bonds issued as of even date herewith by the Funding Corporation; (c) the Exchange and Registration Rights Agreement, dated as of even date herewith, among the Funding Corporation, Credit Suisse First Boston Corporation and Goldman, Sachs & Co.; (d) the Amended and Restated Deposit and Disbursement Agreement, dated as of even date herewith, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent; (e) the Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, as amended by the First Amendment to Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and the Second Amendment to Collateral Agency and Intercreditor Agreement dated as of even date herewith, among the Funding Corporation, the Guarantors, the Secured Parties named therein, the Depositary Agent and the Collateral Agent; (f) the Equity Commitment Agreement, dated as of even date herewith, among CalEnergy, the Guarantors and the Collateral Agent; (g) the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of June 20, 1996, as amended by the Amendment to Notes and to Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of even date herewith, among the Funding Corporation, the Debt Service LOC Provider and the other banks named therein; (h) the Amended and Restated Credit Agreement (Salton Sea Guarantors), dated as of even date herewith, among the Funding Corporation and the Salton Sea Guarantors; (i) the Second Amended and Restated Credit Agreement (Partnership Guarantors), dated as of even date herewith, among the Funding Corporation and the Partnership Guarantors; (j) the promissory note in the amount of $246,483,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (k) the promissory note in the amount of $83,272,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (l) the promissory note in the amount of $24,579,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (m) the promissory note in the amount of $93,150,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (n) the promissory note in the amount of $201,728,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (o) the Amended and Restated Salton Sea Secured Guarantee, dated as of even date herewith, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent; and (p) the Second Amended and Restated Partnership Secured Limited Guarantee, dated as of even date herewith, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent. 2. Effect of This Amendment. On and after the date of this Amendment, each reference in the Deed of Trust to the Deed of Trust, shall mean the Deed of Trust as amended hereby. Except as specifically amended above, the Deed of Trust shall remain in full force and effect and is hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Beneficiary or any of the Secured Parties nor constitute a waiver of any provision of the Deed of Trust. 3. Headings. The headings, titles and captions of various Sections of this Amendment are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. 4. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, and this Amendment shall be effective, as of the day and year first above written. ELMORE, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By:/s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Collateral Agent By: /s/ Rose T. Maravilla Name: Rose T. Maravilla Title: Assistant Vice President EX-4.39(A) 16 EXHIBIT 4.39(a) RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN ) TO: ) ) Skadden, Arps, Slate, ) Meagher & Flom ) 919 Third Avenue ) New York, New York 10022 ) Attention: Jennifer ) Frederick ) FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") is made as of October __, 1998, by LEATHERS L.P., a California limited partnership ("Leathers") as trustor ("Trustor"), to CHICAGO TITLE COMPANY, a California corporation, whose address is 925 B Street, San Diego, California 92101, as trustee ("Trustee") and in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, whose address is 101 California Street, #2725, San Francisco, California 94111, as beneficiary ("Beneficiary") acting in its capacity (a) as trustee (as successor in interest to Chemical Trust Company of California) for and on behalf of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), and the Secured Parties (the "Secured Parties") under that certain Trust Indenture dated as of July 21, 1995 by and between Funding Corporation and Beneficiary, as trustee, as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and (b) as collateral agent (in such capacity, the "Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of even date herewith for the benefit of the Secured Parties and Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). Capitalized terms used and not defined herein shall have the meanings set forth in the Indenture. RECITALS WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475, 000,000.00 (the "Initial Securities"); and WHEREAS, in connection with the issuance and sale of the Initial Securities, Trustor entered into the Partnership Secured Limited Guarantee (the "Initial Partnership Guarantee") whereby Trustor guaranteed certain of the obligations of Funding Corporation under the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities"); and WHEREAS, in connection with the issuance and sale of the Supplemental Securities Trustor entered into various agreements and amendments to the Financing Documents including (a) that certain Deed of Trust, Assignment of Rents, Security Agreements, and Fixture Filing in favor of Trustee and for the benefit of the Secured Parties dated as of June 20, 1996 which was recorded on June 21, 1996 as instrument no. 96013778 in the official records of Imperial County, California, (b) that certain Amended and Restated Partnership Secured Limited Guarantee dated as of June 20, 1996 (the "Supplemental Partnership Guarantee") and (c) that certain Agreement Regarding Security Documents in favor of Collateral Agent and for the benefit of the Secured Parties dated as of June 20, 1996 (the "First Agreement Regarding Security Documents"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Amendment issued and sold Securities in the aggregate principal amount of $285,000,000.00 (the "Additional Securities"); and WHEREAS, in connection with the issuance and sale of the Additional Securities, Trustor entered into various agreements and amendments to the Financing Documents, including (a) the Second Amended and Restated Partnership Guarantee (the "Additional Partnership Guarantee," together with the Initial Partnership Guarantee and the Supplemental partnership Guarantee, the "Partnership Guarantee") and (b) that certain Second Agreement Regarding Security Documents dated as of the date hereof, by and among Trustor, Beneficiary and the other parties named therein (the "Agreement Regarding Security Documents") supplementing the Partnership Guarantee and acknowledging that the obligations guaranteed by the Partnership Guarantee include the obligations of Funding Corporation under the Additional Securities; and WHEREAS, the parties wish to amend the Deed of Trust to expressly provide that it secures Trustor's obligations under the Partnership Guarantee and the other Financing Documents, as so amended, modified or supplemented, including pursuant to the Second Agreement Regarding Security Documents. AGREEMENT NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Financing Documents. The term Financing Documents, as used in the Deed of Trust, is hereby expressly made to include (to the extent it does not now so include), without limitation: (a) the Trust Indenture, dated as of July 21, 1995, as amended by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of even date herewith; (b) the $285,000,000 7.475% Senior Secured Series F Bonds issued as of even date herewith by the Funding Corporation; (c) the Exchange and Registration Rights Agreement, dated as of even date herewith, among the Funding Corporation, Credit Suisse First Boston Corporation and Goldman, Sachs & Co.; (d) the Amended and Restated Deposit and Disbursement Agreement, dated as of even date herewith, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent; (e) the Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, as amended by the First Amendment to Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and the Second Amendment to Collateral Agency and Intercreditor Agreement dated as of even date herewith, among the Funding Corporation, the Guarantors, the Secured Parties named therein, the Depositary Agent and the Collateral Agent; (f) the Equity Commitment Agreement, dated as of even date herewith, among CalEnergy, the Guarantors and the Collateral Agent; (g) the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of June 20, 1996, as amended by the Amendment to Notes and to Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of even date herewith, among the Funding Corporation, the Debt Service LOC Provider and the other banks named therein; (h) the Amended and Restated Credit Agreement (Salton Sea Guarantors), dated as of even date herewith, among the Funding Corporation and the Salton Sea Guarantors; (i) the Second Amended and Restated Credit Agreement (Partnership Guarantors), dated as of even date herewith, among the Funding Corporation and the Partnership Guarantors; (j) the promissory note in the amount of $246,483,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (k) the promissory note in the amount of $83,272,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (l) the promissory note in the amount of $24,579,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (m) the promissory note in the amount of $93,150,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (n) the promissory note in the amount of $201,728,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (o) the Amended and Restated Salton Sea Secured Guarantee, dated as of even date herewith, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent; and (p) the Second Amended and Restated Partnership Secured Limited Guarantee, dated as of even date herewith, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent. 2. Effect of This Amendment. On and after the date of this Amendment, each reference in the Deed of Trust to the Deed of Trust, shall mean the Deed of Trust as amended hereby. Except as specifically amended above, the Deed of Trust shall remain in full force and effect and is hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Beneficiary or any of the Secured Parties nor constitute a waiver of any provision of the Deed of Trust. 