Exhibit 10.65
CONFORMED COPY
--------------
Guarantee
dated 16 July 1999
EDISON MISSION ENERGY
and
BARCLAYS BANK PLC
as Facility Agent for the Banks
parties to the Facility Agreement defined herein
LINKLATERS & PAINES
One Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: (x00) 000 000 0000
This Guarantee is made as a deed on 16 July 1999 between
(1) Edison Mission Energy, a California corporation registered in the State of
California whose principal place of business is at 18101 Xxx Xxxxxx Avenue,
Suite 1700, Xxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America (the
"Guarantor"); and
(2) Barclays Bank PLC, as facility agent for the financial institutions defined
as Banks (the "Banks") in the Facility Agreement defined below (the
"Facility Agent", which expression includes any successor or replacement
Facility Agent appointed pursuant to Clause 18.9 (Resignation of Facility
Agent) of the Facility Agreement).
The Banks have agreed to enter into the coal and capex facility agreement
of even date (the "Facility Agreement") with EME Finance UK Limited (the
"Borrower") on various conditions, one of which is that the Guarantor gives
this Guarantee.
1 Interpretation
1.1 In this Guarantee terms defined and references construed in the Facility
Agreement shall have the same meaning and construction and, except to the
extent that the context requires otherwise:
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility
for administering, any Pension Plan or Welfare Plan). A Person shall be
deemed to be "controlled by" any other Person if such other Person
possesses, directly or indirectly, power to direct or cause the direction
of the management and policies of such Person whether by contract or
otherwise.
"Authorised Representative" means, relative to the Guarantor, those of its
officers and employees whose signatures and incumbency shall have been
certified to the Facility Agent and the Banks pursuant to Clause 4.1(a)
(Initial Conditions Precedent) of the Facility Agreement.
"Business Day" has the meaning given to it in the Facility Agreement.
"Capitalised Lease Liabilities" of any Person means all monetary
obligations of such Person under any leasing or similar arrangement which,
in accordance with US GAAP, would be classified as capitalised leases, and,
for purposes of this Guarantee, the amount of such obligations shall be the
capitalised amount thereof, determined in accordance with US GAAP.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one year after
such time, issued or guaranteed by the United States Government or an
agency thereof; or
(b) other investments in securities or bank instruments rated at least "A"
by S&P and "A2" by Moody's or "A-1" by S&P and "P-1" by Moody's and
with maturities of less than 366 days; or
--------------------------------------------------------------------------------
(c) other securities as to which the Guarantor has demonstrated, to the
satisfaction of the Facility Agent, adequate liquidity through
secondary markets or deposit agreements.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means the failure of Edison International to own,
directly or indirectly, at least 50.1% of the outstanding shares of voting
stock of the Guarantor (or any successor pursuant to Clause 4.2.5(iii)), on
a fully diluted basis.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise
to invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other
than by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares
of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt, obligation or
other liability guaranteed thereby; provided, however, that if the maximum
amount of the debt, obligation or other liability guaranteed thereby has
not been established, the amount of such Contingent Liability shall be the
maximum reasonably anticipated amount of the debt, obligation or other
liability; provided further, however, that any agreement to limit the
maximum amount of such Person's obligation under such Contingent Liability
shall not, of and by itself, be deemed to establish the maximum reasonably
anticipated amount of such debt, obligation or other liability.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or
not incorporated) under common control which, together with the Guarantor,
are treated as a single employer under Section 414(b) or 414(c) of the Code
or Section 4001 of ERISA.
"Debt Rating" means a rating of the Guarantor's long-term debt which is not
secured or supported by a guarantee, letter of credit or other form of
credit enhancement. If Moody's or S&P shall have changed its system of
classifications after the date hereof, the Guarantor's Debt Rating shall be
considered to be at or above a specified level if it is at or above the new
rating which most closely corresponds to the specified level under the old
rating system.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Effective Date" means the date on which the Facility Agent gives the
notification under Clause 4.1(b) (Initial Conditions Precedent) of the
Facility.
--------------------------------------------------------------------------------
"Environmental Laws" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to Hazardous Materials
and/or to public health and protection of the environment, including the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and the Resource Conservation and Recovery Act, as
amended.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"Event of Default" has the meaning given to it in the Facility Agreement.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to
any calendar year (e.g. - the "1999 Fiscal Year") refer to the Fiscal Year
ending on December 31 occurring during such calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"Hazardous Material" means:
(a) any "hazardous substance", as defined by any Environmental Law;
(b) any "hazardous waste", as defined by any Environmental Law;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any
Environmental Law.
"Indebtedness" of any Person means, without duplication:
(a) all indebtedness for borrowed money;
(b) all obligations issued, undertaken or assumed as the deferred purchase
price of property or services which purchase price is due more than
six months from the date of incurrence of the obligation in respect
thereof or is evidenced by a note or other instrument, except trade
accounts arising in the ordinary course of business;
(c) all reimbursement obligations with respect to surety bonds, letters of
credit (to the extent not collateralised with cash or Cash Equivalent
Investments) bankers" acceptances and similar instruments (in each
case, whether or not matured);
(d) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either
case with respect to
--------------------------------------------------------------------------------
property acquired by the Person (even though the rights and remedies
of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property);
(f) all Capitalised Lease Liabilities;
(g) all net obligations with respect to sales of foreign exchange options;
(h) all indebtedness referred to in clauses (a) to (g) above secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by such
Person, even though such Person has not assumed or become liable for
the payment of such Indebtedness; and
(i) all Contingent Liabilities.
