<PAGE>
As filed with the Securities and Exchange Commission on February 18, 2000
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
Edison Mission Energy
(Exact name of Registrant as specified in its charter)
California 4991 95-4031807
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
---------------
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612
(949) 752-5588
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
Steven D. Eisenberg, Esq.
Edison Mission Energy
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612
(949) 752-5588
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copy to:
Robert M. Chilstrom, Esq.
Harold F. Moore, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
---------------
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
---------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Class Proposed Maximum Proposed
of Securities to Be Amount to Be Offering Maximum Aggregate Amount of
Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.73% Senior Notes due
June 15, 2009.......... $600,000,000 100% $600,000,000 $158,400
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933, as amended.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the Registration Statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 18, 2000
PROSPECTUS
Offer to Exchange $600 Million 7.73% Senior Notes due June 15, 2009 for $600
Million 7.73% Senior Notes due June 15, 2009, Which Have Been Registered Under
the Securities Act of 1933, of
[EDISON MISSION ENERGY LOGO]
The exchange offer will expire at 5:00 P.M.,
New York City time, on , 2000, unless extended.
-----------
Terms of the exchange offer:
. We will exchange all original notes that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
. You may withdraw tenders of original notes at any time prior to the
expiration of the exchange offer.
. We believe that the exchange of original notes will not be a taxable event
for U.S. federal income tax purposes, but you should see "Material United
States Federal Income Tax Considerations" on page 66 for more information.
. We will not receive any proceeds from the exchange offer.
. The terms of the exchange notes are substantially identical to the
original notes, except that the exchange notes are registered under the
Securities Act and the transfer restrictions and registration rights
applicable to the original notes do not apply to the exchange notes.
-----------
See "Risk Factors" beginning on page 9 for a discussion of the risks that
should be considered by holders prior to tendering their original notes.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
-----------
The date of this prospectus is , 2000.
<PAGE>
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events based upon our knowledge of facts as of the date of this
prospectus and our assumptions about future events. These forward-looking
statements are subject to various risks and uncertainties that may be outside
our control, including, among other things:
. general political, economic and business conditions in the countries in
which we do business;
. governmental, statutory, regulatory or administrative changes or
initiatives affecting us or the electricity industry generally;
. political and business risks of international projects, including
uncertainties associated with currency exchange rates, currency
repatriation, expropriation, political instability, privatization
efforts and other issues;
. supply, demand and price for the electric capacity and energy in the
markets served by our generating units;
. competition from other power plants, including new plants that may be
developed in the future;
. operating risks, including equipment failure, dispatch levels,
availability, heat rate and output;
. the cost, availability and pricing of fuel and fuel transportation
services for our generating units; and
. our ability to complete the development or acquisition of current and
future projects.
We use words like "anticipate," "estimate," "project," "plan," "expect,"
"will," "believe" and similar expressions to help identify forward-looking
statements in this prospectus.
For additional factors that could affect the validity of our forward-looking
statements, you should read "Risk Factors" beginning on page 9. In light of
these and other risks, uncertainties and assumptions, actual events or results
may be very different from those expressed or implied in the forward-looking
statements in this prospectus, or may not occur. We have no obligation to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events or otherwise.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act and, in
accordance with these requirements, file reports and information statements and
other information with the Securities and Exchange Commission. These reports
and information statements and other information filed by us with the SEC can
be inspected and copied at the Public Reference Section of the SEC at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of this material can be obtained from the
Public Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The SEC maintains a
Web site that contains reports, proxy and information statements and other
materials that are filed through the SEC's Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system. This Web site can be accessed at
http://www.sec.gov.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the SEC are incorporated by reference
into this prospectus:
(i) Our Annual Report on Form 10-K for the year ended December 31,
1998;
(ii) Our Current Reports on Form 8-K dated March 18, 1999, Form 8-K
dated July 19, 1999, Form 8-K dated December 15, 1999 and two
reports on Form 8-K/A dated July 19, 1999; and
(iii) Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999 and September 30, 1999.
i
<PAGE>
All reports and other documents we subsequently file under Sections 13 and
15(d) of the Securities Exchange Act shall be deemed to be incorporated by
reference into this prospectus and to be part of this prospectus from the date
we subsequently file these reports and documents.
Any statement contained in a document incorporated by reference in this
prospectus will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus modifies
or supersedes this statement. Any statement so modified or superseded will not
be deemed to constitute a part of this prospectus except as so modified or
superseded.
------------
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED
STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS
EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE
CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER
RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE
FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A
TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE
MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH
THE PROVISIONS OF THIS PARAGRAPH.
----------------
ii
<PAGE>
PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes specific terms of the exchange notes we are offering, as
well as information regarding our business and detailed financial data. We
encourage you to read this prospectus in its entirety. You should pay special
attention to the "Risk Factors" section beginning on page 9 of this prospectus.
Summary of the Exchange Offer
On June 28, 1999, we completed the private offering of $600 million
aggregate principal amount of 7.73% Senior Notes due June 15, 2009. As part of
that offering, we entered into a registration rights agreement with the initial
purchasers of these original notes in which we agreed, among other things, to
deliver this prospectus to you and to complete an exchange offer for the
original notes. Below is a summary of the exchange offer.
Securities Offered.......... Up to $600,000,000 aggregate principal amount of
new 7.73% Senior Notes due June 15, 2009, which
have been registered under the Securities Act.
The form and terms of these exchange notes are
identical in all material respects to those of
the original notes. The exchange notes, however,
will not contain transfer restrictions and
registration rights applicable to the original
notes.
The Exchange Offer ......... We are offering to exchange new $1,000 principal
amount of our 7.73% Senior Notes due June 15,
2009, which have been registered under the
Securities Act, for $1,000 principal amount of
our outstanding 7.73% Senior Notes due June 15,
2009.
In order to be exchanged, an original note must
be properly tendered and accepted. All original
notes that are validly tendered and not withdrawn
will be exchanged. As of the date of this
prospectus, there are $600 million principal
amount of original notes outstanding. We will
issue exchange notes promptly after the
expiration of the exchange offer.
Resales..................... Based on interpretations by the staff of the SEC,
as detailed in a series of no-action letters
issued to third parties, we believe that the
exchange notes issued in the exchange offer may
be offered for resale, resold or otherwise
transferred by you without compliance with the
registration and prospectus delivery requirements
of the Securities Act as long as:
. you are acquiring the exchange notes in
the ordinary course of your business;
. you are not participating, do not intend
to participate and have no arrangement or
understanding with any person to
participate, in a distribution of the
exchange notes; and
. you are not an affiliate of ours.
If you are an affiliate of ours, are engaged in
or intend to engage in or have any arrangement or
understanding with any person to participate in
the distribution of the exchange notes:
1
<PAGE>
(1)you cannot rely on the applicable
interpretations of the staff of the SEC
and
(2)you must comply with the registration
requirements of the Securities Act in
connection with any resale transaction.
Each broker or dealer that receives exchange
notes for its own account in exchange for
original notes that were acquired as a result of
market-making or other trading activities must
acknowledge that it will comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with any
offer to resell, resale, or other transfer of the
exchange notes issued in the exchange offer,
including the delivery of a prospectus that
contains information with respect to any selling
holder required by the Securities Act in
connection with any resale of the exchange notes.
Furthermore, any broker-dealer that acquired any
of its original notes directly from us:
. may not rely on the applicable
interpretation of the staff of the SEC's
position and
. must also be named as a selling noteholder
in connection with the registration and
prospectus delivery requirements of the
Securities Act relating to any resale
transaction.
Expiration Date............. 5:00 p.m., New York City time, on , 2000
unless we extend the expiration date.
Accrued Interest on the
Exchange Notes and
Original Notes...........
The exchange notes will bear interest from the
most recent date to which interest has been paid
on the original notes. If your original notes are
accepted for exchange, then you will receive
interest on the exchange notes and not on the
original notes.
Conditions to the Exchange The exchange offer is subject to customary
Offer.................... conditions. We may assert or waive these
conditions in our sole discretion. If we
materially change the terms of the exchange
offer, we will resolicit tenders of the original
notes. See "The Exchange Offer--Conditions to the
Exchange Offer."
Procedures for Tendering
Original Notes...........
Except as described in the section titled "The
Exchange Offer-- Guaranteed Delivery Procedures",
a tendering holder must, on or prior to the
expiration date:
. transmit a properly completed and duly
executed letter of transmittal, including
all other documents required by the letter
of transmittal, to The Bank of New York at
the address listed in this prospectus; or
. if notes are tendered in accordance with
the book-entry procedures described in
this prospectus, the tendering holder must
transmit an agent's message to the
exchange agent at the address listed in
this prospectus.
See "The Exchange Offer--Procedures for
Tendering."
2
<PAGE>
Special Procedures for
Beneficial Holders.......
If you are the beneficial holder of original
notes that are registered in the name of your
broker, dealer, commercial bank, trust company or
other nominee, and you wish to tender in the
exchange offer, you should promptly contact the
person in whose name your original notes are
registered and instruct that person to tender on
your behalf. See "The Exchange Offer--Procedures
for Tendering."
Guaranteed Delivery If you wish to tender your original notes and you
Procedures............... cannot deliver your notes, the letter of
transmittal or any other required documents to
the exchange agent before the expiration date,
you may tender your original notes by following
the guaranteed delivery procedures under the
heading "The Exchange Offer--Guaranteed Delivery
Procedures."
Withdrawal Rights........... Tenders may be withdrawn at any time before 5:00
p.m., New York City time, on the expiration date.
Acceptance of Original
Notes and Delivery of
Exchange Notes........... Subject to the conditions stated in the section
"The Exchange Offer--Conditions to the Exchange
Offer" of this prospectus, we will accept for
exchange any and all original notes which are
properly tendered in the exchange offer before
5:00 p.m., New York City time, on the expiration
date. The exchange notes will be delivered
promptly after the expiration date. See "The
Exchange Offer--Terms of the Exchange Offer."
Material United States
Federal Income Tax
Considerations...........
We believe that your exchange of original notes
for exchange notes to be issued in the exchange
offer will not result in any gain or loss to you
for U.S. federal income tax purposes. See
"Material United States Federal Income Tax
Considerations".
Exchange Agent.............. The Bank of New York is serving as exchange agent
in connection with the exchange offer. The
address and telephone number of the exchange
agent are listed under the heading "The Exchange
Offer--Exchange Agent".
Use of Proceeds............. We will not receive any proceeds from the
issuance of exchange notes in the exchange offer.
We will pay all expenses incident to the exchange
offer. See "Use of Proceeds" and "--The Company--
Recent Developments--Offering of Original Notes."
3
<PAGE>
Summary of Terms of the Exchange Notes
The form and terms of the exchange notes and the original notes are
identical in all material respects, except that transfer restrictions and
registration rights applicable to the original notes do not apply to the
exchange notes. The exchange notes will evidence the same debt as the original
notes and will be governed by the same indenture. Where we refer to "notes" in
this document, we are referring to both original notes and exchange notes.
Aggregate Amount............ $600 million principal amount of 7.73% Senior
Notes due June 15, 2009.
Maturity ................... June 15, 2009.
Interest Rate .............. 7.73% per year.
Interest Payment Dates ..... June 15 and December 15 of each year.
Ranking..................... The notes are senior unsecured obligations and
rank equally with all of our senior unsecured
indebtedness and rank senior to our subordinated
indebtedness. All existing and future liabilities
of our subsidiaries will be effectively senior to
the notes.
As of September 30, 1999, we had total recourse
debt of $1.2 billion, with an additional $4.6
billion of non-recourse debt appearing on our
consolidated balance sheet. The percentage of our
total recourse debt to capitalization was 36% as
of September 30, 1999.
The indenture permits us to incur significant
additional indebtedness. See "Description of the
Notes."
Ratings..................... The notes have been assigned ratings of "A-" by
Standard & Poor's Ratings Group and "A3" by
Moody's Investors Service, Inc.
Optional Redemption......... We may redeem any or all of the notes at a
redemption price equal to the greater of:
. 100% of the principal amount of the notes
being redeemed, and
. the sum of the present values of the
remaining scheduled payments on the notes
being redeemed discounted at a rate based on
the rates of U.S. Treasury securities with
average lives comparable to the remaining
lives of the notes plus 37.5 basis points,
plus accrued and unpaid interest on the
notes being redeemed.
4
<PAGE>
The Company
Edison Mission Energy
We are a leading independent power producer engaged in the business of
developing, acquiring, owning and operating electric power generation
facilities worldwide. Edison International is our parent company and also owns
Southern California Edison Company, one of the largest electric utilities in
the United States. At September 30, 1999, we had consolidated assets of
approximately $11.2 billion and total shareholder's equity of approximately
$2.2 billion.
We were formed in 1986 with two domestic operating projects. Our business
has evolved from the development of contract-based domestic power projects to
the development of contract-based international power projects and the
acquisition of operating generating assets within developed and deregulating
power markets. Currently, we own interests in 72 domestic and international
operating power stations with an aggregate generating capacity of 26,649
megawatts, of which our share is 22,056 megawatts. In addition, we own
interests in one domestic and three international projects that are under
construction. The capacity of these projects is expected to total 1,797
megawatts, of which our anticipated share will be approximately 714 megawatts.
Our Strategic Overview
Our business goal is to be one of the leading owners and operators of
electric generating assets in the world. We play an active role, as a long-term
owner, in all phases of power generation, from planning and development through
construction and commercial operation. We believe that this involvement allows
us to better ensure, with our experienced personnel, that our projects are
well-planned, structured and managed, thus maximizing value creation. We have
separate strategies for developed and developing countries.
In developed countries, we expect that new long-term contracts are likely to
be the exception rather than the rule. Our strategy focuses primarily on three
areas with respect to plants whose output is not committed to be sold under
long-term contracts, which are known as merchant plants:
. we continuously improve our valuation tools, enabling us to bid more
effectively and competitively on assets that will be sold over the next
five years in the United States, the United Kingdom, Spain, Italy,
Australia, New Zealand and other developed countries;
. we draw on our power marketing and trading skills to mitigate price
risks and to enhance the returns of our merchant plants; and
. since our principal customers continue to be regulated utilities, we
strive to understand the regulatory and economic environment in which
these utilities operate so we may better anticipate and prepare for what
they will do.
In developing countries, our strategy focuses on investing with good
partners, securing non-recourse financing based upon long-term contracts with
state-owned utilities, and securing government support from organizations such
as the Export-Import Bank of the United States, the U.S. Overseas Private
Investment Corporation and The Export-Import Bank of Japan.
In making investment decisions, we evaluate potential project returns
against rate of return guidelines. We establish these guidelines by identifying
a base rate of return and adjusting the base rate by potential risk factors,
including risks associated with project location and stage of project
development. We endeavor to mitigate these risks by:
. evaluating all projects and the markets in which they operate;
. selecting partners with complementary skills and local experience;
5
<PAGE>
. structuring investments through subsidiaries;
. managing up-front development costs;
. utilizing limited recourse financing; and
. linking revenue and expense components where appropriate.
Many of our projects are operated by our subsidiaries, which helps us to
preserve and enhance the value of our investments.
In response to increasing globalization of the independent power market, we
have organized our operation and development activities into three geographic
regions: (1) Americas, (2) Asia Pacific and (3) Europe, Central Asia, Middle
East and Africa. Each region is served by one or more teams consisting of
business development, operations, finance and legal personnel, and each team is
responsible for all of our activities within a particular geographic region.
Also, we will mobilize personnel from outside a particular region when needed
in order to assist in the development of projects.
Recent Developments
Completed Acquisitions
In December 1999 we acquired the fossil-fuel generating assets of
Commonwealth Edison Company, totaling 6,812 megawatts of generating capacity,
for approximately $4.1 billion. We will operate these plants, which provide
access to the Mid-America Interconnected Network and the East Central Area
Reliability Council. In connection with this transaction, we entered into power
purchase agreements with Commonwealth Edison with a term of up to five years.
Concurrently with this acquisition we assigned our right to purchase the
Collins Station, a 2,698 megawatt gas and oil-fired generating station located
in Illinois, to a third party. After this assignment we entered into a lease of
the Collins Station with a term of 33.75 years. The aggregate megawatts
purchased or leased as a result of these transactions is 9,510 MW.
During October 1999, we completed the acquisition of the remaining 20% of
the 220 megawatt natural gas-fired Roosecote project located in England.
Consideration for the remaining 20% consisted of a cash payment of
approximately $16.0 million. The acquisition was funded with existing cash.
In July 1999, we acquired 100% of the Ferrybridge and Fiddler's Ferry coal-
fired power plants in the United Kingdom with a total generating capacity of
3,886 megawatts from PowerGen UK plc for approximately $2.0 billion. These
plants, which are in the middle of the order in which plants are called upon to
dispatch electric power, will complement the pumped-storage hydroelectric power
plants we already own in the United Kingdom and will sell power into the
electricity trading market there.
In May 1999, we acquired 40% of Contact Energy Limited from the government
of New Zealand for $635 million. Contact Energy owns and operates nine
hydroelectric, geothermal and natural gas-fired power generating plants in New
Zealand and owns an interest in one operating gas-fired plant in Australia,
with a total aggregate capacity of 2,626 megawatts, of which our share is 949
megawatts. Contact Energy also owns an interest in one project in New Zealand
under construction with an expected generating capacity of 45 megawatts, of
which our share is 18 megawatts.
In March 1999, we acquired 100% of the 1,884 megawatt Homer City Generating
Station for approximately $1.8 billion. This facility is one of the largest
coal-fired plants in the mid-Atlantic region of the United States and has
direct, high voltage interconnections to both the New York Independent System
Operator, which controls the transmission grid and energy and capacity markets
for the State of New York and is commonly known as the NYISO, and the
Pennsylvania-New Jersey-Maryland Power Pool, which is commonly known as the
PJM.
6
<PAGE>
In December 1998, we acquired 50% of the 540 megawatt EcoElectrica liquefied
natural gas-fired combined-cycle cogeneration facility under construction in
Penuelas, Puerto Rico for approximately $243 million. The project also includes
a desalination plant and liquefied natural gas storage and vaporization
facilities, and is expected to commence commercial operation by the first
quarter of 2000.
Offering of Original Notes
On June 28, 1999, we issued and sold the original notes. We used the net
proceeds of that offering, which were approximately $596 million, for general
corporate purposes, including financing the development and construction of new
facilities, additions to working capital, reductions of indebtedness and
financing of capital expenditures and pending or potential acquisitions.
----------------
We are incorporated under the laws of the State of California. Our
headquarters and principal executive offices are located at 18101 Von Karman
Avenue, Suite 1700, Irvine, California 92612, and our telephone number is (949)
752-5588.
7
<PAGE>
Summary Consolidated Financial Data
The following table includes a summary of our consolidated financial data
for the periods indicated. The summary consolidated financial data for the nine
months ended September 30, 1999 and 1998 was derived from our unaudited
consolidated financial statements. The summary consolidated financial data for
the years ended December 31, 1998, 1997, 1996, 1995 and 1994 was derived from
our audited consolidated financial statements. This summary is qualified in its
entirety by the more detailed information and financial statements, including
the notes to these financial statements, included in the documents incorporated
by reference in this prospectus. See "Incorporation of Documents by Reference."
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Years Ended December 31,
--------------------- --------------------------------------
1999 1998 1998 1997 1996 1995 1994
---------- --------- ------ ------ ------ ------ ------
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Operating revenues...... $ 1,076.2 $ 666.7 $893.8 $975.0 $843.6 $467.3 $380.6
Operating expenses...... 666.2 392.9 543.3 581.1 476.5 264.0 199.9
---------- -------- ------ ------ ------ ------ ------
Income from operations.. 410.0 273.8 350.5 393.9 367.1 203.3 180.7
Interest expense........ (245.3) (147.7) (196.1) (223.5) (164.2) (93.1) (89.0)
Interest and other
income................. 21.3 34.4 50.9 53.9 40.7 33.1 38.8
Minority interest....... (3.0) (2.l) (2.8) (38.8) (69.5) (48.3) (46.1)
---------- -------- ------ ------ ------ ------ ------
Income before income
taxes.................. 183.0 158.4 202.5 185.5 174.1 95.0 84.4
Provision for income
taxes.................. 33.0 57.3 70.4 57.4 82.0 31.0 29.4
---------- -------- ------ ------ ------ ------ ------
Income before change in
accounting principle
and extraordinary
loss................... 150.0 101.1 132.1 128.1 92.1 64.0 55.0
Extraordinary loss on
early extinguishment of
debt, net of income tax
benefit................ -- -- -- (13.1) -- -- --
Cumulative effect on
prior years of change
in accounting for
start-up costs......... (13.8) -- -- -- -- -- --
---------- -------- ------ ------ ------ ------ ------
Net income.............. $ 136.2 $ 101.1 $132.1 $115.0 $ 92.1 $ 64.0 $ 55.0
========== ======== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
December 31,
September 30, --------------------------------------------
1999 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data
Assets.................. $11,189.1 $5,158.1 $4,985.1 $5,152.5 $4,374.0 $2,842.9
Current liabilities..... 1,293.0 501.3 339.8 270.9 199.8 170.9
Long-term obligations... 5,105.0 2,396.4 2,532.1 2,419.9 1,839.0 1,159.0
Shareholder's equity.... 2,165.3 957.6 826.6 1,019.9 1,028.5 622.2
</TABLE>
8
<PAGE>
RISK FACTORS
In addition to the information contained elsewhere in this prospectus, the
following risk factors should be carefully considered by each prospective
investor in evaluating an investment in the notes. The following risk factors,
other than "--You may have difficulty selling the notes that you do not
exchange," generally apply to the original notes as well as the exchange notes.
You may have difficulty selling the notes that you do not exchange.
If you do not exchange your original notes for exchange notes in the
exchange offer, you will continue to be subject to the restrictions on transfer
of your original notes described in the legend on your original notes. The
restrictions on transfer of your original notes arise because we issued the
original notes under exemptions from, or in transactions not subject to, the
registration requirements of the Securities Act and applicable state securities
laws. In general, you may only offer or sell the original notes if they are
registered under the Securities Act and applicable state securities laws, or
offered and sold under an exemption from these requirements. We do not intend
to register the original notes under the Securities Act. To the extent original
notes are tendered and accepted in the exchange offer, the trading market, if
any, for the original notes would be adversely affected. See "The Exchange
Offer--Consequences of Exchanging or Failing to Exchange Original Notes."
Our ability to repay our debt depends upon the performance of our subsidiaries.
The original notes are, and the exchange notes will be, exclusively our
obligations and not the obligations of any of our subsidiaries or affiliates.
Because substantially all of our operations are conducted by our project
subsidiaries, our cash flow and ability to service our indebtedness, including
our ability to pay the interest on and principal of the notes when due, are
dependent upon the ability of our subsidiaries to pay dividends and make
distributions to us. Financing agreements for our subsidiaries generally place
limitations on the ability of those subsidiaries to pay dividends, make
distributions or otherwise transfer funds to us. In addition, financing
agreements for our subsidiaries, although generally non-recourse to us, contain
representations, warranties, covenants and other agreements that, if not met,
could lead to a default under these financings. After a default under a project
financing for any reason, project lenders may exercise rights and remedies
typically granted to secured parties, including the ability to take control of
the project's collateral assets or our ownership interest in the project
subsidiary. In addition, we own a minority interest in some of our projects,
and therefore are unable unilaterally to cause dividends or distributions to be
made to us from those operations. Accordingly, we cannot assure you that we
will receive sufficient distributions from our subsidiaries to pay debt service
on the notes when due.
Any right of ours to receive any assets of any of our subsidiaries upon any
liquidation or reorganization of a subsidiary, and the consequent right of
holders of the notes to participate in the distribution of, or to realize
proceeds from, those assets, will be effectively subordinated to the claims of
any of that subsidiary's creditors, including trade creditors and holders of
debt issued by that subsidiary.
The indenture governing the notes imposes no limitations on the ability of
our subsidiaries to permit contractual restrictions on their ability to make
dividends or distributions.
Our substantial amount of indebtedness may effect our ability to service our
indebtedness, finance the acquisition and development of additional projects,
compete effectively or operate successfully under adverse economic conditions.
As of September 30, 1999, we had total recourse debt of $1.2 billion, with
an additional $4.6 billion of non-recourse debt appearing on our consolidated
balance sheet. The percentage of our total recourse debt to capitalization was
36% as of September 30, 1999. The indenture governing the notes imposes no
limitations on our ability to incur additional indebtedness either at the
Edison Mission Energy level or at the subsidiary level.
9
<PAGE>
Our substantial amount of total recourse debt and the debt of our subsidiaries
present the risk that we might not have sufficient cash to service our
indebtedness, including the notes, and that our leveraged capital structure
could limit our ability to finance the acquisition and development of
additional projects, to compete effectively or to operate successfully under
adverse economic conditions. See "Capitalization" and "Selected Consolidated
Financial Data."
Our project acquisitions and developments may not be successful.
The development projects and acquisitions in which we have invested or in
which we may invest in the future, including those described in this
prospectus, may be large and complex, and we may not be able to complete the
development or acquisition of any of these projects. The development of a power
project may require us to expend significant sums for preliminary engineering,
permitting, legal and other expenses before we can determine whether we will
win a competitive bid, or whether a project is feasible, economically
attractive or financeable. Moreover, access to capital for future projects is
uncertain. We cannot assure you that we will be successful in structuring the
financing for our projects on a substantially non-recourse basis or that we
will obtain sufficient additional equity capital, project cash flow or
additional borrowings to enable us to fund the equity commitments required for
future projects.
Power purchase agreements often enable the utility to terminate these
agreements, or to retain security posted by the developer as liquidated
damages, in the event that a project fails to achieve commercial operation or
target operating levels by specified dates or fails to meet other significant
contractual requirements. In addition, most of our acquisition agreements
permit the seller to terminate the agreement or impose penalties if the
acquisition of the project is not achieved by a specified date. If these events
were to occur, the default provisions in a financing agreement could be
triggered, rendering the project debt immediately due and payable, and, as a
result, we could lose our interest in the project.
A significant portion of our projects operate without long-term power purchase
agreements.
A significant portion of the projects in which we have acquired, or are
acquiring, an interest do not have long-term power purchase agreements. As
merchant plants whose output is not committed to be sold under long-term
contracts, these projects are subject to market forces to determine the amount
and price of power that they sell. We cannot assure you that these plants will
be successful in selling power into their respective markets. If they are
unsuccessful, they may not be able to generate enough cash to service their own
debt or to make distributions to us.
In addition, some utilities have brought litigation aimed at forcing the
renegotiation or termination of long-term power purchase agreements based upon,
among other things, revised estimates of avoided cost or power demands. We
cannot assure you that in the future, utilities that purchase power from our
contract-based power plants or other power purchasers that purchase power under
long-term agreements from us will not seek to terminate their existing
agreements with us.
Competition could adversely affect our business.
The global independent power industry is characterized by numerous strong
and capable competitors, some of which may have more extensive operating
experience, more extensive experience in the acquisition and development of
power projects, larger staffs and greater financial resources than we do.
Further, in recent years power markets have been characterized by strong and
increasing competition as a result of regulatory changes and other factors
which have contributed to a reduction in market prices for power. These
regulatory and other changes may continue to increase competitive pressures in
the markets where we operate. Increased competition for our new project
investment opportunities may adversely affect our ability to develop or acquire
projects on economically favorable terms.
10
<PAGE>
Our operations are subject to extensive government regulation, and our
inability to comply with existing regulations or requirements or changes in
applicable regulations or requirements may have a negative impact on our
business, results of operations or financial condition.
Our operations are subject to extensive regulation by governmental agencies
in each of the countries in which we conduct operations. See "Business--
Regulatory Matters." Our domestic projects are subject to energy, environmental
and other governmental laws and regulations at the federal, state and local
levels in connection with the development, ownership and operation of the
projects. Our projects are also subject to federal, state and local laws and
regulations that govern the geographical location, zoning, land use and
operation of a project. Our international projects are subject to the energy,
environmental and other laws and regulations of the foreign jurisdictions in
which these projects are located. The degree of regulation varies according to
each country and may be materially different from the regulatory regimes in the
United States.
We cannot assure you that the introduction of new laws or other future
regulatory developments in countries in which we conduct our business will not
have a material adverse effect on our business, results of operations or
financial condition, nor can we assure you that we will be able to obtain and
comply with all necessary licenses, permits and approvals for our proposed
energy projects. If we cannot comply with all applicable regulations, our
business, results of operations and financial condition could be adversely
affected.
In addition, if any of our projects loses its status as a qualifying
facility, eligible facility or foreign utility company under U.S. federal
regulations, we could become subject to regulation as a "holding company" under
the Public Utility Holding Company Act. See "Business--Regulatory Matters."
General operating risks and catastrophic events may reduce revenues generated
by our projects or increase their operating costs.
The operation of power generating plants involves many risks, including:
. start-up problems;
. the breakdown or failure of equipment or processes;
. performance below expected levels of output;
. the inability to meet expected efficiency standards;
. operator error; and
. catastrophic events such as earthquakes, landslides, fires, floods,
explosions or similar calamities.
The occurrence of any of these events could significantly reduce revenues
generated by our projects or increase their generating expenses, thus
diminishing distributions by the projects to us and, as a result, our ability
to make payments on the notes. Equipment and plant warranties and insurance
obtained by us may not be adequate to cover lost revenues or increased expenses
and, as a result, a project may be unable to fund principal and interest
payments under its financing obligations and may operate at a loss. A default
under a financing obligation could cause us to lose our interest in that
project.
Our international projects are subject to risks of doing business in foreign
countries.
Our international projects are subject to political and business risks,
including uncertainties associated with currency exchange rates, currency
repatriation, expropriation, political instability, privatization efforts and
other issues that have the potential to impair these projects from making
dividends or other distributions to us and against which we may not be fully
capable of insuring. In particular, fluctuations in currency exchange rates can
affect, on a U.S. dollar equivalent basis, the amount of our equity
contributions to, and distributions from, our international projects. At times,
we have hedged a portion of our exposure to fluctuations in currency exchange
rates. However, hedge contracts may involve risks, including counterparty
default, and we cannot assure you that fluctuations in currency exchange rates
will be fully offset by these hedges or that these hedges will be available
throughout the term of the notes.
11
<PAGE>
On October 7, 1999, Indonesia's state-owned electricity company, PT
Perusahaan Listrik Negara, filed a lawsuit in the Central Jakarta District
Court against our 40%-owned subsidiary PT Paiton Energy seeking to annul its
contract to purchase power from Paiton Energy's coal-fired 1,230 megawatt
generating station located in East Java, Indonesia on the basis that the power
purchase agreement for this generating station is the result of corruption,
cronyism and nepotism and is "one-sided and against the public interest." This
contract is currently the sole source of revenue for this generating station.
In response, and to protect the integrity of the power purchase agreement,
Paiton Energy commenced arbitration proceedings against PT Perusahaan and the
Government of Indonesia. On January 20, 2000, PT Perusahaan withdrew its
lawsuit and Paiton Energy terminated the arbitration proceedings against PT
Perusahaan and the Government of Indonesia, and the parties have commenced
negotiation of an interim agreement which will provide for administration of
the power purchase agreement until a long-term arrangement is reached.
Additionally, PT Perusahaan has failed to pay Paiton Energy in respect of the
last eight invoices Paiton Energy has issued and has paid only a portion of
another invoice. In response to PT Perusahaan's failure to pay and the
occurrence of other events which, with the giving of notice or passage of time,
may mature into defaults of this generating station's debt agreements, Paiton
Energy entered into an interim agreement on October 15, 1999 with its lenders
under which the lenders waived specified defaults under the project's debt
agreement until July 31, 2000, including those resulting from the events
described above. However, this waiver may expire on an earlier date if
additional defaults, other than those specifically waived, or other specified
events occur. The interim agreement requires us and other shareholders of
Paiton Energy to contribute additional equity from time to time as needed for
the payment of interest on the project's debt, operating costs which become due
and payable during the term of the interim agreement and costs related to the
construction of the project. Under the interim agreement the amount of
contingent equity used for the project's construction costs cannot exceed $30
million. Our maximum share of the total unfunded contingent equity commitments
at December 31, 1999 was $111 million. As of December 31, 1999, our total
investment in the Paiton project was approximately $419 million.
Generally, the uncertainty of the legal structure in foreign countries in
which we may develop or acquire projects could make it more difficult to
enforce our rights under agreements relating to these projects. In addition,
the laws and regulations of some countries may limit our ability to hold a
majority interest in some of the projects that we may develop or acquire.
Risks associated with the year 2000 problem could adversely effect our
business.
We have successfully implemented systems to address year 2000 issues. We
cannot assure you, however, that our year 2000 compliance will not require
additional expenditures in the future. As of the date of this prospectus, we
are not aware of any Year 2000 problem of our systems and services. In
addition, we have not received any notification from any supplier or systems of
any Year 2000-related disruption in their business. However, the success to
date of our Year 2000 efforts and the efforts of our third party suppliers
cannot guarantee that there will not be a material adverse effect on our
business should a Year 2000 problem manifest or become apparent in the future.
Broker-dealers may become subject to the registration and prospectus delivery
requirements of the Securities Act.
Any broker-dealer that:
. exchanges its original notes in the exchange offer for the purpose of
participating in a distribution of the exchange notes, or
. resells exchange notes that were received by it for its own account in
the exchange offer,
may be deemed to have received restricted securities and may be required to
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction by that broker-dealer.
Any profit on the resale of the exchange notes and any commission or
concessions received by a broker-dealer may be deemed to be underwriting
compensation under the Securities Act.
12
<PAGE>
You may find it difficult to sell your notes because there is no existing
trading market for the exchange notes.
You may find it difficult to sell your notes because an active trading
market for the notes may not develop. The exchange notes are being offered to
the holders of the original notes. The original notes were issued on June 28,
1999 primarily to a small number of institutional investors and overseas
investors. After the exchange offer, the trading market for the remaining
untendered original notes could be adversely affected.
There is no existing trading market for the exchange notes. We do not intend
to apply for listing or quotation of the exchange notes on any exchange.
Therefore, we do not know the extent to which investor interest will lead to
the development of a trading market or how liquid that market might be.
Although the initial purchasers of the original notes have informed us that
they currently intend to make a market in the exchange notes, they are not
obligated to do so, and any market-making may be discontinued at any time
without notice. As a result, the market price of the exchange notes could be
adversely affected.
13
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the exchange offer. In consideration
for issuing the exchange notes, we will receive in exchange original notes of
like principal amount, the terms of which are identical in all material
respects to the exchange notes. The original notes surrendered in exchange for
exchange notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the exchange notes will not result in any increase in
our indebtedness. We have agreed to bear the expenses of the exchange offer. No
underwriter is being used in connection with the exchange offer.
On June 28, 1999, we issued and sold the original notes. We used the net
proceeds of that offering, which were approximately $596 million, for general
corporate purposes, including financing the development and construction of new
facilities, additions to working capital, reductions of indebtedness and
financing of capital expenditures and pending or potential acquisitions.
CAPITALIZATION
The following table includes the consolidated capitalization of Edison
Mission Energy as of September 30, 1999 and reflects the issuance of the
original bonds and application of the proceeds from the issuance of the
original bonds as discussed in "Use of Proceeds."
<TABLE>
<CAPTION>
As of
September 30,
1999
-------------
(in millions)
<S> <C>
Short-Term Indebtedness........................................... $ 440.6
Long-Term Indebtedness............................................ 798.1
--------
Total Indebtedness(1)........................................... $1,238.7
Shareholder's Equity.............................................. $2,165.3
--------
Total Capitalization............................................ $3,404.0
========
</TABLE>
- --------
(1) Excludes our subsidiary indebtedness of $4.6 billion as of September 30,
1999.
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table includes a summary of our consolidated financial data
for the periods indicated. The summary consolidated financial data for the nine
months ended September 30, 1999 and 1998 was derived from our unaudited
consolidated financial statements. The summary consolidated financial data for
the years ended December 31, 1998, 1997, 1996, 1995 and 1994 was derived from
our audited consolidated financial statements. This summary is qualified in its
entirety by the more detailed information and financial statements, including
the notes to those financial statements, included in the documents incorporated
by reference in this prospectus. See "Incorporation of Documents by Reference."
<TABLE>
<CAPTION>
Nine Months
Ended September 30, Years Ended December 31,
---------------------- ----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- -------- ------
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Operating revenues................ $ 1,076.2 $ 666.7 $ 893.8 $ 975.0 $ 843.6 $ 467.3 $380.6
Operating expenses................ 666.2 392.9 543.3 581.1 476.5 264.0 199.9
--------- -------- -------- -------- -------- -------- ------
Income from operations............ 410.0 273.8 350.5 393.9 367.1 203.3 180.7
Interest expense.................. (245.3) (147.7) (196.1) (223.5) (164.2) (93.1) (89.0)
Interest and other income......... 21.3 34.4 50.9 53.9 40.7 33.1 38.8
Minority interest................. (3.0) (2.1) (2.8) (38.8) (69.5) (48.3) (46.1)
--------- -------- -------- -------- -------- -------- ------
Income before income taxes........ 183.0 158.4 202.5 185.5 174.1 95.0 84.4
Provision for income taxes........ 33.0 57.3 70.4 57.4 82.0 31.0 29.4
--------- -------- -------- -------- -------- -------- ------
Income before change in accounting
principle and extraordinary loss.. 150.0 101.1 132.1 128.1 92.1 64.0 $ 55.0
Extraordinary loss on early
extinguishment of debt, net of
income tax benefit............... -- -- -- (13.1) -- -- --
Cumulative effect on prior years
of change in accounting for
start-up costs................... (13.8) -- -- -- -- -- --
--------- -------- -------- -------- -------- -------- ------
Net income........................ $ 136.2 $ 101.1 $ 132.1 $ 115.0 $ 92.1 $ 64.0 $ 55.0
========= ======== ======== ======== ======== ======== ======
<CAPTION>
December 31,
September 30, ------------------------------------------------
1999 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data
Assets............................ $11,189.1 $5,158.1 $4,985.1 $5,152.5 $4,374.0 $2,842.9
Current liabilities............... 1,293.0 501.3 339.8 270.9 199.8 170.9
Long-term obligations............. 5,105.0 2,396.4 2,532.1 2,419.9 1,839.0 1,159.0
Shareholder's equity.............. 2,165.3 957.6 826.6 1,019.9 1,028.5 622.2
<CAPTION>
Nine Months
Ended September 30, Years Ended December 31,
---------------------- ----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Other Data
Ratio of earnings to fixed
charges(1)....................... 1.5 1.7 1.7 1.6 1.4 1.3 1.2
</TABLE>
- --------
(1) For purposes of computing the ratio of earnings to fixed charges, earnings
are divided by fixed charges. "Earnings" represent the aggregate of income
(loss) before income taxes of Edison Mission Energy (adjusted for the
excess or shortfall of dividends or other distributions over equity in
earnings of less than 50%-owned entities), amortization of previously
capitalized interest and fixed charges (net of capitalized interest).