3. Headings. The headings, titles and captions of various Sections of this Amendment are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. 4. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, and this Amendment shall be effective, as of the day and year first above written. LEATHERS, L.P. a California limited partnership By: CalEnergy Operating Corporation a Delaware corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Collateral Agent By:/s/ Rose T. Maravilla Name: Rose T. Maravilla Title: Assistant Vice President EX-4.40(A) 17 EXHIBIT 4.40(a) RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN ) TO: ) ) Skadden, Arps, Slate, ) Meagher & Flom ) 919 Third Avenue ) New York, New York 10022 ) Attention: Jennifer ) Frederick ) FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") is made as of October __, 1998 by DEL RANCH L.P., a California limited partnership ("Del Ranch") as trustor ("Trustor"), to CHICAGO TITLE COMPANY, a California corporation, whose address is 925 B Street, San Diego, California 92101, as trustee ("Trustee") and in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, whose address is 101 California Street, #2725, San Francisco, California 94111, as beneficiary ("Beneficiary") acting in its capacity (a) as trustee (as successor in interest to Chemical Trust Company of California) for and on behalf of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), and the Secured Parties (the "Secured Parties") under that certain Trust Indenture dated as of July 21, 1995 by and between Funding Corporation and Beneficiary, as trustee, as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and (b) as collateral agent (in such capacity, the "Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of even date herewith for the benefit of the Secured Parties and Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). Capitalized terms used and not defined herein shall have the meanings set forth in the Indenture. RECITALS WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475, 000,000.00 (the "Initial Securities"); and WHEREAS, in connection with the issuance and sale of the Initial Securities, Trustor entered into the Partnership Secured Limited Guarantee (the "Initial Partnership Guarantee") whereby Trustor guaranteed certain of the obligations of Funding Corporation under the Initial Securities; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities"); and WHEREAS, in connection with the issuance and sale of the Supplemental Securities Trustor entered into various agreements and amendments to the Financing Documents including (a) that certain Deed of Trust, Assignment of Rents, Security Agreement, and Fixture Filing in favor of Trustee and for the benefit of the Secured Parties dated as of June 20, 1996 which was recorded on June 21, 1996 as instrument no. 96013776 in the official records of Imperial County, California, (b) that certain Amended and Restated Partnership Secured Limited Guarantee dated as of June 20, 1996 (the "Supplemental Partnership Guarantee") and (c) that certain Agreement Regarding Security Documents in favor of Collateral Agent and for the benefit of the Secured Parties dated as of June 20, 1996 (the "First Agreement Regarding Security Documents"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Amendment issued and sold Securities in the aggregate principal amount of $285,000,000.00 (the "Additional Securities"); and WHEREAS, in connection with the issuance and sale of the Additional Securities, Trustor entered into various agreements and amendments to the Financing Documents, including (a) that certain Second Amended and Restated Partnership Guarantee (the "Additional Partnership Guarantee," together with the Initial Partnership Guarantee and the Supplemental partnership Guarantee, the "Partnership Guarantee") and (b) that certain Second Agreement Regarding Security Documents dated as of the date hereof, by and among Trustor, Beneficiary and the other parties named therein (the "Second Agreement Regarding Security Documents") supplementing the Partnership Guarantee and acknowledging that the obligations guaranteed by the Partnership Guarantee include the obligations of Funding Corporation under the Additional Securities; and WHEREAS, the parties wish to amend the Deed of Trust to expressly provide that it secures Trustor's obligations under the Partnership Guarantee and the other Financing Documents, as so amended, modified or