For all purposes of this Guarantee, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"Investment" means, relative to any Person:
(a) any loan or advance made by such Person to any other Person (excluding
commission, travel and similar advances to officers and employees made
in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any other
Person.
The amount of any Investment shall be the original principal or capital
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal
to the fair market value of such property.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property, in each case of any
kind, to secure payment of a debt or performance of an obligation.
"Loan Documents" means the Facility Agreement and this Guarantee.
"Material Adverse Effect" means any event, development or circumstance that
has had or could reasonably be expected to have a material adverse effect
on the ability of the Guarantor to perform its payment obligations under
this Guarantee.
"Moody's" means Xxxxx'x Investor Service, a division of Dun & Bradstreet
Corporation, and its successors and assigns.
"Net Tangible Assets" means, as of the date of any determination thereof,
the total amount of all assets of the Guarantor and its Subsidiaries
(determined on a consolidated basis in accordance with US GAAP), less the
sum of (a) the consolidated current liabilities of the Guarantor and its
Subsidiaries (determined on a consolidated basis in accordance
--------------------------------------------------------------------------------
with US GAAP) and (b) assets properly classified as "intangible assets" in
accordance with US GAAP.
"Non-Recourse Debt" means Indebtedness which the Guarantor is not directly
or indirectly obligated to repay.
"Non-Recourse Persons" means the Affiliates of the Borrower, including The
Mission Group, Edison International and Southern California Edison Company,
and the officers, directors, employees, shareholders, agents, Authorised
Representatives and other controlling persons of the Borrower of any of its
Affiliates, provided that in no event shall the Borrower be deemed to be a
Non-Recourse Person.
"Obligations" means all obligations (monetary or otherwise) of the
Guarantor arising under or in connection with the Guarantee.
"Organic Document" means, relative to the Guarantor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts
and similar arrangements applicable to any of its authorised shares or
capital stock.
"Partnership" means a general partnership, limited partnership, joint
venture or similar entity in which the Guarantor or a Subsidiary is a
partner, joint venturer or equity participant.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which
the Guarantor or any corporation, trade or business that is, along with the
Guarantor, a member of a Controlled Group, has any liability, including any
liability by reason of having been a substantial employer within the
meaning of Section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under
Section 4069 of ERISA.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or
other capacity.
"Pricing Grid" means the pricing grid in Clause 6.6 (The Margin) of the
Facility Agreement.
"S&P" means Standard & Poor's Ratings Services and its successors and
assigns.
"Subsidiary" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power
to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned
by such Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries of such Person.
--------------------------------------------------------------------------------
"Tangible Net Worth" means the net worth of the Guarantor and its
Subsidiaries (determined on a consolidated basis in accordance with US
GAAP) after subtracting therefrom the aggregate amount of any intangible
assets of the Guarantor and its Subsidiaries (determined on a consolidated
basis in accordance with US GAAP), including goodwill, franchises,
licences, patents, trademarks, trade names, copyrights, service marks and
brand names.
"Taxes" or "Tax" means any present or future tax, levy, impost, duty,
charge, fee deduction or withholding in the nature of tax whatever called
and wherever imposed and whether imposed, levied, collected, withheld or
assessed (and any penalty or interest payable in connection with any
failure to pay or delay in paying the same) income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes or taxes imposed on or measured by any Bank's net
income, in each case, imposed as a result of a connection between the Bank
and the jurisdiction imposing the tax (other than a connection arising
solely from the Bank having executed, delivered or performed its
obligations or received a payment under, or enforced, this Guarantee), and
the Banks will use reasonable efforts to minimise, to the extent possible,
any such applicable taxes; provided, however, that such Taxes does not
include franchise taxes, receipts, net worth or shareholders' capital.
"Total Commitments" has the meaning given to it in the Facility Agreement.
"US GAAP" means generally accepted accounting principles in effect in the
United States.
"Welfare Plan" means a "welfare plan" as such term is defined in Section
3(1) of ERISA.
"Year 2000 Problem" means any significant risk that computer hardware,
software or equipment containing embedded microchips essential to the
businesses or operations of the Guarantor and its Subsidiaries will not, in
the case of dates or time periods occurring after 31 December 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to 1 January 2000.
1.2 Headings shall be ignored in construing this Guarantee.
1.3 Unless otherwise specified, all accounting terms used in this Guarantee
shall be interpreted, all accounting determinations and computations
hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared in
accordance with US GAAP applied in the preparation of the financial
statements referred to in Clause 3.1.5 except that quarterly financial
statements are not required to contain footnotes.
2 Guarantee
2.1 The Guarantor unconditionally and irrevocably guarantees that, if for any
reason, the Borrower does not pay any sum payable by it under the Facility
Agreement by the time, on the date and otherwise in the manner specified in
the Facility Agreement (whether on the normal due date, on acceleration or
otherwise), the Guarantor will pay that sum within 5 Business Days of
demand by the Facility Agent.