"Fixed charges" represent interest (whether expensed or capitalized), the
amortization of debt discount and the interest portion of rentals.
15
<PAGE>
THE EXCHANGE OFFER
Terms of the Exchange Offer
Upon the terms and conditions described in this prospectus and in the
accompanying letter of transmittal, which together constitute the exchange
offer, we will accept for exchange original notes which are properly tendered
on or before the expiration date and not withdrawn as permitted below. As used
in this prospectus, the term "expiration date" means 5:00 p.m., New York City
time, on , 2000. However, if we, in our sole discretion, have extended the
period of time for which the exchange offer is open, the term "expiration date"
means the latest time and date to which we extend the exchange offer. The
exchange offer, however, will not be in effect any longer than 45 business days
from the date of this prospectus.
As of the date of this prospectus, $600 million aggregate principal amount
of the original notes is outstanding. This prospectus, together with the letter
of transmittal, is first being sent on or about , 2000, to all holders of
original notes known to us. Our obligation to accept original notes for
exchange in the exchange offer is subject to the conditions described below
under "--Conditions to the Exchange Offer."
We reserve the right to extend the period of time during which the exchange
offer is open. We would then delay acceptance for exchange of any original
notes by giving oral or written notice of an extension to the holders of
original notes as described below. During any extension period, all original
notes previously tendered will remain subject to the exchange offer and may be
accepted for exchange by us. Any original notes not accepted for exchange will
be returned to the tendering holder after the expiration or termination of the
exchange offer.
Original notes tendered in the exchange offer must be in denominations of
principal amount of $1,000 and any integral multiple of $1,000.
We reserve the right to amend or terminate the exchange offer, and not to
accept for exchange any original notes not previously accepted for exchange,
upon the occurrence of any of the conditions of the exchange offer specified
below under "--Conditions to the Exchange Offer." We will give oral or written
notice of any extension, amendment, non-acceptance or termination to the
holders of the original notes as promptly as practicable. If we materially
change the terms of the exchange offer, we will resolicit tenders of the
original notes, file a post-effective amendment to the prospectus and provide
notice to the noteholders. If the change is made less than 5 business days
before the expiration of the exchange offer, we will extend the offer so that
the noteholders have at least 5 business days to tender or withdraw. We will
notify you of any extension by means of a press release or other public
announcement no later than 9:00 a.m., New York City time on that date.
Our acceptance of the tender of original notes by a tendering holder will
form a binding agreement upon the terms and subject to the conditions provided
in this prospectus and in the accompanying letter of transmittal.
Procedures for Tendering
Except as described below, a tendering holder must, on or prior to the
expiration date:
. transmit a properly completed and duly executed letter of transmittal,
including all other documents required by the letter of transmittal, to
The Bank of New York at the address listed below under the heading "--
Exchange Agent;" or
. if notes are tendered in accordance with the book-entry procedures
listed below, the tendering holder must transmit an agent's message to
the exchange agent at the address listed below under the heading "--
Exchange Agent."
In addition:
. the exchange agent must receive, on or before the expiration date,
certificates for the original notes; or
16
<PAGE>
. a timely confirmation of book-entry transfer of the original notes into
the exchange agent's account at The Depository Trust Company, the book-
entry transfer facility, along with the letter of transmittal or an
agent's message; or
. the holder must comply with the guaranteed delivery procedures described
below.
The Depository Trust Company will be referred to as DTC in this prospectus.
The term "agent's message" means a message, transmitted to DTC and received
by the exchange agent and forming a part of a book-entry transfer, that states
that DTC has received an express acknowledgment that the tendering holder
agrees to be bound by the letter of transmittal and that we may enforce the
letter of transmittal against this holder.
The method of delivery of original notes, letters of transmittal and all
other required documents is at your election and risk. If the delivery is by
mail, we recommend that you use registered mail, properly insured, with return
receipt requested. In all cases, you should allow sufficient time to assure
timely delivery. You should not send letters of transmittal or original notes
to us.
If you are a beneficial owner whose original notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee, and
wish to tender, you should promptly instruct the registered holder to tender on
your behalf. Any registered holder that is a participant in DTC's book-entry
transfer facility system may make book-entry delivery of the original notes by
causing DTC to transfer the original notes into the exchange agent's account.
Signatures on a letter of transmittal or a notice of withdrawal must be
guaranteed unless the original notes surrendered for exchange are tendered:
. by a registered holder of the original notes who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
. for the account of an "eligible institution."
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantees must be by an "eligible institution."
An "eligible institution" is a financial institution--including most banks,
savings and loan associations and brokerage houses--that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program.
We will determine in our sole discretion all questions as to the validity,
form and eligibility of original notes tendered for exchange. This discretion
extends to the determination of all questions concerning the timing of receipts
and acceptance of tenders. These determinations will be final and binding.
We reserve the right to reject any particular original note not properly
tendered or any which acceptance might, in our judgment or our counsel's
judgment, be unlawful. We also reserve the right to waive any defects or
irregularities or conditions of the exchange offer as to any particular
original note either before or after the expiration date, including the right
to waive the ineligibility of any tendering holder. Our interpretation of the
terms and conditions of the exchange offer as to any particular original note
either before or after the expiration date, including the letter of transmittal
and the instructions to the letter of transmittal, shall be final and binding
on all parties. Unless waived, any defects or irregularities in connection with
tenders of original notes must be cured within a reasonable period of time.
Neither we, the exchange agent nor any other person will be under any duty to
give notification of any defect or irregularity in any tender of original
notes. Nor will we, the exchange agent or any other person incur any liability
for failing to give notification of any defect or irregularity.
17
<PAGE>
If the letter of transmittal is signed by a person other than the registered
holder of original notes, the letter of transmittal must be accompanied by a
written instrument of transfer or exchange in satisfactory form duly executed
by the registered holder with the signature guaranteed by an eligible
institution. The original notes must be endorsed or accompanied by appropriate
powers of attorney. In either case, the original notes must be signed exactly
as the name of any registered holder appears on the original notes.
If the letter of transmittal or any original notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, these persons should so indicate when signing. Unless waived by us,
proper evidence satisfactory to us of their authority to so act must be
submitted.
By tendering, each holder will represent to us that, among other things,
. the exchange notes are being acquired in the ordinary course of business
of the person receiving the exchange notes, whether or not that person
is the holder and
. neither the holder nor the other person has any arrangement or
understanding with any person to participate in the distribution of the
exchange notes.
In the case of a holder that is not a broker-dealer, that holder, by
tendering, will also represent to us that the holder is not engaged in and does
not intend to engage in a distribution of the exchange notes.
If any holder or other person is an "affiliate" of ours, as defined under
Rule 405 of the Securities Act, or is engaged in, or intends to engage in, or
has an arrangement or understanding with any person to participate in, a
distribution of the exchange notes, that holder or other person can not rely on
the applicable interpretations of the staff of the SEC and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes, where the original notes were acquired by it as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus that meets the requirements of
the Securities Act in connection with any resale of the exchange notes. The
letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
Acceptance of Original Notes for Exchange; Delivery of Exchange Notes
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration date, all original notes properly
tendered. We will issue the exchange notes promptly after acceptance of the
original notes. See "--Conditions to the Exchange Offer" below. For purposes of
the exchange offer, we will be deemed to have accepted properly tendered
original notes for exchange when, as and if we have given oral or written
notice to the exchange agent, with prompt written confirmation of any oral
notice.
For each original note accepted for exchange, the holder of the original
note will receive an exchange note having a principal amount equal to that of
the surrendered original note. The exchange notes will bear interest from the
most recent date to which interest has been paid on the original notes.
Accordingly, registered holders of exchange notes on the relevant record date
for the first interest payment date following the completion of the exchange
offer will receive interest accruing from the most recent date to which
interest has been paid. Original notes accepted for exchange will cease to
accrue interest from and after the date of completion of the exchange offer.
Holders of original notes whose original notes are accepted for exchange will
not receive any payment for accrued interest on the original notes otherwise
payable on any interest payment date the record date for which occurs on or
after completion of the exchange offer and will be deemed to have waived their
rights to receive the accrued interest on the original notes.
18
<PAGE>
In all cases, issuance of exchange notes for original notes will be made
only after timely receipt by the exchange agent of:
. certificates for the original notes, or a timely book-entry confirmation
of the original notes, into the exchange agent's account at the book-
entry transfer facility,
. a properly completed and duly executed letter of transmittal or an
agent's message and;
. all other required documents.
Unaccepted or non-exchanged original notes will be returned without expense
to the tendering holder of the original notes. In the case of original notes
tendered by book-entry transfer in accordance with the book- entry procedures
described below, the non-exchanged original notes will be credited to an
account maintained with the book-entry transfer facility, as promptly as
practicable after the expiration or termination of the exchange offer.
Book-Entry Transfer
The exchange agent will make a request to establish an account for the
original notes at the DTC for purposes of the exchange offer within two
business days after the date of this prospectus. Any financial institution that
is a participant in DTC's systems must make book-entry delivery of original
bonds by causing DTC to transfer those original bonds into the exchange agent's
account at DTC in accordance with DTC's procedure for transfer. This
participant should transmit its acceptance to DTC on or prior to the expiration
date or comply with the guaranteed delivery procedures described below. DTC
will verify this acceptance, execute a book-entry transfer of the tendered
original bonds into the exchange agent's account at DTC and then send to the
exchange agent confirmation of this book-entry transfer. The confirmation of
this book-entry transfer will include an agent's message confirming that DTC
has received an express acknowledgement from this participant that this
participant has received and agrees to be bound by the letter of transmittal
and that we may enforce the letter of transmittal against this participant.
Delivery of exchange bonds issued in the exchange offer may be effected through
book-entry transfer at DTC. However, the letter of transmittal or facsimile of
it or an agent's message, with any required signature guarantees and any other
required documents, must:
(1) be transmitted to and received by the exchange agent at the address
listed below under "--Exchange Agent" on or prior to the expiration
date; or
(2) comply with the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If a registered holder of original notes desires to tender the original
notes, and the original notes are not immediately available, or time will not
permit the holder's original notes or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer described above cannot be completed on a timely basis, a tender may
nonetheless be made if:
. the tender is made through an eligible institution;
. prior to the expiration date, the exchange agent received from an
eligible institution a properly completed and duly executed letter of
transmittal, or a facsimile of the letter of transmittal, and notice of
guaranteed delivery, substantially in the form provided by us, by
facsimile transmission, mail or hand delivery,
(a) stating the name and address of the holder of original notes and
the amount of original notes tendered,
(b) stating that the tender is being made and
(c) guaranteeing that within three New York Stock Exchange trading days
after the expiration date, the certificates for all physically
tendered original notes, in proper form for transfer, or a book-
19
<PAGE>
entry confirmation, as the case may be, and any other documents
required by the letter of transmittal will be deposited by the
eligible institution with the exchange agent; and
. the certificates for all physically tendered original notes, in proper
form for transfer, or a book-entry confirmation, as the case may be, and
all other documents required by the letter of transmittal, are received
by the exchange agent within three New York Stock Exchange trading days
after the expiration date.
Withdrawal Rights
Tenders of original notes may be withdrawn at any time before 5:00 p.m., New
York City time, on the expiration date.
For a withdrawal to be effective, the exchange agent must receive a written
notice of withdrawal at the address or, in the case of eligible institutions,
at the facsimile number, indicated below under "--Exchange Agent" before 5:00
p.m., New York City time, on the expiration date. Any notice of withdrawal
must:
. specify the name of the person, referred to as the depositor, having
tendered the original notes to be withdrawn;
. identify the notes to be withdrawn, including the certificate number or
numbers and principal amount of the original notes;
. contain a statement that the holder is withdrawing his election to have
the original notes exchanged;
. be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the original notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer to have the trustee with respect to the original
notes register the transfer of the original notes in the name of the
person withdrawing the tender; and
. specify the name in which the original notes are registered, if
different from that of the depositor.
If certificates for original notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of these
certificates the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and signed notice of withdrawal with
signatures guaranteed by an eligible institution unless this holder is an
eligible institution. If original notes have been tendered in accordance with
the procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the book-entry transfer
facility to be credited with the withdrawn original notes. We will determine
all questions as to the validity, form and eligibility, including time of
receipt, of notices of withdrawal. Any original notes so withdrawn will be
deemed not to have been validly tendered for exchange. No exchange notes will
be issued unless the original notes so withdrawn are validly retendered. Any
original notes that have been tendered for exchange, but which are not
exchanged for any reason, will be returned to the tendering holder without cost
to the holder. In the case of original notes tendered by book-entry transfer,
the original notes will be credited to an account maintained with the book-
entry transfer facility for the original notes. Properly withdrawn original
notes may be retendered by following the procedures described under " --
Procedures for Tendering" above at any time on or before 5:00 p.m., New York
City time, on the expiration date.
20
<PAGE>
Conditions to the Exchange Offer
Notwithstanding any other provision of the exchange offer, we shall not be
required to accept for exchange, or to issue exchange notes in exchange for,
any original notes, and may terminate or amend the exchange offer, if at any
time before the acceptance of the original notes for exchange or the exchange
of the exchange notes for the original notes, any of the following events shall
occur:
. there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission:
(1) seeking to restrain or prohibit the making or completion of the
exchange offer or any other transaction contemplated by the
exchange offer, or assessing or seeking any damages as a result of
this transaction,
(2) resulting in a material delay in our ability to accept for exchange
or exchange some or all of the original notes in the exchange
offer; or any statute, rule, regulation, order or injunction shall
be sought, proposed, introduced, enacted, promulgated or deemed
applicable to the exchange offer or any of the transactions
contemplated by the exchange offer by any governmental authority,
domestic or foreign, or
(3) any action shall have been taken, proposed or threatened, by any
governmental authority, domestic or foreign, that in our sole
judgment might directly or indirectly result in any of the
consequences referred to in clauses (1) or (2) above or, in our
sole judgment, might result in the holders of exchange notes having
obligations with respect to resales and transfers of exchange notes
which are greater than those described in the interpretation of the
SEC referred to above, or would otherwise make it inadvisable to
proceed with the exchange offer; or
. there shall have occurred:
(1) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in
the over-the-counter market;
(2) any limitation by a governmental authority which may adversely
affect our ability to complete the transactions contemplated by the
exchange offer;
(3) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the
extension of credit; or
(4) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United
States, or, in the case of any of the preceding events existing at
the time of the commencement of the exchange offer, a material
acceleration or worsening of these calamities; or
. any change, or any development involving a prospective change, shall
have occurred or be threatened in our business, financial condition,
operations or prospects and those of our subsidiaries taken as a whole
that is or may be adverse to us, or we shall have become aware of facts
that have or may have an adverse impact on the value of the original
notes or the exchange notes; which in our sole judgment in any case
makes it inadvisable to proceed with the exchange offer and/or with such
acceptance for exchange or with such exchange.
These conditions to the exchange offer are to our sole benefit and we may
assert them regardless of the circumstances giving rise to any of these
conditions, or we may waive them in whole or in part in our sole discretion. If
we do so, the exchange offer will remain open for at least 5 business days
following any waiver of the preceding conditions. Our failure at any time to
exercise any of the foregoing rights will not be deemed a waiver of any right.
21
<PAGE>
In addition, we will not accept for exchange any original notes tendered,
and no exchange notes will be issued in exchange for any original notes, if at
this time any stop order is threatened or in effect relating to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture under the Trust Indenture Act of 1939.
Exchange Agent
We have appointed The Bank of New York as the exchange agent for the
exchange offer. You should direct all executed letters of transmittal to the
exchange agent at the address indicated below. You should direct questions and
requests for assistance, requests for additional copies of this prospectus or
of the letter of transmittal and requests for notices of guaranteed delivery to
the exchange agent addressed as follows:
Delivery To: The Bank of New York, Exchange Agent
By Hand or Overnight Delivery: By Registered or Certified Mail:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street,
Seventh Floor E Seventh Floor E
New York, NY 10288 New York, NY 10288
Attention: Ayikwei Aryeetey Attention: Ayikwei Aryeetey
Reorganization Department Reorganization Department
For Information Call:
(212) 815-3687
By Facsimile Transmission
(for Eligible Institutions only):
(212) 571-6339
Confirm by Telephone:
(212) 815-3687
If you deliver the letter of transmittal to an address other than any
address indicated above or transmit instructions via facsimile other than any
facsimile number indicated, then your delivery or transmission will not
constitute a valid delivery of the letter of transmittal.
Fees and Expenses
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the exchange offer. The estimated cash expenses to be incurred
in connection with the exchange offer will be paid by us. We estimate these
expenses in the aggregate to be approximately $500,000.
Accounting Treatment
We will not recognize any gain or loss for accounting purposes upon the
consummation of the exchange offer. We will amortize the expense of the
exchange offer over the term of the exchange notes under generally accepted
accounting principles.
Transfer Taxes
Holders who tender their original notes for exchange will not be obligated
to pay any related transfer taxes, except that holders who instruct us to
register exchange notes in the name of, or request that original notes not
tendered or not accepted in the exchange offer be returned to, a person other
than the registered tendering holder will be responsible for the payment of any
applicable transfer taxes.
22
<PAGE>
Consequences of Exchanging or Failing to Exchange Original Notes
Holders of original notes who do not exchange their original notes for
exchange notes in the exchange offer will continue to be subject to the
provisions in the indenture regarding transfer and exchange of the original
notes and the restrictions on transfer of the original notes as described in
the legend on the notes as a consequence of the issuance of the original notes
under exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, the original notes may not be offered or sold, unless registered under
the Securities Act, except under an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. As
discussed in "Exchange Offer; Registration Rights," we do not currently
anticipate that we will register original notes under the Securities Act.
Based on interpretations by the staff of the SEC, as described in no-action
letters issued to third parties, we believe that exchange notes issued in the
exchange offer in exchange for original notes may be offered for resale, resold
or otherwise transferred by holders of the original notes, other than any
holder which is an "affiliate" of ours within the meaning of Rule 405 under the
Securities Act, without compliance with the registration and prospectus
delivery provisions of the Securities Act, if the exchange notes are acquired
in the ordinary course of the holders' business and the holders have no
arrangement or understanding with any person to participate in the distribution
of the exchange notes. However, the SEC has not considered the exchange offer
in the context of a no-action letter. We cannot assure you that the staff of
the SEC would make a similar determination with respect to the exchange offer
as in the other circumstances. Each holder, other than a broker-dealer, must
acknowledge that it is not engaged in, and does not intend to engage in, a
distribution of exchange notes and has no arrangement or understanding to
participate in a distribution of exchange notes. If any holder is an affiliate
of ours, is engaged in or intends to engage in or has any arrangement or
understanding with any person to participate in the distribution of the
exchange notes to be acquired in the exchange offer, that holder:
(1) could not rely on the applicable interpretations of the staff of the
SEC, and
(2) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives exchange notes for its own account in
exchange for original notes must acknowledge that the original notes were
acquired by the broker-dealer as a result of market-making activities or other
trading activities and that it will comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale of
the exchange notes. Furthermore, any broker-dealer that acquired any of its
original notes directly from us:
. may not rely on the applicable interpretation of the staff of the SEC's
position contained in Exxon Capital Holdings Corp., SEC no-action letter
(April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June
5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983)
and
. must also be named as a selling noteholder in connection with the
registration and prospectus delivery requirements of the Securities Act
relating to any resale transaction.
See "Plan of Distribution."
In addition, to comply with state securities laws, the exchange notes may
not be offered or sold in any state unless they have been registered or
qualified for sale in such state or an exemption from registration or
qualification, with which there has been compliance, is available. The offer
and sale of the exchange notes to "qualified institutional buyers," as defined
under Rule 144A of the Securities Act, is generally exempt from registration or
qualification under the state securities laws. We currently do not intend to
register or qualify the sale of exchange notes in any state where an exemption
from registration or qualification is required and not available.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains forward-looking statements regarding
Edison Mission Energy. These statements are based on our current plans and
expectations that involve risks and uncertainties which could cause actual
future activities and results of operations to be materially different from
those presented in the forward-looking statements. Important factors that could
cause actual results to differ include risks listed in "Risk Factors." Unless
otherwise indicated, the information presented in this section is with respect
to Edison Mission Energy and its consolidated subsidiaries.
General
We are a leading independent power producer engaged in the business of
developing, acquiring, owning and operating electric power generation
facilities worldwide. Our current investments include interests in 72 domestic
and international operating power stations with an aggregate generating
capacity of 26,649 MW, of which our share is approximately 22,056 MW. In
addition, we own interests in one domestic and three international projects
that are under construction. The capacity of these projects is expected to
total 1,797 MW, of which our anticipated share will be approximately 714 MW.
Our consolidated operating revenues are derived primarily from electric
revenues and equity in income from energy projects. Consolidated operating
revenues also include equity in income from oil and gas investments and revenue
attributable to operation and maintenance services.
Our acquisitions of interests in the projects described in "Business," each
have been accounted for utilizing the purchase method. The purchase prices were
allocated to the assets acquired and liabilities assumed based on their
respective fair market values. Our consolidated statement of income for the
nine months ended September 30, 1999 reflects the operations of the Homer City
project beginning March 18, 1999, Contact Energy beginning May 1, 1999 and
Ferrybridge and Fiddler's Ferry beginning July 19, 1999.
Results of Operations for the Nine Months Ended September 30, 1999
Operating Revenues
Operating revenues increased $309.6 million and $409.5 million for the third
quarter and nine months ended September 30, 1999, respectively, compared with
the corresponding periods of 1998, resulting primarily from increases in
electric revenues and equity in income from energy projects. Electric revenues
increased $302.1 million and $374.5 million for the third quarter and nine
months ended September 30, 1999, respectively, compared with the corresponding
periods of 1998, primarily due to revenues from Homer City, acquired in March
1999 and Ferrybridge and Fiddler's Ferry, acquired in July 1999. Equity in
income from energy projects increased $31.7 million during the nine months
ended September 30, 1999, compared with the corresponding period of 1998. The
increase for the nine month period was primarily the result of higher revenues
from several cogeneration projects due to a final settlement on energy pricing
for prior years and a gain on sale of a power sales agreement.
Due to warmer weather during the summer months, electric revenues generated
from Homer City are usually higher during the third quarter of each year. In
addition, our third quarter revenues from energy projects are materially higher
than other quarters of the year due to a significant number of our domestic
energy projects located on the West Coast which generally have power sales
contracts that provide for higher payments during summer months.
Operating Expenses
Operating expenses increased $190.3 million and $273.4 million for the third
quarter and nine months ended September 30, 1999, respectively, compared with
the same prior year periods. These increases are due to
24
<PAGE>
higher fuel, plant operations, depreciation and amortization and administrative
and general expenses. The increases in fuel expense, plant operations and
depreciation and amortization are primarily the result of expenses at Homer
City, acquired in March 1999 and Ferrybridge and Fiddler's Ferry, acquired in
July 1999. The increase in administrative and general expenses was primarily
related to increased project development and acquisition costs.
Other Income (Expense)
Interest expense increased $60.5 million and $93 million for the third
quarter and nine months ended September 30, 1999, respectively, compared with
the same prior year periods. The increase was primarily the result of
additional debt financing of the Homer City and Ferrybridge and Fiddler's Ferry
acquisitions.
Provision for Income Taxes
We recorded an effective tax provision rate of 18% for the nine months ended
September 30, 1999, compared with a 36% rate for the same prior year period.
The decrease in the 1999 effective tax rate was primarily due to lower foreign
income taxes that result from the permanent reinvestment of earnings from
foreign affiliates located in different foreign tax jurisdictions.
Cumulative Effect of Change in Accounting Principle
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities,"
which became effective in January 1999. The Statement requires that specified
costs related to start-up activities be expensed as incurred and that specified
previously capitalized costs be expensed and reported as a cumulative change in
accounting principle. The impact of adopting SOP 98-5 on our net income was
$13.8 million, after tax.
Annual Results of Operations
Operating Revenues
Operating revenues decreased approximately 8% in 1998 compared to 1997, and
increased approximately 16% in 1997 compared to 1996. The 1998 decrease was
primarily due to the Loy Yang B project's new series of power purchase
agreements associated with our acquisition of the remainder of that project in
May 1997 and lower Australian currency exchange rates, partially offset by
higher energy revenues from the First Hydro project as a result of higher
energy prices. The 1997 increase resulted primarily from increases in electric
revenues attributable to the start of commercial operations of Loy Yang B Unit
2 in October 1996 and the Kwinana project in December 1996, and higher energy
revenues from the First Hydro projects as a result of increased utilization and
higher pool prices, partially offset by lower capacity prices in 1997. There
were no comparable electric revenues for Loy Yang B Unit 2 for the first nine
months of 1996 and for the Kwinana project for the first 11 months of 1996.
Equity in income from energy projects rose 14% in 1998 compared to 1997, and
17% in 1997 compared to 1996. The 1998 increase was primarily due to earnings
from a geothermal project that were previously deferred and lower fuel gas
prices at various cogeneration projects, partially offset by lower electric and
steam revenues, which are based, in part, on fuel prices. The 1997 increase was
mainly attributable to higher electric and steam revenues for several
cogeneration projects due to higher fuel gas prices. Equity in income from oil
and gas investments decreased approximately 54% in 1998 compared to 1997, and
increased approximately 52% in 1997 compared to 1996. The 1998 decrease was
primarily due to lower oil and gas prices, while the 1997 increase was due to
higher gas prices.
Operating Expenses
Total operating expenses decreased $37.8 million in 1998 compared to 1997,
and increased $104.6 million in 1997 compared to 1996. The 1998 decrease was
primarily due to lower fuel and depreciation and
25
<PAGE>
amortization expense. Fuel expense decreased $15.4 million and depreciation and
amortization decreased $15.5 million in 1998. The increase in 1997 was
principally due to higher fuel, plant operations, depreciation and amortization
and administrative and general expenses. Fuel and plant operations expense
increased $62.8 million, depreciation and amortization expense increased $12.9
million and administrative and general expenses increased $27.6 million in
1997.
The 1998 decrease in fuel expense was primarily due to the new fuel supply
agreement entered into for the Loy Yang B project in connection with our
acquisition of the remainder of that project in May 1997, partially offset by
higher fuel expense at the First Hydro projects as a result of higher prices
and increased generation in 1998. The 1997 increase in fuel expense and plant
operations was primarily due to commencement of commercial operations of the
Kwinana project in the fourth quarter of 1996 and increased generation and
higher prices at the First Hydro projects.
The 1998 decrease in depreciation and amortization is the result of a full
year's impact of the extension in the useful life of the Loy Yang B project's
plant and equipment from approximately 30 years, the term of the previous power
purchase agreement, to 50 years, the projected economic life of the plant, as a
result of the May 1997 acquisition, combined with lower Australian currency
exchange rates. The 1997 increase in depreciation and amortization resulted
from the commencement of commercial operations of Loy Yang B Unit 2 and the
Kwinana project in the fourth quarter of 1996. The Loy Yang B project's
depreciation expense in 1997 was partially reduced due to the extension in the
useful life of its plant and equipment.
Administrative and general expenses decreased slightly in 1998 as a result
of lower compensation expense for charges related to our phantom stock plan,
which is part of the Edison International Equity Compensation Plan, partially
offset by higher project development costs. The 1997 increase in administrative
and general expenses was attributable to an increase of approximately $54
million in compensation expense as a result of charges related to our phantom
stock plan. The 1997 increase in compensation expense was partially offset by
lower project development costs.
Other Income (Expense)
Interest and other income increased $22.5 million in 1998 compared to 1997,
and $6.5 million in 1997 compared to 1996. The 1998 and 1997 increases resulted
primarily from interest earned on higher cash balances.
During the second quarter of 1997, we completed a sale of our ownership
interest in B.C. Star Partners for total cash proceeds of $71.2 million. We
recorded an after-tax gain of approximately $14 million on the sale in April
1997.
During the second quarter of 1996, CalEnergy Company, Inc., our partner in
four operating geothermal projects in California, purchased all of the stock of
our four wholly-owned subsidiaries, which held interests in these projects. The
purchase price of $70 million resulted in an after-tax gain of $15.5 million.
There was no impact on our future revenues, as we discontinued recognizing
earnings from these projects during 1993.
Interest expense decreased $27.4 million in 1998 compared to 1997, and
increased $59.2 million in 1997 compared to 1996. The decrease in 1998 was due
to lower Australian currency exchange rates and higher capitalized interest as
a result of higher accumulated construction expenditures. Capitalized interest
decreased $51.9 million in 1997 compared to 1996, due to the completion of
construction and resultant commercial operations of Loy Yang B Unit 2 and the
Kwinana project in the fourth quarter of 1996, at which time we discontinued
recording capitalized interest related to these projects.
Minority interest expense decreased $36.1 million in 1998 compared to 1997,
and $30.7 million in 1997 compared to 1996. The decreases resulted from the
acquisition of the remaining 49% ownership interest in the Loy Yang B project
in May 1997.
26
<PAGE>
Provision for Income Taxes
We had effective tax provision rates of 34.8%, 30.9% and 47.1% in 1998, 1997
and 1996, respectively. The 1998 and 1997 tax provisions reflect a benefit from
reductions in the United Kingdom corporate tax rate from 33% to 31% effective
in April 1997, and from 31% to 30% effective in April 1999. In accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," this reduction in the United Kingdom income tax rate resulted in
reductions in income tax expense of approximately $11 million and $20 million
in 1998 and 1997, respectively, to adjust the United Kingdom deferred income
tax liability, primarily related to the First Hydro projects, to the new lower
tax rate.
Extraordinary Loss
The early repayment of the Loy Yang B project's existing debt facilities of
$713 million in connection with our acquisition of the remaining 49% interest
in May 1997 resulted in an extraordinary loss of $13.1 million, net of income
tax benefit of $8.6 million, attributable to the write-off of unamortized debt
issue costs.
Liquidity and Capital Resources
For the nine months ended September 30, 1999, net cash provided by operating
activities increased to $369 million from $172.5 million for the same period in
1998. The increase in working capital was primarily due to increased accounts
payable and accrued liabilities related to our acquisitions of Ferrybridge and
Fiddler's Ferry, and Homer City and commercial operations of Doga. Net working
capital at September 30, 1999 was ($412.4) million compared to $136 million at
December 31, 1998. Net working capital decreased primarily as a result of
utilizing short-term capacity under a commercial paper facility to finance a
portion of the Homer City project. We expect to re-finance the short-term
borrowings during the next year with a combination of new or extended short-
term borrowings and issuance of our long-term debt.
At September 30, 1999, we had cash and cash equivalents of $450.8 million
and had available $353 million of borrowing capacity under a $500 million
revolving credit facility that expires in 2001 and $266 million of borrowing
capacity under a $700 million commercial paper facility that expires in 2000.
This borrowing capacity under the revolving credit facility may be reduced by
borrowings for firm commitments to contribute project equity and to fund
capital expenditures and construction costs of its project facilities.
Net cash provided by financing activities totaled $4,479.2 million during
the first nine months of 1999, compared to $6.2 million used in 1998 for the
same prior year period. The 1999 increase is primarily due to financing of $1.3
billion related to the Ferrybridge and Fiddler's Ferry project, the Edison
Mission Holding Co.'s, parent company of EME Homer City, issuance of $830
million senior secured bonds, our financing of $700 million under our
commercial paper facility, our issuance of Senior Notes of $600 million,
borrowings of $59 million under Edison Mission Energy Taupo Limited's credit
facility, Edison International's $1,066 million equity contribution to us,
Edison Mission Energy Global Management, Inc.'s $120 million Flexible Money
Market Cumulative Preferred Stock and EME Taupo's $158 million Retail
Redeemable Preference Shares.
Net cash used in investing activities increased to $4,859.7 million for the
nine months ended September 30, 1999 from $82.9 million for the nine months
ended September 30, 1998. The increase is primarily due to the purchase of
Ferrybridge and Fiddler's Ferry, Homer City and Contact Energy.
Cash provided by operating activities is derived primarily from
distributions from energy projects and dividends from investments in oil and
gas. Net cash provided by operating activities increased $7.1 million in the
year ended December 1998 compared to 1997, and decreased $35 million in 1997
compared to 1996. The 1998 increase was primarily due to lower income taxes
paid and higher distributions from energy projects, partially offset by lower
dividends from investments in oil and gas and an increase in working capital
requirements. The 1997 decrease primarily reflected an increase in working
capital requirements, principally due to lower accounts receivable collections
from the First Hydro projects.
Net cash provided by financing activities decreased $43.2 million in 1998
compared to 1997, and $123.7 million in 1997 compared to 1996. The decreases
were principally due to a reduction in financing activities. In
27
<PAGE>
1997, the Loy Yang B project's financing proceeds received in connection with
our acquisition of the remaining 49% of that project were primarily used to
repay the project's existing debt facilities. In 1996, we issued 400 million
pounds sterling of 9% Guaranteed Secured Bonds (U.S. $603.8 million), the
proceeds of which were used to repay the 400 million pounds sterling credit
facility entered into in December 1995. In addition, Edison Mission Energy
Funding Corp, 99% owned by Broad Street Contract Services, Inc. and 1% owned by
us, completed in December 1996 a sale of $450 million of senior notes and bonds
to institutional investors pursuant to the Rule 144A exemption under the
Securities Act for non-public sales.
The Loy Yang B financing in 1997 consisted of (1) borrowings under a $373
million (490 million Australian dollars) 15-year interest only term facility,
(2) borrowings under a $583 million (765 million Australian dollars) 20-year
amortizing term facility with principal and interest payments scheduled
quarterly commencing September 30, 1998 and (3) borrowings under an $8 million
(10 million Australian dollars) working capital facility with a term equal to
that of the 20-year amortizing term facility. The financing was structured on a
non-recourse basis to us. Lenders look solely to the operating cash proceeds of
the Loy Yang B project to repay the debt and have taken a security interest in
the Loy Yang B project assets.
The $450 million of securities issued by EME Funding Corp. in 1996 consist
of $260 million of Series A Notes and $190 million of Series B Bonds which
mature in September 2003 and September 2008, respectively. The Series A Notes
and Series B Bonds bear interest rates of 6.77% and 7.33%, respectively, and
were rated "BBB" by Standard & Poor's Ratings Group and "Baa1" by Moody's
Investors Service, Inc. The principal and interest payments under the notes
issued by our four subsidiaries are identical in terms to the Series A Notes
and Series B Bonds. The net proceeds from the sale of these securities were
loaned by EME Funding Corp. to us and used by us to repay borrowings under our
$500 million revolving credit facility, to retire our 200 million Australian
dollar credit facility, to defease other project debt and for other general
corporate purposes. The senior notes and bonds are secured by the pledge of (1)
notes issued by our four subsidiaries that own interests in four California
cogeneration projects, (2) 99% of the capital stock of EME Funding Corp. and
(3) a guarantee issued by our four subsidiaries. The financing structure was
designed to pool and cross-collateralize available cash flow to our four
subsidiaries from the four projects, thus providing for repayment of the senior
notes and bonds with available cash flow from the four projects. The
obligations of our four subsidiaries are non-recourse to us.
Net cash used in investing activities increased $311.1 million in 1998
compared to 1997, and decreased $149.2 million in 1997 compared to 1996. The
1998 increase is principally due to the investments and loans totaling $242.8
million for the purchase of our ownership interest in the EcoElectrica project
and lower proceeds from loan repayments. The 1997 decrease is primarily due to
an increase in proceeds received from loan repayments related to the Brooklyn
Navy Yard and Carbon II projects and fewer loans made to energy projects.
Proceeds of $71.2 million were received from the sale of our ownership interest
in B.C. Star Partners in 1997. We invested $73.4 million, $87.7 million and
$119.4 million in 1998, 1997 and 1996, respectively, in new plant and equipment
principally related to the Doga project in 1998 and 1997 and Loy Yang B Unit 2
and the Kwinana project in 1996.
28
<PAGE>
Firm Commitments to Contribute Project Equity as of September 30, 1999
<TABLE>
<CAPTION>
Projects Local Currency U.S. ($ in millions)
-------- ------------------------ --------------------
<S> <C> <C>
ISAB(1)...................... 244 billion Italian Lira $135
EcoElectrica(2).............. 34
Tri Energy(3)................ 25
</TABLE>
- --------
(1) ISAB is a 512 MW integrated gasification combined cycle power plant under
construction near Siracusa in Sicily, Italy. A wholly-owned subsidiary of
Edison Mission Energy owns a 49% interest. Equity will be contributed at
commercial operation, which is currently scheduled for the first quarter of
2000.
(2) EcoElectrica is a 540 MW liquefied natural gas combined-cycle cogeneration
facility under construction in Penuelas, Puerto Rico. A wholly-owned
subsidiary of Edison Mission Energy owns a 50% interest. Equity will be
contributed at commercial operation, which is currently scheduled for the
first quarter of 2000.
(3) Tri Energy is a 700 MW gas-fired power plant under construction in the
Ratchaburi Province, Thailand. A wholly-owned subsidiary of Edison Mission
Energy owns a 25% interest. Equity will be contributed at commercial
operation, which is currently scheduled for mid-2000.
Firm commitments to contribute project equity could be accelerated due to
specified events of default as defined in the non-recourse project financing
facilities. We have no reason to believe that these events of default will
occur requiring acceleration of the firm commitments.