supplemented, including pursuant to the Second Agreement Regarding Security Documents. AGREEMENT NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Financing Documents. The term Financing Documents, as used in the Deed of Trust, is hereby expressly made to include (to the extent it does not now so include), without limitation: (a) the Trust Indenture, dated as of July 21, 1995, as amended by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of even date herewith; (b) the $285,000,000 7.475% Senior Secured Series F Bonds issued as of even date herewith by the Funding Corporation; (c) the Exchange and Registration Rights Agreement, dated as of even date herewith, among the Funding Corporation, Credit Suisse First Boston Corporation and Goldman, Sachs & Co.; (d) the Amended and Restated Deposit and Disbursement Agreement, dated as of even date herewith, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent; (e) the Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, as amended by the First Amendment to Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and the Second Amendment to Collateral Agency and Intercreditor Agreement dated as of even date herewith, among the Funding Corporation, the Guarantors, the Secured Parties named therein, the Depositary Agent and the Collateral Agent; (f) the Equity Commitment Agreement, dated as of even date herewith, among CalEnergy, the Guarantors and the Collateral Agent; (g) the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of June 20, 1996, as amended by the Amendment to Notes and to Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of even date herewith, among the Funding Corporation, the Debt Service LOC Provider and the other banks named therein; (h) the Amended and Restated Credit Agreement (Salton Sea Guarantors), dated as of even date herewith, among the Funding Corporation and the Salton Sea Guarantors; (i) the Second Amended and Restated Credit Agreement (Partnership Guarantors), dated as of even date herewith, among the Funding Corporation and the Partnership Guarantors; (j) the promissory note in the amount of $246,483,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (k) the promissory note in the amount of $83,272,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (l) the promissory note in the amount of $24,579,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (m) the promissory note in the amount of $93,150,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (n) the promissory note in the amount of $201,728,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (o) the Amended and Restated Salton Sea Secured Guarantee, dated as of even date herewith, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent; and (p) the Second Amended and Restated Partnership Secured Limited Guarantee, dated as of even date herewith, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent. 2. Effect of This Amendment. On and after the date of this Amendment, each reference in the Deed of Trust to the Deed of Trust, shall mean the Deed of Trust as amended hereby. Except as specifically amended above, the Deed of Trust shall remain in full force and effect and is hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Beneficiary or any of the Secured Parties nor constitute a waiver of any provision of the Deed of Trust. 3. Headings. The headings, titles and captions of various Sections of this Amendment are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. 4. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, and this Amendment shall be effective, as of the day and year first above written. DEL RANCH, L.P., a California limited partnership By: CalEnergy Operating Corporation, a Delaware corporation, its general partner By: /s/ Craig M. Hammett Name: Craig M. Hammett Title: Senior Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Collateral Agent By: /s/ Rose T. Maravilla Name: Rose T. Maravilla Title: Assistant Vice President EX-10.1(C) 18 EXHIBIT 10.1(c) RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN ) TO: ) ) Skadden, Arps, Slate, ) Meagher & Flom ) 919 Third Avenue ) New York, New York 10022 ) Attention: Jennifer ) Frederick ) SECOND AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING THIS SECOND AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Amendment") is made as of October __, 1998 by SALTON SEA POWER GENERATION L.P., a California limited partnership ("SSPG"), whose address is 302 South 36th Street, Suite 400-E, Omaha, Nebraska 68131, SALTON SEA BRINE PROCESSING L.P., a California limited partnership ("SSBP"), whose address is 302 South 36th Street, Suite 400-D, Omaha, Nebraska 68131 and FISH LAKE POWER COMPANY, a Delaware corporation ("Fish Lake"), whose address is 302 South 36th Street, Suite 400-B, Omaha, Nebraska 68131, jointly and severally as trustor (collectively "Trustor"), to CHICAGO TITLE COMPANY, a California corporation, whose address is 925 B Street, San Diego, California 92101, as trustee ("Trustee") and in