--------------------------------------------------------------------------------
2.2 The Guarantor's liability under this Guarantee shall remain in force
notwithstanding any act, omission, neglect, event or matter whatsoever
(whether or not known to the Facility Agent, any Bank or the Guarantor)
other than the irrevocable payment to the Banks of all amounts payable
hereunder. Nothing shall impair or discharge the Guarantor's liability or
obligations under this Guarantee and this shall apply, without limitation,
in relation to:
2.2.1 anything which would have discharged the Guarantor (wholly or in
part) whether as surety, co-obligor or otherwise or which would have
afforded the Guarantor any legal or equitable defence; or
2.2.2 the existence or validity or the taking or renewal of any other
guarantee or security taken by the Banks in relation to the Facility
Agreement, or any enforcement of or failure to enforce or the
release or waiver of any such guarantee or security; or
2.2.3 any amendment to or variation of the Facility Agreement, or any
security or other document relating to the Facility Agreement, or
any assignment thereof or any waiver or departure from their
respective terms or any such security or document in any such case
with or without the consent of the Guarantor; or
2.2.4 any release of, or granting of time or any other indulgence to, the
Borrower or any other person; or
2.2.5 any winding up, dissolution, reconstruction, arrangement or
reorganisation, legal limitation, disability, incapacity or lack of
corporate power or authority or other circumstances of, or any
change in the constitution or corporate identity or loss of
corporate identity by, the Borrower or any other person (or any act
taken by the Guarantor or the Borrower in relation to any such
event); or
2.2.6 any other circumstances which might render void or unenforceable the
obligations, commitments and undertakings of the Borrower under the
Facility Agreement, or which might affect the Banks' ability to
recover amounts from the Borrower thereunder; or
2.2.7 any defence or counterclaim which the Borrower may be able to assert
against the Banks.
2.3 Any amounts payable under this Guarantee shall be paid in full without any
deduction or withholding whatsoever (whether in respect of set-off,
counterclaim, duties, charges, Taxes or otherwise) unless such deduction or
withholding is required by law. If such a deduction or withholding is
required the Guarantor shall forthwith pay to the Facility Agent an
additional amount calculated to ensure that the net amount received by the
Banks (taking into account any deduction or withholding required on the
additional amount) will equal the full amount which would have been
received by it had no such deduction or withholding been made.
2.4 As a separate, additional continuing and primary obligation, the Guarantor,
unconditionally and irrevocably, undertakes to indemnify the Banks on
demand by the Facility Agent (without requiring the Facility Agent to first
take steps against the Borrower or any other person) against any loss
suffered or incurred by the Banks should the amounts which would otherwise
be due under Clause 2.1 above not be recoverable for any reason whatsoever,
including (but not limited to) the Facility Agreement being or
--------------------------------------------------------------------------------
becoming void, voidable or unenforceable, the amount of that loss being the
amount expressed to be payable by the Borrower in respect of the relevant
sum.
2.5 Demands may be made by the Facility Agent under this Guarantee from time to
time and irrespective of whether any demands, steps or proceedings are
being or have been taken against the Borrower or any other person.
2.6 The Guarantor's obligations under this Guarantee are and will remain in
full force and effect by way of continuing security until no sum remains to
be lent under the Facility Agreement and the Finance Parties have received
or recovered all sums payable under the Facility Agreement.
2.7 So long as any sum remains to be lent or remains payable under the Facility
Agreement, the Guarantor shall not, after a claim has been made or by
virtue of any payment or performance by it under this Guarantee for or on
account of the liabilities of the Borrower:
2.7.1 be subrogated to any rights, security or moneys held, received or
receivable by the Facility Agent or any of the other Finance Parties
or be entitled to any right of contribution or indemnity in respect
of any payment made or monies received on account of the Guarantor's
liability under this Guarantee;
2.7.2 claim, rank, prove or have the benefit of any payment, distribution
or security from or on account of the Borrower or exercise any right
of set-off as against the Borrower
unless the Facility Agent otherwise directs.
3 Representations and Warranties
3.1 The Guarantor represents and warrants to and for the benefit of the
Facility Agent (on behalf of itself and each Bank) as follows:
3.1.1 Organisation; Power; Compliance with Law and Contractual
Obligations: It (i) is a corporation validly organised and existing
and in good standing under the laws of the state of its
incorporation, (ii) is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the
nature of its business requires such qualification, (iii) has all
requisite corporate power and authority and holds all material
requisite governmental licences, permits and other approvals to
enter into and perform its Obligations under this Guarantee and to
conduct its business substantially as currently conducted by it and
(iv) is in compliance with all laws, governmental regulations, court
decrees, orders and Contractual Obligations applicable to it,
except, with respect to Clause 3.1.1(ii) to (iv) to the extent that
the failure to comply therewith could not reasonably be expected to
have a Material Adverse Effect.
3.1.2 Due Authorisation; Non-Contravention: The execution, delivery and
performance by the Guarantor of this Guarantee is within the
Guarantor's corporate powers, has been duly authorised by all
necessary corporate action, and does not:
(i) contravene the Guarantor's Organic Documents;
--------------------------------------------------------------------------------
(ii) contravene any law, governmental regulation, court decree or
order or material Contractual Obligation binding on or
affecting the Guarantor; or
(iii) result in, or require the creation or imposition of, any Lien
on any of the Guarantor's properties.