Contingent Obligations to Contribute Project Equity as of September 30, 1999
<TABLE>
<CAPTION>
Projects U.S. ($ in millions)
-------- --------------------
<S> <C>
Paiton(1)............................................. $141
Tri Energy(2)......................................... 20
Doga(2)............................................... 7
All Other............................................. 17
</TABLE>
- --------
(1) Contingent obligations to contribute additional project equity would be
based on events principally related to insufficient cash flow to cover
interest on project debt and operating expenses, project cost overruns
during the plant construction, specified partner obligations or events of
default. In any and all circumstances, our obligation to contribute
contingent equity will not exceed $141 million.
As more fully described below under the caption "Other Commitments and
Contingencies", PT Perusahaan Listrik Negara, the main source of revenue for
the project, had, at September 30, 1999, failed to pay the project in
respect of its last five invoices and paid only a portion of another
invoice. In addition, PT Perusahaan has filed a lawsuit, which it
subsequently withdrew, contesting the validity of the Power Purchase
Agreement under which it was to purchase electricity from the project.
In response to PT Perusahaan's failure to pay, Paiton Energy entered into an
interim agreement with its lenders which modified the contingent equity
provisions of the Paiton debt documents during the agreed interim period,
which extends from October 15, 1999 through July 31, 2000. The interim
agreement provides, among other things, that contingent equity from us and
the other Paiton Energy shareholders shall be contributed from time to time
as needed to enable Paiton Energy to pay interim project costs. Interim
project costs include interest on project debt and operating costs which
become due and payable during the term of the interim agreement and other
costs related to the construction of the project, provided that in the
latter case no more than an aggregate of $30 million of contingent equity
can be used for this purpose. The interim agreement provides that a portion
of unfunded contingent equity in the original amount of $206 million, of
which our current unfunded share is $85 million, will become due and payable
by the shareholders in the event that specified events of default, other
than those specifically waived under the interim agreement, occur. The
interim agreement further provides that all unfunded contingent equity in
the original amount of $300 million, of which our unfunded share at
September 30, 1999, was $124 million, will become due and payable by the
shareholders in the event that Paiton fails to make any interest payment
during the pendency of the interim agreement. As of September 30, 1999,
29
<PAGE>
Paiton Energy's shareholders had contributed to Paiton $36 million of
contingent equity, of which our share is $17 million.
The contractor for the Paiton project and Paiton Energy have reached a
global settlement in principle, the terms of which are being finalized in a
definitive agreement. The global settlement deals with all claims, including
contractor claims for retention, costs relating to a dispute involving a
slope adjacent to the Paiton site and other cost overruns related to delays
in the completion of the construction of the project and Paiton Energy's
claims under the construction contract. Terms and conditions of this
settlement, which include a near term partial payment of the amount owed the
contractor, will require the approval of Paiton Energy's lenders. We have no
reason to believe that these approvals will not be obtained. As noted above
the shareholders' obligations to contribute contingent equity to Paiton to
enable it to pay the contractor for the finally agreed amount is limited to
$30 million. Paiton's obligations to the contractor under the settlement may
exceed this amount and thus Paiton may be required to seek lenders'
approvals for the settlement. In accordance with the global settlement, this
excess is payable over time in accordance with revenues available during and
after renegotiation of the Power Purchase Agreement and the project's debt
agreements, as more fully discussed under the caption, "Other Commitments
and Contingencies."
Our contingent equity obligations for the Paiton project are to be
cancelled, if unused, as of the later of the date of term financing by the
Export-Import Bank of the United States and August 1, 2000. Term financing
by the Export-Import Bank of the United States is the subject of a
comprehensive set of conditions. The obligation of the Export-Import Bank of
the United States to provide term financing was initially scheduled to
terminate on October 15, 1999. The Export-Import Bank of The United States
agreed to extend the term financing commitment through December 31, 2000 and
has determined that the project will need to meet additional terms and
conditions for take-out of the construction lenders.
(2) Contingent obligations to contribute additional equity to the project would
be based on events principally related to capital cost overruns during the
plant's construction, specified partner obligations or events of default.
Other than as noted above, we are not aware, at this time, of any other
contingent obligation or obligations to contribute project equity.
Other Commitments and Contingencies
Subsidiary Indemnification Agreements
Some of our subsidiaries have entered into indemnification agreements under
which the subsidiaries agreed to repay capacity payments to the projects' power
purchasers in the event the projects unilaterally terminate their performance
or reduce their electric power producing capability during the term of the
power contracts. Obligations under these indemnification agreements as of
September 30, 1999, if payment were required, would be $233 million. We have no
reason to believe that the projects will either terminate their performance or
reduce their electric power producing capability during the term of the power
contracts.
Paiton
Paiton is a 1,230-MW coal-fired power plant in operation in East Java,
Indonesia. A wholly owned subsidiary of Edison Mission Energy owns a 40%
interest and has a $388 million investment at September 30, 1999. The tariff is
higher in the early years and steps down over time. The tariff for the Paiton
project includes infrastructure to be used in common by other units at the
Paiton complex. The plant's output is fully contracted with the state-owned
electricity company, PT Perusahaan Listrik Negara. Payments are in Indonesian
Rupiah, with the portion of such payments intended to cover non-Rupiah project
costs, including returns to investors, indexed to the Indonesian Rupiah/U.S.
dollar exchange rate established at the time of the Power Purchase Agreement in
February 1994. The project received substantial finance and insurance support
from the Export-Import Bank of the United States, The Export-Import Bank of
Japan, the U.S. Overseas Private Investment Corporation and the Ministry of
International Trade and Industry of Japan. PT Perusahaan's payment obligations
are supported by the Government of Indonesia. The projected rate of growth of
the Indonesian
30
<PAGE>
economy and the exchange rate of Indonesian Rupiah into U.S. dollars have
deteriorated significantly since the Paiton project was contracted, approved
and financed. The Paiton project's senior debt ratings have been reduced from
investment grade to speculative grade based on the rating agencies' perceived
increased risk that PT Perusahaan might not be able to honor the electricity
sales contract with Paiton. The Government of Indonesia has arranged to
reschedule sovereign debt owed to foreign governments and has entered into
discussions about rescheduling sovereign debt owed to private lenders.
Specified events, including those discussed in the paragraph below, which,
with the passage of time or upon notice, may mature into defaults of the
project's debt agreements have occurred. On October 15, 1999, the project
entered into an interim agreement with its lenders under which the lenders
waived these defaults until July 31, 2000. However, this waiver may expire on
an earlier date if additional defaults, other than those specifically waived,
or other specified events occur.
In May 1999, Paiton Energy notified PT Perusahaan that Unit 7 of Paiton
achieved commercial operation under terms of the Power Purchase Agreement and
that Unit 8 of Paiton achieved commercial operation under the terms of the
Power Purchase Agreement in July 1999. Because of the economic downturn, PT
Perusahaan is experiencing low electricity demand and PT Perusahaan has
therefore dispatched the Paiton plant to zero; however, under the terms of the
Power Purchase Agreement, PT Perusahaan is required to continue to pay for
capacity and fixed operating costs once each unit and the plant achieve
commercial operation. An invoice for these charges for May in the amount of
$7.8 million was submitted to PT Perusahaan. The project and PT Perusahaan met
to review the invoice and a partial payment of $2.5 million was subsequently
received. The primary reason for the payment shortage was the use of an
arbitrary Indonesian Rupiah/U.S. dollar exchange rate of 2,450 Indonesian
Rupiah to one U.S. dollar by PT Perusahaan. The use of this exchange rate is
not in agreement with the Power Purchase Agreement, but is the exchange rate
on which PT Perusahaan payments to other independent power producers in
Indonesia have been based. Invoices for capacity charges and fixed operating
costs for June, July, August and September in an aggregate amount of $164.1
million were later submitted to PT Perusahaan. PT Perusahaan has yet to make
any payments in respect of the latter invoices. In addition, PT Perusahaan
filed a lawsuit contesting the validity of its agreement to purchase
electricity from the project. The lawsuit has been terminated by PT Perusahaan
and the project and PT Perusahaan have commenced discussions to renegotiate
the Power Purchase Agreement, however; it is not yet known what form the
renegotiation may take. Any material modifications of the Power Purchase
Agreement could also require a renegotiation of the Paiton project's debt
agreements. The impact of any of these renegotiations with PT Perusahaan, the
Government of Indonesia or the project's creditors on our expected return on
its investment in Paiton is uncertain at this time, however; we believe that
we will ultimately recover our investment in the project.
Contact Energy
In May 1999, a wholly-owned subsidiary of Edison Mission Energy issued $120
million of preferred stock in connection with the acquisition of a 40%
interest in Contact Energy. We entered into a support agreement with this
subsidiary that requires us to make capital contributions to the subsidiary in
order for it to maintain a positive net worth and to provide sufficient funds
for payment of declared dividends on preferred stock and any redemption price
in respect of the preferred stock.
Our maximum obligation under the support agreement is limited to either:
(A) an amount equal to twice the sum of
(1) the liquidation preference of the preferred stock, currently
approximately $240 million, and
(2) the liquidation preference of all outstanding shares of stock of
the subsidiary ranking on a parity with the preferred stock, currently
zero; or
(B) the amount that we could lawfully distribute to our shareholder
under the Corporation Code of the State of California, approximately $370
million as of September 30, 1999.
31
<PAGE>
Brooklyn Navy Yard
Brooklyn Navy Yard is a 286 MW gas-fired cogeneration power plant in
Brooklyn, New York. Our wholly-owned subsidiary owns 50% of the project. In
February 1997, the construction contractor asserted general monetary claims
under the turnkey agreement against Brooklyn Navy Yard Cogeneration Partners,
L.P. for damages in the amount of $136.8 million. Brooklyn Navy Yard
Cogeneration Partners has asserted general monetary claims against the
contractor. In connection with a $407 million non-recourse project refinancing
in 1997, we agreed to indemnify Brooklyn Navy Yard Cogeneration Partners and
its partner from all claims and costs arising from or in connection with the
contractor litigation, which indemnity has been assigned to Brooklyn Navy Yard
Cogeneration Partners's lenders. We believe that the outcome of this litigation
will not have a material adverse effect on our consolidated financial position
or results of operations.
Homer City
We have guaranteed to the bondholders, banks and other secured parties which
financed the acquisition of the Homer City project the performance and payment
when due by Edison Mission Holdings Co. of its obligations in respect of
specified senior debt, up to $42 million. This guarantee will be available
until December 31, 2001, after which time we will have no further obligations
under this guarantee.
Other
In support of the businesses of our subsidiaries, we have made, from time to
time, guarantees and have entered into indemnity agreements with respect to our
subsidiaries' obligations, like those for debt service, fuel supply or the
delivery of power, and have entered into reimbursement agreements with respect
to letters of credit issued to third parties to support our subsidiaries'
obligations.
We may incur additional guaranty, indemnification and reimbursement
obligations as well as obligations to make equity and other contributions to
projects in the future. We believe that we will have sufficient liquidity on
both a short and long-term basis to fund pre-financing project development
costs, make equity contributions to project subsidiaries, pay our debt
obligations and pay other administrative and general expenses as they are
incurred from (1) distributions from energy projects and dividends from
investments in oil and gas, (2) proceeds from the repayment of loans made by us
to our project subsidiaries and (3) funds available from our revolving credit
facility.
Market Risk Exposures
Changes in interest rates, changes in electricity pool pricing and
fluctuations in foreign currency exchange rates can have a significant impact
on our results of operations. Interest rate changes affect the cost of capital
needed to finance the construction and operation of our projects. We have
mitigated the risk of interest rate fluctuations by arranging for fixed rate
financing or variable rate financing with interest rate swaps or other hedging
mechanisms for the majority of our project financings. Interest expense
included $19.1 million and $15.6 million for the nine months ended September
30, 1999 and 1998, respectively, as a result of interest rate swap and collar
agreements. We have entered into several interest rate swap agreements under
which the maturity date of the swaps occurs prior to the final maturity of the
underlying debt. We do not believe that interest rate fluctuations will have a
materially adverse effect on our financial position or results of operations.
Our electric revenues decreased by $3.4 million for the nine-month period
ended September 30, 1999, compared to an increase of $87.6 million for the
nine-month period ended September 30, 1998, as a result of electricity rate
swap agreements and other hedging activities. An electricity rate swap
agreement is an exchange of a fixed price of electricity for a floating price.
As a seller of power, we receive the fixed price in exchange for a floating
price, like the index price associated with electricity pools. In the United
Kingdom, these forward sales are also called electricity forward agreements or
contracts for differences.
Electric power generated at our uncontracted plants is generally sold under
bilateral arrangements with utilities and power marketers under short-term
contracts with terms of two years or less, or, in the case of the
32
<PAGE>
Homer City project, to the PJM or the NYISO. We have developed risk management
policies and procedures which, among other matters, address credit risk. When
making sales under negotiated bilateral contracts, it is our policy to deal
with investment grade counterparties. We hedge a portion of the electric output
of our merchant plants, whose output is not committed to be sold under long
term contracts, in order to lock-in desirable outcomes. When appropriate we
manage the "spark spread" or margin, which is the spread between electric
prices and fuel prices and use forward contracts, swaps, futures, or options
contracts to achieve those objectives. For a detailed description of market
risk in connection with the Homer City project, the United Kingdom projects and
the Loy Yang B project and how these risks are mitigated, see "Business--
Project Development--Sales of Power from Merchant Plants."
Fluctuations in foreign currency exchange rates can affect, on a U.S. dollar
equivalent basis, the amount of our equity contributions to, and distributions
from, our international projects. As we continue to expand into foreign
markets, fluctuations in foreign currency exchange rates can be expected to
have a greater impact on our results of operations in the future. At times, we
have hedged a portion of our current exposure to fluctuations in foreign
exchange rates through financial derivatives, offsetting obligations
denominated in foreign currencies, and indexing underlying project agreements
to U.S. dollars or other indices reasonably expected to correlate with foreign
exchange movements. In addition, we have used statistical forecasting
techniques to help assess foreign exchange risk and the probabilities of
various outcomes. Foreign exchange considerations for two major international
projects are discussed below.
The First Hydro projects in the United Kingdom and the Loy Yang B project in
Australia have been financed in their local currency, pounds sterling and
Australian dollars, respectively, thus hedging the majority of their
acquisition costs against foreign exchange fluctuations. Furthermore, we have
evaluated the return on the remaining equity portion of these investments with
regard to the likelihood of various foreign exchange scenarios. These analyses
use market derived volatilities, statistical correlations between specified
variables, and long-term forecasts to predict ranges of expected returns. Based
upon these analyses, we believe that the investment returns for the First Hydro
and Loy Yang B projects are adequately insulated from a broad range of foreign
exchange scenarios at this time. In 1996, we repaid a 200 million Australian
dollar loan that was originally structured to hedge a portion of the foreign
exchange risk associated with our equity investment in the Loy Yang B project.
The decision to repay the loan was based on our view that the cost of the hedge
was high relative to the current and expected volatility of the Australian
dollar.
We will continue to monitor our foreign exchange exposure and analyze the
effectiveness and efficiency of hedging strategies in the future.
The electric power generated by some of our domestic operating projects,
excluding Homer City, is sold to electric utilities under long-term, typically,
with terms of 15 to 30-years, power purchase agreements and is expected to
result in consistent cash flow under a wide range of economic and operating
circumstances. To accomplish this, we structure our long-term contracts so that
fluctuations in fuel costs will produce similar fluctuations in electric and/or
steam revenues and enter into long-term fuel supply and transportation
agreements.
Environmental Matters and Regulations
We are subject to environmental regulation by federal, state and local
authorities in the United States and foreign regulatory authorities with
jurisdiction over projects located outside the United States. We believe that,
as of the date of this prospectus, we are in substantial compliance with
environmental regulatory requirements and that maintaining compliance with
current requirements will not materially affect our financial position or
results of operations.
We expect that the implementation of Clean Air Act Amendments will result in
increased capital expenditures and operating expenses. For example, we plan to
spend approximately $258 million to install upgrades to the environmental
controls at the Homer City project to control sulfur dioxide and nitrogen oxide
emissions.
33
<PAGE>
Similarly, we plan to upgrade the environmental controls at the former
Commonwealth Edison plants to control nitrogen oxide emissions. We do not
expect these increased capital expenditures and operating expenses to have a
material effect on our financial position or results of operations.
Year 2000 Issues
We have a comprehensive program in place to remediate potential year 2000
impacts from critical systems. We have divided our year 2000 issue activities
into five phases: inventory, impact assessment, remediation, documentation and
certification. A critical system was defined as those applications and systems,
including embedded processor technology, which, if not appropriately
remediated, might have had a significant impact on customers, the revenue
stream, regulatory compliance, or the health and safety of personnel. We have
essentially completed all phases of our year 2000 project.
The other essential component of our year 2000 readiness program was to
identify and assess vendor products and business partners for year 2000
readiness. We have a process in place to identify and contact vendors and
business partners to determine their year 2000 status, and have evaluated the
responses. Our general policy requires that all newly purchased products be
year 2000 ready or otherwise designed to allow us to determine whether such
products present year 2000 issues.
Plant contingency plans have been developed and reviewed for any significant
issues and to schedule appropriate testing and/or training. These contingency
plans include developing strategies for dealing with year 2000-related
processing failures or malfunctions due to our internal systems or those of
third parties. Our contingency plans evaluate reasonably likely worst case
scenarios or conditions.
As of the date of this prospectus, we are not aware of any Year 2000 problem
of our systems and services. In addition, we have not received any notification
from any supplier or systems of any Year 2000-related disruption in their
business. However, the success to date of our Year 2000 efforts and the efforts
of our third party suppliers cannot guarantee that there will not be a material
adverse effect on our business should a Year 2000 problem manifest or become
apparent in the future.
Statement of Financial Accounting Standards No. 133
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities", which will be effective in January 2001. The Statement
establishes accounting and reporting standards requiring that every derivative
instrument be recorded in the balance sheet as either an asset or liability
measured at its fair value. The Statement requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. A derivative's gains and losses for
qualifying hedges offset related results on the hedged item in the income
statement and a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. The impact of
adopting Statement 133 on our financial statements has not been quantified at
this time.
Recent Developments
In December 1999, we completed the acquisition of the fossil-fuel generating
assets of Commonwealth Edison, totaling 6,812 MW. We will operate the plants,
which are located in the midwestern United States. We financed the $4.1 billion
acquisition with a combination of debt secured by the project, corporate debt
and funding from Edison International. In connection with this transaction, we
entered into transaction contracts with Commonwealth Edison, which will enable
Commonwealth Edison to access specified amounts of plant output for up to the
next five years to serve its customers.
In January 2000, the Board of Directors of Edison International gave
preliminary approval for an exchange offer to the holders of outstanding
phantom options under our phantom stock plan. Our phantom stock plan is part of
the Edison International Equity Compensation Plan. We have taken a one-time
charge of $67.5 million in the fourth quarter of 1999 in anticipation of this
offer.
34
<PAGE>
BUSINESS
Overview
We are a leading independent power producer engaged in the business of
developing, acquiring, owning and operating electric power generation
facilities worldwide. Edison International is our parent company and also owns
Southern California Edison, one of the largest electric utilities in the United
States. At September 30, 1999, we had consolidated assets of approximately
$11.2 billion and total shareholder's equity of approximately $2.2 billion.
We were formed in 1986 with two domestic operating projects. Our business
has evolved from the development of contract-based domestic power projects to
the development of contract-based international power projects and the
acquisition of operating generating assets within developed and deregulating
power markets. Currently, we own interests in 72 domestic and international
operating power stations with an aggregate generating capacity of 26,649 MW, of
which our share is 22,056 MW. In addition, we own interests in one domestic and
three international projects that are under construction. The capacity of these
projects is expected to total 1,797 MW, of which our anticipated share will be
approximately 714 MW.
Strategic Overview
Our business goal is to be one of the leading owners and operators of
electric generating assets in the world. We play an active role, as a long-term
owner, in all phases of power generation, from planning and development through
construction and commercial operation. We believe that this involvement allows
us to better ensure, with our experienced personnel, that our projects are
well-planned, structured and managed, thus maximizing value creation. We have
separate strategies for developed and developing countries.
In developed countries, we expect that new long-term contracts are likely to
be the exception rather than the rule. Our strategy focuses primarily on three
areas with respect to plants whose output is not committed to be sold under
long term contracts, which are known as merchant plants: valuation, power
marketing and trading, and regulation. First, we continuously improve our
valuation tools, enabling us to bid more effectively and competitively on
assets that will be sold over the next five years in the United States, the
United Kingdom, Spain, Italy, Australia, New Zealand and other developed
countries. Second, we draw on our power marketing and trading skills to
mitigate price risks and to enhance the returns of our merchant plants. Third,
since our principal customers continue to be regulated utilities, we strive to
understand the regulatory and economic environment in which these utilities
operate so it may better anticipate and prepare for what they will do.
In developing countries, our strategy focuses on investing with good
partners, securing non-recourse financing based upon long-term contracts with
state-owned utilities, and securing government support from organizations like
the Export-Import Bank of the United States, the U.S. Overseas Private
Investment Corporation and The Export-Import Bank of Japan.
In making investment decisions, we evaluate potential project returns
against rate of return guidelines. We establish these guidelines by identifying
a base rate of return and adjusting the base rate by potential risk factors,
like risks associated with project location and stage of project development.
We endeavor to mitigate these risks by:
. evaluating all projects and the markets in which they operate;
. selecting partners with complementary skills and local experience;
. structuring investments through subsidiaries;
. managing up-front development costs;
. utilizing limited recourse financing; and
. linking revenue and expense components where appropriate.
35
<PAGE>
Many of our projects are operated by our subsidiaries, which helps us to
preserve and enhance the value of our investments.
In response to the increasing globalization of the independent power market,
we have organized our operation and development activities into three
geographic regions: (1) Americas, (2) Asia Pacific and (3) Europe, Central
Asia, Middle East and Africa. Each region is served by one or more teams
consisting of business development, operations, finance and legal personnel,
and each team is responsible for all our activities within a particular
geographic region. Also, we will mobilize personnel from outside a particular
region when needed in order to assist in the development of specified projects.
Below is a brief discussion of the current strategy for each of the three
regions and a summary of some of our projects that are currently in the
construction, advanced development or early operations stage and other
significant operating projects in each of the regions.
Americas
Our Americas region is headquartered in Irvine, California, with additional
offices located in Chicago, Fairfax, Virginia and Washington, D.C. The strategy
for the Americas region is:
. to manage our interest in operating and construction-phase projects
located throughout the United States,
. to pursue the acquisition and development of existing generating assets
from utilities, industrial companies and other independent power
producers throughout the region and
. to pursue the development of new power projects throughout the region.
We currently have 34 operating projects in this region, all of which are
located in the United States.
In December 1998, we acquired 50% of the 540 MW EcoElectrica liquefied
natural gas-fired combined-cycle cogeneration facility under construction in
Penuelas, Puerto Rico for approximately $243 million. The project also includes
a desalination plant and liquefied natural gas storage and vaporization
facilities, and is expected to commence commercial operation by the first
quarter of 2000.
In March 1999, we acquired 100% of the 1,884 MW Homer City Generating
Station for approximately $1.8 billion. We financed the acquisition with a
combination of debt secured by the project, Edison Mission Energy debt, cash
and borrowings under our revolving credit facility. The Homer City project is
one of the largest coal-fired plants in the mid-Atlantic region of the United
States and has direct, high voltage interconnections to both the NYISO and the
PJM.
In December 1999, we acquired the fossil-fuel generating assets of
Commonwealth Edison, totaling 6,812 MW of generating capacity, for
approximately $4.1 billion. We will operate these plants, which provide access
to the Mid-America Interconnected Network and the East Central Area Reliability
Council. In connection with this transaction, we entered into power purchase
agreements with Commonwealth Edison with a term of up to five years.
Concurrently with this acquisition we assigned our right to purchase the
Collins Station, a 2,698 MW gas and oil-fired generating station located in
Illinois, to a third party. After this assignment we entered into a lease of
the Collins Station with a term of 33.75 years. The aggregate MW purchased or
leased as a result of these transactions is 9,510 MW.
For additional information regarding our 34 domestic operating projects, see
"--Our Operating Power Generation Facilities--Domestic."
36
<PAGE>
Asia Pacific
Our Asia Pacific region is headquartered in Singapore with additional
offices located in Australia, Indonesia and the Philippines. The strategy for
this region is:
. to pursue projects in countries where there exist strong political
commitment and the structural framework necessary for private power,
. to seek opportunities to employ indigenous fuels and
. to seek strategic, complementary alliances with partners who bring value
to a project by providing fuel, equipment and construction services.
Beginning in mid-1997, several of the developing economies in Asia
experienced an economic downturn that is continuing, and has resulted in an
overall decline in the growth of demand for electric power, and, in some
countries, a decline in electric power usage. Many governments in the region
have committed to privatization of the electric power industry, and are looking
to the private sector to develop a significant portion of new generating
capacity and to purchase existing generating assets.
Our activity in the Asia Pacific region commenced in December 1992 with the
acquisition of a 51% interest of Loy Yang B from the State Government of
Victoria, Australia's first electric privatization effort. In May 1997, we
acquired the State's remaining 49% interest in the Loy Yang B project. The
first of two 500 MW units at the Loy Yang B project began commercial operations
in October 1993. Loy Yang B Unit 2 commenced commercial operation in October
1996. An affiliate of ours provides operation and maintenance services for both
units.
Kwinana is a $108 million 116 MW gas-fired cogeneration project located at
the British Petroleum Kwinana refinery near Perth, Australia. The project,
which is 100% owned by us, began commercial operations in December 1996. The
project supplies electricity to Western Power, formerly The State Electricity
Commission of Western Australia, and electricity and steam to the British
Petroleum Kwinana refinery.
In April 1995, we and our partners, Mitsui & Co. Ltd., General Electric
Corporation and P.T. Batu Hitam Perkasa, an Indonesian limited liability
company, commenced construction of the $2.5 billion Paiton project, a 1,230 MW
coal-fired power plant in East Java, Indonesia. The project consists of two
units, each of which has a capacity of approximately 615 MW. In January 1996,
we purchased an additional 7.5% interest in the Paiton project from a
subsidiary of General Electric Corporation, thus increasing our ownership
interest to 40%.
In May 1999, Paiton notified PT Perusahaan that Unit 7 of Paiton achieved
commercial operation under terms of the Power Purchase Agreement and that Unit
8 of Paiton achieved commercial operation under the terms of the Power Purchase
Agreement in July 1999. The project's output is fully contracted with the
state-owned electricity company, PT Perusahaan. Payments are in Indonesian
Rupiah, with the portion of these payments intended to cover non-Rupiah project
costs including returns to investors, indexed to the Indonesian Rupiah/U.S.
dollar exchange rate established at the time the power purchase agreement was
executed in February 1994. PT Perusahaan's payment obligations are supported by
the Government of Indonesia. The exchange rate of Indonesian Rupiah into U.S.
dollars and the projected rate of growth of the Indonesian economy have
deteriorated significantly since the Paiton project was contracted, approved
and financed, thus significantly increasing the cost of power in Rupiah terms
to PT Perusahaan. The project received substantial finance and insurance
support from the Export-Import Bank of the United States, The Export-Import
Bank of Japan, the U.S. Overseas Private Investment Corporation and the
Ministry of International Trade and Industry of Japan. The Paiton project's
senior debt ratings have been reduced from investment grade to speculative
grade based on the rating agencies' perceived increased risk that PT Perusahaan
might not be able to honor its power purchase agreement with Paiton. PT
Perusahaan has announced its intentions to commence discussions with
independent power producers to renegotiate its power purchase agreement;
however, it is not yet known what form the negotiation may take. Any material
modifications of the Paiton project's power purchase agreement with PT
Perusahaan could also require a renegotiation of the Paiton project's debt
agreements. The
37
<PAGE>
impact of any renegotiation with PT Perusahaan, the Government of Indonesia or
the project's creditors on our dividends from the project is uncertain at this
time; however, we believe that we will ultimately recover our investment in the
project.
In July 1998, we purchased a 25% interest in the Tri Energy project, a 700
MW gas-fired power plant under construction in the Ratchaburi Province,
Thailand. The project will sell its capacity and energy to the Electricity
Generating Authority of Thailand under a 20-year power purchase agreement.
Commercial operation is expected to begin in mid-2000.
In May 1999, we acquired 40% of Contact Energy from the government of New
Zealand for $635 million. Contact Energy owns and operates nine hydroelectric,
geothermal and natural gas-fired power generating plants in New Zealand and
owns an interest in one operating gas-fired plant in Australia, with a total
aggregate capacity of 2,626 MW, of which our share is 949 MW. Contact Energy
also owns interests in one project under construction in New Zealand with an
expected generating capacity of 45 MW, of which our share is 18 MW.
Europe, Central Asia, Middle East and Africa
Our Europe, Central Asia, Middle East and Africa region is headquartered in
London, England with additional offices located in Italy, Spain and Turkey. The
London office was established in 1989. The territorial scope of the region
includes Europe, Africa, the Middle East, India and Pakistan. The region is
characterized by both mature and developing markets. Our strategy for the
region is to pursue the development and acquisition of medium to large scale
power and cogeneration facilities with diversified fuel sources and generation
technology.
Beginning in the early 1990's we acquired the Iberian Hy-Power projects,
which consist of 18 small hydroelectric facilities located in Spain, an 80%
interest in the 220 MW Roosecote project located in northwest England, and a
33% interest in the 214 MW Derwest project located in Derby, England.
In December 1995, we purchased all of the outstanding shares of First Hydro
Company for approximately $1 billion or 653 million pounds sterling. First
Hydro's principal assets are two pumped-storage electric power stations located
in North Wales at Dinorwig and Ffestiniog, which have a combined capacity of
2,088 MW. The Dinorwig station, which was commissioned in 1983, is comprised of
six units totaling 1,728 MW. The Ffestiniog station was commissioned in 1963
and is comprised of four units totaling 360 MW. First Hydro is an independent
generating company with three main sources of revenues: (1) selling power into
the electricity trading market in England and Wales; (2) providing system
support services to The National Grid Company plc; and (3) selling its
installed capacity on a forward basis by entering into contracts for
differences, which are electricity rate swap agreements, with large electricity
suppliers.
In June 1995, the ISAB project, of which we own 49%, signed a twenty-year
power purchase contract with ENEL S.p.A., Italy's state electricity
corporation, under which ENEL S.p.A. will purchase 507 MW of output from the
512 MW ISAB power project, which is located near Siracusa in Sicily, Italy. The
project will employ gasification technology to convert heavy oil residues from
the ISAB refinery in Priolo Gargallo into clean-burning synthetic fuel gas that
will be used to generate electricity in a combustion turbine. The approximately
2 trillion lira, or $1.3 billion, project financing was completed in April
1996, with construction commencing in July 1996. The project is near
completion, with commercial operation expected to begin in the first quarter of
2000.
In February 1995, we signed a shareholders' agreement to develop the $180
million Doga Enerji A.S. project in Esenyurt, near Istanbul, Turkey. In April
1997, we completed financing and commenced construction of the Doga project.
The 180 MW combined cycle gas-fired cogeneration facility commenced commercial
operation in May 1999.
In July 1999, we acquired 100% of the Ferrybridge and Fiddler's Ferry coal-
fired power plants in the United Kingdom with a total generating capacity of
3,886 MW from PowerGen UK plc for approximately $2.0
38
<PAGE>
billion. These plants, which are in the middle of the order in which plants are
called upon to dispatch electric power, will complement the pumped-storage
hydroelectric power plants we already own in the United Kingdom and will sell
power into the electricity trading market there.
During October 1999, we completed the acquisition of the remaining 20
percent of the 220 MW natural gas-fired Roosecote project located in England.
Project Development
The development of power generation projects, whether through new
construction or the acquisition of existing assets, involves numerous elements,
including evaluating and selecting development opportunities, evaluating
regulatory and market risks, designing and engineering the project, acquiring
necessary land rights, permits and fuel resources, obtaining financing,
managing construction and, in some cases, obtaining power and steam sales
agreements.
We initially evaluate and select potential development projects based on a
variety of factors, including the reliability of technology, the strength of
the potential partners, the feasibility of the project, the likelihood of
obtaining a long-term power purchase agreement or profitably selling power
without this agreement, the probability of obtaining required licenses and
permits and the projected economic return. During the development process, we
monitor the viability of our projects and make business judgments concerning
expenditures for both internal and external development costs. Completion of
the financing arrangements for a project is generally an indication that
business development activities are substantially complete.
Project Type
The selection of power generation technology for a particular project is
influenced by various factors, including regulatory requirements, availability
of fuel and anticipated economic advantages of a particular application.
We have interests in operating projects that employ gas-fired combustion
turbine technology, predominantly through an application known as cogeneration.
Cogeneration facilities sequentially produce two or more useful forms of
energy, such as electricity and steam, from a single primary source of fuel,
such as natural gas or coal. Many of our cogeneration projects are located near
large, industrial steam users or in oil fields that inject steam underground to
enhance recovery of heavy oil. The regulatory advantages for cogeneration
facilities under the Public Utility Regulatory Policies Act of 1978, as
amended, have become somewhat less significant because of other federal
regulatory exemptions made available to independent power producers under the
Energy Policy Act. Accordingly, we expect that the majority of our future
projects will generate power without selling steam to industrial users.
We also have interests in projects that use renewable resources like
hydroelectric energy. Our hydroelectric projects, excluding First Hydro's
projects, use run-of-the-river technology to generate electricity. The First
Hydro project utilizes pumped-storage stations that consume electricity when it
is comparatively less expensive in order to pump water for storage in an upper
reservoir. Water is then allowed to flow back through turbines in order to
generate electricity when its market value is higher. This type of generation
is characterized by its speed of response, its ability to work efficiently at
wide variations of load and the basic reliance of revenue on the difference
between the peak and trough prices of electricity during the day.
We also have domestic and international interests in operating projects and
projects under construction and advanced development, which are large-scale,
coal-fired projects using pulverized coal and coal-fired generation technology.
In the United States, we have developed and acquired coal and waste coal-fired
projects that employ traditional pulverized coal and circulating fluidized bed
technology, which allows for the use of lower quality coal and the direct
removal of sulfur from the coal.
39
<PAGE>
Long-Term Power and Steam Sales Contracts
Many of our operating projects in the United States sell power and steam to
domestic electric utilities and industrial steam users under long-term
contracts. Electric power generated by several of our international projects is
sold under long-term contracts to electric utilities located in the country
where the power project is located. These projects' revenues from power
purchase agreements usually consist of two components: energy payments and
capacity payments. Energy payments are made based on actual deliveries of
electric energy, such as kilowatt-hours, to the purchaser. Energy payments are
usually indexed to specified variable costs that the purchaser avoids by
purchasing this electric energy from our projects as opposed to operating its
own power plants to produce the same amount of electric energy. The variable
components typically include fuel costs and selected operation and maintenance
expenses. These costs may be indexed to the utility's cost of fuel and/or
selected inflation indices. Capacity payments are based on a project's proven
capability reliably to make electric capacity available, whether or not the
project is called on to deliver electric energy. Capacity payments compensate a
project for specified fixed costs that are incurred independent of the amount
of energy sold by the project. Such fixed costs include taxes, debt service and
distributions to the project's owners. To receive capacity payments, there are
typically minimum performance standards that must be met, and often there is a
performance range that further influences the amount of capacity payments.
Steam produced from our cogeneration facilities is sold to industrial steam
users, such as petroleum refineries or companies involved in the enhanced
recovery of oil through steam flooding of oil fields, under long-term steam
sales contracts. Steam payments are generally based on formulas that reflect
the cost of water, fuel and capital to us. In some cases, we have provided
steam purchasers with discounts from their previous costs for producing this
steam and/or has partially indexed steam payments to other indices, including
specified oil prices.
Sales of Power from Merchant Plants
Over the past two years, we have shifted our primary focus to the
acquisition and operation of competitive generation, both domestically and
internationally. We identify high-quality generating assets that are strategic
to deregulated power markets. We have recently acquired, or have under contract
for acquisition, a number of merchant plants, which sell capacity, energy and,
in some cases, other services on a competitive basis under bilateral
arrangements or through centralized power pools that provide an institutional
framework for price setting, dispatch and settlement procedures.
Electric power generated at the Homer City project is sold under bilateral
arrangements with domestic utilities and power marketers under short-term
contracts with terms of two years or less, or to the PJM or the NYISO. These
pools have short-term markets, which establish an hourly clearing price. The
Homer City project is situated in the PJM control area and is physically
connected to high-voltage transmission lines serving both the PJM and NYISO
markets. The Homer City project can also transmit power to the midwestern
United States.
Our projects in the United Kingdom sell their electrical energy and capacity
through a centralized electricity pool, which establishes a half-hourly
clearing price, also referred to as the pool price, for electrical energy. The
pool price is extremely volatile and can vary by as much as a factor of ten or
more over the course of a few hours, due to the large differentials in demand
according to the time of day. First Hydro and Ferrybridge and Fiddler's Ferry
mitigate a portion of the market risk of the pool by entering into contracts
for differences, which are electricity rate swap agreements related to either
the selling or purchasing price of power. These contracts specify a price at
which the electricity will be traded, and the parties to the agreement make
payments calculated based on the difference between the price in the contract
and the pool price for the element of power under contract. These contracts are
sold in various structures and act to stabilize revenues or purchasing costs by
removing an element of their net exposure to pool price volatility.
40
<PAGE>
On July 29, 1998, the Director General of Electricity Supply proposed to the
Minister for Science, Energy and Industry that the current structure of
contracts for differences and compulsory trading via the pool at half-hourly
clearing prices bid a day ahead be abolished. He proposed in their place, among
other things:
. the establishment of voluntary forwards and futures markets, organized
by independent market operators and evolving in response to demand;
. a short-term bilateral market operating from 24 to four-hours before a
trading period;
. a balancing market to enable the system operator to balance generation
and demand and resolve any transmission constraints;
. a settlement process for recovering imbalances between contracted and
metered volumes with stronger incentives for being in balance; and
. a Balancing and Settlement Code Panel to oversee governance of the
short-term bilateral and balancing markets.
The Minister for Science, Energy and Industry has recommended that the proposal
be implemented by October 2000. Further definition of the proposal will be
required before the effects of the changes can be evaluated. Legislation is
being introduced to allow for the implementation of new trading arrangements.