favor of CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, whose address is 101 California Street, #2725, San Francisco, California 94111, as beneficiary ("Beneficiary") acting in its capacity (a) as trustee (as successor in interest to Chemical Trust Company of California) for and on behalf of Salton Sea Funding Corporation, a Delaware corporation ("Funding Corporation"), and the Secured Parties (the "Secured Parties") under that certain Trust Indenture dated as of July 21, 1995 by and between Funding Corporation and Beneficiary, as trustee, as the same may be amended, modified or supplemented, including by that certain First Supplemental Indenture dated as of October 18, 1995, that certain Second Supplemental Indenture dated as of June 20, 1996, that certain Third Supplemental Indenture dated as of July 29, 1996, and that certain Fourth Supplemental Trust Indenture dated as of even date herewith (as so amended, modified or supplemented, the "Indenture") and (b) as collateral agent (in such capacity, the "Collateral Agent") under that certain Collateral Agency and Intercreditor Agreement dated as of July 21, 1995 as the same may be amended, modified or supplemented, including by that certain First Amendment to the Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and that certain Second Amendment to the Collateral Agency and Intercreditor Agreement dated as of even date herewith for the benefit of the Secured Parties and Funding Corporation (as so amended, modified or supplemented, the "Intercreditor Agreement"). Capitalized terms used and not defined herein shall have the meanings set forth in the Indenture. RECITALS WHEREAS, Funding Corporation is a corporation established for the sole purpose of making loans to the Guarantors from proceeds of the issuance of notes and bonds (collectively, the "Securities") in its individual capacity as principal and as agent acting on behalf of the Guarantors pursuant to the Indenture; and WHEREAS, on July 21, 1995 the Funding Corporation issued and sold Securities in the aggregate principal amount of $475, 000,000.00 (the "Initial Securities"); and WHEREAS, in connection with the issuance and sale of the Initial Securities, Trustor entered into the Salton Sea Secured Guarantee dated as of July 21, 1995 in favor of Beneficiary (the "Initial Salton Sea Guarantee") whereby Trustor guaranteed certain of the obligations of Funding Corporation under the Initial Securities; and WHEREAS, in order to secure its obligations under the Salton Sea Secured Guarantee and the other Financing Documents, Trustor has, among other things, entered into that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing in favor of Trustee and for the benefit of Beneficiary (the "Initial Deed of Trust") dated as of July 21, 1995 which was recorded on July 21, 1995, as instrument no. 95015970, in the official records of Imperial County, California; and WHEREAS, on June 20, 1996 the Funding Corporation issued and sold Securities in the aggregate principal amount of $135,000,000.00 (the "Supplemental Securities"); and WHEREAS, in connection with the issuance and sale of the Supplemental Securities Trustor entered into various agreements and amendments to the Financing Documents including (a) that certain First Amendment to Deed of Trust, Assignment of Rents, Security Agreements, and Fixture Filing in favor of Trustee and for the benefit of the Secured Parties (the "First Amendment" and together with the "Initial Deed of Trust", the "Deed of Trust") dated as of June 20, 1996 which was recorded on June 21, 1996 as instrument no. 96013784 in the official records of Imperial County, California; and (b) that certain Agreement Regarding Security Documents in favor of Collateral Agent and for the benefit of the Secured Parties dated as of June 20, 1996 (the "First Agreement Regarding Security Documents"); and WHEREAS, Funding Corporation has simultaneously with the execution and delivery of this Amendment issued and sold Securities in the aggregate principal amount of $285,000,000.00 (the "Additional Securities"); and WHEREAS, in connection with the issuance and sale of the Additional Securities, Trustor entered into various agreements and amendments to the Financing Documents, including (a) the Amended and Restated Salton Sea Guarantee (the "Second Salton Sea Guarantee," together with the Initial Salton Sea Guarantee, the "Salton Sea Guarantee") dated as of the date hereof and (b) that certain Second Agreement Regarding Security Documents dated as of the date hereof, by and among Trustor, Beneficiary and the other parties named therein (the "Agreement Regarding Security Documents") supplementing the Salton Sea Guarantee and acknowledging that the obligations guaranteed by the Salton Sea Guarantee include the obligations of Funding Corporation under the Additional Securities; and WHEREAS, the parties wish to amend the Deed of Trust to expressly provide that it secures Trustor's obligations under the