3.1.3 Governmental Approval; Regulation:
(i) No authorisation, consent, approval, licence, exemption of or
filing or registration with any court or governmental
authority or regulatory body ("Governmental Approval") is
required for the Guarantor to execute and perform its
obligations under this Guarantee, except for those which have
been duly obtained or effected. No material Governmental
Approval is required for the Guarantor to carry on its
business, except for those which have been duly obtained or
effected.
(ii) The Guarantor is not subject to any regulation as an
"investment company" subject to the U.S. Investment Company
Act of 1940, as amended, or as a "holding company" or a
"subsidiary company" or an "affiliate" of a "holding company"
subject to the U.S. Public Utility Holding Company Act of
1935, as amended ("PUHCA"), except that the Guarantor is a
"subsidiary company" of Edison International which is a
"holding company" that is exempt from all regulation under
PUHCA (except Section 9(a)(2) thereof) pursuant to Section
3(a) thereof. The Guarantor is not otherwise subject to any
regulation as a "public utility" under any other applicable
law, rule or regulation, which would have Material Adverse
Effect.
3.1.4 Validity: This Guarantee constitutes the legal, valid and binding
obligations of the Guarantor enforceable in accordance with its
terms (except as may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights
generally and general principles of equity).
3.1.5 Financial Information: The consolidated balance sheets of the
Guarantor (as at 31 December 1997 and 31 December 1998, and the
related consolidated statements of income and cash flows of the
Guarantor, copies of which have been furnished to the Facility
Agent, have been prepared in accordance with US GAAP consistently
applied, and present fairly the consolidated financial condition of
the Guarantor and its Subsidiaries as at the dates thereof and the
results of their operations for the periods then ended.
3.1.6 No Material Adverse Change: There has not occurred any event or
condition having a Material Adverse Effect since 31 December 1998.
3.1.7 Litigation: There is no pending or, to the knowledge of the
Guarantor, threatened litigation, action, proceeding, or labour
controversy affecting the Guarantor, or any of its properties,
businesses, assets or revenues, which, if adversely determined
(taking into account any insurance proceeds payable under a policy
where the insurer has accepted coverage without any reservations),
would have a Material
--------------------------------------------------------------------------------
Adverse Effect or which purports to affect adversely the legality,
validity or enforceability of this Guarantee.
3.1.8 Ownership of Properties: The Guarantor owns good and marketable
title to, or a valid leasehold interest in or other enforceable
interest in all properties and assets, real and personal, tangible
and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights) purported to
be owned, leased or held by it, free and clear of all Liens, charges
or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to
Clause 4.2.2.
3.1.9 Taxes: The Guarantor has filed all tax returns and reports required
by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such
taxes or charges which are being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with US GAAP shall have been set aside on its books.
3.1.10 Pension and Welfare Plans: During the consecutive 12 month period
prior to the date of the execution and delivery of this Guarantee
and prior to the Issue Date (as defined in the Facility Agreement),
no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect
to any Pension Plan which could reasonably be expected to result in
the incurrence by the Guarantor or any member of the Controlled
Group of any material liability (other than liabilities incurred in
the ordinary course of maintaining the Pension Plan), fine or
penalty. Neither the Guarantor nor any member of the Controlled
Group has any contingent liability with respect to any post-
retirement benefit under a Welfare Plan which could reasonably be
expected to have a Material Adverse Effect, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
3.1.11 Environmental Warranties:
(i) All facilities and property owned or leased by the Guarantor
or any of its Subsidiaries or Partnerships have been, and
continue to be, owned or leased by the Guarantor, its
Subsidiaries or Partnership, as the case may be, in
compliance with all Environmental Laws, except where the
failure so to comply would not have, or be reasonably
expected to have, a Material Adverse Effect.
(ii) There are no pending or, to the knowledge of the Guarantor,
threatened:
(a) material claims, complaints, notices or requests for
information received by the Guarantor from governmental
authorities with respect to any alleged violation by the
Guarantor of any Environmental Law; or
--------------------------------------------------------------------------------
(b) material complaints, notices or inquiries to the
Guarantor from governmental authorities regarding
potential liability under any Environmental Law.
(iii) There have been no Releases (as defined under any
Environmental Law) of Hazardous Materials at, on or under any
property now or previously owned or leased by the Guarantor
that, singly or in the aggregate, have, or may reasonably be
expected to have, a Material Adverse Effect.
(iv) The Guarantor has obtained and is in compliance with all
permits, certificates, approvals, licences and other
authorisations relating to environmental matters and
necessary for the Guarantor's business, except where the
failure to obtain, maintain or comply with such permits,
certificates, approvals, licences or other authorisations
would not have, or be reasonably expected to have, a Material
Adverse Effect.
(vi) No property now or previously owned or leased by the
Guarantor is listed or proposed for listing (with respect to
owned property only) on the U.S. National Priorities List
pursuant to any Environmental Law, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-
up.
(vi) No conditions exist at, on or under any property now or
previously owned or leased by the Guarantor which, with the
passage of time, or the giving of notice or both, would give
rise to liability under any Environmental Law which liability
would have, or may reasonably be expected to have, a Material
Adverse Effect.