The Loy Yang B project sells its electrical energy through a centralized
electricity pool, which provides for a system of generator bidding, central
dispatch and a settlements system based on a clearing market for each half-hour
of every day. The Victorian Power Exchange, operator and administrator of the
pool, determines a system marginal price each half-hour. To mitigate exposure
to price volatility of the electricity traded into the pool, the Loy Yang B
project has entered into a number of financial hedges. From May 8, 1997 to
December 31, 2000, approximately 53% to 64% of the plant output sold is hedged
under vesting contracts with the remainder of the plant capacity hedged under
the state hedge described below. Vesting contracts were put into place by the
State Government of Victoria, Australia, between each generator and each
distributor, prior to the privatization of electric power distributors, in
order to provide more predictable pricing for those electricity customers that
were unable to choose their electricity retailer. Vesting contracts set base
strike prices at which the electricity will be traded. The parties to the
vesting contracts make payments, which are calculated based on the difference
between the price in the contract and the half-hourly pool clearing price for
the element of power under contract. Vesting contracts are sold in various
structures and are accounted for as electricity rate swap agreements. The state
hedge is a long-term contractual arrangement based upon a fixed price
commencing May 8, 1997 and terminating October 31, 2016. The State of Victoria
guarantees the State Electricity Commission of Victoria's obligations under the
state hedge.
Power Marketing and Trading Activities
When making sales under negotiated contracts, it is our policy to deal with
investment grade parties. We hedge a portion of the electric output of our
merchant plants in order to stabilize and enhance the operating revenues from
merchant plants. When appropriate we manage the "spark spread," or margin,
which is the spread between electric prices and fuel prices and use forward
contracts, swaps, futures, or options contracts to achieve those objectives.
Our power marketing and trading organization is divided into front-, middle-
and back-office segments, with specified duties segregated for control
purposes. The risk management personnel have a high level of knowledge of
utility operations, fuel procurement, energy marketing and futures and options
trading. We have systems in place which monitor real-time spot and forward
pricing and perform option valuations. We also have a wholesale power
scheduling group that operates on a 24-hour basis.
Fuel Supply Contracts
We seek to enter into long-term contracts to mitigate the risks of
fluctuations in prices for coal, oil, gas and fuel transportation. We believe,
however, that our financial condition will not be substantially adversely
41
<PAGE>
affected by these fluctuations because our long-term contracts to sell power
and steam typically are structured so that fluctuations in fuel costs will
produce similar fluctuations in electric energy and/or steam revenues. The
degree of linkage between these revenues and expenses varies from project to
project, but generally permits the projects to operate profitably under a wide
array of potential price fluctuation scenarios.
Project Financing
Each project we develop requires a substantial capital investment. The
permanent project financing is often arranged immediately prior to the
construction of the project. With limited exceptions, this debt financing is
for approximately 50 to 80% of each project's costs and is structured on a
basis that is non-recourse to us and our other projects. In addition, the
collateral security for each project's financing generally has been limited to
the physical assets, contracts and cash flow of that project and our ownership
interests in that project.
In general, each of our direct or indirect subsidiaries is organized as a
legal entity separate and apart from us and our other subsidiaries. Any asset
of any of these subsidiaries may not be available to satisfy our obligations or
any of our other subsidiaries. However, unrestricted cash or other assets that
are available for distribution by a subsidiary may, subject to applicable law
and the terms of financing arrangements of these subsidiaries, be advanced,
loaned, paid as dividends or otherwise distributed or contributed to us.
The ability to arrange project financing and the cost of this financing are
dependent upon numerous factors, including:
. general economic and capital market conditions,
. the credit attributes of a project,
. conditions in energy markets, regulatory developments, credit
availability from banks or other lenders, investor confidence in the
industry,
. Edison Mission Energy and other project participants,
. the continued success of our other projects, and
. provisions of tax and securities laws that are conducive to raising
capital.
We have developed extensive project and corporate financing expertise in the
relevant markets of execution and seek to mitigate financing risks by
developing flexible financing plans that allow for access to a number of
alternate markets.
Our financial exposure in any project is generally limited by contractual
arrangement to our equity commitment, which is usually about 20 to 50% of our
share of the aggregate project cost. In some cases, we provide additional
credit support to projects in the form of debt service reserves, contingent
equity commitments, revenue shortfall support or other arrangements designed to
provide limited support.
Permits and Approvals
Because the process for obtaining initial environmental, siting and other
governmental permits and approvals is complicated and lengthy, often taking a
year or longer, we seek to obtain all permits, licenses and other approvals
required for the construction and operation of a project, including siting,
construction and environmental permits, rights-of-way and planning approvals,
early in the development process for a project. See "--Regulatory Matters--
General."
Construction, Operations & Maintenance and Management
In the project implementation stage, we often provide construction
management, start-up and testing services. The detailed engineering and
construction of the projects typically are performed by outside contractors
under fixed-price, turnkey contracts. Under these contracts, the contractor
generally is required to
42
<PAGE>
pay liquidated damages to us in the event of cost overruns, schedule delays or
the project's failure to meet specified capacity, efficiency and emission
standards.
As a project goes into operation, operation and maintenance services are
provided to the project by one of our operation and maintenance subsidiaries or
another operation and maintenance contractor. The projects that we operated in
1998 achieved an average 97% availability. Availability is a measure of the
weighted average number of hours each generator is available for generation as
a percentage of the total number of hours in a year.
An executive director generally manages the day-to-day administration of
each project. Management committees comprised of a project's partners generally
meet monthly or quarterly to review and manage the operating performance of the
project.
43
<PAGE>
Our Operating Power Generation Facilities
Domestic
As indicated in the table below, we currently own interests in 34 domestic
operating projects in ten states. These operating projects consist of 13
natural gas-fired cogeneration projects, one coal-fired cogeneration project,
seven coal-fired eligible facility projects, one waste coal project and 12 gas-
fired eligible facility projects. All of the our domestic cogeneration
projects, as well as the waste coal project, are qualifying facilities under
the Public Utility Regulatory Policies Act. Our domestic operating projects
have a total generating capacity of 15,003 MW, of which our net ownership share
is 13,008 MW.
<TABLE>
<CAPTION>
Electric Operation/
Capacity Primary Electric Type of Ownership Acquisition
Project Location (in MW) Purchaser(2) Facility(3) Interest Date
------- ------------- -------- ---------------- ---------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
American Bituminous(1) West Virginia 80 MPC Waste Coal 50% 1993
Auburndale(1) Florida 150 FPC Cogeneration/EWG 50% 1994
Bayonne New Jersey 165 JCP&L/PSE&G Cogeneration 0.38% 1989
Brooklyn Navy Yard New York 286 CE Cogeneration/EWG 50% 1996
Coalinga(1) California 38 PG&E Cogeneration 50% 1991
Commonwealth Atlantic Virginia 340 VEPCO EWG 50% 1992
Gordonsville(1) Virginia 240 VEPCO Cogeneration/EWG 50% 1994
Harbor(1) California 80 Pool EWG 30% 1989
Homer City(1) Pennsylvania 1,884 Pool EWG 100% 1999
Hopewell Virginia 356 VEPCO Cogeneration 25% 1990
Illinois Plants (1) Illinois 9,510 ComEd EWG 100%(4) 1999
(12 projects)
James River Virginia 110 VEPCO Cogeneration 50% 1987
Kern River(1) California 300 SCE Cogeneration 50% 1985
March Point 1 Washington 80 PSE Cogeneration 50% 1991
March Point 2 Washington 60 PSE Cogeneration 50% 1993
Mid-Set(1) California 38 PG&E Cogeneration 50% 1989
Midway-Sunset(1) California 225 SCE Cogeneration 50% 1989
Nevada Sun-Peak Nevada 210 NVP EWG 50% 1991
Saguaro(1) Nevada 90 NVP Cogeneration 50% 1991
Salinas River(1) California 38 PG&E Cogeneration 50% 1991
Sargent Canyon(1) California 38 PG&E Cogeneration 50% 1991
Sycamore(1) California 300 SCE Cogeneration 50% 1988
Watson California 385 SCE Cogeneration 49% 1988
</TABLE>
- --------
(1) Operated by Edison Mission Energy.
(2) Electric purchaser abbreviations are as follows:
<TABLE>
<S> <C>
CE Consolidated Edison Company of New York, Inc.
ComEd Commonwealth Edison Company
FPC Florida Power Corporation
JCP&L Jersey Central Power & Light Company
MPC Monongahela Power Company
NVP Nevada Power Company
Pool Regional electricity trading market
</TABLE>
<TABLE>
<S> <C>
PG&E Pacific Gas & Electric Company
PSE Puget Sound Energy, Inc.
PSE&G Public Service Electric & Gas Company
SCE Southern California Edison Company
VEPCO Virginia Electric & Power Company
</TABLE>
(3) All of the cogeneration projects are gas-fired facilities, except for the
James River project, which uses coal.
(4) We own 6,812 MW of the Illinois Plants and lease the remaining 2,698 MW
from an unrelated party under a 33.75 year lease entered into by us in
December 1999.
44
<PAGE>
International
As indicated in the table below, we own interests in 38 operating projects
outside the United States. The total generating capacity of these facilities is
11,646 MW, of which our net ownership share is 9,048 MW.
<TABLE>
<CAPTION>
Electric Operation/
Capacity Primary Electric Ownership Acquisition
Project Location (in MW) Purchaser(/2/) Interest Date
- ------- -------------- -------- ---------------- --------- ----------------
<S> <C> <C> <C> <C> <C>
Contact (10
projects) New Zealand(6) 2,626 Pool 40% 1999, 2000
Derwent(1) England 214 SE(3) 33% 1995
Dinorwig(1) Wales 1,728 Pool 100% 1995
Doga(1) Turkey 180 TEAS 80% 1999
Ferrybridge(1) England 1,960 Pool 100% 1999
Ffestiniog(1) Wales 360 Pool 100% 1995
Fiddler's
Ferry(1) England 1,926 Pool 100% 1999
Iberian Hy-
Power I(1) (5
projects) Spain 43 FECSA 100%(7) 1992, 1996
Iberian Hy-
Power II(1)
(13 projects) Spain 43 FECSA 100% 1993, 1996
Kwinana(1) Australia 116 WP 100% 1996
Loy Yang B(1) Australia 1,000 Pool(4) 100% 1993, 1996, 1997
Paiton(1) Indonesia 1,230 PLN 40% 1999
Roosecote England 220 NORWEB(5) 100% 1992, 1999
</TABLE>
- --------
(1) Operated by Edison Mission Energy.
(2) Electric purchaser abbreviations are as follows:
<TABLE>
<C> <C> <C> <S>
FECSA Fuerzas Electricas de Cataluma, S.A. PLN PT Perusahaan Listrik Negara
NORWEB North Western Electricity Board SE Southern Electric plc
WP Western Power TEAS Turkiye Elektrik Urehm, A.S.
Pool Electricity trading market for England,
Wales, Australia and New Zealand
</TABLE>
(3) Sells to the pool with a long-term contract with SE.
(4) Sells to the pool with a long-term contract with the State Electricity
Commission of Victoria.
(5) Sells to the pool with a long-term contract with NORWEB.
(6) Minority interest in one project in Australia.
(7) Minority interests are owned by third parties in three of the projects.
Oil and Gas Investments
In 1988, we formed a wholly-owned subsidiary, Mission Energy Fuel Company,
to develop and invest in fuel interests. Since that time, Mission Energy Fuel
Company has invested in a number of oil and gas properties and a production
company. Oil and gas produced from the properties are generally sold at spot or
short-term market prices.
Four Star
Edison Mission Energy and Texaco Inc. each owned approximately 50% of the
stock of Four Star Oil & Gas Company at December 31, 1998. The underlying value
of Four Star is attributable to production of oil and gas from nine producing
properties. Our proportionate interest in net quantities of proved reserves at
December 31, 1998 totaled 190.5 billion cubic feet of natural gas and 21.2
million barrels of oil. On November 1, 1999, we completed the sale of a portion
of our interest in Four Star to a company in which we hold a 50% interest. Net
proceeds from the sale of a portion of this investment were $20.5 million.
During the fourth quarter of 1999, we recorded a pre-tax gain on sale of our
investment of approximately $6 million dollars. Our net ownership interest in
Four Star was reduced from 50% to 34% as a result of the transaction. During
December 1999, we purchased additional shares of stock of Four Star, increasing
our ownership to 35%.
45
<PAGE>
Competition
We compete with many other companies, including multinational development
groups, equipment suppliers and other independent power producers, including
affiliates of utilities, in selling electric power and steam. We also compete
with electric utilities in obtaining the right to install new generating
capacity. Over the past decade, obtaining a power sales contract with a utility
has generally become a progressively more difficult, expensive and competitive
process. Many power sales contracts are now awarded by competitive bidding,
which both increases the costs of obtaining these contracts and decreases the
chances of obtaining these contracts. We evaluate each potential project in an
effort to determine when the probability of success is high enough to justify
expenditures in developing a proposal or bid for the project.
Amendments to the Public Utility Holding Company Act of 1935 made by the
Energy Policy Act have increased the number of competitors in the domestic
independent power industry by reducing restrictions applicable to projects that
are not qualifying facilities under the Public Utility Regulatory Policies Act.
Retail wheeling of power, which is the offering by utilities of unbundled
retail distribution service, could also lead to increased competition in the
independent power market. See "--Regulatory Matters--Retail Competition."
Tax Sharing Agreements
We are included in the consolidated federal income tax and combined state
franchise tax returns of Edison International. We calculate our income tax
provision on a separate company basis under a tax sharing arrangement with The
Mission Group, which in turn has an agreement with Edison International. Tax
benefits generated by us and used in the Edison International consolidated tax
return are recognized by us without regard to separate company limitations.
Employees and Offices
At December 31, 1999, we employed 3,245 people, all of whom were full-time
employees and approximately 636, 146 and 1,179 of whom were covered by
collective bargaining agreements in the United Kingdom, Australia and the
United States, respectively. We have never experienced a work stoppage, strike
or labor dispute. We believe we have good relations with our employees.
We lease our corporate headquarters in Irvine, California and our principal
regional offices in London, Melbourne and Singapore. We also lease other
smaller offices in the United States and certain foreign countries.
Regulatory Matters
General
Our operations are subject to extensive regulation by governmental agencies
in each of the countries in which we conduct operations. Our domestic projects
are subject to energy, environmental and other governmental laws and
regulations at the federal, state and local levels in connection with the
development, ownership and operation of, and use of electric energy, capacity
and related products, including ancillary services from, our projects. Federal
laws and regulations govern, among other things, transactions by and with
purchasers of power, including utility companies, the operations of a project
and the ownership of a project. Under limited circumstances where exclusive
federal jurisdiction is not applicable or specific exemptions or waivers from
state or federal laws or regulations are otherwise unavailable, federal and/or
state utility regulatory commissions may have broad jurisdiction over non-
utility owned electric power plants. Energy-producing projects are also subject
to federal, state and local laws and regulations that govern the geographical
location, zoning, land use and operation of a project. Federal, state and local
environmental requirements generally require that a wide variety of permits and
other approvals be obtained before the commencement of construction or
operation of an energy-producing facility and that the facility then operate in
compliance with these permits and approvals. While we believe the requisite
approvals for our existing projects have been obtained and that our business is
operated in substantial compliance with applicable laws, we remain subject to
46
<PAGE>
a varied and complex body of laws and regulations that both public officials
and private parties may seek to enforce. Regulatory compliance for the
construction of new facilities is a costly and time consuming process.
Intricate and changing environmental and other regulatory requirements may
necessitate substantial expenditures and may create a significant risk of
expensive delays or significant loss of value in a project if the project is
unable to function as planned due to changing requirements or local opposition.
Each of our international projects is subject to the energy and
environmental laws and regulations of the foreign country in which this project
is located. The degree of regulation varies according to each country and may
be materially different from the regulatory regime in the United States.
U.S. Federal Energy Regulation
Overview. The enactment of the Public Utility Regulatory Policies Act in
1978 and the adoption of regulations under this act by the Federal Energy
Regulatory Commission provided incentives for the development of cogeneration
facilities and of small power production facilities utilizing alternative or
renewable fuels. The passage of the Energy Policy Act in 1992 further
encouraged independent power production by providing limited exemptions from
the Public Utility Holdings Company Act, but not from the Federal Power Act or
state regulation, for exempt wholesale generators and foreign utility
companies.
A domestic electricity generating project must be a qualifying facility
under the Federal Energy Regulatory Commission regulations in order to take
advantage of selected rate and regulatory incentives provided by the Public
Utility Regulatory Policies Act. Subject to limited exceptions, the Public
Utility Regulatory Policies Act exempts:
. owners of qualifying facilities from the Public Utility Holdings Company
Act,
. qualifying facilities from most provisions of the Federal Power Act and,
. qualifying facilities from most provisions of state laws concerning
rate, financial or organizational regulation, except under limited
circumstances.
In order to be a qualifying facility, a cogeneration facility must:
(1) sequentially produce both useful thermal, such as steam, and electric
energy,
(2) meet specified operating standards and energy efficiency standards when
oil or natural gas is used as a fuel source and
(3) not be controlled, or more than 50% owned, by an electric utility, an
electric utility holding company or an affiliate of these entities.
A number of non-cogeneration facilities may also be qualifying facilities if
they produce power from renewable energy, such as geothermal energy, or a waste
source of fuel, such as waste coal, and meet the ownership restrictions
discussed above. Before 1990, non-cogeneration qualifying facilities were
subject to 30 MW or 80 MW size limits, depending upon their fuel source. In
1990, these limits were lifted for solar, wind, waste, and geothermal
qualifying facilities, provided that applications for or notices of qualifying
facility status were filed with the Federal Energy Regulatory Commission for
these facilities on or before December 31, 1994, and provided, in the case of
new facilities, the construction of these facilities commenced on or before
December 31, 1999.
Amendments made to the Public Utility Holdings Company Act by the Energy
Policy Act provide that owners or operators of exempt wholesale generators and
foreign utility companies will not be considered electric utility companies,
and upstream owners will not be considered holding companies under the Public
Utility Holdings Company Act. An exempt wholesale generator is an entity
determined by the Federal Energy Regulatory Commission to be exclusively
engaged, directly or indirectly, in the business of owning and/or operating
specified eligible facilities and selling electric energy at wholesale, or, if
located in a foreign country,
47
<PAGE>
at wholesale or retail. A foreign utility company is, in general, an entity
located outside the United States that owns or operates facilities used for the
generation, distribution or transmission of electric energy for sale or the
distribution at retail of natural or manufactured gas, but derives none of its
income, directly or indirectly, from these activities within the United States.
Under present federal law, we are not and will not be subject to regulation
as a holding company under the Public Utility Holdings Company Act as long as
the projects in which we have an interest are qualifying facilities, exempt
wholesale generators or foreign utility companies or are subject to another
exemption from regulation. See "Public Utility Holdings Company Act."
Public Utility Regulatory Policies Act. The Public Utility Regulatory
Policies Act provides two primary benefits to qualifying facilities. First,
qualifying facilities are relieved of compliance with extensive federal and
state regulations that control the development, financial structure and
operation of an energy-producing project and the prices and terms on which
wholesale energy may be sold by the project. Second, the Federal Energy
Regulatory Commission regulations promulgated under the Public Utility
Regulatory Policies Act require that electric utilities purchase electricity
generated by qualifying facilities at a price based on the purchasing utility's
avoided cost, and that the utilities sell back-up power to the qualifying
facility on a non-discriminatory basis. The term "avoided cost" is defined by
the Federal Energy Regulatory Commission regulations as the incremental cost to
an electric utility of electric energy or capacity or both which, but for the
purchase from the qualifying facility or qualifying facilities, this utility
would generate itself or purchase from another source. The Federal Energy
Regulatory Commission regulations also permit qualifying facilities and
utilities to negotiate agreements for utility purchases of power at prices
different than the utility's avoided costs. While public utilities are not
explicitly required by the Public Utility Regulatory Policies Act to enter into
long-term contracts, it has been common for long-term contracts to be
negotiated in order, among other things, to facilitate the project financing of
independent power facilities and to reflect the deferral by the utility of
capital costs for new plant additions. However, increasing competition and the
development of new power markets have resulted in a trend toward shorter term
power contracts that would place greater risk on the project owner.
We endeavor to develop our qualifying facility projects, monitor regulatory
compliance by these projects and choose our customers in a manner that
minimizes the risks of losing these projects' qualifying facility status.
However, some factors necessary to maintain qualifying facility status are
subject to risks of events outside of our control. For example, loss of a
thermal energy customer or failure of a thermal energy customer to take
required amounts of thermal energy from a cogeneration facility that is a
qualifying facility could cause this facility to fail requirements regarding
the level of useful thermal energy output. Upon the occurrence of this event,
we would seek to replace the thermal energy customer or find another use for
the thermal energy that meets the Public Utility Regulatory Policies Act's
requirements.
If one of the projects in which we have an interest were to lose its status
as a qualifying facility, the project would no longer be entitled to the
qualifying facility-related exemptions from regulation under the Public Utility
Regulatory Policies Act and the Federal Power Act. This could subject the
project to rate regulation as a public utility under the Federal Power Act and
could result in Edison Mission Energy inadvertently becoming a public utility
holding company by owning more than 10% of the voting securities of, or
controlling, a facility that would no longer be exempt from the Public Utility
Holdings Company Act. Loss of qualifying facility status may also trigger
defaults under covenants to maintain qualifying facility status in the
project's power sales agreements, steam sales agreements and financing
agreements and result in termination, penalties or acceleration of indebtedness
under these agreements. This loss of qualifying facility status may be on a
retroactive or a prospective basis. If a power purchaser ceased taking and
paying for electricity or sought to obtain refunds of past amounts paid due to
the loss of qualifying facility status, we cannot assure you that the costs
incurred in connection with the project could be recovered through sales to
other purchasers. Moreover, our business and financial condition could be
adversely affected if regulations or legislation were modified or enacted that
changed the standards for maintaining qualifying facility status or that
eliminated or reduced the benefits and exemptions currently enjoyed by
qualifying facilities. If a project were to lose its qualifying facility
status, we could attempt to avoid holding company status on a prospective basis
by
48
<PAGE>
qualifying the project as an exempt wholesale generator. However, assuming this
changed status would be permissible under the terms of the applicable power
sales agreement, rate approval from the Federal Energy Regulatory Commission
would be required. In addition, the project would be required to cease selling
electricity to any retail customers, in order to qualify for exempt wholesale
generator status, and could become subject to additional state regulation. Loss
of qualifying facility status on a retroactive basis could lead to, among other
things, fines and penalties being levied against us, or claims by the utility
customer for refund of payments previously made. Loss of qualifying facility
status by one project could also, because of the Public Utility Regulatory
Policies Act ownership restrictions, adversely affect the qualifying facility
status of other projects having one or more of the same partners. In addition,
under Section 26(b) of the Public Utility Holdings Company Act, any project
contracts that are entered into in violation of the Public Utility Holdings
Company Act may be determined by the courts or the SEC to be void.
The Energy Policy Act. The passage of the Energy Policy Act in 1992
significantly expanded the options available to independent power producers
with respect to their regulatory status. The Energy Policy Act created a new
class of power producer, the exempt wholesale generator, that, like a
qualifying facility, is not considered an electric utility company under the
Public Utility Holding Company Act. Exempt wholesale generators may own
facilities of any size, use any fuel source and be owned by utilities or non-
utilities. Thus, in addition to qualifying facility status, an independent
power producer now can also apply to the Federal Energy Regulatory Commission
to be granted status as an exempt wholesale generator. Exempt wholesale
generators, however, are not exempt from regulation by the Federal Energy
Regulatory Commission or state public utility commissions. The effect of these
amendments is to enhance the development of non-qualifying facilities that do
not have to meet the fuel, production and ownership requirements of the Public
Utility Regulatory Policies Act. We believe that the amendments benefit us by
expanding our ability to own and operate facilities that do not qualify for
qualifying facility status, but also result in increased competition because
utilities and other companies, such as equipment suppliers, may now develop
facilities that are not subject to the constraints of the Public Utility
Holding Company Act. The Energy Policy Act also expanded the Federal Energy
Regulatory Commission authority to order utilities to grant transmission access
to qualifying facilities and exempt wholesale generators and lifted
restrictions on ownership of foreign utilities by U.S. companies. Under the
Energy Policy Act, foreign utility companies are also not electric utility
companies under the Public Utility Holdings Company Act.
Public Utility Holdings Company Act. Under the Public Utility Holdings
Company Act, any corporation, partnership or other entity or organized group
that owns, controls or holds with power to vote 10% or more of the outstanding
voting securities of a public-utility company or a company that is a holding
company of a public utility company is subject to registration with the SEC and
regulation under the Public Utility Holdings Company Act, unless eligible for
an exemption or unless an appropriate application is filed with, and an order
is granted by, the SEC declaring it not to be a holding company. A registered
public utility holding company regulated under the Public Utility Holdings
Company Act is required to limit its utility operations to a single integrated
utility system and to divest any other operations not functionally related to
the operation of that utility system. Approval by the SEC is required for major
financial commitments and other business dealings of the regulated holding
company or its subsidiaries.
As noted above, however, regulations have been adopted under the Public
Utility Regulatory Policies Act and the Energy Policy Act providing that
qualifying facilities, exempt wholesale generators and foreign utility
companies are not public utility companies under the Public Utility Holdings
Company Act. Accordingly, we are not regulated as a holding company under the
Public Utility Holdings Company Act because the power generation facilities we
own or in which we have investments are either qualifying facilities, exempt
wholesale generators or foreign utility companies. All international projects
and specified U.S. projects that we are currently developing or proposing to
acquire will be non-qualifying facility independent power projects. We intend
for each project to qualify as an exempt wholesale generator or as a foreign
utility company. Loss of exempt wholesale generator or foreign utility company
status, like loss of qualifying facility status, could also result in Edison
Mission Energy becoming subject to registration and regulation as a public
utility holding
49
<PAGE>
company under the Public Utility Holdings Company Act and could trigger
defaults under covenants in project agreements. Loss of exempt wholesale
generator or foreign utility company status on a retroactive basis could lead
to, among other things, fines and penalties and could cause specified project
and other contracts to be void.
Natural Gas Act. Nineteen of the domestic operating facilities that we own,
operate or have investments in are fueled by natural gas. Under the Natural Gas
Act, the Federal Energy Regulatory Commission has jurisdiction over the sale,
transportation and storage of natural gas in interstate commerce. With respect
to most transactions that do not involve the construction of pipeline
facilities, regulatory authorization can be obtained on a self-implementing
basis. However, pipeline rates for these services are subject to continuing
Federal Energy Regulatory Commission oversight. Order No. 636, issued by the
Federal Energy Regulatory Commission in April 1992, and affirmed in Orders 636A
and 636B issued, respectively, in August and November 1992, required the
restructuring of interstate natural gas pipeline sales and transportation
services and changed the terms and conditions under which interstate pipelines
provide transportation services, as well as the rates pipelines may charge for
these services. The restructuring required by the rule included:
(1) the separation of a pipeline's sales, transportation and storage
services,
(2) the prohibition against pipelines engaging in sales of gas,
(3) the implementation of a straight fixed-variable rate design methodology
under which all of a pipeline's fixed costs are recovered through its
reservation charge,
(4) the implementation of a capacity releasing mechanism under which
holders of firm transportation capacity on pipelines can release that
capacity for resale by the pipeline, and
(5) the opportunity for pipelines to recover 100% of their prudently
incurred costs associated with implementing the restructuring mandated
by this rule.
Federal Power Act. The Federal Power Act grants the Federal Energy
Regulatory Commission exclusive ratemaking jurisdiction over wholesale sales of
electricity in interstate commerce, including ongoing as well as initial rate
jurisdiction. This ratemaking jurisdiction enables the Federal Energy
Regulatory Commission to revoke or modify previously approved rates. These
rates may be based on a cost-of-service approach or may, in competitive
markets, be market-based. While qualifying facilities under the Public Utility
Regulatory Policies Act generally are exempt from the ratemaking and some other
provisions of the Federal Power Act, exempt wholesale generators and other non-
qualifying facility independent power projects are subject to the Federal Power
Act and to Federal Energy Regulatory Commission ratemaking jurisdiction, which
may limit their flexibility in negotiations with power purchasers. However,
since these projects would not be bound by the Public Utility Regulatory
Policies Act's thermal energy use requirement, they have greater latitude in
site selection and facility size. In addition, as noted above, we may own 100%
of exempt wholesale generators. In addition, the Federal Power Act grants
Federal Energy Regulatory Commission jurisdiction over the sale or transfer of
jurisdictional facilities, including wholesale power sales contracts, and in
some cases, jurisdiction over the issuance of securities or the assumption of
specified liabilities.
Currently, five of our operating projects, the Homer City, Nevada Sun-Peak,
Brooklyn Navy Yard, Commonwealth Atlantic and Harbor projects, are subject to
Federal Energy Regulatory Commission rate-making regulation under the Federal
Power Act. Our future domestic non-qualifying facility independent power
projects will also be subject to Federal Energy Regulatory Commission
jurisdiction on rates.
State Energy Regulation
State public utility commissions have broad jurisdiction over non-qualifying
facility independent power projects, including exempt wholesale generators,
which are considered public utilities in many states. This jurisdiction often
includes the issuance of certificates of public convenience and necessity
and/or other certifications to construct, own and operate a facility, as well
as regulation of organizational, accounting, financial and other corporate
matters on an ongoing basis. Qualifying facilities may also be required to
obtain
50
<PAGE>
these certificates in some states. Several states that have restructured their
electric industries require generators to register to provide electric service
to customers. Many states are currently undergoing significant changes in their
electric statutory and regulatory frameworks that result from restructuring the
electric industries that may affect generators in those states. Although the
Federal Energy Regulatory Commission generally has exclusive jurisdiction over
the rates charged by a non-qualifying facility independent power project to its
wholesale customers, a state's public utility commission has the ability, in
practice, to influence the establishment of these rates by asserting
jurisdiction over the purchasing utility's ability to pass through the
resulting cost of purchased power to its retail customers. A state's public
utility commission also has the authority to determine avoided costs for
qualifying facilities and regulate the retail rates charged by qualifying
facilities. In addition, states may assert jurisdiction over the siting and
construction of independent power projects and, among other things, the
issuance of securities, related party transactions and the sale or other
transfer of assets by these facilities. The actual scope of jurisdiction over
independent power projects by state public utility commissions varies from
state to state.
In addition, state public utility commissions may seek to modify, suspend or
terminate a qualifying facility's power sales contract under limited
circumstances. This could occur if the state public utility commission
determined that the pricing mechanism of the power sales contract is unfairly
high in light of the current prevailing market cost of power for the utility
purchasing the power. In this instance, the state public utility commission may
attempt to alter the terms of the power sales contract to reflect more
accurately market conditions for the prevailing cost of power. While we believe
that these attempts are not common and that state public utility commissions
may not have any jurisdiction to modify the terms of wholesale power sales, we
cannot assure you that the power sales contracts of our projects will not be
subject to adverse regulatory actions.
The California Public Utility Commission has authorized the electric
utilities in California to monitor compliance by qualifying facilities with
Public Utility Regulatory Policies Act rules and regulations. However, the
United States Court of Appeals for the Ninth Circuit found in 1994 that a
California Public Utility Commission program was preempted by the Public
Utility Regulatory Policies Act to the extent it authorized utilities to
determine that a qualifying facility was not in compliance with Public Utility
Regulatory Policies Act rules and regulations, to then pay a reduced avoided
cost rate and to take other action contrary to a facility's status as a
qualifying facility. The court did, however, uphold reasonable monitoring of
qualifying facility operating data. Other states, like New York and Virginia,
have also instituted qualifying facility monitoring programs.
We buy and transport the natural gas used at our domestic facilities through
local distribution companies. State public utility commissions have
jurisdiction over the transportation of natural gas by local distribution
companies. Each state's regulatory laws are somewhat different; however, all
generally require the local distribution companies to obtain approval from the
relevant public utility commission for the construction of facilities and
transportation services if the local distribution company's generally
applicable tariffs do not cover the proposed transaction. Local distribution
companies rates are usually subject to continuing public utility commission
oversight.
Recent Foreign Regulatory Matters
On July 29, 1998, the British Director General of Electricity Supply
proposed to the Minister for Science, Energy and Industry that the current
structure of contracts for differences and compulsory trading via the pool at
half-hourly clearing prices bid a day ahead be abolished.
He proposed in their place, among other things:
. the establishment of voluntary forwards and futures markets, organized
by independent market operators and evolving in response to demand;
. a short-term bilateral market operating from 24 to four-hours before a
trading period;
51
<PAGE>
. a balancing market to enable the system operator to balance generation
and demand and resolve any transmission constraints;
. a settlement process for recovering imbalances between contracted and
metered volumes with stronger incentives for being in balance;
. and a Balancing and Settlement Code Panel to oversee governance of the
short-term bilateral and balancing markets.
The Minister for Science, Energy and Industry has recommended that the
proposal be implemented by October 2000. Further definition of the proposal
will be required before the effects of the changes on our U.K. projects can be
evaluated. Legislation is being introduced to allow for the implementation of
new trading arrangements.
The New Zealand Government has been undergoing a steady process of electric
industry deregulation since 1987. Reform in the distribution and retail supply
sector began in 1992 with legislation that deregulated electricity distribution
and provided for competition in the retail electric supply function. The New
Zealand Energy Market, established in 1996, is a voluntary competitive
wholesale market which allows for the trading of physical electricity on a
half-hourly basis. The Electricity Industry Reform Act, which was passed in
July 1998, was designed to increase competition at the wholesale generation
level by splitting up Electricity Company of New Zealand Limited, the large
state-owned generator, into three separate generation companies. The
Electricity Industry Reform Act also prohibits the ownership of both generation
and distribution assets by the same entity.
Transmission of Wholesale Power
Generally, projects that sell power to wholesale purchasers other than the
local utility to which the project is interconnected require the transmission
of electricity over power lines owned by others, which is called "wheeling".
The prices and other terms and conditions of transmission contracts are
regulated by the Federal Energy Regulatory Commission when the entity providing
the wheeling service is a jurisdictional public utility under the Federal Power
Act. Until 1992, the Federal Energy Regulatory Commission's ability to compel
wheeling was very limited, and the availability of voluntary wheeling service
could be a significant factor in determining whether a site was viable for
project development.
The Federal Energy Regulatory Commission's authority under the Federal Power
Act to require electric utilities to provide transmission service on a case by
case basis to qualifying facilities, exempt wholesale generators, and other
power generators was expanded substantially by the Energy Policy Act.
Furthermore, in 1996 the Federal Energy Regulatory Commission issued a
rulemaking order, Order 888, in which the Federal Energy Regulatory Commission
asserted the power, under its authority to eliminate undue discrimination in
transmission, to compel all jurisdictional public utilities under the Federal
Power Act to file open access transmission tariffs consistent with a pro forma
tariff drafted by the Federal Energy Regulatory Commission. The Federal Energy
Regulatory Commission subsequently issued Orders 888-A, 888-B and 888-C to
clarify the terms that jurisdictional transmitting utilities are required to
include in their open access transmission tariffs. The Federal Energy
Regulatory Commission also issued Order 889, which required those transmitting
utilities to abide by specified standards of conduct when using their own
transmission systems to make wholesale sales of power, and to post certain
transmission information, including information about transmission requests and
availability, on a publicly available computer bulletin board. Although the pro
forma tariff does not cover the pricing of transmission service, Order 888 is
expected to improve transmission access for independent power producers like
us. A recent decision by the United States Court of Appeals for the Eighth
Circuit has cast doubt on the extent of the Federal Energy Regulatory
Commission's authority to require specified curtailment policies in the pro
forma tariff.
52
<PAGE>
Retail Competition
In response to pressure from retail electric customers, particularly large
industrial users, the state commissions or state legislatures of most states
are considering, or have considered, whether to open the retail electric power
market to competition. Retail competition is possible when a customer's local
utility agrees, or is required, to unbundle its distribution service, from its
transmission and generation service. The delivery of electric power through its
local distribution lines and the provision of electric power from the utility's
generating facilities or wholesale power purchases are examples of a local
utility's distribution services and its transmission and generation service,
respectively. Several state commissions and legislatures have issued orders or
passed legislation requiring utilities to offer unbundled retail distribution
service, which is called retail wheeling, beginning as early as 1998 and
phasing in retail wheeling over the next several years. Other states are
expected to move toward retail competition by 2000.
The competitive pricing environment that will result from retail competition
may cause utilities to experience revenue shortfalls and deteriorating
creditworthiness. However, we expect that most, if not all, state plans will
insure that utilities receive sufficient revenues, through a distribution
surcharge if necessary, to pay their obligations under existing long-term power
purchase contracts with qualifying facilities and exempt wholesale generators.
On the other hand, qualifying facilities and exempt wholesale generators may be
subject to pressure to lower their contract prices in an effort to reduce the
stranded investment costs of their utility customers.
We believe that, as a predominantly low cost producer of electricity, we
will ultimately benefit from any increased competition that may arise from the
opening of the retail market. Although our exempt wholesale generators are
forbidden under the Public Utility Holdings Company Act from selling electric
power in the retail market, our exempt wholesale generators could sell at
wholesale to a power marketer which could resell at retail. Furthermore,
qualifying facilities are permitted to market power directly to large
industrial users that could not previously be served, because of local
franchise laws or the inability to obtain retail wheeling. We also believe we
will be an attractive wholesale supplier to power marketers serving the newly-
open retail markets.
Environmental Regulation
The construction and operation of power projects are subject to
environmental regulation by federal, state and local authorities in the United
States and regulatory authorities with jurisdiction over the projects located
outside the United States. We believe that, as of the date of this prospectus,
we are in substantial compliance with environmental regulatory requirements and
that maintaining compliance with current requirements will not materially
affect our financial condition or results of operations. However, possible
future developments, like more stringent environmental laws and regulations,
could affect the costs and the manner in which we conduct our business. We
cannot assure you that in this event we would be able to recover these
increased costs from our customers or that our financial position and results
of operations would not be materially adversely affected.