Salton Sea Guarantee and the other Financing Documents, as so amended, modified or supplemented, including pursuant to the Second Agreement Regarding Security Documents. AGREEMENT NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Financing Documents. The term Financing Documents, as used in the Deed of Trust, is hereby expressly made to include (to the extent it does not now so include), without limitation: (a) the Trust Indenture, dated as of July 21, 1995, as amended by the First Supplemental Indenture dated as of October 18, 1995, the Second Supplemental Indenture dated as of June 20, 1996, the Third Supplemental Indenture dated as of July 29, 1996 and the Fourth Supplemental Indenture dated as of even date herewith; (b) the $285,000,000 7.475% Senior Secured Series F Bonds issued as of even date herewith by the Funding Corporation; (c) the Exchange and Registration Rights Agreement, dated as of even date herewith, among the Funding Corporation, Credit Suisse First Boston Corporation and Goldman, Sachs & Co.; (d) the Amended and Restated Deposit and Disbursement Agreement, dated as of even date herewith, among the Funding Corporation, the Guarantors, the Collateral Agent and the Depositary Agent; (e) the Collateral Agency and Intercreditor Agreement, dated as of July 21, 1995, as amended by the First Amendment to Collateral Agency and Intercreditor Agreement dated as of June 20, 1996 and the Second Amendment to Collateral Agency and Intercreditor Agreement dated as of even date herewith, among the Funding Corporation, the Guarantors, the Secured Parties named therein, the Depositary Agent and the Collateral Agent; (f) the Equity Commitment Agreement, dated as of even date herewith, among CalEnergy, the Guarantors and the Collateral Agent; (g) the Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement, dated as of June 20, 1996, as amended by the Amendment to Notes and to Amended and Restated Debt Service Reserve Letter of Credit and Reimbursement Agreement dated as of even date herewith, among the Funding Corporation, the Debt Service LOC Provider and the other banks named therein; (h) the Amended and Restated Credit Agreement (Salton Sea Guarantors), dated as of even date herewith, among the Funding Corporation and the Salton Sea Guarantors; (i) the Second Amended and Restated Credit Agreement (Partnership Guarantors), dated as of even date herewith, among the Funding Corporation and the Partnership Guarantors; (j) the promissory note in the amount of $246,483,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (k) the promissory note in the amount of $83,272,000, dated as of even date herewith, executed by the Salton Sea Guarantors in favor of the Funding Corporation; (l) the promissory note in the amount of $24,579,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (m) the promissory note in the amount of $93,150,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (n) the promissory note in the amount of $201,728,000, dated as of even date herewith, executed by the Partnership Guarantors in favor of the Funding Corporation; (o) the Amended and Restated Salton Sea Secured Guarantee, dated as of even date herewith, by the Salton Sea Guarantors in favor of the Trustee and the Collateral Agent; and (p) the Second Amended and Restated Partnership Secured Limited Guarantee, dated as of even date herewith, by the Partnership Guarantors in favor of the Trustee and the Collateral Agent. 2. Effect of This Amendment. On and after the date of this Amendment, each reference in the Deed of Trust to the Deed of Trust, shall mean the Deed of Trust as amended hereby. Except as specifically amended above, the Deed of Trust shall remain in full force and effect and is hereby ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Beneficiary or any of the Secured Parties nor constitute a waiver of any provision of the Deed of Trust. 3. Headings. The headings, titles and captions of various Sections of this Amendment are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. 4. Governing Law. THIS AMENDMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 5. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed, and this Amendment shall be effective, as of the day and year first above written. SALTON SEA POWER GENERATION L.P., a California limited partnership By: Salton Sea Power Company, a Nevada corporation, its general partner By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President SALTON SEA BRINE PROCESSING L.P., a California limited partnership By: Salton Sea Power Company, a Nevada corporation, its general partner By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President FISH LAKE POWER COMPANY, a Delaware corporation By: /s/ Steven A. McArthur Name: Steven A. McArthur Title: Executive Vice President CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as Collateral Agent By: /s/ Rose T. Maravilla Name:Rose T. Maravilla Title: Assistant Vice President -----END PRIVACY-ENHANCED MESSAGE-----