3.1.12 Regulations T, U and X: The Guarantor is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Advances will be used for a purpose
which violates, or would be inconsistent with, F.R.S. Board
Regulation T, U or X. Terms for which meanings are provided in
F.R.S. Board Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Clause
3.1.12 with such meanings.
3.1.13 Accuracy of Information: All factual information heretofore or
contemporaneously furnished by the Guarantor in writing to the
Facility Agent or any Bank for purposes of or in connection with
this Guarantee or any transaction contemplated hereby is, and all
other such written factual information hereafter furnished by the
Guarantor in writing to the Facility Agent or any Bank will be, true
and materially accurate in every material respect on the date as of
which such information is dated or certified and as of the date of
execution and delivery of this Guarantee by the Facility Agent and
such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make
such information not materially misleading.
3.1.14 The Obligations: The Obligations are senior, unsecured Indebtedness
of the Guarantor ranking at least pari passu with all other senior,
unsecured Indebtedness of the Guarantor.
--------------------------------------------------------------------------------
3.1.15 Year 2000 Matters: The Guarantor has reviewed its operations and
those of its Subsidiaries with a view to assessing whether its
businesses or the businesses of any of its Subsidiaries will, in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilisation of data, be vulnerable to a Year
2000 Problem or will be vulnerable to the effects of a Year 2000
Problem suffered by any of the Guarantor's or any of its
Subsidiaries' major commercial counterparties. Based on such review
the Guarantor has no reason to believe that a Material Adverse
Effect will occur with respect to its businesses or operations or
the businesses or operations of any of its Subsidiaries resulting
from a Year 2000 Problem.
3.2 The representations and warranties set out in Clause 3.1 shall be deemed to
be repeated on the date of drawdown of each Advance (unless stated to
relate solely to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date). The
representations and warranties set out in Clause 3.1.1 to 3.1.5 (inclusive)
shall be deemed to be repeated by the Guarantor on the first day of each
Interest Period with reference to the facts and circumstances then
existing.
4 Covenants
4.1 Affirmative Covenants: The Guarantor agrees with the Facility Agent (on
behalf of itself and each Bank) that, until the Total Commitments have
terminated and all obligations of the Borrower under the Facility Agreement
have been paid and performed in full, the Guarantor will perform the
obligations set forth in this Clause 4.1.
4.1.1 Financial Information, Reports, Notices: The Guarantor will furnish,
or will cause to be furnished, to the Facility Agent copies of the
following financial statements, reports, notices and information:
(i) as soon as available and in any event within 60 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal
year of the Guarantor, consolidated balance sheets of the
Guarantor and its Subsidiaries as of the end of such Fiscal
Quarter and consolidated statements of income and cash flows
of the Guarantor and its Subsidiaries for such Fiscal Quarter
and for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter,
certified by an Authorised Representative with responsibility
for financial matters;
(ii) as soon as available and in any event within 120 days after
the end of each Fiscal Year of the Guarantor, a copy of the
annual audit report for such Fiscal Year for the Guarantor
and its Subsidiaries, including therein consolidated balance
sheets of the Guarantor and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of income and
cash flows of the Guarantor and its Subsidiaries for such
Fiscal Year, and accompanied by the unqualified opinion of
Xxxxxx Xxxxxxxx & Co. or other internationally recognised
independent auditors selected by the Guarantor which report
shall state that such consolidated financial statements
present fairly in all material respects the financial
position for the periods
--------------------------------------------------------------------------------
indicated in conformity with US GAAP applied on a basis
consistent with prior periods;
(iii) concurrently with the delivery of the financial statements
referred to in Clause 4.1.1(i) a certificate, executed by the
controller, treasurer or chief financial officer of the
Guarantor, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to
the Facility Agent) compliance with the financial covenant
set forth in Clause 4.2.3;
(iv) as soon as possible and in any event within 5 Business Days
after any Authorised Representative obtains knowledge of the
occurrence of each Default, a statement of such Authorised
Representative setting forth details of such Default or
default and the action which the Guarantor has taken and
proposes to take with respect thereto;
(v) as soon as possible and in any event within 5 Business Days
after (1) the occurrence of any material adverse development
with respect to any litigation, action, proceeding, or labour
controversy of the type described in Clause 3.1.7 or (2) the
commencement of any labour controversy, litigation, action,
proceeding of the type described in Clause 3.1.7, notice
thereof and, upon request of the Facility Agent, copies of
all non-privileged documentation relating thereto;
(vi) promptly after the sending or filing thereof, copies of all
reports and registration statements which the Guarantor files
with the Securities and Exchange Commission or any national
securities exchange;
(vii) immediately upon becoming aware of the institution of any
steps by the Guarantor or any other Person to terminate any
Pension Plan (other than a standard termination under ERISA
Section 4041(b)), or the failure to make a required
contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under Section 302(f) of
ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Guarantor
furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any
Pension Plan which could result in the incurrence by the
Guarantor or any member of the Controlled Group of any
material liability (other than liabilities incurred in the
ordinary course of maintaining the Pension Plan), fine or
penalty, or any increase in the contingent liability of the
Guarantor with respect to any post-retirement Welfare Plan
benefit which has a Material Adverse Effect, notice thereof
and copies of all documentation relating thereto; and
(viii) as soon as known, any changes in Guarantor's Debt Rating by
Xxxxx'x or S&P or any other rating agency which maintains a
Debt Rating on the Guarantor which is used in the Pricing
Grid.
