Exhibit 10.65.2
AMENDMENT TWO
AMENDMENT TWO (this "AMENDMENT"), dated as of May 29, 2001, by and
among EDISON MISSION ENERGY, (the "GUARANTOR"), EME FINANCE UK LIMITED (the
"BORROWER"), and BARCLAYS BANK PLC, as Facility Agent (the "FACILITY AGENT")
for the Banks (as defined below).
WHEREAS, the Borrower, certain banks party thereto (the "BANKS"),
Barclays Capital and Credit Suisse First Boston, as arrangers, and the
Facility Agent have entered into that certain Coal and CAPEX Facility
Agreement dated July 16, 1999, the "FACILITY AGREEMENT");
WHEREAS, pursuant to the Facility Agreement the Guarantor issued
that certain Guarantee, dated as of July 16, 1999 (as amended by Amendment
One dated as of August 17, 2000 among the Guarantor, Borrower, and the
Facility Agent) (the "GUARANTEE"), in favor of the Facility Agent, as
Facility Agent for the Banks, which sets forth, INTER ALIA, certain covenants
of the Guarantor;
WHEREAS, pursuant to Clause 22 of the Facility Agreement, the
consent of the Majority Banks and the Facility Agent is required for any
amendment to the Guarantee;
WHEREAS, Edison International, the Guarantor's ultimate parent,
is contemplating a new debt facility; and
WHEREAS, the Guarantor and the Borrower have requested, and the
Facility Agent and the Majority Banks have agreed, to amend certain
provisions of the Guarantee and the Facility Agreement so as to permit the
new debt facility.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this
Amendment, terms defined in the Guarantee are used herein (and in the
introductions and recitals hereto) as defined therein.
AMENDMENT TWO TO GUARANTEE
Section 2. AMENDMENT TO THE GUARANTEE. Subject to the
satisfaction of the conditions precedent specified in Section 3 below, but
effective as of the Amendment Effective Date, the Guarantee shall be amended
as follows:
(a) SECTION 1.1 of the Guarantee shall be amended by deleting the
definition of "Change in Control" in its entirety.
(b) SECTION 1.1 of the Guarantee shall be amended by adding the
following definitions in alphabetical order:
"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 rate at least
"A" by S&P and "A2" by Xxxxx'x or "A-1" by S&P and "P-1" by Xxxxx'x and with
maturities of less than 366 days; or
(c) other securities as to which the Borrower has demonstrated, to the
satisfaction of the Facility Agent, adequate liquidity through secondary markets
or deposit agreements.
"CONSOLIDATED NET WORTH" means, at any date, the
consolidated stockholders' equity of the Guarantor and its Consolidated
Subsidiaries determined as of such date without giving effect to any
accumulated other comprehensive gain or loss after December 31, 1999 plus, to
the extent not otherwise included therein, (a) the liquidation preference at
such date of non-redeemable preferred stock of the Guarantor and (b) Equity
Preferred Securities.
"CONSOLIDATED OPERATING PROJECTS" means any electric
generation facilities, oil and gas properties, trading activities, and
operation and maintenance services in which the Guarantor or its Subsidiaries
have a direct or indirect ownership greater than 50%.
"CONSOLIDATED SUBSIDIARY" means, at any date with
respect to any Person, any Subsidiary of such Person or other entity the
accounts of which would be consolidated with those of such Person in its
consolidated financial statements if such statements were prepared as of such
date.
AMENDMENT TWO TO GUARANTEE
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"DERIVATIVES OBLIGATIONS" of any Person means all
obligations of such Person in respect of any rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of the foregoing transactions) or any combination
of the foregoing transactions. For purposes of determining the Recourse Debt
to Recourse Capital Ratio on any date, the Derivatives Obligations of the
Guarantor shall be determined on a "xxxx to market" basis on such date.
"DISTRIBUTIONS" means any interest or principal
payments on loans, distributions, management fees and dividends to the
Guarantor or any of its Subsidiaries made by a Non-Consolidated Operating
Project.
"EQUITY PREFERRED SECURITIES" means securities issued
by the Guarantor (a) that are not subject to mandatory redemption or the
underlying securities, if any, of which are not subject to mandatory
redemption, (b) that are perpetual or mature no less than 30 years from the
date of issuance, (c) the indebtedness issued in connection with which,
including any guaranty, is subordinate in right of payment to the unsecured
and unsubordinated indebtedness of the issuer of such indebtedness or
guaranty, and (d) the terms of which permit the deferral of payment of
interest or distributions thereon to the date occurring after the Commitment
Termination Date of July 16, 2004.
"FUNDS FLOW FROM OPERATIONS" means, for any period,
Distributions plus Operating Cash Flow plus Interest Income during such
period less Operating Expenses during such period.
"INTEREST COVERAGE RATIO" means, for any period, the
ratio of (a) Funds Flow from Operations during such period to (b) Interest
Expense for such period.
"INTEREST EXPENSE" means the accrued interest expense
of all the Guarantor's senior recourse indebtedness, but shall exclude any
intercompany obligation on which interest or the equivalent is received by
the Guarantor.