Typically, environmental laws require a lengthy and complex process for
obtaining licenses, permits and approvals prior to construction and operation
of a project. Meeting all of the necessary requirements can delay or sometimes
prevent the completion of a proposed project as well as require extensive
modifications to existing projects, which may involve significant capital
expenditures.
In 1990, Congress passed amendments to the Clean Air Act that greatly expand
the scope of federal regulations in several significant respects. One of our
projects made capital expenditures of approximately $5.5 million, of which our
share is $2.7 million, during 1999 in order to comply with the amended Clean
Air Act. In addition, we plan to spend approximately $258 million to install
upgrades to the environmental controls at the Homer City project during 2000
and 2001 in order to control sulfur dioxide and nitrogen oxide emissions.
Similarly, we plan to upgrade the environmental controls at the former
Commonwealth Edison plants to control
53
<PAGE>
nitrogen oxide emissions. Provisions related to nonattainment, air toxins,
permitting, enforcement and acid rain may affect our projects; however, final
details of all these programs have not been issued by the United States
Environmental Protection Agency and state agencies.
The Comprehensive Environmental Response, Compensation, and Liability Act
requires the cleanup of sites from which there has been a release or threatened
release of hazardous substances. As of the date of this prospectus, we are not
aware of any liability under this act; however, we cannot assure you that we
will not incur this liability in the future.
Legal Proceedings
In February 1997, a civil action was commenced in the Superior Court of the
State of California, Orange County, entitled The Parsons Corporation and PMNC
v. Brooklyn Navy Yard Cogeneration Partners, L.P., Mission Energy New York,
Inc. and B-41 Associates, L.P., Case No. 774980, in which plaintiffs assert
general monetary claims under the Construction Turnkey Agreement in the amount
of $136.8 million. Brooklyn Navy Yard has also filed an action entitled
Brooklyn Navy Yard Cogeneration Partners, L.P. v. PMNC, Parsons Main of New
York, Inc., Nab Construction Corporation, L.K. Comstock & Co., Inc. and The
Parsons Corporation, in the Supreme Court of the State of New York, Kings
County, Index No. 5966/97 asserting general monetary claims in excess of $13
million under the Construction Turnkey Agreement. On March 26, 1998, the
Superior Court in the California action granted PMNC's motion for attachment in
the amount of $43 million against Brooklyn Navy Yard and attached a Brooklyn
Navy Yard bank account in the amount of $0.5 million. Brooklyn Navy Yard is
appealing the attachment order. On the same day, the court stayed all
proceedings in the California action pending the New York action. PMNC's motion
to dismiss the New York action was denied by the New York Supreme Court and
further denied on appeal in September 1998. On March 9, 1999, Brooklyn Navy
Yard filed a motion for partial summary judgment in the New York action. The
motion was denied and Brooklyn Navy Yard has appealed. The parties have agreed
to suspend both the appeal and the commencement of discovery pending voluntary
mediation. We agreed to indemnify Brooklyn Navy Yard Cogeneration and its
partner from all claims and costs arising from or in connection with the
contractor litigation. We believe that the outcome of this litigation will not
have a material adverse effect on our consolidated financial position or
results of operations.
We experience other routine litigation in the normal course of our business.
None of our pending litigation is expected to have a material adverse effect on
our consolidated financial position or results of operations. See "--Regulatory
Matters--Environmental Regulation."
54
<PAGE>
MANAGEMENT
Directors and Executive Officers
Listed below are our current directors and executive officers and their
positions.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Alan J. Fohrer................. 49 President and Chief Executive Officer
John E. Bryson................. 56 Chairman of the Board
Bryant C. Danner............... 62 Director
Thomas R. McDaniel............. 50 Director
Robert M. Edgell............... 53 Executive Vice President and Division
President of Edison Mission Energy, Asia
Pacific
William J. Heller.............. 43 Senior Vice President and Division President
of Edison Mission Energy, Europe, Central
Asia, Middle East and Africa
Kevin M. Smith................. 41 Senior Vice President and Chief Financial
Officer
James V. Iaco, Jr.............. 55 Senior Vice President and Division President
of Edison Mission Energy, Americas
Georgia R. Nelson.............. 50 Senior Vice President and President of
Midwest Generation EME, LLC
Ronald L. Litzinger............ 40 Senior Vice President, Worldwide Operations
Raymond W. Vickers............. 57 Senior Vice President and General Counsel
</TABLE>
Business Experience
Below is a description of the principal business experience during the past
five years of each of the individuals named above and the name of each public
company in which any director named above is a director.
Mr. Fohrer has been President and Chief Executive Officer of Edison Mission
Energy since January 2000. From 1998 to 2000, Mr. Fohrer served as Chairman of
the Board. From 1993 to 1998, Mr. Fohrer served as Vice Chairman of the Board.
Mr. Fohrer has been Executive Vice President and Chief Financial Officer of
Edison International since June 1995. Mr. Fohrer was Executive Vice President
and Chief Financial Officer of Southern California Edison from June 1995 until
January 2000. Effective February 1996 and June 1995, Mr. Fohrer also served as
Treasurer of Southern California Edison and Edison International, respectively,
until August 1996. Mr. Fohrer was Senior Vice President, Treasurer and Chief
Financial Officer of Edison International, and Senior Vice President and Chief
Financial Officer of Southern California Edison from January 1993 until May
1995. Mr. Fohrer was Edison Mission Energy's interim Chief Executive Officer
between May 1993 and August 1993. From 1991 until 1993, Mr. Fohrer was Vice
President, Treasurer and Chief Financial Officer of Edison International and
Southern California Edison.
Mr. Bryson has been Chairman of the Board of Edison Mission Energy since
January 2000. Mr. Bryson has been President of Edison International since
January 2000 and Chairman of the Board and Chief Executive Officer of Edison
International since 1990. Mr. Bryson served as Chairman of the Board, Chief
Executive Officer and a Director of Southern California Edison from 1990 to
January 2000. Mr. Bryson is a director of The Boeing Company and The Times
Mirror Company.
55
<PAGE>
Mr. McDaniel has been a Director of Edison Mission Energy since February
2000. Mr. McDaniel has been President, Chief Executive Officer and a director
of Edison Capital, a wholly owned subsidiary of Edison International, since
September 1987.
Mr. Danner has been a Director of Edison Mission Energy since May 1993. Mr.
Danner has been Executive Vice President and General Counsel of Edison
International and Southern California Edison since June 1995. Mr. Danner was
Senior Vice President and General Counsel of Edison International and Southern
California Edison from July 1992 until May 1995.
Mr. Edgell has been Executive Vice President of Edison Mission Energy since
April 1988. Mr. Edgell was named Division President of Edison Mission Energy's
Asia Pacific region in January 1995.
Mr. Heller has been our Senior Vice President and Division President of
Edison Mission Energy, Europe, Central Asia, Middle East and Africa since
February 2000. Mr. Heller was Senior Vice President of Strategic Planning and
New Business Development for Edison International from January 1996 until
February 2000. Prior to joining Edison International, Mr. Heller was with
McKinsey and Company, Inc from 1982 to 1995, serving as principal and head of
McKinsey's Los Angeles Energy Practice from 1991 to 1995.
Mr. Smith has been Senior Vice President and Chief Financial Officer of
Edison Mission Energy since May 1999. Mr. Smith served as Vice President and
Treasurer of Edison Mission Energy and Regional Vice President, Americas
region, from March 1998 until April 1999. Mr. Smith served as Treasurer of
Edison Mission Energy from 1992 to 2000.
Mr. Iaco has been Senior Vice President of Edison Mission Energy since
January 1994 and Division President of Edison Mission Energy's Americas region
since January 1998. Mr. Iaco served as Chief Financial Officer from January
1994 to May 1999. From September 1993 until December 1993, Mr. Iaco was self-
employed and provided consulting services, specializing in restructuring,
finance, crisis management and other management services. From October 1992
until September 1993, Mr. Iaco served as senior vice president and chief
financial officer of Phoenix Distributors, Inc., a distributor of industrial
gas and welding supplies.
Ms. Nelson has been President of Midwest Generation EME, LLC since May 1999.
From January 1996 until June 1999, Ms. Nelson was Senior Vice President,
Worldwide Operations. Ms. Nelson was Division President of Edison Mission
Energy's Americas region from January 1996 to January 1998. Prior to joining
Edison Mission Energy, Ms. Nelson served as Senior Vice President of Southern
California Edison from June 1995 until December 1995 and Vice President of
Southern California Edison from June 1993 until May 1995. From 1992 to 1993,
Ms. Nelson served as a Special Assistant to the Chairman of Edison
International.
Mr. Litzinger has been Senior Vice President, Worldwide Operations, since
June 1999. Mr. Litzinger served as Vice President-O&M Business Development from
December 1998 to May 1999. Mr. Litzinger has been with Edison Mission Energy
since November 1995 serving as both Regional Vice President, O&M Business
Development and Manager, O&M Business Development until December 1998. Prior to
joining Edison Mission Energy, Mr. Litzinger was a Reliability Supervisor with
Texaco Refining and Marketing, Inc. from March 1995 to October 1995 and prior
to that held numerous management positions with Southern California Edison
since June 1986.
Mr. Vickers has been Senior Vice President and General Counsel of Edison
Mission Energy since March 1999. Prior to joining Edison Mission Energy, Mr.
Vickers was a partner with the law firm Skadden, Arps, Slate, Meagher & Flom
LLP concentrating on international business transactions, particularly cross-
border capital markets and investment transactions, project implementation and
finance. Mr. Vickers originally joined Skadden, Arps, Slate, Meagher & Flom LLP
in 1989 as resident partner in the Hong Kong office.
56
<PAGE>
DESCRIPTION OF THE NOTES
The form and terms of the exchange notes and the original notes are
identical in all material respects, except that transfer restrictions and
registration rights applicable to the original notes do not apply to the
exchange notes.
For purposes of this summary, references to "Edison Mission Energy", "we",
"our", "ours" and "us" do not include any of our direct or indirect
subsidiaries or affiliates. The following description is a summary of material
provisions of the indenture and the notes. It is not a complete description of
the notes and is subject to, and qualified in its entirety, by reference to the
notes and the indenture. We urge you to read the indenture and the notes
because they, and not this description, define your rights as a holder of these
notes.
General
We issued the original notes and will issue the exchange notes under the
indenture and the first supplemental indenture, each dated as of June 28, 1999,
between us and The Bank of New York, as trustee. References to the notes
include the exchange notes unless the context otherwise requires. The notes are
unsecured senior obligations and rank equally in right of payment with all our
other unsubordinated indebtedness. Because we conduct substantially all our
business through numerous subsidiaries, all existing and future liabilities of
our direct and indirect subsidiaries are and will be effectively senior to the
notes. The notes are not guaranteed by, or otherwise obligations of, our
project subsidiaries and project affiliates, or our other direct and indirect
subsidiaries and affiliates.
We issued the original notes in aggregate principal amount of $600,000,000.
The notes will mature on June 15, 2009 and will bear interest at the rate of
7.73% per annum. We will pay interest on the notes on each June 15 and December
15, to the holders of record on the immediately preceding June 1 and December
1. Interest on the notes will accrue from the most recent date to which
interest has been paid. Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months. The interest rate on the notes may be
increased under the circumstances described in "Exchange Offer--Registration
Rights."
The original notes are, and the exchange notes will be, in denominations of
$100,000 and any integral multiple of $1,000 in excess of $100,000.
We may issue additional series of notes under the indenture from time to
time in accordance with the conditions described in this prospectus.
Redemption
We may redeem the notes at any time, in whole or in part, at a redemption
price equal to:
. the greater of
(1) 100% of the principal amount of the notes being redeemed and
(2) the sum of the present values of the Remaining Scheduled
Payments on the notes being redeemed discounted to the date of
redemption on a semiannual basis, assuming a 360-day year consisting of
twelve 30-day months, at a rate equal to the Treasury Rate plus 37.5
basis points,
. plus accrued and unpaid interest, if any, on the principal amount of
notes being redeemed to the redemption date.
"Remaining Scheduled Payments" means, with respect to each note that we are
redeeming, the remaining scheduled payments of the principal and interest on
that note that would be due after the related redemption date if we were not
redeeming that note. However, if the redemption date is not a scheduled
interest payment date with respect to that note, the amount of the next
succeeding scheduled interest payment on that note will be reduced by the
amount of interest accrued on that note to the redemption date.
57
<PAGE>
"Treasury Rate" means, with respect to any redemption date, an annual rate
equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue, expressed as a
percentage of its principal amount, equal to the Comparable Treasury Price for
the redemption date. The semiannual equivalent yield to maturity will be
computed as of the third business day immediately preceding the redemption
date.
"Comparable Treasury Issue" means the United States Treasury security
selected by Credit Suisse First Boston Corporation or an affiliate as having a
maturity comparable to the remaining term of the notes that would be utilized,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the notes.
"Comparable Treasury Price" means the average of three Reference Treasury
Dealer Quotations obtained by the trustee in respect of the notes to be
redeemed on the applicable redemption date.
"Reference Treasury Dealer Quotation" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue,
expressed in each case as a percentage of its principal amount, quoted in
writing to the trustee by a Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding the redemption date.
"Reference Treasury Dealers" means Credit Suisse First Boston Corporation,
so long as it continues to be a primary U.S. Government securities dealer, and
any two other primary U.S. Government securities dealers chosen by us. If
Credit Suisse First Boston Corporation ceases to be a primary U.S. Government
securities dealer, we will appoint in its place another nationally recognized
investment banking firm that is a primary U.S. Government securities dealer.
We will give notice to The Depository Trust Company and holders of
definitive notes at least 30 days, but not more than 60 days, before we redeem
the notes. If we redeem only some of the notes, DTC's practice is to choose by
lot the amount to be redeemed from the notes held by each of its participating
institutions. DTC will give notice to these participants, and these
participants will give notice to any street name holders of any indirect
interests in the notes according to arrangements among them. These notices may
be subject to statutory or regulatory requirements. We will not be responsible
for giving notice of a redemption of the notes to anyone other than DTC and
holders of definitive notes.
Covenants
Restrictions on Liens
We may not pledge, mortgage, hypothecate or permit to exist any mortgage,
pledge or other lien upon any property at any time directly owned by us to
secure any indebtedness for money borrowed which is incurred, issued, assumed
or guaranteed by us, without providing for the notes to be equally and ratably
secured with any and all of this indebtedness and with any other indebtedness
similarly entitled to be equally and ratably secured. However, this restriction
does not apply to, or prevent the creation or existence of:
(1) liens existing at the original date of issuance of the notes;
(2) purchase money liens which do not exceed the cost or value of the
purchased property;
(3) other liens not to exceed 10% of our Consolidated Net Tangible Assets;
and
(4) liens granted in connection with extending, renewing, replacing or
refinancing in whole or in part the indebtedness, including, without
limitation, increasing the principal amount of the indebtedness,
secured by liens described in clauses (1) through (3) above.
58
<PAGE>
"Consolidated Net Tangible Assets" means, as of any date of determination,
the total amount of all of our assets, determined on a consolidated basis in
accordance with generally accepted accounting principles as of that date, less
the sum of
(a) our consolidated current liabilities, determined in accordance with
generally accepted accounting principles and
(b) our assets that are properly classified as intangible assets in
accordance with generally accepted accounting principles, except for any
intangible assets which are distribution or related contracts with an
assignable value.
If we pledge, mortgage or hypothecate any property at any time directly
owned by us to secure any indebtedness, other than as permitted by the
indenture, we will give prior written notice of this pledge, mortgage or
hypothecation to the trustee, who will give notice to the holders of notes. We
will also, prior to or simultaneously with this pledge, mortgage or
hypothecation, effectively secure all the notes equally and ratably with this
indebtedness.
This covenant will not restrict the ability of our subsidiaries and
affiliates to pledge, mortgage, hypothecate or permit to exist any mortgage,
pledge or lien upon their assets, in connection with project financings or
otherwise.
Merger, Consolidation, Sale, Lease or Conveyance
We may not merge or consolidate with or into any other person and we may not
sell, lease or convey all or substantially all of our assets to any person,
unless;
(1) either
(A) we are the continuing corporation, or
(B) the successor corporation or the person that acquires all or
substantially all of our assets is a corporation organized and existing
under the laws of the United States or a state of the United States or
the District of Columbia and expressly assumes all our obligations
under the notes and the indenture,
(2) immediately after this merger, consolidation, sale, lease or
conveyance, there is no default or event of default under the indenture,
(3) if, as a result of the merger, consolidation, sale, lease or
conveyance, any or all of our property would become the subject of a lien
that would not be permitted by the indenture, we secure the notes equally
and ratably with the obligations secured by that lien and
(4) we deliver or cause to be delivered to the trustee an officers'
certificate and opinion of counsel each stating that the merger,
consolidation, sale, lease or conveyance comply with the indenture.
The meaning of the term "all or substantially all of the assets" has not
been definitely established and is likely to be interpreted by reference to
applicable state law if and at the time the issue arises and will be dependent
on the facts and circumstances existing at the time.
Except for a sale of our assets substantially as an entirety as described
above, we may not sell or otherwise dispose of any assets, if, on a pro forma
basis, the aggregate net book value of all these sales during the most recent
12-month period would exceed 10% of our Consolidated Net Tangible Assets
computed as of the end of the most recent quarter preceding this sale. This
restriction on the sale of assets does not apply to assets we are required to
sell to conform with governmental regulations and the sale of short-term,
readily marketable investments purchased for cash management purposes with
funds not from the proceeds of other asset sales. However, any sale will be
disregarded for purposes of this 10% limitation if the proceeds are invested in
assets in similar or related lines of our business. We may also sell or
otherwise dispose of assets in excess of this 10% limitation if we retain the
proceeds from these sales or dispositions, which are not
59
<PAGE>
reinvested as provided above, as cash or cash equivalents or if we use the
proceeds from these sales to purchase and retire notes or indebtedness ranking
equal in right of payment to the notes or indebtedness of our subsidiaries.
Reporting Obligations
We will furnish or cause to be furnished to holders of notes copies of our
annual reports and of the information, documents and other reports that we are
required to file with the SEC under Section 13 or 15(d) of the Exchange Act
within 15 days after we file them with the SEC.
Additional Covenants
Subject to limited exceptions and qualifications, we agreed in the indenture
to do, among other things, the following:
(1) deliver to the trustee copies of all reports that we file with the
SEC;
(2) deliver to the trustee annual officers' certificates with respect to
our compliance with our obligations under the indenture;
(3) maintain our corporate existence, subject to the provisions
described above relating to mergers and consolidations; and
(4) pay our taxes when due, except when we are contesting these taxes in
good faith.
Modification of the Indenture
The indenture contains provisions permitting us and the trustee, with the
consent of the holders of at least a majority in aggregate principal amount of
notes then outstanding, to modify or amend the indenture or the rights of the
holders of notes. However, no modification or amendment may, without the
consent of the holder of each outstanding note affected by this modification or
amendment:
(1) change the stated maturity of the principal of, or extend the time
of payment of interest on, any note;
(2) reduce the principal amount of, or interest on, any note;
(3) change the place or currency of payment of principal of, or interest
on, any note;
(4) reduce any amount payable upon the redemption of any note; or
(5) impair the right to institute suit for the enforcement of any
payment on or with respect to any note.
In addition, without the consent of the holders of all notes then
outstanding, no modification or amendment may:
(1) reduce the percentage in principal amount of outstanding notes the
consent of whose holders is required for modification or amendment of the
indenture;
(2) reduce the percentage in principal amount of outstanding notes
necessary for waiver of compliance with specified provisions of the
indenture or for waiver of specified defaults; or
(3) modify these provisions with respect to modification and waiver.
The holders of at least a majority in principal amount of the outstanding
notes may waive compliance by us with restrictive provisions of the indenture.
The holders of a majority in principal amount of the outstanding notes may
waive any past default under the indenture, except a default in the payment of
principal or interest and specified covenants and provisions of the indenture
which cannot be amended without the consent of the holder of each outstanding
note affected.
We and the trustee may, without the consent of any holder of notes, amend
the indenture and the notes for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective provision of the
60
<PAGE>
indenture, or in any manner that we and the trustee may determine is not
inconsistent with the indenture and the notes and will not adversely affect
the interest of any holder of notes.
Events of Default
Each of the following will be an event of default under the indenture:
(1) our failure to pay any interest on any note when due, and the
default continues for 30 days; or
(2) our failure to pay principal or premium when due; or
(3) our failure to perform any other covenant in the notes or the
indenture for a period of 90 days after the trustee or the holders of at
least 25% in aggregate principal amount of the notes gives us written
notice of our failure to perform; or
(4) an event of default occurring under any of our instruments under
which there may be issued, or by which there may be secured or evidenced,
any indebtedness for money borrowed that has resulted in the acceleration
of this indebtedness, or any default occurring in payment of any
indebtedness at final maturity, and after the expiration of any applicable
grace periods, other than
(A) indebtedness which is payable solely out of the property or
assets of a partnership, joint venture or similar entity of which we or
any of our subsidiaries or affiliates is a participant, or which is
secured by a lien on the property or assets owned or held by this
entity, without further recourse to or liability of us; or
(B) indebtedness not exceeding $20,000,000; or
(5) one or more nonappealable final judgments, decrees or orders of any
court, tribunal, arbitrator, administrative or other governmental body or
similar entity for the payment of money aggregating more than $20,000,000
shall be rendered against us, excluding the amount covered by insurance,
and shall remain undischarged, unvacated and unstayed for more than 90
days, except while being contested in good faith by appropriate
proceedings; or
(6) specified events of bankruptcy, insolvency or reorganization in
respect of us.
If any event of default, other than an event of default due to specified
events of bankruptcy, insolvency or reorganization, has occurred and is
continuing, either the trustee or the holders of not less than 25% in
principal amount of the notes outstanding under the indenture may declare the
principal of all notes under the indenture and interest accrued on the notes
to be due and payable immediately.
The trustee will be entitled, subject to the duty of the trustee during a
default to act with the required standard of care, to be indemnified by the
holders of notes before proceeding to exercise any right or power under the
indenture at the request of these holders. Subject to these provisions in the
indenture for the indemnification of the trustee and other limitations, the
holders of a majority in principal amount of the notes then outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee.
No holder of notes may institute any action against us under the indenture,
except actions for payment of overdue principal or interest, unless:
(1) such holder previously has given the trustee written notice of the
default and continuance of this default;
(2) the holders of not less than 25% in principal amount of the notes
then outstanding have requested the trustee to institute this action and
offered the trustee reasonable indemnity;
(3) the trustee has not instituted this action within 60 days of the
request; and
(4) the trustee has not received direction inconsistent with this
written request from the holders of a majority in principal amount of the
notes then outstanding.
61
<PAGE>
Defeasance and Covenant Defeasance
Defeasance
We will be deemed to have paid and will be discharged from any and all
obligations in respect of the notes on the 123rd day after we have made the
deposit described below, and the provisions of the indenture will cease to be
applicable with respect to the notes, except for, among other matters, specific
obligations to register the transfer of or exchange of the notes, to replace
stolen, lost or mutilated notes, to maintain paying agencies and to hold funds
for payment in trust, if
(1) we have deposited with the trustee, in trust, money and/or selected
U.S. government obligations that, through the payment of interest and
principal in respect of these obligations in accordance with their terms,
will provide money in an amount sufficient to pay the principal of,
premium, if any, and accrued interest on the notes at the time these
payments are due in accordance with the terms of the indenture,
(2) we have delivered to the trustee
(A) an opinion of counsel to the effect that note holders will not
recognize income, gain or loss for federal income tax purposes as a
result of the defeasance and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would
have been the case if this deposit, defeasance and discharge had not
occurred, which opinion of counsel must be based upon a ruling of the
Internal Revenue Service to the same effect or a change in applicable
federal income tax law or related treasury regulations after the date
of the indenture and
(B) an opinion of counsel to the effect that the defeasance trust
does not constitute an "investment company" within the meaning of the
Investment Company Act of 1940 and after the passage of 123 days
following the deposit, the trust fund will not be subject to the effect
of Section 547 of the U.S. Bankruptcy Code or Section 15 of the New
York Debtor and Creditor Law,
(3) immediately after giving effect to the deposit, no event of default,
or event that after the giving of notice or lapse of time or both would
become an event of default, will have occurred and be continuing on the
date of this deposit or during the period ending on the 123rd day after the
date of this deposit, and this deposit shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which we are a party or by which we are bound and
(4) if at the time the notes are listed on a national securities
exchange, we have delivered to the trustee an opinion of counsel to the
effect that the notes will not be delisted as a result of this deposit and
discharge.
Defeasance of Specified Covenants and Specified Events of Default
The provisions of the indenture will cease to be applicable with respect to:
(1) the covenants described in "--Covenants", other than those with
respect to the maintenance of our existence and those described under the
first paragraph of the caption "--Covenants--Merger, Consolidation, Sale,
Lease or Conveyance",
(2) clause (3) in "--Events of Default" with respect to these covenants
and
(3) clauses (4) and (5) in "--Events of Default" upon
(A) the deposit with the trustee, in trust, of money and/or U.S.
government obligations that through the payment of interest and
principal in respect of these obligations in accordance with their
terms will provide money in an amount sufficient to pay the principal
of, premium, if any, and accrued interest on the notes,
(B) the satisfaction of the conditions described in clauses (2)(B),
(3) and (4) of the preceding paragraph and
(C) our delivery to the trustee of an opinion of counsel to the
effect that, among other things, the holders of the notes will not
recognize income, gain or loss for federal income tax purposes as a
62
<PAGE>
result of this deposit and defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if this deposit and defeasance had
not occurred.
Defeasance and Other Events of Default
If we exercise our option to omit compliance with specified covenants and
provisions of the indenture as described in the immediately preceding paragraph
and the notes are declared due and payable because of the occurrence of an
event of default that remains applicable, the amount of money and/or U.S.
government obligations on deposit with the trustee may not be sufficient to pay
amounts due on the notes at the time of acceleration resulting from this event
of default. In this event, we will remain liable for these payments.
Book-Entry; Delivery and Form
The certificates representing the exchange notes will be issued in fully
registered form. Except as described below, the exchange notes initially will
be represented by one or more global notes, in definitive, fully registered
form without interest coupons. The global notes will be deposited with the
trustee as custodian for DTC and registered in the name of Cede & Co. or
another nominee as DTC may designate.
DTC has advised us as follows:
. DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code
and a "clearing agency" registered pursuant to the provision of Section
17A of the Exchange Act.
. DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions
between participants through electronic book-entry changes in accounts
of its participants, thus eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations and other
organizations. Indirect access to the DTC system is available to others,
including banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly
or indirectly.
. Upon the issuance of the global notes, DTC or its custodian will credit,
on its internal system, the respective principal amounts of the exchange
notes represented by the global notes to the accounts of persons who
have accounts with DTC. Ownership of beneficial interests in the global
notes will be limited to persons who have accounts with DTC or persons
who hold interests through the persons who have accounts with DTC.
Persons who have accounts with DTC are referred to as "participants."
Ownership of beneficial interests in the global notes will be shown on,
and the transfer of that ownership will be effected only through,
records maintained by DTC or its nominee, with respect to interests of
participants, and the records of participants, with respect to interests
of persons other than participants.
So long as DTC or its nominee is the registered owner or holder of the
global notes, DTC or the nominee, as the case may be, will be considered the
sole record owner or holder of the exchange notes represented by the global
notes for all purposes under the indenture and the exchange notes. No
beneficial owners of an interest in the global notes will be able to transfer
that interest except according to DTC's applicable procedures, in addition to
those provided for under the indenture. Owners of beneficial interests in the
global notes will not:
. be entitled to have the exchange notes represented by the global notes
registered in their names,
. receive or be entitled to receive physical delivery of certificated
notes in definitive form, and
. be considered to be the owners or holders of any exchange notes under
the global notes.
63
<PAGE>
Accordingly, each person owning a beneficial interest in the global notes must
rely on the procedures of DTC and, if a person is not a participant, on the
procedures of the participant through which that person owns its interests, to
exercise any right of a holder of exchange notes under the global notes. We
understand that under existing industry practice, in the event an owner of a
beneficial interest in the global notes desires to take any action that DTC, as
the holder of the global notes, is entitled to take, DTC would authorize the
participants to take that action, and that the participants would authorize
beneficial owners owning through the participants to take that action or would
otherwise act upon the instructions of beneficial owners owning through them.
Payments of the principal of, premium, if any, and interest on the exchange
notes represented by the global notes will be made to DTC or its nominee, as
the case may be, as the registered owner of the global notes. Neither we, the
trustee, nor any paying agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the global notes or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
of, premium, if any, or interest on the global notes will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
ownership interests in the principal amount of the global notes, as shown on
the records of DTC or its nominee. We also expect that payments by participants
to owners of beneficial interests in the global notes held through these
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in the names of nominees for these customers. These payments will be
the responsibility of these participants.
Transfer between participants in DTC will be effected in the ordinary way in
accordance with DTC rules. If a holder requires physical delivery of notes in
certificated form for any reason, including to sell notes to persons in states
which require the delivery of the notes or to pledge the notes, a holder must
transfer its interest in the global notes in accordance with the normal
procedures of DTC and the procedures described in the indenture.
Unless and until they are exchanged in whole or in part for certificated
exchange notes in definitive form, the global notes may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC.
Beneficial owners of exchange notes registered in the name of DTC or its
nominee will be entitled to be issued, upon request, exchange notes in
definitive certificated form.
DTC has advised us that DTC will take any action permitted to be taken by a
holder of notes, including the presentation of notes for exchange as described
below, only at the direction of one or more participants to whose account the
DTC interests in the global notes are credited. Further, DTC will take any
action permitted to be taken by a holder of notes only in respect of that
portion of the aggregate principal amount of notes as to which the participant
or participants has or have given that direction.
Although DTC has agreed to these procedures in order to facilitate transfers
of interests in the global notes among participants of DTC, it is under no
obligation to perform these procedures, and may discontinue them at any time.
Neither we nor the trustee will have any responsibility for the performance by
DTC or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
Subject to specified conditions, any person having a beneficial interest in
the global notes may, upon request to the trustee, exchange the beneficial
interest for exchange notes in the form of certificated notes. Upon any
issuance of certificated notes, the trustee is required to register the
certificated notes in the name of, and cause the same to be delivered to, the
person or persons, or the nominee of these persons. In addition, if DTC is at
any time unwilling or unable to continue as a depositary for the global notes,
and a successor depositary is not appointed by us within 90 days, we will issue
certificated notes in exchange for the global notes.
64
<PAGE>
EXCHANGE OFFER; REGISTRATION RIGHTS
As part of the sale of the original notes, and under a registration rights
agreement dated as of June 23, 1999, we agreed with the initial purchasers, for
the benefit of the holders of the notes, that we will file and use our
reasonable best efforts to cause to become effective, at our cost, a
registration statement with respect to a registered offer to exchange the
original notes for the exchange notes which are in all material respects
substantially identical to the original notes. Once this registration statement
is declared effective, we will offer the exchange notes in return for surrender
of the original notes. This offer will remain open for no less than 30 days
after the date notice of the exchange offer is mailed to the original note
holders. For each original note surrendered to us under the exchange offer, the
original note holder will receive exchange notes in an equal principal amount.
Interest on each exchange note will accrue from the last date on which interest
was paid on the original note so surrendered.
In the event that we determine in good faith that applicable interpretations
of the staff of the SEC or other circumstances specified in the registration
rights agreement do not permit us to effect this exchange offer, we will, at
our cost, use our reasonable best efforts, subject to customary representations
and agreements of the note holders, to have a shelf registration statement
covering resale of the original notes declared effective and kept effective
until,June 23, 2001 subject to specified exceptions. We will, in the event of a
shelf registration, provide to each note holder copies of the prospectus,
notify each note holder when a registration statement for the notes has become
effective and take other actions as are appropriate to permit resale of the
notes.
In the event that this exchange offer is not commenced or this registration
statement is not declared effective by March 24, 2000, the annual interest rate
on the notes will increase by one half of one percent (50 basis points)
effective on the 271st day following, which increase will remain in effect
until the date on which this exchange offer is commenced and the registration
statement will have become effective.
Each note holder, other than specified holders, who wishes to exchange its
original notes for exchange notes in the exchange offer will be required to
represent that:
. any exchange notes to be received by it will be acquired in the ordinary
course of business and
. that at the time of the commencement of the exchange offer it will have
no arrangement with any person to participate in the distribution,
within the meaning of the Securities Act, of the exchange notes.
A note holder that sells its notes under a shelf registration generally:
. would be required to be named as a selling holder in the related
prospectus and to deliver a prospectus to purchasers,
. will be subject to several of the civil liability provisions under the
Securities Act in connection with this sale and
. will be required to agree in writing to be bound by the provisions of
the registration rights agreement which are applicable to this note
holder, including specified indemnification obligations.
65
<PAGE>
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes material United States federal income tax
considerations that may be relevant to beneficial owners of the notes. The
summary is based on the Internal Revenue Code of 1986, as amended, and
regulations, rulings and judicial decisions as of the date of this prospectus,
all of which may be repealed, revoked or modified with possible retroactive
effect. This discussion does not deal with holders that may be subject to
special tax rules, including, but not limited to, insurance companies, tax-
exempt organizations, financial institutions, dealers in securities or
currencies, holders whose functional currency is not the United States dollar
or holders who will hold the notes as a hedge against currency risks or as
part of a straddle, synthetic security, conversion transaction or other
integrated investment comprised of the notes and one or more other
investments. The summary is applicable only to purchasers that acquire the
notes under the offering at the initial offering price and who will hold the
notes as capital assets within the meaning of Section 1221 of the Code. This
summary is for general information only and does not address all aspects of
United States federal income taxation that may be relevant to holders of the
notes in light of their particular circumstances, and it does not address any
tax consequences arising under the laws of any state, local or foreign taxing
jurisdiction. Prospective holders should consult their own tax advisors as to
the particular tax consequences to them.
As used in this prospectus, the term "United States Holder" means a
beneficial owner of a note that is
. a citizen or resident of the United States for United States federal
income tax purposes,
. a corporation created or organized under the laws of the United States,
any state thereof or the District of Columbia,
. an estate the income of which is subject to United States federal income
tax without regard to its source or
. a trust if (x) a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial
decisions of the trust or (y) the trust has a valid election in effect
under applicable United States Treasury regulations to be treated as a
United States Holder.
A "Non-United States Holder" is any beneficial holder of a note that is not
a United States Holder.
United States Holders
The Exchange
For United States federal income tax purposes, a beneficial owner of a note
will not recognize any taxable gain or loss on the exchange of the original
notes for exchange notes under the exchange offer, and a United States
Holder's tax basis and holding period in the exchange notes will be the same
as in the original notes.
Stated Interest on Exchange Notes
Stated interest on an exchange note generally will be taxable to a United
States Holder as ordinary income at the time it accrues or is received in
accordance with the United States Holder's method of accounting for United
States federal income tax purposes.
Disposition of an Exchange Note
Upon the sale, exchange, redemption, retirement or other disposition of an
exchange note, a United States Holder generally will recognize gain or loss
equal to the difference between the amount realized upon the sale, exchange,
redemption, retirement or other disposition, not including amounts
attributable to accrued but unpaid interest, which will be taxable as such,
and this United States Holder's adjusted tax basis in the exchange note. A
United States Holder's tax basis in an exchange note will, in general, be the
United States Holder's basis in the note exchanged for the original note. This
gain or loss will be capital gain or loss. Capital gain recognized by an
individual investor upon a disposition of an exchange note that has been held
for more than 12 months will generally be subject to a maximum tax rate of 20%
or, in the case of an exchange note that has been held for 12 months or less,
will be subject to tax at ordinary income tax rates.
66
<PAGE>
Market Discount
United States Holders other than original purchasers of the notes in the
offering of the original notes should be aware that the sale of the exchange
notes may be affected by the market discount provisions of the Code. The market
discount rules generally provide that if a United States Holder purchased the
note, after the original offering, at a "market discount", i.e., at an amount
less than the adjusted issue price of the note as determined on the date of
this purchase, exceeding a statutorily-defined de minimis amount, and
subsequently recognizes gain upon a disposition, including a partial
redemption, of the exchange note received in exchange for an original note, the
lesser of such gain or the portion of the market discount that accrued while
the original note and exchange note were held by such United States Holder will
be treated as ordinary interest income at the time of disposition. The rules
also provide that a United States Holder who acquires a note at a market
discount may be required to defer a portion of any interest expense that may
otherwise be deductible on any indebtedness incurred or maintained to purchase
or carry the note until the United States Holder disposes of such note in a
taxable transaction. If a holder of a note elects to include market discount in
income currently, both of the preceding rules would not apply.
Non-United States Holders
Under present United States federal income tax law, subject to the
discussion of backup withholding and information reporting below:
(a) payments of principal and interest on the exchange notes to any Non-
United States Holder will not be subject to United States federal income,
branch profits or withholding tax provided that
. the Non-United States Holder does not actually or constructively own 10%
or more of the total combined voting power of all classes of stock of
Edison Mission Energy entitled to vote,
. the Non-United States Holder is not a bank receiving interest under a
loan agreement entered into in the ordinary course of its trade or
business,
. the Non-United States Holder is not a controlled foreign corporation
that is related to Edison Mission Energy (directly or indirectly)
through stock ownership,
. such interest payments are not effectively connected with a United
States trade or business and
. certain certification requirements are met.
Such certification will be satisfied if the beneficial owner of the exchange
note certifies on IRS Form W-8 or a substantially similar substitute form,
under penalties of perjury, that it is not a United States person and provides
its name and address, and (x) this beneficial owner files such form with the
withholding agent or (y) in the case of an exchange note held by a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business, a
"financial institution" and holds the exchange note, such financial institution
certifies to Edison Mission Energy or its agent under penalties of perjury that
this statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
withholding agent with a copy of such statement; and
(b) a Non-United States Holder will not be subject to United States
federal income or branch profits tax on gain realized on the sale,
exchange, redemption, retirement or other disposition of an exchange note,
unless;
. the gain is effectively connected with a trade or business carried on by
this holder within the United States or, if a treaty applies, and the
holder complies with applicable certification and other requirements to
claim treaty benefits, is generally attributable to a United States
permanent establishment maintained by the holder, or
. the holder is an individual who is present in the United States for 183
days or more in the taxable year of disposition and specified other
requirements are met.