4.1.2 Compliance with Laws: The Guarantor will comply in all material
respects with all applicable law, rules, regulations and orders,
such compliance to include the
--------------------------------------------------------------------------------
payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its
property (except to the extent such assignments and charges are
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with US GAAP shall
have been set aside on its books).
4.1.3 Maintenance of Properties: The Guarantor will, and will use
reasonable efforts to cause each of its Subsidiaries and
Partnerships to, maintain, preserve, protect and keep its property
and equipment in good repair, working order and condition (ordinary
wear and tear excepted), and make necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless
the Guarantor determines in good faith that the continued
maintenance of any of its properties or equipment is no longer
economically desirable and except where the failure so to do would
not have a Material Adverse Effect.
4.1.4 Insurance: The Guarantor will maintain or cause to be maintained
with responsible insurance companies insurance with respect to its
properties and business against such casualties and contingencies
and of such types and in such amounts as is customary in the case of
similar businesses.
4.1.5 Books and Records: The Guarantor will, and will cause each of its
active Subsidiaries to, keep books and records which accurately
reflect all of its business affairs and transactions and permit the
Facility Agent and each Bank or any of their respective
representatives (at the Facility Agent's or such Bank's expense), at
reasonable times and intervals upon reasonable prior notice, to
visit all of its offices, to discuss its financial matters with its
officers and independent public accountant. The Guarantor will at
any reasonable time and from time to time upon reasonable prior
notice, permit the Facility Agent and the Banks or any of their
respective agents or representatives to examine and make copies of
and abstracts from the records and books of account of the
Guarantor; provided that by virtue of this Clause 4.1.5 the
Guarantor shall not be deemed to have waived any right to
confidential treatment of the information obtained, subject to the
provisions of applicable law or court order.
4.1.6 Environmental Covenant: The Guarantor will, and will use best
efforts to cause each of its Subsidiaries and Partnerships to:
(i) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licences and other
authorisations relating to environmental matters in effect
and remain in material compliance therewith, and handle all
Hazardous Materials in material compliance with all
applicable Environmental Laws, in each case where the failure
to do so may reasonably be expected to have a Material
Adverse Effect;
(ii) promptly cure and have dismissed to the reasonable
satisfaction of the Facility Agent any actions and
proceedings relating to compliance with Environmental Laws
where such action or proceeding may reasonably be
--------------------------------------------------------------------------------
expected to have a Material Adverse Effect; provided that the
Guarantor or such Subsidiary or Partnership may postpone such
cure and dismissal during any period in which it is
diligently pursuing any available appeals in such action or
proceeding so long as such postponement would not be
reasonably likely to have a Material Adverse Effect; and
(iii) provide such non-privileged information as the Facility Agent
may reasonably request from time to time to evidence
compliance with this Clause 4.1.6.
4.1.7 Conduct of Business and Maintenance of Existence: The Guarantor will
continue to engage in business of the same type as now conducted by
it and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all
material rights, privileges and franchises necessary or desirable in
the normal conduct of its business, except, in each case, as
otherwise permitted by Clause 4.2.5.
4.1.8 Year 2000 Matters: The Guarantor will, and will use best efforts to
cause each of its Subsidiaries and Partnerships to assure that its
computer based systems are able to effectively process data
including dates on or after 1 January 2000.
4.1.9 L/C Reductions: The Guarantor will procure that the L/C Amount (as
defined in the Capex Letter of Credit) is reduced at the time and to
the extent permitted under the financing documents to which the
Project Company is a party.
4.2 Negative Covenants: The Guarantor agrees with the Facility Agent (on behalf
of itself and each Bank) that, until the Total Commitments] have terminated
and all obligations of the Borrower under the Facility Agreement have been
paid and performed in full, the Guarantor will, and will cause each of its
Subsidiaries and Partnerships, as applicable, to perform the obligations
set forth in this Clause 4.2:
4.2.1 Restrictions on Secured Indebtedness: The Guarantor will not create,
incur, assume or suffer to exist any secured Indebtedness other
than:
(i) Capitalised Lease Liabilities and other secured Indebtedness
of any kind whatsoever (including, without limitation,
Indebtedness secured by a pledge of the stock of a Subsidiary
not otherwise permitted under Clause 4.2.1(ii)) at any time
outstanding not exceeding an aggregate principal amount equal
to 10% of Net Tangible Assets; provided that any Indebtedness
exceeding such amount may be secured pursuant to Clause
4.2.2(vi) and
(ii) Non-Recourse Debt with respect to which the Guarantor has
pledged the stock of a Subsidiary in order to secure initial
project financing obtained or being obtained after the
Effective Date by such Subsidiary (or the Partnership in
which such Subsidiary is a partner).