"MIDWEST" means Midwest Generation, LLC.
AMENDMENT TWO TO GUARANTEE
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"NON-CONSOLIDATED OPERATING PROJECTS" means any
electric generation facilities, oil and gas properties, trading activities,
and operation and maintenance services in which the Guarantor or its
Subsidiaries have a direct or indirect ownership equal to or less than 50%.
"OPERATING CASH FLOW" means, for any period, the
excess of accrued Project Revenues during such period less accrued Project
Operating Expenses less accrued Project Debt Service during such period from
the Consolidated Operating Projects.
"OPERATING EXPENSES" means, for any period, all
amounts accrued by the Guarantor in the conduct of its business during such
period, including utilities, general and administrative expenses, employee
salaries, wages and other employment-related costs, fees for letters of
credit, surety bonds and performance bonds. Operating Expenses do not include
federal and state taxes, depreciation of amortization, and other non-cash
charges.
"POWERTON/JOLIET GUARANTEES" means, collectively, (i)
the Guaranty Agreement dated as of August 17, 2000 made by the Guarantor in
favor of Powerton Trust I that, among other things, guarantees the payment by
Midwest of certain liabilities payable to Powerton Trust I, (ii) the Guaranty
Agreement dated as of August 17, 2000 made by the Guarantor in favor of
Powerton Trust II that, among other things, guarantees the payment by Midwest
of certain liabilities payable to Powerton Trust II, (iii) the Guaranty
Agreement dated as of August 17, 2000 made by the Guarantor in favor of
Joliet Trust I that, among other things, guarantees the payment by Midwest of
certain liabilities payable to Joliet Trust I and (iv) the Guaranty Agreement
dated as of August 17, 2000 made by the Guarantor in favor of Joliet Trust II
that, among other things, guarantees the payment by Midwest of certain
liabilities payable to Joliet Trust II.
"POWERTON/JOLIET INTERCOMPANY NOTES" means the
promissory notes of the Guarantor dated as of August 24, 2000 having an
aggregate principal amount equal to $1,367,000,000, evidencing in each case a
loan from Midwest to the Guarantor.
"PROJECT DEBT SERVICE" means, for any period, all
accrued interest and principal payments during such period for the
Consolidated Operating Projects. Any principal payments made due to
refinancing shall be excluded.
"PROJECT OPERATING EXPENSES" means all accrued
expenses by the Consolidated Operating Projects which are necessary for the
AMENDMENT TWO TO GUARANTEE
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continued operation and maintenance of the Consolidated Operating Projects
which shall include operating lease payments and foreign taxes paid but
exclude depreciation and amortization or any capital expenditure undertaken
primarily to increase the efficiency of, expand or re-power the Consolidated
Operating Projects or capital expenditures for environmental purposes which
are not required by applicable law.
"PROJECT REVENUES" means, for any period, all accrued
revenues by the Consolidated Operating Projects during such period, including
revenues from the sale of energy and capacity, steam and fuel plus accruals
for business interruption insurance and all interest and other income.
"RECOURSE DEBT" means, on any date, the sum (without
duplication) of the following indebtedness of the Guarantor: (a) all
indebtedness for borrowed money other than Subordinated Debt; (b) all
guarantees for (i) indebtedness of the Subsidiaries and (ii) rental expenses
of the Subsidiaries; (c) all reimbursement obligations with respect to surety
bonds, letters of credit (to the extent not collateralized 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; and (e) Derivatives Obligations. For purposes of the foregoing,
(i) indebtedness of the Guarantor shall exclude, to the extent included, (A)
indebtedness of the Guarantor evidenced by the Powerton/Joliet Intercompany
Notes for so long as amounts payable thereunder are subject to setoff against
amounts paid under the Powerton/Joliet Guarantees in accordance with the
terms of the Powerton/Joliet Intercompany Notes; (B) indebtedness of the
Guarantor evidenced by the Synthetic Lease Intercompany Note for so long as
amount payable thereunder are subject to setoff against payments under the
Synthetic Lease Guarantee in accordance with the terms of the Synthetic Lease
Intercompany Note; and (C) indebtedness of the Guarantor under guarantees of
rental expenses to the extent attributable to lease indebtedness provided by
Subsidiaries under leasing transactions, including, without limitation,
indebtedness of the Guarantor under the Synthetic Lease Guarantee to the
extent attributable to lease indebtedness provided by Subsidiaries as
Synthetic Lease Tranche A Loans; and (ii) the amount of indebtedness of the
Guarantor under guarantees of rental expenses of the Subsidiaries on any date
of determination shall be the termination value under the related lease on
such date of determination (adjusted so as to give effect to adjustments
contemplated by clause (i)(C) above, if applicable) plus reasonably
anticipated indemnity or other
AMENDMENT TWO TO GUARANTEE
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similar payments as of such date of determination; provided that the amount
of indebtedness of the Guarantor under each Powerton/Joliet Guarantee on any
date of determination shall be the Termination Value (or, if applicable,
Special Termination Value) as defined in such Powerton/Joliet Guarantee on
such date of determination plus reasonably anticipated indemnity or other
similar payments as of such date of determination.