67
<PAGE>
The Internal Revenue Service has recently amended the certification rules
described in clause (a) above. Non-United States Holders should be aware that
withholding certificates or statements that are valid on December 31, 1999 may
be treated as valid until the earlier of their expiration or December 31, 2000.
Certificates or statements received under the currently effective rules will
fail to be effective after December 31, 2000.
Backup Withholding and Information Reporting
In general, payments of interest and the proceeds of the sale, exchange,
redemption, retirement or other disposition of the exchange notes payable by a
United States paying agent or other United States intermediary will be subject
to information reporting. In addition, backup withholding at a rate of 31% will
apply to these payments if:
. in the case of a United States Holder, the Holder fails to provide an
accurate taxpayer information number, or fails to certify that this
Holder is not subject to backup withholding or fails to report all
interest and dividends required to be shown on its United States federal
income tax returns, or
. in the case of a Non-United States Holder, the Holder fails to provide
the certification on IRS Form W-8 described above or otherwise does not
provide evidence of exempt status.
A number of United States Holders, including, among others, corporations,
and Non-United States Holders that comply with specified certification
requirements are not subject to backup withholding. Any amount paid as backup
withholding will be creditable against the Holder's United States federal
income tax liability provided that the required information is timely furnished
to the IRS. Holders of exchange notes should consult their tax advisors as to
their qualification for exemption from backup withholding and the procedure for
obtaining this exemption. On October 6, 1997, new Treasury Regulations were
issued that generally modify the information reporting and backup withholding
rules applicable to specified payments made after December 31, 2000. In
general, the new regulations would not significantly alter the present rules
discussed above, except in special situations.
68
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of the exchange notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for original notes where
the original notes were acquired as a result of market-making activities or
other trading activities. We have agreed that, for a period of 180 days after
the expiration date of the exchange offer, it will make this prospectus
available to any broker-dealer for use in connection with any resale. In
addition, until , 2000, all dealers effecting transactions in the exchange
notes may be required to deliver a prospectus.
We will not receive any proceeds from any sale of exchange notes by broker-
dealers. Exchange notes received by broker-dealers for their own account in the
exchange offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the exchange notes or a combination of these methods of resale.
These resales may be made at market prices prevailing at the time of resale, at
prices related to these prevailing market prices or negotiated prices. Any
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
broker-dealer or the purchasers of any of the exchange notes. Any broker-dealer
that resells exchange notes that were received by it for its own account in the
exchange offer and any broker or dealer that participates in a distribution of
the exchange notes may be deemed to be an underwriter within the meaning of the
Securities Act, and any profit on the resale of exchange notes and any
commission or concessions received by those persons may be deemed to be
underwriting compensation under the Securities Act. Any broker-dealer that
resells notes that were received by it for its own account in the exchange
offer and any broker-dealer that participates in a distribution of those notes
may be deemed to be an underwriter within the meaning of the Securities Act and
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, including the
delivery of a prospectus that contains information with respect to any selling
holder required by the Securities Act in connection with any resale of the
exchange notes. The letter of transmittal states that, by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an underwriter within the meaning of the Securities Act.
Furthermore, any broker-dealer that acquired any of its original notes
directly from us:
. may not rely on the applicable interpretation of the staff of the SEC's
position contained in Exxon Capital Holdings Corp., SEC no-action letter
(April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June
5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983)
and
. must also be named as a selling noteholder in connection with the
registration and prospectus delivery requirements of the Securities Act
relating to any resale transaction.
For a period of 180 days after the expiration date of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these
documents in the letter of transmittal. We have agreed to pay all expenses
incident to the exchange offer, including the expenses of one counsel for the
holders of the notes, other than commissions or concessions of any brokers or
dealers. We will indemnify the holders of the notes, including any broker-
dealers, against various liabilities, including liabilities under the
Securities Act.
In addition, all reports and other documents we subsequently file under
Sections 13(a) and 15(d) of the Securities Exchange Act will be deemed to be
incorporated by reference into this prospectus and to be part of this
prospectus from the date we subsequently file the reports and documents.
Any statements contained in a document incorporated or deemed to be
incorporated by reference into this prospectus are deemed to be modified or
superseded for purposes of this prospectus to the extent modified or superseded
by another statement contained in any subsequently filed document also
incorporated by reference
69
<PAGE>
in this prospectus. Any statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute part of this prospectus.
You may request a copy of any of these filings, at no cost, by writing or
telephoning us at the following address or phone number:
Edison Mission Energy
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612
(949) 752-5588
Attention: Corporate Secretary
LEGAL MATTERS
The legality of the exchange notes will be passed upon for Edison Mission
Energy by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements of Edison Mission Energy and
subsidiaries included in Edison Mission Energy's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, which is incorporated by reference in
this prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said report. The audited special-purpose combined accounts of Fiddlers
Ferry and Ferrybridge C Power Stations for the year ended March 30, 1997, the
year ended March 29, 1998 and the nine-month period ended January 3, 1999
incorporated in this prospectus by reference to the two reports on Form 8-K/A
dated July 19, 1999 of Edison Mission Energy have been so incorporated in
reliance on the report of PricewaterhouseCoopers, Chartered Accountants, given
the authority of said firm as experts in auditing and accounting.
70
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must
not rely on unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful. The information in
this prospectus is current as of , 2000. However, you should realize that
our affairs may have changed since the date of this prospectus.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward-Looking Statements............................................... i
Available Information.................................................... i
Incorporation of Documents by Reference ................................. i
Notice to New Hampshire Residents ....................................... ii
Prospectus Summary ...................................................... 1
Risk Factors ............................................................ 9
Use of Proceeds ......................................................... 14
Capitalization........................................................... 14
Selected Consolidated Financial Data..................................... 15
The Exchange Offer....................................................... 16
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 24
Business................................................................. 35
Management............................................................... 55
Description of the Notes................................................. 57
Exchange Offer; Registration Rights ..................................... 65
Material United States Federal Income Tax Considerations................. 66
Plan of Distribution..................................................... 69
Legal Matters............................................................ 70
Experts.................................................................. 70
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$600,000,000
[EDISON MISSION ENERGY LOGO]
7.73% Senior Notes
due June 15, 2009
---------------
PROSPECTUS
---------------
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. Indemnification of Directors and Officers
We are a California corporation. Article VI of our Bylaws provide, in
effect, that, to the extent and under the circumstances permitted by Section
317 of the California Corporations Code, we shall indemnify any person who was
or is a party or is threatened to be made a party to any action, suit or
proceeding of the type described in that section by reason of the fact that he
or she is or was our director of officer.
Section 317 of the California Corporations Code empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, other than in certain actions
by or in the right of the corporation as described below, by reason of the fact
that he or she is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or was a director, officer, employee or
agent of a corporation that was a predecessor corporation of the corporation or
of another enterprise at the request of the predecessor corporation, against
expenses, including attorneys' fees, judgments, fines, settlements and other
amounts actually or reasonably incurred by this person in connection with this
action, suit or proceeding if this person acted in good faith and in a manner
he or she reasonably believed to be in the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe that his or her conduct was unlawful. In the case of an action by or
in the right of the corporation, no indemnification shall be made in respect to
any claim, issue or matter as to which this person shall have been adjudged to
be liable to the corporation in the performance of his or her duty to the
corporation and its shareholders unless and only to the extent that the court
in which this action or suit is or was pending shall determine that, in view of
all of the circumstances of the case, this person is fairly and reasonably
entitled to indemnify for these expenses which this court shall deem proper.
Section 317 further provides that to the extent that this director, officer,
employee or agent of a corporation has been successful on the merits in defense
of any action, suit or proceeding referred to above or in the defense of any
claim, issue or matter, this person shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him or her in
connection.
Article IV of our Certificate of Incorporation relieves our directors from
monetary damages to us or our shareholders for any breach of this director's
fiduciary duty as a director to the extent permitted by the California
Corporations Code. Under Section 204(a)(10) of the California Corporations
Code, a corporation may relieve its directors from personal liability to such
corporation or its shareholders for monetary damages for any breach of their
fiduciary duty as directors except
(1) for acts or omissions that show a reckless disregard for the director's
duty to the corporation or its shareholders in circumstances in which
the director was unaware, or should have been aware, in the ordinary
course of performing his or her duties, of a risk of serious injury to
the corporation or its shareholders,
(2) for any act or omission not in good faith or that a director believes
to be contrary to the best interests of the corporation or its
shareholders,
(3) for any intentional misconduct or knowing and culpable violation of
law,
(4) for any willful or negligent violation of certain provisions of the
California Corporations Code imposing certain requirements with respect
to the making of loans or guarantees and the payment of dividends,
(5) for any transaction from which the director derived an improper
personal benefit or
(6) for acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders.
II-1
<PAGE>
ITEM 21. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2.1 Agreement for the sale and purchase of shares in First Hydro
Limited, dated December 21, 1995, between PSB Holding Limited and
First Hydro Finance Plc, incorporated by reference to Exhibit 2.1
to Edison Mission Energy's Current Report on Form 8-K, No. 1-13434
dated January 4, 1996.
2.2 Transaction Implementation Agreement, dated March 29, 1997,
between The State Electricity Commission of Victoria, Edison
Mission Energy Australia Limited, Loy Yang B Power Station Pty
Ltd, Loy Yang Power Limited, The Honourable Alan Robert Stockdale,
Leanne Power Pty Ltd and Edison Mission Energy, incorporated by
reference to Exhibit 2.2 to Edison Mission Energy's Current Report
on Form 8-K, No. 1-13434 dated May 22, 1997.
2.3 Stock Purchase and Assignment Agreement, dated December 23, 1998,
between KES Puerto Rico, L.P., KENETECH Energy Systems, Inc., KES
Bermuda, Inc. and Edison Mission Energy del Caribe for the (i)
sale and purchase of KES Puerto Rico, L.P.'s shares in
EcoElectrica Holdings Ltd.; (ii) assignment of KENETECH Energy
Systems' rights and interests in that certain Project Note from
the Partnership; and (iii) assignment of KES Bermuda, Inc.'s
rights and interests in that certain Administrative Services
Agreement dated October 31, 1997, incorporated by reference to
Exhibit 2.3 to Edison Mission Energy's 10-K for the year ended
December 31, 1998.
2.4 Asset Purchase Agreement, dated August 1, 1998, between
Pennsylvania Electric Company, NGE Generation, Inc., New York
State Electric & Gas Corporation and Mission Energy Westside, Inc,
incorporated by reference to Exhibit 2.4 to Edison Mission
Energy's 10-K for the year ended December 31, 1998.
2.5 Asset Sale Agreement, dated March 22, 1999 between Commonwealth
Edison Company and Edison Mission Energy as to the Fossil
Generating Assets, incorporated by reference to Exhibit 2.5 to
Edison Mission Energy's 10-K for the year ended December 31, 1998.
2.6 Agreement for the Sale and Purchase of Shares in Contact Energy
Limited, dated March 10, 1999, between Her Majesty the Queen in
Right of New Zealand, Edison Mission Energy Taupo Limited and
Edison Mission Energy, incorporated herein by reference to Exhibit
2.6 to the Edison Mission Energy's Form 10-Q for the quarter ended
March 31, 1999.
2.7 Sale, Purchase and Leasing Agreements between Edison First Power
Limited and PowerGen UK plc for the purchase of the Ferrybridge C
and Fiddler's Ferry Power Stations; incorporated by reference to
Exhibits 2.7 and 2.8 to Edison Mission Energy's Form 8-K/A dated
July 19, 1999.
3.1 Amended and Restated Articles of Incorporation of Edison Mission
Energy incorporated by reference to Exhibit 3.1 to Edison Mission
Energy's Current Report on Form 8-K, No. 1-13434 dated January 30,
1996. Originally filed with Edison Mission Energy's Registration
Statement on Form 10 to the Securities and Exchange Commission on
September 30, 1994 and amended by Amendment No. 1 thereto dated
November 19, 1994 and Amendment No. 2 thereto dated November 21,
1994 (as so amended, the "Form 10").
3.2 By-Laws of Edison Mission Energy, incorporated by reference to
Exhibit 3.2 to Edison Mission Energy's Form 10.
4.1 Indenture, dated as of June 28, 1999, between Edison Mission
Energy and The Bank of New York, as Trustee.*
4.2 First Supplemental Indenture, dated as of June 28, 1999, to
Indenture dated as of June 28, 1999, between Edison Mission Energy
and The Bank of New York, as Trustee.*
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to Edison Mission Energy.*
10.1 Registration Rights Agreement, dated as of June 23, 1999, between
Edison Mission Energy and the Initial Purchasers specified
therein.*
10.2 Power Purchase Contract between Southern California Edison Company
and Champlin Petroleum Company, dated March 8, 1985, incorporated
by reference to Exhibit 10.2 to Edison Mission Energy's Form 10.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.2.1 Amendment to Power Purchase Contract between Southern California
Edison Company and Champlin Petroleum Company, dated July 29,
1985, incorporated by reference to Exhibit 10.2.1 to Edison
Mission Energy's Form 10.
10.2.2 Amendment No. 2 to Power Purchase Contract between Southern
California Edison Company and Champlin Petroleum Company, dated
October 29, 1985, incorporated by reference to Exhibit 10.2.2 to
Edison Mission Energy's Form 10.
10.4 Power Purchase Contract between Southern California Edison Company
and Imperial Energy Company, dated February 22, 1984, incorporated
by reference to Exhibit 10.4 Edison Mission Energy's Form 10.
10.4.1 Amendment to Power Purchase Contract between Southern California
Edison Company and Imperial Energy Company, dated November 13,
1984, incorporated by reference to Exhibit 10.4.1 to Edison
Mission Energy's Form 10.
10.6 Power Purchase Contract between Southern California Edison Company
and Imperial Energy Company Niland No. 2, dated April 16, 1985,
incorporated by reference to Exhibit 10.6 to Edison Mission
Energy's Form 10.
10.7 Power Purchase Contract between Southern California Edison Company
and Chevron U.S.A. Inc., dated November 9, 1984, incorporated by
reference to Exhibit 10.7 to Edison Mission Energy's Form 10.
10.7.1 Amendment No. 1 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated March 29,
1985, incorporated by reference to Exhibit 10.7.1 to Edison
Mission Energy's Form 10.
10.7.2 Amendment No. 2 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated November
21, 1985, incorporated by reference to Exhibit 10.7.2 to Edison
Mission Energy's Form 10.
10.7.3 Amendment No. 3 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated November
21, 1985, incorporated by reference to Exhibit 10.7.3 to Edison
Mission Energy's Form 10.
10.8 Power Purchase Contract between Southern California Edison Company
and Arco Petroleum Products Company (Watson Refinery),
incorporated by reference to Exhibit 10.8 to Edison Mission
Energy's Form 10.
10.9 Power Supply Agreement between State Electricity Commission of
Victoria, Loy Yang B Power Station Pty. Ltd. and the Company
Australia Pty. Ltd., as managing partner of the Latrobe Power
Partnership, dated December 31, 1992, incorporated by reference to
Exhibit 10.9 to Edison Mission Energy's Form 10.
10.10 Power Purchase Agreement between P.T. Paiton Energy Company as
Seller and Perusahaan Umum Listrik Negara as Buyer, dated February
12, 1994, incorporated by reference to Exhibit 10.10 to Edison
Mission Energy's Form 10.
10.11 Amended and Restated Power Purchase Contract between Southern
California Energy Company and Midway-Sunset Cogeneration Company,
dated May 5, 1988, incorporated by reference to Exhibit 10.11 to
Edison Mission Energy's Form 10.
10.12 Parallel Generation Agreement between Kern River Cogeneration
Company and Southern California Energy Company, dated January 6,
1984, incorporated by reference to Exhibit 10.12 to Edison Mission
Energy's Form 10.
10.13 Parallel Generation Agreement between Kern River Cogeneration
(Sycamore Project) Company and Southern California Energy Company,
dated December 18, 1984, incorporated by reference to Exhibit
10.13 to Edison Mission Energy's Form 10.
10.14 Amendment No. 2 to Power Purchase Agreement between Southern
California Energy Company and Vulcan/BN Geothermal Power Company,
dated April 1, 1986, incorporated by reference to Exhibit 10.14 to
Edison Mission Energy's Form 10.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.15 U.S. $325 million Bank of Montreal Revolver, dated October 29,
1993, incorporated by reference to Exhibit 10.15 to Edison Mission
Energy's Form 10.
10.15.1 U.S. $400 million Bank of America National Trust and Savings
Association Credit Agreement, dated October 27, 1994, incorporated
by reference to Exhibit 10.15.1 to Edison Mission Energy's Form
10.
10.15.2 Conformed copy of the Amended and Restated U.S. $400 million Bank
of America National Trust and Savings Association Credit
Agreement, dated as of November 17, 1994, incorporated by
reference to Exhibit 10.15.2 to Edison Mission Energy's Annual
Report on Form 10-K for the year ended December 31, 1994.
10.15.3 Conformed copy of the Second Amended and Restated U.S. $400
million Bank of America National Trust and Savings Association
Credit Agreement, dated as of October 11, 1996, incorporated by
reference to Exhibit 10.15.3 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1996.
10.16 Amended and Restated Ground Lease Agreement between Texaco
Refining and Marketing Inc. and March Point Cogeneration Company,
dated August 21, 1992, incorporated by reference to Exhibit 10.16
to Edison Mission Energy's Form 10.
10.16.1 Amendment No. 1 to Amended and Restated Ground Lease Agreement
between Texaco Refining and Marketing Inc. and March Point
Cogeneration Company, dated August 21, 1992, incorporated by
reference to Exhibit 10.16 to Edison Mission Energy's Form 10.
10.17 Memorandum of Agreement between Atlantic Richfield Company and
Products Cogeneration Company, dated September 17, 1987,
incorporated by reference to Exhibit 10.17 to Edison Mission
Energy's Form 10.
10.18 Memorandum of Ground Lease between Texaco Producing Inc. and
Sycamore Cogeneration Company, dated January 19, 1987,
incorporated by reference to Exhibit 10.18 to Edison Mission
Energy's Form 10.
10.19 Amended and Restated Memorandum of Ground Lease between Getty Oil
Company and Kern River Cogeneration Company, dated November 14,
1984, incorporated by reference to Exhibit 10.19 to Edison Mission
Energy's Form 10.
10.20 Memorandum of Lease between Sun Operating Limited Partnership and
Midway-Sunset Cogeneration Company, incorporated by reference to
Exhibit 10.20 to Edison Mission Energy's Form 10.
10.21 Executive Supplemental Benefit Program, incorporated by reference
to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-2313).
10.22 1981 Deferred Compensation Agreement, incorporated by reference to
Exhibits to Forms 10-K filed by SCEcorp (File No. 1-2313).
10.23 1985 Deferred Compensation Agreement for Executives, incorporated
by reference to Exhibits to Forms 10-K filed by SCEcorp (File No.
1-2313).
10.24 1987 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.25 1988 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.26 1989 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
10.27 1990 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.28 Annual Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
10.29 Executive Retirement Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.31 Estate and Financial Planning Program for Executive Officers,
incorporated by reference to Exhibits to Forms 10-K filed by
SCEcorp (File No. 1-9936).
10.32 Letter Agreement with Edward R. Muller, incorporated by reference
to Exhibit 10.32 to Edison Mission Energy's Form 10.
10.33 Agreement with James S. Pignatelli, incorporated by reference to
Exhibit 10.33 to Edison Mission Energy's Form 10.
10.34 Conformed copy of the Guarantee Agreement dated as of November 30,
1994, incorporated by reference to Exhibit 10.34 to Edison Mission
Energy's Form 10.
10.35 Indenture of Lease between Brooklyn Navy Yard Development
Corporation and Cogeneration Technologies, Inc., dated as of
December 18, 1989, incorporated by reference to Exhibit 10.35 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.1 First Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
November 1, 1991, incorporated by reference to Exhibit 10.35.1 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.2 Second Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
June 3, 1994, incorporated by reference to Exhibit 10.35.2 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.3 Third Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
December 12, 1994, incorporated by reference to Exhibit 10.35.3 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.36 Conformed copy of A$200 million Bank of America National Trust and
Savings Association Credit Agreement, dated November 22, 1994,
incorporated by reference to Exhibit 10.36 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.36.1 Conformed copy of the Amended and Restated A$200 million Bank of
America National Trust and Savings Associated Credit Agreement,
dated December 12, 1994, incorporated by reference to Exhibit
10.36.1 to Edison Mission Energy's Form 10-K for the year ended
December 31, 1994.
10.36.2 Conformed copy of First Amendment to Amended and Restated A$200
million Bank of America National Trust and Savings Associated
Credit Agreement, dated June 7, 1995, incorporated by reference to
Exhibit 10.36.2 to Edison Mission Energy's Form 10-Q for the
quarter ended September 30, 1995.
10.37 Amended and Restated Limited Partnership Agreement of Mission
Capital, L.P., dated as of November 30, 1994, incorporated by
reference to Exhibit 10.37 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1994.
10.38 Action of General Partner of Mission Capital, L.P. creating the 9
7/8% Cumulative Monthly Income Preferred Securities, Series A,
dated as of November 30, 1994, incorporated by reference to
Exhibit 10.38 to Edison Mission Energy's Form 10-K for the year
ended December 31, 1994.
10.39 Action of General Partner of Mission Capital, L.P. creating the 8
1/2% Cumulative Monthly Income Preferred Securities, Series B,
dated as of August 8, 1995, incorporated by reference to Exhibit
10.39 to Edison Mission Energy's Form 10-Q for the quarter ended
June 30, 1995.
10.40 Power Purchase Contract between ISAB Energy, S.r.l. as Seller and
Enel, S.p.A. as Buyer, dated June 9, 1995, incorporated by
reference to Exhibit 10.40 to Edison Mission Energy's Form 10-Q
for the quarter ended June 30, 1995.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.41 400 million sterling pounds Barclays Bank Plc Credit Agreement,
dated December 18, 1995, incorporated by reference to Exhibit
10.41 to Edison Mission Energy's Form 8-K, dated
December 21, 1995.
10.42 Guarantee by Edison Mission Energy, dated December 1, 1995
supporting Letter of Credit issued by Bank of America National
Trust and Savings Association to secure payment of bonds issued
pursuant to the Brooklyn Navy Yard project tax-exempt bond
financing, incorporated by reference to Exhibit 10.42 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1995.
10.43 Guarantee by Edison Mission Energy, dated December 1, 1995,
supporting Letter of Credit issued by Bank of America National
Trust and Savings Association to secure Brooklyn Navy Yard's
indemnity to the New York City Industrial Development Agency
pursuant to the Brooklyn Navy Yard project tax-exempt bond
financing, incorporated by reference to Exhibit 10.43 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1995.
10.44 Guarantee by Edison Mission Energy, dated December 20, 1996, in
favor of The Fuji Bank, Limited, Los Angeles Agency, to secure
Camino Energy Company's payments pursuant to Camino Energy
Company's Credit Agreement and Defeasance Agreement, incorporated
by reference to Exhibit 10.44 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1996.
10.45 Power Purchase Agreement between National Power Corporation and
San Pascual Cogeneration Company International B.V., dated
September 10, 1997, incorporated by reference to Exhibit 10.45 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1997.
10.46 Power Purchase Agreement between Gulf Power Generation Co., LTD.,
and Electricity Generating Authority of Thailand, dated December
22, 1997, incorporated by reference to Exhibit 10.46 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1997.
10.47 Guarantee by Edison Mission Energy, dated June 30, 1998, in favor
of Tri Energy Company Limited and the Sanwa Bank, Limited to
guarantee payment of 25% of Tri Energy Company Limited's aggregate
capital contributions under the Equity Bridge Loan, incorporated
by reference to Exhibit 10.47 to Edison Mission Energy's Form 10-Q
for the quarter ended September 30, 1998.
10.48 Guarantee by Edison Mission Energy, dated June 30, 1998, in favor
of Tri Energy Company Limited and the Sanwa Bank, Limited to
guarantee payment of 37.5% of Tri Energy Company Limited's
aggregate capital contributions attributable to Banpu Gas and
BANPU, incorporated by reference to Exhibit 10.48 to Edison
Mission Energy's Form 10-Q for the quarter ended September 30,
1998.
10.49 Equity Support Guarantee by Edison Mission Energy, dated December
23, 1998, in favor of ABN AMRO Bank N.V., and the Chase Manhattan
Bank to guarantee certain equity funding obligations of
EcoElectrica Ltd. and EcoElectrica Holdings Ltd. pursuant to
EcoElectrica Ltd.'s Credit Agreement dated as of October 31, 1997,
incorporated by reference to Exhibit 10.49 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.50 Master Guarantee and Support Instrument by Edison Mission Energy,
dated December 23, 1998, in favor of ABN AMRO Bank N.V., and the
Chase Manhattan Bank to guarantee the availability of funds to
purchase fuel for the EcoElectrica project pursuant to
EcoElectrica Ltd.'s Credit Agreement dated as of October 31, 1997
and Intercreditor Agreement dated as of October 31, 1997,
incorporated by reference to Exhibit 10.50 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.51 Guarantee Assumption Agreement from Edison Mission Energy, dated
December 23, 1998, under Edison Mission Energy assumed all of the
obligations of KENETECH Energy Systems, Inc. to Union Carbide
Caribe Inc., under the certain Guaranty dated November 25, 1997,
incorporated by reference to Exhibit 10.51 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.52 Transition Power Purchase Agreement, dated August 1, 1998, between
New York State Electric & Gas Corporation and Mission Energy
Westside, Inc, incorporated by reference to Exhibit 10.52 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1998.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.53 Transition Power Purchase Agreement, dated August 1, 1998, between
Pennsylvania Electric Company and Mission Energy Westside, Inc.,
incorporated by reference to Exhibit 10.53 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.54 Guarantee, dated August 1, 1998, between Edison Mission Energy,
Pennsylvania Electric Company, NGE Generation, Inc. and New York
State Electric & Gas Corporation, incorporated by reference to
Exhibit 10.54 to Edison Mission Energy's Form 10-K for the year
ended December 31, 1998.
10.55 Credit Agreement, dated March 18, 1999, among Edison Mission
Holdings Co. and Certain Commercial Lending Institutions, and
Citicorp USA, Inc., incorporated by reference to Exhibit 10.55 to
Edison Mission Energy's Form 8-K dated March 18, 1999.
10.56 Guarantee and Collateral Agreement made by Edison Mission Holdings
Co., Edison Mission Finance Co., Homer City Property Holdings,
Inc., Chestnut Ridge Energy Co., Mission Energy Westside, Inc.,
EME City Generation L.P. and Edison Mission Energy in favor of
United States Trust Company of New York, dated as of March 18,
1999, incorporated by reference to Exhibit 10.56 to Edison Mission
Energy's Form 8-K dated March 18, 1999.
10.56.1 Amendment No. 1 to the Guarantee and Collateral Agreement, dated
May 27, 1999, between Edison Mission Holdings, Edison Mission
Finance Co., Homer City Property Holdings, Inc., Chestnut Ridge
Energy Company, Mission Energy Westside, Inc., EME Homer City
Generation L.P and Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.56.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.56.2 Open-End Mortgage, Security Agreement and Assignment of Leases and
Rents, dated March 18, 1999 from EME Homer City Generation L.P. to
United States Trust Company of New York, incorporated by reference
to Exhibit 10.56.2 to Amendment No. 1 of Edison Mission Holdings
Co.'s Registration Statement on Form S-4 to the Securities and
Exchange Commission on February 8, 2000.
10.56.3 Amendment No. 1 to the Open-End Mortgage, Security Agreement and
Assignment of Leases and Rents, dated May 27, 1999, from EME Homer
City Generation L.P. to United States Trust Company of New York,
incorporated by reference to Exhibit 10.56.3 to Amendment No. 1 of
Edison Mission Holdings Co.'s Registration Statement on Form S-4
to the Securities and Exchange Commission on February 8, 2000.
10.57 Collateral Agency and Intercreditor Agreement among Edison Mission
Holdings Co., Edison Mission Finance Co., Homer City Property
Holdings, Inc., Chestnut Ridge Energy Co., Mission Energy
Westside, Inc., EME Homer City Generation L.P., The Secured
Parties' Representatives, Citicorp USA, Inc. as Administrative
Agent and United States Trust Company of New York, as Collateral
Agent, dated as of March 18, 1999, incorporated by reference to
Exhibit 10.57 to Edison Mission Energy's Form 8-K dated March 18,
1999.
10.58 Security Deposit Agreement among Edison Mission Holdings Co.,
Edison Mission Finance Co., Homer City Property Holdings, Inc.,
Chestnut Ridge Energy Co., Mission Energy Westside, Inc., EME
Homer City Generation L.P. and United States Trust Company of New
York, as Collateral Agent, dated as of Marcy 18, 1999,
incorporated by reference to Exhibit 10.58 to Edison Mission
Energy's Form 8-K dated March 18, 1999.
10.58.1 Amendment No. 1 to the Security Deposit Agreement, dated May 27,
1999, between Edison Mission Holdings, Edison Mission Finance Co.,
Homer City Property Holdings, Inc., Chestnut Ridge Energy Company,
Mission Energy Westside, Inc., EME Homer City Generation L.P. and
United States Trust Company of New York, as Collateral Agent,
incorporated by reference to Exhibit 10.58.1 to Amendment No. 1 of
Edison Mission Holdings Co.'s Registration Statement on Form S-4
to the Securities and Exchange Commission on February 8, 2000.
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.59 Credit Support Guarantee, dated as of March 18, 1999, made by
Edison Mission Energy in favor of United States Trust Company of
New York, incorporated by reference to Exhibit 10.59 to Edison
Mission Energy's Form 8-K dated March 18, 1999.
10.59.1 Amendment No. 1 to the Credit Support Guarantee, dated May 27,
1999, made by Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.59.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.60 Debt Service Reserve Guarantee, dated as of March 18, 1999, made
by Edison Mission Energy in favor of United States Trust Company
of New York on behalf of the various financial institutions
(Lenders) as are or may become parities to the Credit Agreement,
dated as of March 18, 1999, among Edison Mission Holdings Co., the
Lenders and Citicorp USA, Inc., incorporated by reference to
Exhibit 10.60 to Edison Mission Energy's Form 8-K dated March 18,
1999.
10.60.1 Amendment No. 1 to the Debt Service Reserve Guarantee, dated May
27, 1999, made by Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.60.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.60.2 Bond Debt Service Reserve Guarantee, dated May 27, 1999, made by
Edison Mission Energy in favor of United States Trust Company of
New York, incorporated by reference to Exhibit 10.60.2 to
Amendment No. 1 of Edison Mission Holdings Co.'s Registration
Statement on Form S-4 to the Securities and Exchange Commission on
February 8, 2000.
10.61 Credit Agreement, dated March 18, 1999, among Edison Mission
Energy and Certain Commercial Lending Institutions, and Citicorp
USA, Inc., incorporated by reference to Exhibit 10.61 to Edison
Mission Energy's Form 8-K dated March 18, 1999.
10.62 Edison Power Limited (Pounds)1,150,000,000 Guaranteed Secured
Variable Rate Bonds due 2019 Guaranteed by Maplekey UK Limited,
incorporated by reference to Exhibit 10.62 to Edison Mission
Energy's Current Report on Form 8-K, No. 1-13434 dated July 19,
1999.
10.64 Coal and Capex Facility Agreement, dated July 16, 1999 between EME
Finance UK Limited; Barclay's Capital and Credit Suisse First
Boston; The Financial Institutions named as Banks; and Barclays
Bank PLC as Facility Agent, incorporated by reference to Exhibit
10.64 to Edison Mission Energy's Form 10-Q for the quarter ended
September 30, 1999.
10.65 Guarantee by Edison Mission Energy dated July 16, 1999 supporting
the Coal and Capex Facility Agreement (Facility Agreement) issued
by Barclays Bank PLC to secure EME Finance UK Limited obligations
pursuant to the Facility Agreement, incorporated by reference to
Exhibit 10.65 to Edison Mission Energy's Form 10-Q for the quarter
ended September 30, 1999.
10.71 Copy of the Global Debenture representing Edison Mission Energy's
9 7/8% Junior Subordinated Deferrable Interest Debentures, Series
A, Due 2024, incorporated by reference as Exhibit 4.1 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1994.
10.72 Conformed copy of the Indenture, dated as of November 30, 1994,
between Edison Mission Energy and The First National Bank of
Chicago, as Trustee, incorporated by reference to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.73 First Supplemental Indenture, dated as of November 30, 1994, to
Indenture dated as of November 30, 1994 between Edison Mission
Energy and The First National Bank of Chicago, as Trustee,
incorporated by reference as Exhibit 4.2.1 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.74 Indenture, dated as of May 27, 1999, between Edison Mission
Holdings Co. and United States Trust Company of New York, as
Trustee, incorporated by reference to Exhibit 10.71 to Edison
Mission Holdings Co.'s Registration Statement on Form S-4 to the
Securities and Exchange Commission on December 3, 1999.
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.74.1 First Supplemental Indenture, dated as of June 28, 1999, to
Indenture dated as of June 28, 1999 between Edison Mission Energy
and The Bank of New York, as Trustee, incorporated by reference to
Exhibit 10.72 to Edison Mission Holdings Co.'s Registration
Statement on Form S-4 to the Securities and Exchange Commission on
December 3, 1999.
10.75 Exchange and Registration Rights Agreement, dated as of May 27,
1999, by and among the Initial Purchasers named therein, the
Guarantors named therein and Edison Mission Holdings Co,
incorporated by reference to Exhibit 10.1 to Edison Mission
Holdings Co.'s Registration Statement on Form S-4 to the
Securities and Exchange Commission on December 3, 1999.
12.1 Statement regarding the computation of ratio of earnings to fixed
charges for Edison Mission Energy.*
21.1 List of Subsidiaries.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of PricewaterhouseCoopers.*
23.3 Consent of Skadden, Arps, Slate Meagher & Flom LLP (included in
Exhibit 5.1).
25.1 Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York, as Trustee, under the Indenture filed as Exhibit 4.1
hereto.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Letter to Clients.*
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
</TABLE>
- --------
* Filed herewith
ITEM 22. Undertakings
(a) The undersigned Registrant hereby undertakes:
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in
II-9
<PAGE>
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) For purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Irvine, State of
California, on the 18th day of February, 2000.
Edison Mission Energy
(Registrant)
/s/ Kevin M. Smith
By: _________________________________
Kevin M. Smith
Senior Vice President and Chief
Financial Officer
POWER OF ATTORNEY
KNOWN TO ALL THESE PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Kevin M. Smith and Steven D.
Eisenberg his attorneys-in-fact, with the power of substitution, for him in any
and all capacities, to sign any amendments to this registration statement
(including post-effective amendments), and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alan J. Fohrer President, and Chief February 18, 2000
______________________________________ Executive Officer,
Alan J. Fohrer Director (Principal
Executive Officer)
/s/ Kevin M. Smith Senior Vice President and February 18, 2000
______________________________________ Chief Financial Officer
Kevin M. Smith (Principal Financial and
Accounting Officer)
/s/ John E. Bryson Chairman of the Board February 18, 2000
______________________________________
John E. Bryson
/s/ Bryant C. Danner Director February 18, 2000
______________________________________
Bryant C. Danner
/s/ Thomas R. McDaniel Director February 18, 2000
______________________________________
Thomas R. McDaniel
</TABLE>
II-11
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2.1 Agreement for the sale and purchase of shares in First Hydro
Limited, dated December 21, 1995, between PSB Holding Limited and
First Hydro Finance Plc, incorporated by reference to Exhibit 2.1
to Edison Mission Energy's Current Report on Form 8-K, No. 1-13434
dated January 4, 1996.
2.2 Transaction Implementation Agreement, dated March 29, 1997,
between The State Electricity Commission of Victoria, Edison
Mission Energy Australia Limited, Loy Yang B Power Station Pty
Ltd, Loy Yang Power Limited, The Honourable Alan Robert Stockdale,
Leanne Power Pty Ltd and Edison Mission Energy, incorporated by
reference to Exhibit 2.2 to Edison Mission Energy's Current Report
on Form 8-K, No. 1-13434 dated May 22, 1997.
2.3 Stock Purchase and Assignment Agreement, dated December 23, 1998,
between KES Puerto Rico, L.P., KENETECH Energy Systems, Inc., KES
Bermuda, Inc. and Edison Mission Energy del Caribe for the (i)
sale and purchase of KES Puerto Rico, L.P.'s shares in
EcoElectrica Holdings Ltd.; (ii) assignment of KENETECH Energy
Systems' rights and interests in that certain Project Note from
the Partnership; and (iii) assignment of KES Bermuda, Inc.'s
rights and interests in that certain Administrative Services
Agreement dated October 31, 1997, incorporated by reference to
Exhibit 2.3 to Edison Mission Energy's 10-K for the year ended
December 31, 1998.
2.4 Asset Purchase Agreement, dated August 1, 1998, between
Pennsylvania Electric Company, NGE Generation, Inc., New York
State Electric & Gas Corporation and Mission Energy Westside, Inc,
incorporated by reference to Exhibit 2.4 to Edison Mission
Energy's 10-K for the year ended December 31, 1998.
2.5 Asset Sale Agreement, dated March 22, 1999 between Commonwealth
Edison Company and Edison Mission Energy as to the Fossil
Generating Assets, incorporated by reference to Exhibit 2.5 to
Edison Mission Energy's 10-K for the year ended December 31, 1998.
2.6 Agreement for the Sale and Purchase of Shares in Contact Energy
Limited, dated March 10, 1999, between Her Majesty the Queen in
Right of New Zealand, Edison Mission Energy Taupo Limited and
Edison Mission Energy, incorporated herein by reference to Exhibit
2.6 to the Edison Mission Energy's Form 10-Q for the quarter ended
March 31, 1999.