4.2.2 Liens: The Guarantor will not create, incur, assume or suffer to
exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:
--------------------------------------------------------------------------------
(i) Liens granted to secure payment of Indebtedness of the type
permitted and described in Clause 4.2.1(ii);
(ii) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable
without penalty or which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with US GAAP shall have been set aside
on its books;
(iii) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for
sums not overdue or which are being diligently contested in
good faith by appropriate proceedings and for which adequate
reserves in accordance with US GAAP shall have been set aside
on its books;
(iv) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(v) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a
customary deductible) by insurance maintained with
responsible insurance companies;
(vi) Liens upon any property at any time directly owned by the
Guarantor to secure any Indebtedness of the nature described
in Clause 4.2.1(i) in excess of the amount otherwise
permitted thereby, provided that the Guarantor's Obligations
shall be equally and rateably secured with any and all such
Indebtedness and with any other Indebtedness similarly
entitled to be equally and rateably secured; and
(vii) any Lien existing on the property of the Guarantor on the
Effective Date.
In the event that the Guarantor shall propose to create, incur,
assume or suffer to exist any Lien upon any property at any time
directly owned by it to secure any Indebtedness as contemplated by
Clause 4.2.2(vi) above, the Guarantor will give prior written notice
thereof to the Facility Agent, who shall give notice to the Banks,
and the Guarantor will, prior to or simultaneously with the creation
of such Lien, effectively secure the Guarantor's Obligations equally
and rateably with such Indebtedness.
4.2.3 Financial Condition: The Guarantor will not permit its Tangible Net
Worth to be less than $400,000,000 plus 25% of the Guarantor's and
its Subsidiaries' consolidated net income earned (without
subtracting net losses) in each Fiscal Quarter commencing with the
quarter ending after 30 September 1992.
4.2.4 Investments: The Guarantor will not, and will not permit any of its
Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
--------------------------------------------------------------------------------
(i) Investments existing on the Effective Date;
(ii) Cash Equivalent Investments provided, however, that any
Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if
made thereafter would not comply with such requirements;
(iii) without duplication, Investments permitted as Indebtedness
pursuant to Clause 4.2.1;
(iv) otherwise in the ordinary course of business; and
(v) Investments permitted pursuant to Clause 4.2.5(ii).
4.2.5 Consolidation Merger: The Guarantor will not, and will not permit
any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other corporation, or purchase or
otherwise acquire all or substantially all of the assets of any
Person (or of any division thereof) except:
(i) any such Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Guarantor or any other
Subsidiary, and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by the Guarantor or any other
Subsidiary;
(ii) so long as no Default (by reason of the violation of Clause
4.2.3) has occurred and is continuing or would occur after
giving effect thereto, the Guarantor or any of its
Subsidiaries may purchase all or substantially all of the
assets of any Person, or (in the case of any such Subsidiary)
acquire such person by merger; and
(iii) provided that no Default has occurred and is continuing or
would occur after giving effect thereto (including, without
limitation, a Change in Control), the Guarantor may
consolidate with or merge into any other Person, or convey,
transfer or lease its properties and assets substantially as
an entirety to any person, or permit any Person to merge into
or consolidate with the Guarantor if the Guarantor is the
surviving corporation or the surviving corporation or
purchaser or lessee is a corporation incorporated under the
laws of the United States of America or Canada and assumes
the Guarantor's Obligations.
4.2.6 Asset Dispositions: The Guarantor will not, and will not permit any
of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with
respect to, all or any substantial part of its assets (including
accounts receivable and capital stock of Subsidiaries) to any
Person, unless:
(i) such sale, transfer, lease, contribution or conveyance is the
ordinary course of its business; or
(ii) the net book value of such assets, together with the net book
value of all other assets sold, transferred, leased,
contributed or conveyed otherwise
--------------------------------------------------------------------------------
than in the ordinary course of business by the Guarantor or
any of its Subsidiaries pursuant to this Clause 4.2.6(ii)
during the most recent 12 month period since the Effective
Date, does not exceed 10% of Net Tangible Assets computed as
of the end of the most recent quarter preceding such sale;
provided, however, that any such sales shall be disregarded
for purposes of the limitation of this Clause 4.2.6(ii) if
the proceeds are invested in assets in similar or related
lines of business of the Guarantor, and provided further,
that the Guarantor may sell or otherwise dispose of assets in
excess of such 10% if the proceeds from such sales or
dispositions, which are not so reinvested, are retained by
the Guarantor as cash or Cash Equivalent Investments.
4.2.7 Transactions with Affiliates: The Guarantor will not enter into, or
cause, suffer or permit to exist any arrangement or contract with
any of its Affiliates unless such arrangement or contract is fair
and equitable to the Guarantor and is an arrangement or contract of
the kind which would be entered into by a prudent Person in the
position of the Guarantor with a Person which is not one of its
Affiliates.
4.2.8 Restrictive Agreements: The Guarantor will not, and will not permit
any of its Subsidiaries to, enter into any agreement (excluding any
Loan Document and any agreement governing any Indebtedness permitted
by Clause 4.2.1(ii) as to the assets financed with the proceeds of
such Indebtedness) prohibiting:
(i) the ability of the Guarantor to amend or otherwise modify any
Loan Document; or
(ii) the ability of any Subsidiary to make any payments, directly
or indirectly, to the Guarantor by way of dividend, advances,
repayments of loans or advances, reimbursements of management
and other intercompany charges, expenses and accruals or
other returns on investments, or any other agreement or
arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to
the Guarantor where such prohibition or restriction has a
Material Adverse Effect.