"RECOURSE DEBT TO RECOURSE CAPITAL RATIO" means, on
any date, the ratio of: (a) Recourse Debt on such date to (b) the sum on such
date of (i) Consolidated Net Worth on such date PLUS (ii) Recourse Debt.
"SUBORDINATED DEBT" means all unsecured Indebtedness
of the Guarantor for money borrowed which is subordinated, upon terms
(including the terms applicable to the payment, prepayment, redemption,
purchase or defeasance thereof) satisfactory to the Majority Banks, in right
of payment to the payment in full in cash of all Obligations.
"SYNTHETIC LEASE CREDIT AGREEMENT" means the Credit
Agreement dated as of June 23, 2000 among EME/CDL Trust, Midwest Peaker
Holdings, Inc., Citicorp Del-Lease, Inc. and Citicorp North America, Inc.
"SYNTHETIC LEASE GUARANTEE" means the Guaranty
Agreement dated as of June 23, 2000 made by the Guarantor in favor of the
EME/CDL Trust.
"SYNTHETIC LEASE INTERCOMPANY NOTE" means the
intercompany note of the Guarantor dated as of July 10, 2000 having a
principal amount of $300,000,000, evidencing a loan from Midwest to the
Guarantor.
"SYNTHETIC LEASE TRANCHE A LOANS" means the Tranche A
Loans (as defined in the Synthetic Lease Credit Agreement).
(c) SECTION 4.1 of the Guarantee shall be amended by deleting
Section 4.1.1(iii) in its entirety and replacing it with the following:
"concurrently with the delivery of the financial statements
referred to in Clause 4.1.l(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 covenants
set forth in Clause 4.2.9 and 4.2.10;"
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(d) SECTION 4.2 of the Guarantee shall be amended by deleting
Section 4.2.3 in its entirety and replacing it with the following:
"[INTENTIONALLY OMITTED]".
(e) SECTION 4.2 of the Guarantee shall be amended by deleting
Section 4.2.5(ii) in its entirety and replacing it with the following:
"so long as no default (by reason of the violation of Clause
4.2.9 and 4.2.10) 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"
(f) SECTION 4.2 of the Guarantee shall be amended by adding the
following sections:
"Section 4.2.9 INTEREST COVERAGE. The Guarantor will
at the end of each of its fiscal quarters maintain an Interest Coverage Ratio
for the immediately preceding four consecutive fiscal quarters of the
Guarantor of not less than 1.50 to 1.00.
"Section 4.2.10 RECOURSE DEBT TO RECOURSE CAPITAL
RATIO. The Guarantor will at the end of each of its fiscal quarters maintain
a Recourse Debt to Recourse Capital Ratio of not more than 0.675 to 1.00."
Section 3. CONDITIONS PRECEDENT. This Amendment shall become
effective and the Guarantee shall be amended on the date (the "AMENDMENT
EFFECTIVE DATE") on which the Facility Agent shall have executed the
Amendment and shall have received from the Guarantor and the Borrower a copy
of this Amendment duly executed and delivered by the Guarantor and the
Borrower. Notwithstanding the preceding sentence, this Amendment shall not
become effective and the Guarantee shall not be amended on the Amendment
Effective Date (a) if a Potential Event of Default or an Event of Default has
occurred and is continuing on such date and (b) unless, except as disclosed
in the Guarantor's filings with the Securities and Exchange Commission
pursuant to the Exchange Act of 1934 (copies of which have been provided to
the Facility Agent), the representations and warranties of the Guarantor
contained in the Loan Documents are true and correct in all material respects
as of the Amendment Effective Date with the same effect as though such
representations and warranties had been made on and as of the Amendment
Effective Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all material respects as
of such specified date).
AMENDMENT TWO TO GUARANTEE
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Section 4. MISCELLANEOUS. Except as expressly amended hereby, the
Guarantee is hereby reaffirmed in all respects and all of the terms and
provisions of the Guarantee are and shall remain in full force and effect.
This Amendment may be executed in any number of counterparts and by facsimile
signature, all of which taken together shall constitute one and the same
original instrument and any of the parties hereto may execute this Amendment
by signing any such counterpart. This Amendment shall be governed by, and
construed in accordance with, the laws of England.
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AMENDMENT TWO TO GUARANTEE
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their respective officers thereunto duly authorized.
EDISON MISSION ENERGY
By: /s/ G. Xxxx Xxxxxx
-------------------------------------
Name: G. Xxxx Xxxxxx
Title: Treasurer
Date: May 29, 2001
EME FINANCE UK LIMITED
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Director
Date: May 31, 2001
BARCLAYS BANK PLC, as Facility Agent for
the Banks party to the Coal and CAPEX
Facility Agreement
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Manager
Date: May 29, 2001
BARCLAYS BANK PLC, as Facility Agent, on
behalf of, and with the consent of, the
Majority Banks
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
Title: Manager
Date: May 29, 2001
AMENDMENT TWO TO GUARANTEE
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