2.7 Sale, Purchase and Leasing Agreements between Edison First Power
Limited and PowerGen UK plc for the purchase of the Ferrybridge C
and Fiddler's Ferry Power Stations; incorporated by reference to
Exhibits 2.7 and 2.8 to Edison Mission Energy's Form 8-K/A dated
July 19, 1999.
3.1 Amended and Restated Articles of Incorporation of Edison Mission
Energy incorporated by reference to Exhibit 3.1 to Edison Mission
Energy's Current Report on Form 8-K, No. 1-13434 dated January 30,
1996. Originally filed with Edison Mission Energy's Registration
Statement on Form 10 to the Securities and Exchange Commission on
September 30, 1994 and amended by Amendment No. 1 thereto dated
November 19, 1994 and Amendment No. 2 thereto dated November 21,
1994 (as so amended, the "Form 10").
3.2 By-Laws of Edison Mission Energy, incorporated by reference to
Exhibit 3.2 to Edison Mission Energy's Form 10.
4.1 Indenture, dated as of June 28, 1999, between Edison Mission
Energy and The Bank of New York, as Trustee.*
4.2 First Supplemental Indenture, dated as of June 28, 1999, to
Indenture dated as of June 28, 1999, between Edison Mission Energy
and The Bank of New York, as Trustee.*
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to Edison Mission Energy.*
10.1 Registration Rights Agreement, dated as of June 23, 1999, between
Edison Mission Energy and the Initial Purchasers specified
therein.*
10.2 Power Purchase Contract between Southern California Edison Company
and Champlin Petroleum Company, dated March 8, 1985, incorporated
by reference to Exhibit 10.2 to Edison Mission Energy's Form 10.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.2.1 Amendment to Power Purchase Contract between Southern California
Edison Company and Champlin Petroleum Company, dated July 29,
1985, incorporated by reference to Exhibit 10.2.1 to Edison
Mission Energy's Form 10.
10.2.2 Amendment No. 2 to Power Purchase Contract between Southern
California Edison Company and Champlin Petroleum Company, dated
October 29, 1985, incorporated by reference to Exhibit 10.2.2 to
Edison Mission Energy's Form 10.
10.4 Power Purchase Contract between Southern California Edison Company
and Imperial Energy Company, dated February 22, 1984, incorporated
by reference to Exhibit 10.4 Edison Mission Energy's Form 10.
10.4.1 Amendment to Power Purchase Contract between Southern California
Edison Company and Imperial Energy Company, dated November 13,
1984, incorporated by reference to Exhibit 10.4.1 to Edison
Mission Energy's Form 10.
10.6 Power Purchase Contract between Southern California Edison Company
and Imperial Energy Company Niland No. 2, dated April 16, 1985,
incorporated by reference to Exhibit 10.6 to Edison Mission
Energy's Form 10.
10.7 Power Purchase Contract between Southern California Edison Company
and Chevron U.S.A. Inc., dated November 9, 1984, incorporated by
reference to Exhibit 10.7 to Edison Mission Energy's Form 10.
10.7.1 Amendment No. 1 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated March 29,
1985, incorporated by reference to Exhibit 10.7.1 to Edison
Mission Energy's Form 10.
10.7.2 Amendment No. 2 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated November
21, 1985, incorporated by reference to Exhibit 10.7.2 to Edison
Mission Energy's Form 10.
10.7.3 Amendment No. 3 to Power Purchase Contract between Southern
California Edison Company and Chevron U.S.A. Inc., dated November
21, 1985, incorporated by reference to Exhibit 10.7.3 to Edison
Mission Energy's Form 10.
10.8 Power Purchase Contract between Southern California Edison Company
and Arco Petroleum Products Company (Watson Refinery),
incorporated by reference to Exhibit 10.8 to Edison Mission
Energy's Form 10.
10.9 Power Supply Agreement between State Electricity Commission of
Victoria, Loy Yang B Power Station Pty. Ltd. and the Company
Australia Pty. Ltd., as managing partner of the Latrobe Power
Partnership, dated December 31, 1992, incorporated by reference to
Exhibit 10.9 to Edison Mission Energy's Form 10.
10.10 Power Purchase Agreement between P.T. Paiton Energy Company as
Seller and Perusahaan Umum Listrik Negara as Buyer, dated February
12, 1994, incorporated by reference to Exhibit 10.10 to Edison
Mission Energy's Form 10.
10.11 Amended and Restated Power Purchase Contract between Southern
California Energy Company and Midway-Sunset Cogeneration Company,
dated May 5, 1988, incorporated by reference to Exhibit 10.11 to
Edison Mission Energy's Form 10.
10.12 Parallel Generation Agreement between Kern River Cogeneration
Company and Southern California Energy Company, dated January 6,
1984, incorporated by reference to Exhibit 10.12 to Edison Mission
Energy's Form 10.
10.13 Parallel Generation Agreement between Kern River Cogeneration
(Sycamore Project) Company and Southern California Energy Company,
dated December 18, 1984, incorporated by reference to Exhibit
10.13 to Edison Mission Energy's Form 10.
10.14 Amendment No. 2 to Power Purchase Agreement between Southern
California Energy Company and Vulcan/BN Geothermal Power Company,
dated April 1, 1986, incorporated by reference to Exhibit 10.14 to
Edison Mission Energy's Form 10.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.15 U.S. $325 million Bank of Montreal Revolver, dated October 29,
1993, incorporated by reference to Exhibit 10.15 to Edison Mission
Energy's Form 10.
10.15.1 U.S. $400 million Bank of America National Trust and Savings
Association Credit Agreement, dated October 27, 1994, incorporated
by reference to Exhibit 10.15.1 to Edison Mission Energy's Form
10.
10.15.2 Conformed copy of the Amended and Restated U.S. $400 million Bank
of America National Trust and Savings Association Credit
Agreement, dated as of November 17, 1994, incorporated by
reference to Exhibit 10.15.2 to Edison Mission Energy's Annual
Report on Form 10-K for the year ended December 31, 1994.
10.15.3 Conformed copy of the Second Amended and Restated U.S. $400
million Bank of America National Trust and Savings Association
Credit Agreement, dated as of October 11, 1996, incorporated by
reference to Exhibit 10.15.3 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1996.
10.16 Amended and Restated Ground Lease Agreement between Texaco
Refining and Marketing Inc. and March Point Cogeneration Company,
dated August 21, 1992, incorporated by reference to Exhibit 10.16
to Edison Mission Energy's Form 10.
10.16.1 Amendment No. 1 to Amended and Restated Ground Lease Agreement
between Texaco Refining and Marketing Inc. and March Point
Cogeneration Company, dated August 21, 1992, incorporated by
reference to Exhibit 10.16 to Edison Mission Energy's Form 10.
10.17 Memorandum of Agreement between Atlantic Richfield Company and
Products Cogeneration Company, dated September 17, 1987,
incorporated by reference to Exhibit 10.17 to Edison Mission
Energy's Form 10.
10.18 Memorandum of Ground Lease between Texaco Producing Inc. and
Sycamore Cogeneration Company, dated January 19, 1987,
incorporated by reference to Exhibit 10.18 to Edison Mission
Energy's Form 10.
10.19 Amended and Restated Memorandum of Ground Lease between Getty Oil
Company and Kern River Cogeneration Company, dated November 14,
1984, incorporated by reference to Exhibit 10.19 to Edison Mission
Energy's Form 10.
10.20 Memorandum of Lease between Sun Operating Limited Partnership and
Midway-Sunset Cogeneration Company, incorporated by reference to
Exhibit 10.20 to Edison Mission Energy's Form 10.
10.21 Executive Supplemental Benefit Program, incorporated by reference
to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-2313).
10.22 1981 Deferred Compensation Agreement, incorporated by reference to
Exhibits to Forms 10-K filed by SCEcorp (File No. 1-2313).
10.23 1985 Deferred Compensation Agreement for Executives, incorporated
by reference to Exhibits to Forms 10-K filed by SCEcorp (File No.
1-2313).
10.24 1987 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.25 1988 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.26 1989 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
10.27 1990 Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.28 Annual Deferred Compensation Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
9936).
10.29 Executive Retirement Plan for Executives, incorporated by
reference to Exhibits to Forms 10-K filed by SCEcorp (File No. 1-
2313).
10.31 Estate and Financial Planning Program for Executive Officers,
incorporated by reference to Exhibits to Forms 10-K filed by
SCEcorp (File No. 1-9936).
10.32 Letter Agreement with Edward R. Muller, incorporated by reference
to Exhibit 10.32 to Edison Mission Energy's Form 10.
10.33 Agreement with James S. Pignatelli, incorporated by reference to
Exhibit 10.33 to Edison Mission Energy's Form 10.
10.34 Conformed copy of the Guarantee Agreement dated as of November 30,
1994, incorporated by reference to Exhibit 10.34 to Edison Mission
Energy's Form 10.
10.35 Indenture of Lease between Brooklyn Navy Yard Development
Corporation and Cogeneration Technologies, Inc., dated as of
December 18, 1989, incorporated by reference to Exhibit 10.35 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.1 First Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
November 1, 1991, incorporated by reference to Exhibit 10.35.1 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.2 Second Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
June 3, 1994, incorporated by reference to Exhibit 10.35.2 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.35.3 Third Amendment to Indenture of Lease between Brooklyn Navy Yard
Development Corporation and Cogeneration Technologies, Inc., dated
December 12, 1994, incorporated by reference to Exhibit 10.35.3 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1994.
10.36 Conformed copy of A$200 million Bank of America National Trust and
Savings Association Credit Agreement, dated November 22, 1994,
incorporated by reference to Exhibit 10.36 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.36.1 Conformed copy of the Amended and Restated A$200 million Bank of
America National Trust and Savings Associated Credit Agreement,
dated December 12, 1994, incorporated by reference to Exhibit
10.36.1 to Edison Mission Energy's Form 10-K for the year ended
December 31, 1994.
10.36.2 Conformed copy of First Amendment to Amended and Restated A$200
million Bank of America National Trust and Savings Associated
Credit Agreement, dated June 7, 1995, incorporated by reference to
Exhibit 10.36.2 to Edison Mission Energy's Form 10-Q for the
quarter ended September 30, 1995.
10.37 Amended and Restated Limited Partnership Agreement of Mission
Capital, L.P., dated as of November 30, 1994, incorporated by
reference to Exhibit 10.37 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1994.
10.38 Action of General Partner of Mission Capital, L.P. creating the 9
7/8% Cumulative Monthly Income Preferred Securities, Series A,
dated as of November 30, 1994, incorporated by reference to
Exhibit 10.38 to Edison Mission Energy's Form 10-K for the year
ended December 31, 1994.
10.39 Action of General Partner of Mission Capital, L.P. creating the 8
1/2% Cumulative Monthly Income Preferred Securities, Series B,
dated as of August 8, 1995, incorporated by reference to Exhibit
10.39 to Edison Mission Energy's Form 10-Q for the quarter ended
June 30, 1995.
10.40 Power Purchase Contract between ISAB Energy, S.r.l. as Seller and
Enel, S.p.A. as Buyer, dated June 9, 1995, incorporated by
reference to Exhibit 10.40 to Edison Mission Energy's Form 10-Q
for the quarter ended June 30, 1995.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.41 400 million sterling pounds Barclays Bank Plc Credit Agreement,
dated December 18, 1995, incorporated by reference to Exhibit
10.41 to Edison Mission Energy's Form 8-K, dated
[December 21, 1995].
10.42 Guarantee by Edison Mission Energy, dated December 1, 1995
supporting Letter of Credit issued by Bank of America National
Trust and Savings Association to secure payment of bonds issued
pursuant to the Brooklyn Navy Yard project tax-exempt bond
financing, incorporated by reference to Exhibit 10.42 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1995.
10.43 Guarantee by Edison Mission Energy, dated December 1, 1995,
supporting Letter of Credit issued by Bank of America National
Trust and Savings Association to secure Brooklyn Navy Yard's
indemnity to the New York City Industrial Development Agency
pursuant to the Brooklyn Navy Yard project tax-exempt bond
financing, incorporated by reference to Exhibit 10.43 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1995.
10.44 Guarantee by Edison Mission Energy, dated December 20, 1996, in
favor of The Fuji Bank, Limited, Los Angeles Agency, to secure
Camino Energy Company's payments pursuant to Camino Energy
Company's Credit Agreement and Defeasance Agreement, incorporated
by reference to Exhibit 10.44 to Edison Mission Energy's Form 10-K
for the year ended December 31, 1996.
10.45 Power Purchase Agreement between National Power Corporation and
San Pascual Cogeneration Company International B.V., dated
September 10, 1997, incorporated by reference to Exhibit 10.45 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1997.
10.46 Power Purchase Agreement between Gulf Power Generation Co., LTD.,
and Electricity Generating Authority of Thailand, dated December
22, 1997, incorporated by reference to Exhibit 10.46 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1997.
10.47 Guarantee by Edison Mission Energy, dated June 30, 1998, in favor
of Tri Energy Company Limited and the Sanwa Bank, Limited to
guarantee payment of 25% of Tri Energy Company Limited's aggregate
capital contributions under the Equity Bridge Loan, incorporated
by reference to Exhibit 10.47 to Edison Mission Energy's Form 10-Q
for the quarter ended September 30, 1998.
10.48 Guarantee by Edison Mission Energy, dated June 30, 1998, in favor
of Tri Energy Company Limited and the Sanwa Bank, Limited to
guarantee payment of 37.5% of Tri Energy Company Limited's
aggregate capital contributions attributable to Banpu Gas and
BANPU, incorporated by reference to Exhibit 10.48 to Edison
Mission Energy's Form 10-Q for the quarter ended September 30,
1998.
10.49 Equity Support Guarantee by Edison Mission Energy, dated December
23, 1998, in favor of ABN AMRO Bank N.V., and the Chase Manhattan
Bank to guarantee certain equity funding obligations of
EcoElectrica Ltd. and EcoElectrica Holdings Ltd. pursuant to
EcoElectrica Ltd.'s Credit Agreement dated as of October 31, 1997,
incorporated by reference to Exhibit 10.49 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.50 Master Guarantee and Support Instrument by Edison Mission Energy,
dated December 23, 1998, in favor of ABN AMRO Bank N.V., and the
Chase Manhattan Bank to guarantee the availability of funds to
purchase fuel for the EcoElectrica project pursuant to
EcoElectrica Ltd.'s Credit Agreement dated as of October 31, 1997
and Intercreditor Agreement dated as of October 31, 1997,
incorporated by reference to Exhibit 10.50 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.51 Guarantee Assumption Agreement from Edison Mission Energy, dated
December 23, 1998, under Edison Mission Energy assumed all of the
obligations of KENETECH Energy Systems, Inc. to Union Carbide
Caribe Inc., under the certain Guaranty dated November 25, 1997,
incorporated by reference to Exhibit 10.51 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.52 Transition Power Purchase Agreement, dated August 1, 1998, between
New York State Electric & Gas Corporation and Mission Energy
Westside, Inc, incorporated by reference to Exhibit 10.52 to
Edison Mission Energy's Form 10-K for the year ended December 31,
1998.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.53 Transition Power Purchase Agreement, dated August 1, 1998, between
Pennsylvania Electric Company and Mission Energy Westside, Inc.,
incorporated by reference to Exhibit 10.53 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1998.
10.54 Guarantee, dated August 1, 1998, between Edison Mission Energy,
Pennsylvania Electric Company, NGE Generation, Inc. and New York
State Electric & Gas Corporation, incorporated by reference to
Exhibit 10.54 to Edison Mission Energy's Form 10-K for the year
ended December 31, 1998.
10.55 Credit Agreement, dated March 18, 1999, among Edison Mission
Holdings Co. and Certain Commercial Lending Institutions, and
Citicorp USA, Inc., incorporated by reference to Exhibit 10.55 to
Edison Mission Energy's Form 8-K dated March 18, 1999.
10.56 Guarantee and Collateral Agreement made by Edison Mission Holdings
Co., Edison Mission Finance Co., Homer City Property Holdings,
Inc., Chestnut Ridge Energy Co., Mission Energy Westside, Inc.,
EME City Generation L.P. and Edison Mission Energy in favor of
United States Trust Company of New York, dated as of March 18,
1999, incorporated by reference to Exhibit 10.56 to Edison Mission
Energy's Form 8-K dated March 18, 1999.
10.56.1 Amendment No. 1 to the Guarantee and Collateral Agreement, dated
May 27, 1999, between Edison Mission Holdings, Edison Mission
Finance Co., Homer City Property Holdings, Inc., Chestnut Ridge
Energy Company, Mission Energy Westside, Inc., EME Homer City
Generation L.P and Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.56.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.56.2 Open-End Mortgage, Security Agreement and Assignment of Leases and
Rents, dated March 18, 1999 from EME Homer City Generation L.P. to
United States Trust Company of New York, incorporated by reference
to Exhibit 10.56.2 to Amendment No. 1 of Edison Mission Holdings
Co.'s Registration Statement on Form S-4 to the Securities and
Exchange Commission on February 8, 2000.
10.56.3 Amendment No. 1 to the Open-End Mortgage, Security Agreement and
Assignment of Leases and Rents, dated May 27, 1999, from EME Homer
City Generation L.P. to United States Trust Company of New York,
incorporated by reference to Exhibit 10.56.3 to Amendment No. 1 of
Edison Mission Holdings Co.'s Registration Statement on Form S-4
to the Securities and Exchange Commission on February 8, 2000.
10.57 Collateral Agency and Intercreditor Agreement among Edison Mission
Holdings Co., Edison Mission Finance Co., Homer City Property
Holdings, Inc., Chestnut Ridge Energy Co., Mission Energy
Westside, Inc., EME Homer City Generation L.P., The Secured
Parties' Representatives, Citicorp USA, Inc. as Administrative
Agent and United States Trust Company of New York, as Collateral
Agent, dated as of March 18, 1999, incorporated by reference to
Exhibit 10.57 to Edison Mission Energy's Form 8-K dated March 18,
1999.
10.58 Security Deposit Agreement among Edison Mission Holdings Co.,
Edison Mission Finance Co., Homer City Property Holdings, Inc.,
Chestnut Ridge Energy Co., Mission Energy Westside, Inc., EME
Homer City Generation L.P. and United States Trust Company of New
York, as Collateral Agent, dated as of Marcy 18, 1999,
incorporated by reference to Exhibit 10.58 to Edison Mission
Energy's Form 8-K dated March 18, 1999.
10.58.1 Amendment No. 1 to the Security Deposit Agreement, dated May 27,
1999, between Edison Mission Holdings, Edison Mission Finance Co.,
Homer City Property Holdings, Inc., Chestnut Ridge Energy Company,
Mission Energy Westside, Inc., EME Homer City Generation L.P. and
United States Trust Company of New York, as Collateral Agent,
incorporated by reference to Exhibit 10.58.1 to Amendment No. 1 of
Edison Mission Holdings Co.'s Registration Statement on Form S-4
to the Securities and Exchange Commission on February 8, 2000.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.59 Credit Support Guarantee, dated as of March 18, 1999, made by
Edison Mission Energy in favor of United States Trust Company of
New York, incorporated by reference to Exhibit 10.59 to Edison
Mission Energy's Form 8-K dated March 18, 1999.
10.59.1 Amendment No. 1 to the Credit Support Guarantee, dated May 27,
1999, made by Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.59.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.60 Debt Service Reserve Guarantee, dated as of March 18, 1999, made
by Edison Mission Energy in favor of United States Trust Company
of New York on behalf of the various financial institutions
(Lenders) as are or may become parities to the Credit Agreement,
dated as of March 18, 1999, among Edison Mission Holdings Co., the
Lenders and Citicorp USA, Inc., incorporated by reference to
Exhibit 10.60 to Edison Mission Energy's Form 8-K dated March 18,
1999.
10.60.1 Amendment No. 1 to the Debt Service Reserve Guarantee, dated May
27, 1999, made by Edison Mission Energy in favor of United States
Trust Company of New York, incorporated by reference to Exhibit
10.60.1 to Amendment No. 1 of Edison Mission Holdings Co.'s
Registration Statement on Form S-4 to the Securities and Exchange
Commission on February 8, 2000.
10.60.2 Bond Debt Service Reserve Guarantee, dated May 27, 1999, made by
Edison Mission Energy in favor of United States Trust Company of
New York, incorporated by reference to Exhibit 10.60.2 to
Amendment No. 1 of Edison Mission Holdings Co.'s Registration
Statement on Form S-4 to the Securities and Exchange Commission on
February 8, 2000.
10.61 Credit Agreement, dated March 18, 1999, among Edison Mission
Energy and Certain Commercial Lending Institutions, and Citicorp
USA, Inc., incorporated by reference to Exhibit 10.61 to Edison
Mission Energy's Form 8-K dated March 18, 1999.
10.62 Edison Power Limited (Pounds)1,150,000,000 Guaranteed Secured
Variable Rate Bonds due 2019 Guaranteed by Maplekey UK Limited,
incorporated by reference to Exhibit 10.62 to Edison Mission
Energy's Current Report on Form 8-K, No. 1-13434 dated July 19,
1999.
10.64 Coal and Capex Facility Agreement, dated July 16, 1999 between EME
Finance UK Limited; Barclay's Capital and Credit Suisse First
Boston; The Financial Institutions named as Banks; and Barclays
Bank PLC as Facility Agent, incorporated by reference to Exhibit
10.64 to Edison Mission Energy's Form 10-Q for the quarter ended
September 30, 1999.
10.65 Guarantee by Edison Mission Energy dated July 16, 1999 supporting
the Coal and Capex Facility Agreement (Facility Agreement) issued
by Barclays Bank PLC to secure EME Finance UK Limited obligations
pursuant to the Facility Agreement, incorporated by reference to
Exhibit 10.65 to Edison Mission Energy's Form 10-Q for the quarter
ended September 30, 1999.
10.66 Copy of the Global Debenture representing Edison Mission Energy's
9 7/8% Junior Subordinated Deferrable Interest Debentures, Series
A, Due 2024, incorporated by reference as Exhibit 4.1 to Edison
Mission Energy's Form 10-K for the year ended December 31, 1994.
10.67 Conformed copy of the Indenture, dated as of November 30, 1994,
between Edison Mission Energy and The First National Bank of
Chicago, as Trustee, incorporated by reference to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.68 First Supplemental Indenture, dated as of November 30, 1994, to
Indenture dated as of November 30, 1994 between Edison Mission
Energy and The First National Bank of Chicago, as Trustee,
incorporated by reference as Exhibit 4.2.1 to Edison Mission
Energy's Form 10-K for the year ended December 31, 1994.
10.69 Indenture, dated as of May 27, 1999, between Edison Mission
Holdings Co. and United States Trust Company of New York, as
Trustee, incorporated by reference to Exhibit 10.71 to Edison
Mission Holdings Co.'s Registration Statement on Form S-4 to the
Securities and Exchange Commission on December 3, 1999.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.69.1 First Supplemental Indenture, dated as of June 28, 1999, to
Indenture dated as of June 28, 1999 between Edison Mission Energy
and The Bank of New York, as Trustee, incorporated by reference to
Exhibit 10.72 to Edison Mission Holdings Co.'s Registration
Statement on Form S-4 to the Securities and Exchange Commission on
December 3, 1999.
10.70 Exchange and Registration Rights Agreement, dated as of May 27,
1999, by and among the Initial Purchasers named therein, the
Guarantors named therein and Edison Mission Holdings Co,
incorporated by reference to Exhibit 10.1 to Edison Mission
Holdings Co.'s Registration Statement on Form S-4 to the
Securities and Exchange Commission on December 3, 1999.
12.1 Statement regarding the computation of ratio of earnings to fixed
charges for Edison Mission Energy.*
21.1 List of Subsidiaries.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of PricewaterhouseCoopers.*
23.3 Consent of Skadden, Arps, Slate Meagher & Flom LLP (included in
Exhibit 5.1).
25.1 Statement of Eligibility and Qualification on Form T-1 of The Bank
of New York, as Trustee, under the Indenture filed as Exhibit 4.1
hereto.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Notice of Guaranteed Delivery.*
99.3 Form of Letter to Clients.*
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
</TABLE>
- --------
* Filed herewith
8
<PAGE>
Exhibit 4.1
================================================================================
EXECUTION COPY
INDENTURE
DATED AS OF JUNE 28, 1999,
between
EDISON MISSION ENERGY
and
THE BANK OF NEW YORK,
as Trustee
Providing for the issuance from time to
time of Notes in one or more series
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1. DEFINITIONS............................................................................................ 1
Section 1.1. Certain Terms Defined........................................................................... 1
ARTICLE 2. THE NOTES.............................................................................................. 8
Section 2.1. Form and Dating................................................................................. 8
Section 2.2. Amount; Issuable in Series...................................................................... 9
Section 2.3. Execution and Authentication.................................................................... 10
Section 2.4. Registrar and Paying Agent...................................................................... 10
Section 2.5. Paying Agent to Hold Money in Trust............................................................. 11
Section 2.6. Holder Lists.................................................................................... 12
Section 2.7. Transfer and Exchange........................................................................... 12
Section 2.8. Replacement Notes............................................................................... 24
Section 2.9. Outstanding Notes............................................................................... 24
Section 2.10. Temporary Notes................................................................................ 25
Section 2.11. Cancellation................................................................................... 25
Section 2.12. Defaulted Interest............................................................................. 25
ARTICLE 3. COVENANTS OF THE COMPANY AND THE TRUSTEE............................................................... 26
Section 3.1. Payment of Principal and Interest............................................................... 26
Section 3.2. Appointment to Fill Vacancy in Office of Trustee................................................ 26
Section 3.3. Certificate to Trustee, Notices of Defaults..................................................... 26
Section 3.4. Reports by the Company.......................................................................... 26
Section 3.5. Restrictions on Liens........................................................................... 27
Section 3.6. Maintenance of Corporate Existence.............................................................. 27
Section 3.7. Taxes........................................................................................... 27
ARTICLE 4. EVENTS OF DEFAULT AND REMEDIES OF THE TRUSTEE AND NOTEHOLDERS.......................................... 28
Section 4.1. Event of Default Defined; Acceleration of Maturity; Waiver of Default........................... 28
Section 4.2. Collection of Indebtedness by Trustee; Trustee May Prove Debt................................... 30
Section 4.3. Application of Proceeds......................................................................... 32
Section 4.4. Suits for Enforcement........................................................................... 33
Section 4.5. Restoration of Rights on Abandonment of Proceedings............................................. 33
Section 4.6. Limitations of Suits by Noteholders............................................................. 33
Section 4.7. Powers and Remedies Cumulative, Delay or Omission Not Waiver of Default......................... 34
Section 4.8. Control by Noteholders.......................................................................... 34
Section 4.9. Waiver of Past Defaults......................................................................... 34
Section 4.10. Rights of Holders to Receive Payment........................................................... 35
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE 5. CONCERNING THE TRUSTEE................................................................................ 35
Section 5.1. Duties and Responsibilities of the Trustee During Default and Prior to
Default...................................................................................... 35
Section 5.2. Certain Rights of the Trustee.................................................................. 36
Section 5.3. Trustee Not Responsible for Recitals, Disposition of Notes or Application
of Proceeds Thereof.......................................................................... 38
Section 5.4. Trustee and Agents May Hold Notes; Collections, Etc............................................ 38
Section 5.5. Moneys Held by Trustee......................................................................... 38
Section 5.6. Compensation and Indemnification of Trustee and Its Prior Claim................................ 38
Section 5.7. Right of Trustee to Rely on Officers' Certificate, Etc......................................... 39
Section 5.8. Persons Eligible for Appointment as Trustee.................................................... 39
Section 5.9. Resignation and Removal, Appointment of Successor Trustee...................................... 39
Section 5.10. Acceptance of Appointment by Successor Trustee................................................ 40
Section 5.11. Merger, Conversion, Consolidation or Succession to Business of Trustee........................ 41
Section 5.12. Reports by Trustee............................................................................ 41
ARTICLE 6. CONCERNING THE NOTEHOLDERS............................................................................ 42
Section 6.1. Evidence of Action Taken by Noteholders........................................................ 42
Section 6.2. Proof of Execution of Instruments and of Holding of Notes Record Date.......................... 42
Section 6.3. Holders to Be Treated as Owners................................................................ 42
Section 6.4. Notes Owned by Company Deemed Not Outstanding.................................................. 42
Section 6.5. Right of Revocation of Action Taken............................................................ 43
ARTICLE 7. SUPPLEMENTAL INDENTURES............................................................................... 43
Section 7.1. Supplemental Indentures Without Consent of Noteholders......................................... 43
Section 7.2. Supplemental Indentures With Consent of Noteholders............................................ 44
Section 7.3. Effect of Supplemental Indenture............................................................... 45
Section 7.4. Documents to Be Given to Trustee............................................................... 46
Section 7.5. Notation of Notes in Respect of Supplemental Indentures........................................ 46
ARTICLE 8. MERGER, CONSOLIDATION, SALE, LEASE OR CONVEYANCE...................................................... 46
Section 8.1. Covenant Not to Merge, Consolidate, Sell, Lease or Transfer Assets Except Under Certain
Conditions................................................................................... 46
Section 8.2. Successor Corporation Substituted.............................................................. 47
Section 8.3. Opinion of Counsel to Trustee; Officers' Certificate........................................... 47
ARTICLE 9. SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS............................................. 48
Section 9.1. Satisfaction and Discharge of Indenture........................................................ 48
Section 9.2. Application by Trustee of Funds Deposited for Payment of Notes................................. 49
Section 9.3. Repayment of Moneys Held by Paying Agent....................................................... 49
Section 9.4. Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years...................... 49
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 9.5. Defeasance and Discharge of Indenture.......................................................... 49
Section 9.6. Defeasance of Certain Obligations.............................................................. 51
ARTICLE 10. REDEMPTION OF NOTES.................................................................................. 52
Section 10.1. Notes Redeemed in Part........................................................................ 52
Section 10.2. Notice of Redemption.......................................................................... 52
Section 10.3. Payment of Notes Called for Redemption........................................................ 52
ARTICLE 11. MISCELLANEOUS PROVISIONS............................................................................. 53
Section 11.1. Incorporators, Shareholders, Officers and Directors of Company Exempt from Individual
Liability.................................................................................... 53
Section 11.2. Provisions of the Indenture for the Sole Benefit of Parties and Noteholders................... 53
Section 11.3. Successors and Assigns of Company Bound by Indenture.......................................... 53
Section 11.4. Notices and Demands on Company, Trustee and Noteholders....................................... 54
Section 11.5. Statements to Be Contained in Officers' Certificates and Opinions of Counsel.................. 54
Section 11.6. Payments Due on Saturdays, Sundays and Holidays............................................... 55
Section 11.7. New York Law to Govern........................................................................ 55
Section 11.8. Counterparts.................................................................................. 55
Section 11.9. Effect of Headings............................................................................ 56
</TABLE>
iii
<PAGE>
INDENTURE, dated as of June 28, 1999, between EDISON MISSION ENERGY, a
California corporation (the "Company"), and THE BANK OF NEW YORK, a New York
-------
banking corporation, as trustee (the "Trustee").
-------
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issue of its senior notes to
be issued in one or more series (the "Notes"), and to provide, among other
-----
things, for the authentication, delivery and administration thereof, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee as in this Indenture
provided, the valid, binding and legal obligations of the Company, and to
constitute these presents a valid Indenture and agreement according to its
terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Notes by the
Holders (as defined herein) thereof, the Company and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
Holders from time to time of the Notes as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1. Certain Terms Defined.
The following terms (except as otherwise expressly provided) for all
purposes of this Indenture shall have the respective meanings specified in this
Section. All accounting terms used herein and not expressly defined shall have
the meanings given to them in accordance with GAAP (as defined herein). The
words "herein," "hereof' and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural as well as
the singular.
"Affiliate" has the meaning set forth in the Registration Rights Agreement.
---------
"Agent" means any Registrar, Paying Agent or co-registrar.
-----
"Applicable Procedures" means, with respect to any transfer or exchange of
---------------------
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Authentication Order" has the meaning set forth in Section 2.3 hereof.
-------------------- -----------
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
--------------
law for the relief of debtors.
<PAGE>
"Board of Directors" means either the Board of Directors of the Company or
------------------
any committee of such Board duly authorized to act on behalf of such Board.
"Broker-Dealer" means any broker or dealer registered under the Exchange
-------------
Act.
"Business Day" means a day which is neither a legal holiday nor a day on
------------
which banking institutions (including, without limitation, the Federal Reserve
System) are authorized or required by law or regulation to close in The City of
New York.
"Capital Stock" means, with respect to any Person, any and all outstanding
-------------
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of, or interests in (however designated), the
equity of such Person, including without limitation all Common Stock and
Preferred Stock and partnership and joint venture interests of such Person.
"Cedel" means CedelBank, SA.
-----
"Commission" means the Securities and Exchange Commission, as from time to
----------
constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body (if any) performing such
duties at such time.
"Common Stock" means, with respect to any Person, Capital Stock of such
------------
Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of any other class of
Capital Stock of such Person.
"Company" means Edison Mission Energy, a California corporation, and,
-------
subject to Article 8 hereof, its successors and assigns.
---------
"Consolidated Net Tangible Assets" means, as of the date of determination
--------------------------------
thereof, the total amount of all of the Company's assets, determined on a
consolidated basis in accordance with GAAP as of such date, less the sum of (a)
the Company's consolidated current liabilities determined in accordance with
GAAP and (b) the Company's assets properly classified as intangible assets in
accordance with GAAP, except for any intangible assets that are distribution or
related contracts with an assignable value.
"Corporate Trust Office" means the principal office of the Trustee at which
----------------------
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, Floor 21W, New York, New York
10286.
"Custodian" means the Trustee, as custodian with respect to the Notes in
---------
global form, or any successor entity thereto.
2
<PAGE>
"Default" means any occurrence, circumstance or event, or any combination
-------
thereof, which, with the lapse of time and/or the giving of notice, would
constitute an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
---------------
Holder thereof and issued in accordance with Section 2.7 hereof, substantially
-----------
in the form of Exhibit A hereto, except that such Note shall not bear the Global
---------
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
----------
or in part in global form, the Person specified in Section 2.4 hereof as the
-----------
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DTC" has the meaning set forth in Section 2.4 hereof.
--- -----------
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
office, as operator of the Euroclear system.
"Event of Default" means any event or condition specified as such in
----------------
Section 4.1 hereof that shall have continued for the period of time, if any,
- -----------
therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
--------------
Section 2.7(f) hereof.
- --------------
"Exchange Offer" has the meaning set forth in the Registration Rights
--------------
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
-------------------------------------
Registration Rights Agreement.
"GAAP" means generally accepted accounting principles in the United States
----
applied on a basis consistent with the principles, methods, procedures and
practices employed in the preparation of the Company's audited financial
statements, including, without limitation, those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession.
"Global Notes" means, individually and collectively, each of the Restricted
------------
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.1, 2.7(b)(iv), 2.7(d)(ii)
- --------- ----------- ---------- ----------
or 2.7(f) hereof.
------
"Global Note Legend" means the legend set forth in Section 2.7(g)(ii),
------------------ ------------------
which is required to be placed on all Global Notes issued under this Indenture.
3
<PAGE>
"Good Faith Contest" means the contest of an item if (i) the item is
------------------
diligently being contested in good faith by appropriate proceedings timely
instituted, (ii) adequate reserves are established in accordance with GAAP with
respect to the contested item, if the contested item individually or when taken
together with all other contested items for which reserves are not at the time
being held could reasonably be expected to result in liability of the Company in
excess of $1,000,000, (iii) during the period of such contest, the enforcement
of any contested item is effectively stayed, unless such enforcement would not
reasonably be expected to result in a Material Adverse Effect, (iv) any Lien
filed in connection therewith shall have been removed from the record by bonding
arrangements by a reputable surety company, or title insurance or cash deposits
are otherwise provided to assure the discharge of the Company's obligation in
connection therewith, provided that such cash deposits, in the aggregate, shall
not exceed $2,000,000, (v) such payment shall have been made as is necessary to
prevent the recordation of a tax deed or other similar instrument conveying the
property of the Company or any portion thereof, (vi) the failure to pay or
comply with the contested item during the period of such Good Faith Contest
would not reasonably be expected to result in a Material Adverse Effect and
(vii) the Company has no knowledge of any actual or proposed deficiency or
additional assessment in connection therewith not otherwise satisfying the
requirements of clauses (i) through (vi).
"Holder," "Holder of Notes," "Noteholder" and other similar terms mean the
------ --------------- ----------
registered holder of any Note as reflected in the registration records of the
Registrar.
"Indebtedness" has the meaning set forth in Section 3.5.
------------ -----------
"Indenture" means this instrument as originally executed and delivered or,
---------
if amended or supplemented as herein provided, as so amended or supplemented.
"Indirect Participant" means a Person who holds a beneficial interest in a
--------------------
Global Note through a Participant.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"Interest Payment Date" means, with respect to any Note, the Stated
---------------------
Maturity of an installment of interest on such Note.
"Letter of Transmittal" means the letter of transmittal to be prepared by
---------------------
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Material Adverse Effect" means a material adverse effect on the condition
-----------------------
(financial or other), business, properties or results of operations of the
Company and its subsidiaries, taken as a whole, or on the ability of the Company
to perform its obligations under this Indenture, any indenture supplemental
hereto, the Notes, any Registration Rights Agreement or any purchase or
underwriting agreement in respect of any series of Notes.
"Non-U.S. Person" means a Person who is not a U.S. Person.
---------------
4
<PAGE>
"Note" or "Notes" has the meaning set forth in the recitals above.
---- -----
"Notes Register" has the meaning set forth in Section 2.4 hereof.
-------------- -----------
"Officer" means, with respect to any Person, the Chairman of the Board, the
-------
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
---------------------
by the Chairman of the Board of Directors or the President or any Vice President
and by the Chief Financial Officer or the Secretary or any Assistant Secretary
or the Treasurer or any Assistant Treasurer of the Company and delivered to the
Trustee. Each such certificate shall include the statements provided for in
Section 11.5 hereof, if and to the extent required thereby.
- ------------
"Opinion of Counsel" means an opinion in writing signed by legal counsel,
------------------
who may be an employee of or counsel to the Company. Each such opinion shall
include the statements provided for in Section 11.5 hereof, if and to the extent
------------
required thereby.