4.3 ERISA: The Guarantor will not engage in any prohibited transactions under
Section 406 of ERISA or under Section 4975 of the Internal Revenue Code,
which would subject the Guarantor to any tax, penalty or other liabilities
having a Material Adverse Effect.
5 Invalidity
If any provision of this Guarantee is held to be invalid or unenforceable,
then such provision shall (so far as it is invalid or unenforceable) be
given no effect and shall be deemed not to be included in this Guarantee
but without invalidating any of the remaining provisions of this Guarantee.
The parties shall then use all reasonable endeavours to replace the invalid
or unenforceable provision with a valid provision the effect of which is as
close as possible to the intended effect of the invalid or unenforceable
provision.
--------------------------------------------------------------------------------
6 Notices
6.1 Any notice or other communications to be given under, or in connection
with, this Guarantee shall be in writing and signed by or on behalf of the
party giving it. It shall be served by sending it by fax to the number set
out in Clause 6.2 (provided that it is also sent by delivery by hand or
first class post on the same day), or delivering it by hand, or sending it
by pre-paid recorded delivery, special delivery or registered post, to the
address set out in Clause 6.2 and in each case marked for the attention of
the relevant party set out in Clause 6.2 (or as otherwise notified from
time to time in accordance with the provisions of this Clause 6). Any
notice so served by hand, fax or post shall be deemed to have been
received:
6.1.1 in the case of delivery by hand, when delivered;
6.1.2 in the case of fax, at the time of transmission;
6.1.3 in the case of pre-paid recorded delivery, special delivery or
registered post, at 10:00 a.m. on the second Business Day following
the date of posting,
provided that in each case where delivery by hand or by fax occurs after
6.00 p.m. on a Business Day or on a day which is not a Business Day,
service shall be deemed to occur at 9.00 a.m. on the next following
Business Day.
References to time in this clause are to local time in the country of the
addressee.
6.2 The addresses and fax number of the parties for the purpose of Clause 6.1
are as follows:
The Facility Agent:
Address 5 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
For the attention of: Xxxx Xxxxxx
Fax: 0171 773 6807
Guarantor:
Address: Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx
X0X 0XX
For the attention of: General Counsel
Fax: 0171 312 4041
6.3 A party may notify the other for a change to its name, relevant addressee,
address or fax number for the purposes of this Clause 6, provided that such
notice shall only be effective on:
--------------------------------------------------------------------------------
6.3.1 the date specified in the notice as the date on which the change is
to take place; or
6.3.2 if no date is specified or the date specified is less than five New
York Business Days after the date on which notice is given, the date
following five New York Business Days after notice of any change has
been given.
6.4 In proving such service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered either to the
address shown thereon or into the custody of the postal authorities as a
pre-paid recorded delivery, special delivery or registered post letter, or
that the facsimile transmission was made after obtaining, in person or by
telephone, appropriate evidence of the capacity of the addressee to receive
the same, as the case may be.
7 Assignment
No person shall be entitled to assign, transfer, charge, declare trusts over or
otherwise deal in any way whatsoever with the benefit or burden of this
Guarantee (in whole or in part) or any right, benefit or obligation arising
under this Guarantee or with any income or benefit derived or to be derived from
this Guarantee or agree to do any such matter; Provided that a Bank may assign
the benefit of this Guarantee to any person to whom it transfers its rights and
obligations under the Facility Agreement.
8 Variation
No variation of any of the terms of this Guarantee shall be valid unless it is
made in accordance with Clause 22 of the Facility Agreement. The expression
"variation" shall include any variation, supplement, deletion or replacement
however effected.
9 Waiver
9.1 Any delay by a Bank or the Facility Agent or the Guarantor in exercising,
or any failure to exercise, any right or remedy under this Guarantee shall
not constitute a waiver of the right or remedy or a waiver of any other
rights or remedies and no single or partial exercise of any rights or
remedy under this Guarantee or otherwise shall prevent any further exercise
of the right or remedy or the exercise of any other right or remedy.
9.2 The rights and remedies of the parties under or pursuant to this Guarantee
are cumulative and are in addition to any rights or remedies provided under
general law.
10 Governing Law and Jurisdiction
10.1 Governing Law: This Agreement shall be governed by and construed in
accordance with the laws of England.
10.2 English Courts: The Facility Agent (on behalf of itself and each Bank)
irrevocably agrees that the courts of England are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Guarantee and that, accordingly, any legal action or proceedings arising
out of or in connection with this Guarantee ("Proceedings") may be brought
in those courts and the Guarantor irrevocably submits to the jurisdiction
of those courts.
--------------------------------------------------------------------------------
This Guarantee has been executed as a Deed on the date stated at the beginning.
EXECUTED and DELIVERED as a DEED by
EDISON MISSION ENERGY
acting by a duly authorised officer
in the presence of: XXXX XXXXXX
XXXXXX XXXXXXX
One Silk Street
London
EXECUTED as a DEED by
Xxxxxx Xxxx on behalf of
BARCLAYS BANK PLC
pursuant to a power of attorney dated
for the Banks party to the Facility Agreement XXXXXX XXXX
--------------------------------------------------------------------------------