"Original Issue Date" of any Note (or portion thereof) means the earlier of
-------------------
(a) the date of such Note or (b) the date of any Note (or portion thereof) in
exchange for which such Note was issued (directly or indirectly) on registration
of transfer, exchange or substitution.
"Outstanding", when used with reference to Notes, means, subject to the
-----------
provisions of Sections 2.9 and 6.4 hereof, as of any particular time, all Notes
------------ ---
authenticated and delivered by the Trustee under this Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation, or which shall have been paid pursuant to Section
-------
2.8 hereof (other than any such Notes in respect of which there shall have
---
been presented to the Trustee proof satisfactory to it that such Notes are
held by a bona fide purchaser in whose hands the Notes are valid
obligations of the Company); and
(ii) Notes, or portions thereof, for the payment or redemption of
which moneys or direct obligations of the United States of America backed
by its full faith and credit in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside, segregated and held in trust by
the Company (if the Company shall act as its own paying agent), provided
that if such Notes are to be redeemed prior to the maturity thereof,
written notice of such redemption shall have been herein provided, or
provision satisfactory to the Trustee shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
-----------
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
5
<PAGE>
"Paying Agent" has the meaning set forth in Section 2.4 hereof.
------------ -----------
"Person" means an individual, a corporation, a partnership, a limited
------
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
---------------
interests, participations or other equivalents (however designated, whether
voting or non-voting) of preferred or preference Capital Stock of such Person
that is outstanding or issued on or after the date of this Indenture.
"Private Placement Legend" means the legend set forth in Section 2.7(g)(i)
------------------------ -----------------
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
---
"Registrar" has the meaning set forth in Section 2.4 hereof.
--------- -----------
"Registration Rights Agreement" means the Registration Rights Agreement,
-----------------------------
dated as of June 23, 1999, by and among the Company and the other parties named
on the signature pages thereof, as such agreement may be amended, modified or
supplemented from time to time, and, with respect to any transfer-restricted
Notes issued pursuant to a Series Supplemental Indenture after the date of this
Indenture ("Additional Notes"), one or more registration rights agreements
----------------
between the Company and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes, or exchange such Additional Notes for securities registered, under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
------------
"Responsible Officer", when used with respect to the Trustee, means any
-------------------
officer of the Trustee assigned by the Trustee to administer its corporate trust
matters.
"Restricted Definitive Note" means a Definitive Note bearing the Private
--------------------------
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
----------------------
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee.
"Rule 144" means Rule 144 promulgated under the Securities Act.
--------
"Rule 144A" means Rule 144A promulgated under the Securities Act.
---------
"Rule 903" means Rule 903 promulgated under the Securities Act.
--------
"Rule 904" means Rule 904 promulgated under the Securities Act.
--------
6
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Series Supplemental Indenture" means an indenture supplemental to this
-----------------------------
Indenture entered into by the Company and the Trustee for the purpose of
establishing, in accordance with Article 2 of this Indenture, the title, form
---------
and terms of the Notes of any series.
"Shelf Registration Statement" means the Shelf Registration Statement as
----------------------------
defined in the Registration Rights Agreement.
"Stated Maturity" means, with respect to any debt security or any
---------------
installment of interest thereon, the date specified in such debt security as the
fixed date on which any principal of such debt security or any such installment
of interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
----------
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
---
"Trustee" means the entity identified as "Trustee" in the first paragraph
-------
hereof until the appointment of a successor trustee pursuant to Article 5, after
---------
which "Trustee" shall mean such successor trustee.
"Unrestricted Global Note" means a permanent Global Note substantially in
------------------------
the form of Exhibit A attached hereto that bears the Global Note Legend and that
---------
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
----------------------------
not bear and are not required to bear the Private Placement Legend.
"U.S. Government Obligations" means securities that are (i) direct and
---------------------------
unconditional obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by, and acting as an agency or instrumentality of, the
United States of America, the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company
subject to federal or state supervision or examination with a combined capital
and surplus of at least $100,000,000, as custodian with respect to any such U.S.
Government Obligations or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository
7
<PAGE>
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
-----------
Securities Act.
ARTICLE 2.
THE NOTES
Section 2.1. Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
---------
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $100,000 and any integral multiple of $1,000 in
excess thereof. Interest on the Notes shall be computed on the basis of a 360-
day year consisting of twelve 30-day months.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.
For purposes of this Article 2, the unrestricted Notes pertaining to
---------
previously restricted Notes (such as the unrestricted Notes that may be
exchanged for restricted Notes pursuant to an Exchange Offer) shall be deemed to
be Notes of the same series, notwithstanding that such unrestricted Notes and
restricted Notes may be designated as different series and have been issued
under different Series Supplemental Indentures.
(b) Global Notes and Definitive Notes. Notes issued in global form shall
be substantially in the form of Exhibit A attached hereto (including the Global
---------
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
---------
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.7 hereof.
-----------
8
<PAGE>
(c) Institutional Accredited Investors. Notwithstanding anything to the
contrary herein, Institutional Accredited Investors may not hold beneficial
interests in any Restricted Global Note, but may be Holders of Restricted
Definitive Notes.
(d) Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of CedelBank"
and "Customer Handbook" of Cedel shall be applicable to transfers of beneficial
interests in Global Notes sold pursuant to the exemption to the registration
requirements of the Securities Act afforded by Regulation S and that are held by
Participants through Euroclear or Cedel.
Section 2.2. Amount; Issuable in Series.
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is unlimited.
The Notes may be issued in one or more series. There shall be established
in one or more Series Supplemental Indentures, prior to the issuance of Notes of
any series:
(a) the title of the Notes of such series (which shall distinguish the
Notes of such series from all other Notes);
(b) any limit upon the aggregate principal amount of the Notes of such
series that may be authenticated and delivered under this Indenture (except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of such series pursuant to Section
-------
2.7(f), 2.8, 2.10, 7.5 or 10.1 and except for Notes that are deemed never to
- ------ --- ---- --- ----
have been authenticated and delivered hereunder);
(c) the date or dates on which the principal of the Notes of such series
is payable, the amounts of principal payable on such date or dates and the
regular record date for the determination of Holders to whom principal is
payable; and the date or dates on or as of which the Notes of such series shall
be dated, if other than as provided in the first paragraph of Section 2.1(a);
--------------
(d) the rate or rates at which the Notes of such series shall bear
interest, or the method by which such rate or rates shall be determined, the
date or dates from which such interest shall accrue, the interest payment dates
on which such interest shall be payable and the regular record date for the
determination of Holders to whom interest is payable; and the basis of
computation of interest, if other than as provided in the first paragraph of
Section 2.1(a);
- --------------
(e) if other than as provided in Section 2.4, the place or places where
-----------
(i) the principal of and interest on Notes of such series shall be payable, (ii)
Notes of such series may be surrendered for registration of transfer or exchange
and (iii) notices and demands to or upon the Company in respect of the Notes of
such series and this Indenture may be served;
9
<PAGE>
(f) the price or prices at which, the period or periods within which and
the terms and conditions upon which Notes of such series may be redeemed, in
whole or in part, at the option of the Company;
(g) the obligation, if any, of the Company to redeem, purchase or repay
Notes of such series pursuant to any sinking fund or analogous provision or at
the option of a Holder thereof and the price or prices at which and the period
or periods within which and the terms and conditions upon which Notes of such
series shall be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligations;
(h) if other than minimum denominations of $100,000 and any integral
multiple of $1,000 in excess thereof, the denominations in which Notes of such
series shall be issuable;
(i) any other terms of such series (which terms shall not be inconsistent
with the provisions of this Indenture);
(j) any trustees, authenticating or paying agents, warrant agents,
transfer agents or registrars with respect to the Notes of such series if
different than those provided for herein; and
(k) CUSIP numbers, if any.
Section 2.3. Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes of a given series for
--------------------
original issue up to the aggregate principal amount stated in the applicable
Series Supplemental Indenture. The aggregate principal amount of Notes of a
given series outstanding at any time may not exceed such amount except as
provided in Section 2.8 hereof.
-----------
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.4. Registrar and Paying Agent.
The Company shall maintain, in the Borough of Manhattan in the City of New
York, an office or agency where Notes may be presented for registration of
transfer or for exchange
10
<PAGE>
("Registrar") and an office or agency where Notes may be presented for payment
---------
("Paying Agent") and an office or agency where notices and demands to or upon
------------
the Company in respect of the Notes or this Indenture may be served. The
Registrar shall keep a register ("Notes Register") of the Notes and of their
--------------
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such and
shall accept presentations, notices and demands hereunder at the Corporate Trust
Office. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
---
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes and
designates the Trustee's New York office as the office or agency referred to in
the first sentence of this Section.
Section 2.5. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee in
writing of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
The Company shall, prior to each due date, or not later than 11 AM New York
City time on each due date, of the principal of, and premium, if any, or
interest on the Notes, deposit with the Paying Agent a sum sufficient to pay
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of any failure to take
such action.
Anything in this Section 2.5 to the contrary notwithstanding, the Company
-----------
may at any time, for the purpose of obtaining satisfaction and discharge of this
Indenture or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust by any Paying Agent hereunder, as required by this Section
-------
2.5, such sums to be held by the Trustee upon the trusts herein contained.
- ---
11
<PAGE>
Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section 3.4 is subject to the provisions
-----------
of Section 9.1 and Section 9.3 hereof.
----------- -----------
Section 2.6. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes, and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.7. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary for any of the Global Notes or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is
not appointed by the Company within 120 days after the date of such notice from
the Depositary, (ii) there shall have occurred and be continuing an Event of
Default with respect to the applicable Notes and beneficial owners holding
interests representing an aggregate principal amount of at least 51% of such
Notes represented by Global Notes advise the Trustee in writing that the
continuation of a book-entry system through the Depositary is no longer in such
owner's best interests or (iii) the Company executes and delivers to the Trustee
an order that the Global Notes will be so exchangeable. Upon the occurrence of
any of the preceding events in clauses (i), (ii) or (iii) above, Definitive
Notes shall be issued in such names as the Depositary shall instruct the Trustee
in writing. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.8 and 2.10 hereof. Every Note authenticated and
------------ ----
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.7 or Section 2.8 or 2.10 hereof shall be
----------- ----------- ----
authenticated and delivered in the form of, and shall be, a Global Note, except
as otherwise provided herein. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.7(a); however, beneficial
--------------
interests in a Global Note may be transferred and exchanged as provided in
Section 2.7(b), (c) or (f) hereof.
- -------------- --- ---
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial
12
<PAGE>
interests in the Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the
other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described
in the second sentence of this Section 2.7(b)(i).
-----------------
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.7(b)(i), the transferor of such
-----------------
beneficial interest must deliver to the Registrar either (A) (1) a written
order from a Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a Participant
or an Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in clause (B)(1) above. Upon consummation of an Exchange Offer
by the Company in accordance with Section 2.7(f) hereof, the requirements
--------------
of this Section 2.7(b)(ii) shall be deemed to have been satisfied upon
------------------
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Note of the applicable series. Upon satisfaction of all
of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.7(h) hereof.
--------------
(iii) Transfer of Beneficial Interests in a Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
such Restricted Global Note if the transfer complies with the requirements
of Section 2.7(b)(i) above and the Registrar receives the following:
-----------------
(A) if the transferee will take delivery in the form of a
beneficial interest in a Global Note by virtue of the exemption from
the registration requirements of the Securities Act afforded by Rule
144A, then the transferor
13
<PAGE>
must deliver a certificate in the form of Exhibit B hereto, including
---------
the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in a Global Note by virtue of the exemption from
the registration requirements of the Securities Act afforded by
Regulation S, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2)
---------
thereof.
(iv) Transfer and Exchange of Beneficial Interests in the Restricted
Global Note of a Series for Beneficial Interests in the Unrestricted Global
Note of Such Series. A beneficial interest in the Restricted Global Note
of a series may be exchanged by any holder thereof for a beneficial
interest in the Unrestricted Global Note of such series, or transferred to
a Person who takes delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note of such series, if the exchange or transfer
complies with the requirements of Section 2.7(b)(ii) and:
------------------
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be exchanged, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in the Unrestricted Global
Note of such series, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (l)(a)
---------
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in the Unrestricted Global Note of such
series, a certificate from such holder in the form of Exhibit B
---------
hereto, including the certifications in item (4) thereof;
14
<PAGE>
and, in each such case set forth in this subparagraph (D), if the
Company so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note of the applicable series
has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.3 hereof, the Trustee
-----------
shall authenticate, one or more Unrestricted Global Notes of such series in
an aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in Global Notes for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note of a series proposes to exchange such beneficial interest for a
Restricted Definitive Note of such series or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Note of such series, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
---------
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
---------
in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-
U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
---------
thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
---------
in item (3)(a) thereof; or
15
<PAGE>
(E) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
---------
thereof;
the Trustee shall cause the aggregate principal amount of the Global Note of
such series to be reduced accordingly pursuant to Section 2.7(h) hereof, and the
--------------
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.7(c) shall be
--------------
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.7(c)(i) shall bear the Private Placement Legend and shall be
-----------------
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note of a series may exchange such beneficial interest for an Unrestricted
Definitive Note of such series or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note of such series only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a Broker-
Dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (l)(b)
---------
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who
16
<PAGE>
shall take delivery thereof in the form of a Definitive Note that
does not bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit B hereto, including the
---------
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Company so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note of a series proposes to exchange such
beneficial interest for a Definitive Note of such series or to transfer
such beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Note of such series, then, upon satisfaction of the
conditions set forth in Section 2.7(b)(ii) hereof, the Trustee shall cause
------------------
the aggregate principal amount of the Unrestricted Global Note of such
series to be reduced accordingly pursuant to Section 2.7(h) hereof, and the
--------------
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note of such series in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.7(c)(iii) shall be
-------------------
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this Section
-------
2.7(c)(iii) shall not bear the Private Placement Legend.
-----------
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests in
Global Notes.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note of a
series proposes to exchange such Note for a beneficial interest in a
Restricted Global Note of such series or to transfer such Restricted
Definitive Note to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
---------
including the certifications in item (2)(b) thereof;
17
<PAGE>
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
---------
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
---------
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
---------
certifications in item (3)(a) thereof; or
(E) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
---------
(3)(b) thereof,
the Trustee shall cancel the Restricted Definitive Note and increase or
cause to be increased the aggregate principal amount of the Restricted
Global Note of such series.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note of a
series may exchange such Note for a beneficial interest in an Unrestricted
Global Note of such series or transfer such Restricted Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note of such series only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Note proposes to
exchange such Note for a beneficial interest in the Unrestricted
Global Note of such
18
<PAGE>
series, a certificate from such Holder in the form of Exhibit C
---------
hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Note proposes to
transfer such Note to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note
of such series, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
---------
thereof;
and, in each such case set forth in this subparagraph (D), if the
Company so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.7(d)(ii), the Trustee shall cancel the Definitive Note and
------------------
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note of such series.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
of such series or transfer such Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note of such series at any time. Upon receipt of a request for such
an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes of such
series.
If any such exchange or transfer from a Definitive Note of a series to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
or (iii) above at a time when an Unrestricted Global Note of such series
has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.3 hereof, the Trustee
-----------
shall authenticate one or more Unrestricted Global Notes of such series in
an aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.7(e), the Registrar shall register the transfer or
--------------
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
-------
2.7(e).
- ------
19
<PAGE>
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note of a series may be transferred to and registered
in the name of Persons who take delivery thereof in the form of a
Restricted Definitive Note of such series if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
---------
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
---------
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
---------
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note of a series may be exchanged by the Holder
thereof for an Unrestricted Definitive Note of such series or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
---------
hereto, including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Note
proposes to transfer such Note to a Person who shall take
delivery thereof in the form
20
<PAGE>
of an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the
---------
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Company so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.3, the
-----------
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not Broker-
Dealers, (y) they are not participating in a distribution of the Exchange Notes
and (z) they are not affiliates (as defined in Rule 144) of the Company, and
accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall, as indicated below, appear on
the face of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this
Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear a legend in substantially
the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER
21
<PAGE>
OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF EDISON
MISSION ENERGY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO EDISON MISSION ENERGY, (II) INSIDE THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (II) THROUGH (V) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.7 (and
-----------
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.8 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.7(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF EDISON MISSION ENERGY."
(iii) IAI Note Legend. Each Definitive Note held by an Institutional
Accredited Investor shall bear a legend in substantially the following
form:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO
22
<PAGE>
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
------------
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's written order or at the Registrar's
written request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 7.5 and 11.1 hereof).
------------- --- ----
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Article 10 hereof and ending at the close of business on
----------
the day of selection, (B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in part, except the unredeemed
23
<PAGE>
portion of any Note being redeemed in part or (C) to register the transfer
of or to exchange a Note between a record date and the next succeeding
Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.3 hereof.
-----------
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.7 to
-----------
effect a registration of transfer or exchange may be submitted by facsimile
but originals of such opinions shall follow by mail.
Section 2.8. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.9. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 6.4 hereof, a Note does not
-----------
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
If a Note is replaced pursuant to Section 2.8 hereof it ceases to be
-----------
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 3.1
-----------
hereof, it ceases to be outstanding and interest on it ceases to accrue.
24
<PAGE>
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate permanent Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
the canceled Notes pursuant to its customary practices and procedures in effect
from time to time (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it
has paid or that have been delivered to the Trustee for cancellation, except as
otherwise provided for herein.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 3.1 hereof. The Company shall notify the Trustee in writing of
-----------
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
25
<PAGE>
ARTICLE 3.
COVENANTS OF
THE COMPANY AND THE TRUSTEE
Section 3.1. Payment of Principal and Interest.
The Company shall duly and punctually pay or cause to be paid the principal
of, and premium, if any, and interest on, each of the Notes at the place or
places, at the respective times and in the manner provided in the applicable
Series Supplemental Indenture and the Notes. Payment of principal of, and
premium and interest on the Notes shall be paid by mailing a check to or upon
the written order of the registered Holders of Notes entitled thereto at their
last address as it appears on the Notes Register or, upon written application to
the Trustee (which shall be received by the Trustee prior to the record date) by
a Holder of $1,000,000 or more in aggregate principal amount of Notes, by wire
transfer of immediately available funds to an account maintained by such Holder
with a bank or other financial institution; provided, however that (subject to
-------- -------
the provisions of Section 2.8 hereof) payment of principal of, and premium, if
-----------
any, on any Note may be conditioned upon presentation for payment of the
certificate representing such Note.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the rate set forth in the applicable Series Supplemental Indenture and the
Notes, and it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 3.2. Appointment to Fill Vacancy in Office of Trustee. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, shall
appoint, in the manner provided in Section 5.9 hereof, a Trustee, so that there
-----------
shall at all times be a Trustee hereunder.
Section 3.3. Certificate to Trustee, Notices of Defaults.
The Company shall furnish to the Trustee (i) on or before March 31 in each
year (beginning with March 31, 2000) a brief certificate from the principal
executive, financial or accounting officer of this Company as to his or her
knowledge of the Company's compliance with all covenants under this Indenture
(such compliance to be determined without regard to any period of grace or
requirement of notice provided under this Indenture). and (ii) upon becoming
aware of any Default or Event of Default, a statement specifying such Default or
Event of Default. Within 30 days of its becoming aware of any Default or Event
of Default, the Trustee shall provide the Holders with a notice specifying such
Default or Event of Default.
Section 3.4. Reports by the Company. The Company shall deliver to the Trustee
and provide Noteholders, within 15 days after it files them with the Commission,
copies of its annual reports and of the information, documents and other reports
that the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange Act, and shall deliver to the Trustee copies of any
other report that the Company files with the Commission. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and
26
<PAGE>
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants contained hereunder.
Section 3.5. Restrictions on Liens.
The Company shall not pledge, mortgage or hypothecate, or permit to exist,
any mortgage, pledge or other lien upon any property at any time directly owned
by the Company to secure any indebtedness for money borrowed that is incurred,
issued, assumed or guaranteed by the Company ("Indebtedness"), without making
------------
effective provisions whereby the Notes shall be equally and ratably secured with
any and all such Indebtedness and with any other Indebtedness similarly entitled
to be equally and ratably secured; provided, however, that this restriction
-------- -------
shall not apply to or prevent the creation or existence of (i) liens existing at
the Original Issue Date of the Notes, (ii) purchase money liens not to exceed
the cost or value of the purchased property, (iii) other liens not to exceed 10%
of Consolidated Net Tangible Assets, and (iv) liens granted in connection with
extending, renewing, replacing or refinancing, in whole or in part, the
Indebtedness (including, without limitation, increasing the principal amount of
such Indebtedness) secured by liens described in the foregoing clauses (i)
through (iii).
In the event that the Company proposes to pledge, mortgage or hypothecate
any property at any time directly owned by it to secure any Indebtedness, other
than as permitted by clauses (i) through (iv) of the previous paragraph, the
Company shall give prior written notice thereof to the Trustee, who shall give
notice to the Holders, and the Company shall, prior to or simultaneously with
such pledge, mortgage or hypothecation, effectively secure all the Notes equally
and ratably with such Indebtedness.
Section 3.6. Maintenance of Corporate Existence.
Subject to the provisions of Article 8 hereof, the Company shall at all
---------
times preserve and maintain in full force and effect (i) its corporate existence
and good standing under the laws of the State of California and (ii) its
qualification to do business in each other jurisdiction in which the character
of its properties or the nature of its activities make such qualification
necessary, except where the failure to be so qualified would not reasonably be
expected to result in a Material Adverse Effect.
Section 3.7. Taxes.
The Company shall, prior to the time penalties attach thereto, (i) file, or
cause to be filed, all tax and information returns that are required to be, or
are required to have been, filed by it in any jurisdiction, and (ii) pay or
cause to be paid all taxes shown to be, or to have been, due and payable on such
returns and all other taxes lawfully imposed and payable by it, except to the
extent there is a Good Faith Contest thereof by the Company.
27
<PAGE>
ARTICLE 4.
EVENTS OF DEFAULT AND REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
Section 4.1. Event of Default Defined; Acceleration of Maturity; Waiver of
Default.
If one or more of the following Events of Default (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body or otherwise) shall have occurred and be continuing:
(a) default in the payment of all or any part of the principal of, or
premium, if any, on, any of the Notes as and when the same shall become due and
payable either at maturity, upon any redemption or required repurchase, by
declaration of acceleration or otherwise; or
(b) default in the payment of any installment of interest upon any of the
Notes as and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or
(c) an event of default, as defined in any instrument of the Company under
which there may be issued, or by which there may be secured or evidenced, any
Indebtedness of the Company that has resulted in the acceleration of such
Indebtedness, or any default occurring in payment of any such Indebtedness at
final maturity (and after the expiration of any applicable grace periods), other
than such Indebtedness (i) which is payable solely out of the property or assets
of a partnership, joint venture or similar entity of which the Company or any of
its Subsidiaries or Affiliates is a participant, or which is secured by a lien
on the property or assets owned or held by such entity, without further recourse
to or liability of the Company, or (ii) the principal of, and interest on,
which, when added to the principal of and interest on all other such
Indebtedness (exclusive of Indebtedness under clause (i) above), does not exceed
$20,000,000; or
(d) failure on the part of the Company duly to observe or perform any other
of the covenants or agreements on the part of the Company in the Notes or in
this Indenture and such failure continues for a period of 90 days after the date
on which written notice specifying such failure, stating that such notice is a
"Notice of Default" hereunder and demanding that the Company remedy the same,
shall have been given to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes at the time Outstanding; or
(e) one or more final, nonappealable judgments, decrees or orders of any
court, tribunal, arbitrator, administrative or other governmental body or
similar entity for the payment of money shall be rendered against the Company or
any of its properties in an aggregate amount in excess of $20,000,000 (excluding
the amount thereof covered by insurance) and such judgment, decree or order
shall remain unvacated, undischarged and unstayed for more than 90 days, except
while being contested in good faith by appropriate proceedings; or
(f) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under any applicable bankruptcy,
28
<PAGE>
insolvency, reorganization or other similar law now or hereafter in effect, or a
decree or order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment, or
composition of or in respect of the Company under any applicable federal or
state law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall remain unstayed and in effect
for a period of 90 consecutive days; or
(g) the Company shall commence a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or consent to the entry of a decree or
order for relief in an involuntary case or proceeding under any such law, or to
the commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or consent seeking
reorganization or relief under any such applicable federal or state law, or the
consent by the Company to the filing of such petition or to the appointment of
or the taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by the Company of an assignment
for the benefit of creditors, or the taking of action by the Company in
furtherance of any such action;
then and in each and every such case (other than an Event of Default with
respect to the Company specified in Section 4.1(f) or 4.1(g) hereof), unless the
-------------- ------
principal amount of all of the Notes shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Notes then Outstanding hereunder, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the entire
principal amount of all the Notes and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become
immediately due and payable. This provision, however, is subject to the
condition that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Notes and the principal and
premium, if any, of any and all Notes that shall have become due otherwise than
by acceleration (with interest upon such principal and premium, if any, and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the rate of interest specified in the
Notes, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred and all reasonable advances made by
the Trustee and each predecessor Trustee except as a result of gross negligence
or bad faith, and if any and all Events of Default under this Indenture, other
than the non-payment of the principal that shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then and in every such case the Holders of a majority in aggregate
principal amount of the Notes then Outstanding, by written notice to the Company
and to the Trustee, may waive all defaults (except, unless theretofore
29
<PAGE>
cured, a default in payment of principal of, or premium, if any, or interest on,
the Notes) and rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
If an Event of Default specified in Section 4.1(f) or 4.1(g) hereof occurs
-------------- ------
with respect to the Company, the principal of and accrued interest on the Notes
shall become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Noteholder.
Section 4.2. Collection of Indebtedness by Trustee; Trustee May Prove Debt.
The Company covenants that (a) in case default shall be made in the payment
of any installment of interest on any of the Notes when such interest shall have
become due and payable, and such default shall have continued for a period of 30
days or (b) in case default shall be made in the payment of all or any part of
the principal of, or premium, if any, on, any of the Notes when the same shall
have become due and payable, whether upon maturity or upon any redemption or by
declaration or acceleration or otherwise, then upon demand of the Trustee, the
Company shall pay to the Trustee for the benefit of the Holders of the Notes the
whole amount that then shall have become due and payable on all such Notes of
principal, premium and interest, as the case may be (with interest to the date
of such payment upon the overdue principal or premium and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the rate of interest specified in the Notes), and in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys and counsel, and
any reasonable expenses and liabilities incurred, and all reasonable advances
made, by the Trustee and each predecessor Trustee, except as a result of its
gross negligence or bad faith.
Until such demand is made by the Trustee, the Company may pay the principal
of and premium and interest on the Notes to the registered Holders, whether or
not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Notes and
collect in the manner provided by law out of the property of the Company or
other obligor upon the Notes, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Company or any
other obligor upon the Notes under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian, sequestrator or similar official shall have been
appointed for or taken possession of the Company or its property or such other
obligor, or
30
<PAGE>
in case of any other comparable judicial proceedings relative to the Company or
other obligor upon the Notes, or to the creditors or property of the Company or
such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective or whether the Trustee shall have made any demand
pursuant to the provisions of this Section 4.2, shall be entitled and empowered,
-----------
by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of principal,
premium and interest owing and unpaid in respect of the Notes, and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all reasonable expenses and liabilities
incurred, and all reasonable advances made, by the Trustee and each predecessor
Trustee, except as a result of gross negligence or bad faith) and of the
Noteholders, allowed in any judicial proceedings relative to the Company or
other obligor upon the Notes, or to the creditors or property of the Company or
such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of the Notes in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings;
and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Noteholders and of the Trustee on their behalf; and
any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Noteholders to make payments to the Trustee,
and, in the event that the Trustee shall consent to the making of payments
directly to the Noteholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
reasonable expenses and liabilities incurred, and all reasonable advances made,
by the Trustee and each predecessor Trustee except as a result of negligence or
bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Noteholders any plan or reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes or the production thereof at any trial or other proceeding relative
thereto, and any such action or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
31
<PAGE>
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
Section 4.3. Application of Proceeds.
Any moneys collected by the Trustee pursuant to this Article shall be
applied in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal or interest,
upon presentation of the several Notes and stamping (or otherwise noting)
thereon the payment, or issuing Notes in reduced principal amounts in exchange
for the presented Notes if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee and each predecessor Trustee and their respective
agents and attorneys and of all reasonable expenses and liabilities incurred,
and all reasonable advances made, by the Trustee and each predecessor Trustee,
except as a result of gross negligence or bad faith, and all other amounts due
under Section 5.6 hereof;
-----------
SECOND: In case the principal and premium, if any, of the Notes shall not
have become and be then due and payable, to the payment of interest in default
in the order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest payable at the rate of interest specified in
the Notes, such payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
THIRD: In case the principal of the Notes shall have become and shall be
then due and payable, to the payment of the whole amount then owing and unpaid
upon all the Notes for principal, premium and interest, with interest upon the
overdue principal and premium, if any, and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest payable at
the rate of interest specified in the Notes, and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the Notes,
then to the payment of such principal, premium and interest, without preference
or priority of principal or premium over interest, or of interest over principal
or premium, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal, premium and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 4.3.
-----------
32
<PAGE>
Section 4.4. Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may proceed to protect and enforce the rights vested in
it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either at
law or in equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
Section 4.5. Restoration of Rights on Abandonment of Proceedings.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company, the Trustee and the Noteholders shall continue as though no such
proceedings had been taken.
Section 4.6. Limitations of Suits by Noteholders.
Subject to Section 4.10, no Holder of any Note shall have any right by
------------
virtue or by availing of any provision of this Indenture to institute any action
or proceeding at law or in equity or in bankruptcy or otherwise upon or under or
with respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless (i) such Holder previously has given to a Responsible Officer
of the Trustee written notice of default and of the continuance hereof, as
hereinbefore provided, (ii) the Holders of not less than 25% in aggregate
principal amount of the Notes then Outstanding have made written request upon
the Trustee to institute such action or proceeding in its own name as Trustee
hereunder and have offered to the Trustee such reasonable security and indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby, (iii) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such action
or proceeding and (iv) no direction inconsistent with such written request has
been given to the Trustee pursuant to Section 4.8 hereof; it being understood
-----------
and intended, and being expressly covenanted by the taker and Holder of every
Note with every other taker and Holder and the Trustee, that no one or more
Holders of Notes shall have any right in any manner whatever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holder of Notes, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Notes. For the protection and enforcement of
the provisions of this Section 4.6, each and every Noteholder and the Trustee
-----------
shall be entitled to such relief as can be given either at law or in equity.
33
<PAGE>
Section 4.7. Powers and Remedies Cumulative, Delay or Omission Not Waiver of
Default.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any of the Notes to
exercise as aforesaid any such right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 4.6 hereof, every power and remedy
-----------
given by this Indenture or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Noteholders.
Section 4.8. Control by Noteholders.
The Holders of a majority in aggregate principal amount of the Notes at the
time Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee by this Indenture; provided that
--------
such direction shall not be otherwise than in accordance with law and the
provisions of this Indenture; and provided further that (subject to the
-------- -------
provisions of Section 5.1 hereof) the Trustee shall have the right to decline to
-----------
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken or
if the Trustee in good faith by its board of directors, the executive committee,
or a trust committee of directors or Responsible Officers of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability, or if the Trustee in good faith shall so determine that
the actions or forbearances specified in or pursuant to such direction shall be
unduly prejudicial to the interests of Holders of the Notes not joining in the
giving of said direction, it being understood that (subject to Section 5.1
-----------
hereof) the Trustee shall have no duty to ascertain whether or not such actions
or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Noteholders.
Section 4.9. Waiver of Past Defaults.
Prior to the declaration of the maturity of the Notes as provided in
Section 4.1 hereof, the Holders of a majority in aggregate principal amount of
- -----------
the Notes at the time Outstanding may on behalf of the Holders of all the Notes
waive any past Default or Event of Default hereunder and its consequences,
except a Default (a) in the payment of principal of, premium, if any, or
interest on any of the Notes or (b) in respect of a covenant or provision hereof
that cannot be modified or
34
<PAGE>
amended without the consent of the Holder of each Note affected. In the case of
any such waiver, the Company, the Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively, but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 4.10. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture (including, without
limitation, Section 4.6 hereof), the right of any Holder to receive, and to
-----------
institute suit to enforce, payment of the principal of, and premium, if any, and
interest on the Notes on or after the respective due dates expressed in such
Notes (including upon redemption and acceleration of the maturity of the
principal of and premium, if any, and interest on the Notes), shall not be
affected or impaired, and shall be absolute and unconditional.
ARTICLE 5.
CONCERNING THE TRUSTEE
Section 5.1. Duties and Responsibilities of the Trustee During Default and
Prior to Default.
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, undertakes to
perform only such duties as are specifically set forth in this Indenture. In
case an Event of Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and shall use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the curing or
waiving of all such Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
35
<PAGE>
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a majority in principal amount of the Notes at the time
Outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or indemnity reasonably satisfactory to it against such
liability is not reasonably assured to it.
Section 5.2. Certain Rights of the Trustee.
Subject to Section 5.1 hereof:
-----------
(a) the Trustee may rely conclusively and shall be fully protected in
acting or refraining from acting upon any resolution, Officers' Certificate or
any other certificate (including, without limitation, any certificate provided
to the Trustee pursuant to Section 3.3 hereof), statement, instrument, opinion,
-----------
report, notice, request, consent, order, bond, debenture, note, coupon, security
or other paper document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed) and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
36
<PAGE>
(d) the Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Indenture at the request, order or direction of
any of the Noteholders pursuant to the provisions of this Indenture, unless such
Noteholders shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that might be
incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless requested
in writing to do so by the Holders of not less than a majority in aggregate
principal amount of the Notes then Outstanding; provided that if the payment
--------
within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured by the security afforded to it by
the terms of this Indenture, the Trustee may require indemnity reasonably
satisfactory to it against such expenses or liabilities as a condition to
proceeding, and the reasonable expenses of every such examination shall be paid
by the Company, or by the Trustee or any predecessor Trustee and repaid by the
Company upon demand;
(g) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Trustee
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(h) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee which conform to the requirements of this Indenture;
(i) the Trustee shall not be liable for any error of judgment made in good
faith by an officer or officers of the Trustee, unless it shall be conclusively
determined by a court of competent jurisdiction that the Trustee was grossly
negligent in ascertaining the pertinent facts;
(j) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees appointed with due care, and shall not be responsible for
any willful misconduct or gross negligence on the part of any agent, attorney,
custodian or nominee so appointed; and
37
<PAGE>
(k) the Trustee shall not be deemed to have notice of an Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
written notice of any Event of Default is received by the Trustee at its
Corporate Trust Office.
Section 5.3. Trustee Not Responsible for Recitals, Disposition of Notes or
Application of Proceeds Thereof.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of any of the Notes or of the proceeds thereof.
Section 5.4. Trustee and Agents May Hold Notes; Collections, Etc.
The Trustee or any agent of the Company or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Notes with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee or such
agent.
Section 5.5. Moneys Held by Trustee.
Subject to the provisions of Section 9.4 hereof, all moneys received by the
-----------
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by mandatory provisions of law. Neither the
Trustee nor any agent of the Company or the Trustee shall be under any liability
for interest on any moneys received by it hereunder, except as the Company and
the Trustee otherwise may agree.
Section 5.6. Compensation and Indemnification of Trustee and Its Prior Claim.
The Company covenants and agrees to pay to the Trustee from time to time as
shall be agreed upon between the Company and the Trustee in writing from time to
time, and the Trustee shall be entitled to reasonable compensation (which shall
not be limited by any provision of law relating to the compensation of a trustee
of an express trust), and the Company covenants and agrees to pay or reimburse
the Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and expenses and disbursements of its counsel and of all
agents and other persons not regularly in its employ), except to the extent any
such expense, disbursement or advance may arise from the Trustee's gross
negligence or bad faith. The Company also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any and all
loss, liability, damage, claims or expenses arising out of or in connection with
the acceptance or administration of this Indenture or the trusts hereunder and
its duties hereunder and the performance of its duties hereunder, including the
costs and expenses of defending and
38
<PAGE>
investigating any claim of liability in the premises, except to the extent any
such loss, liability or expense is due to its own gross negligence or bad faith.
The obligations of the Company under this Section 5.6 to compensate and
-----------
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture.
Section 5.7. Right of Trustee to Rely on Officers' Certificate, Etc.
Subject to Section 5.1 and Section 5.2 hereof, whenever in the
----------- -----------
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the absence of
gross negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee.
Section 5.8. Persons Eligible for Appointment as Trustee.
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States or of a state thereof having
a combined capital and surplus of at least $50,000,000, and which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of a federal, state or District of Columbia supervising or examining authority,
then for the purposes of this Section 5.8, the combined capital and surplus of
-----------
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. No obligor on the
Notes or Person directly or indirectly controlling, controlled by or under
common control with such obligor shall serve as Trustee.
Section 5.9. Resignation and Removal, Appointment of Successor Trustee.
(a) The Trustee may at any time resign by giving written notice of
resignation to the Company and by mailing notice thereof by first-class mail to
Holders of Notes at their last addresses as they shall appear on the Notes
Register. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by written instrument in duplicate, executed by
authority of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no
such successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction, at the
expense of the Company, for the appointment of a successor trustee, or any
Noteholder who has been a bona fide Holder of a Note or Notes for at least six
months may, on behalf of itself and all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
39
<PAGE>
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of TIA (S)
310(b), after written request thereafter by the Company or by any
Noteholder who has been a bona fide Holder of a Note or Notes for at least
six months;
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 5.8 hereof and shall fail to resign after written
-----------
request therefor by the Company or by any such Noteholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall be
delivered to the Trustee so removed and one copy of which shall be delivered to
the successor trustee, or any Noteholder who has been a bona fide Holder of a
Note or Notes for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Notes
at the time Outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company the evidence provided for in Section 6.1
-----------
hereof of the action in that regard taken by the Noteholders.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 5.9 shall
-----------
become effective only upon acceptance of appointment by the successor trustee as
provided in Section 5.10 hereof.
------------
Section 5.10. Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 5.9 hereof shall
-----------
execute and deliver to the Company and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the Trustee ceasing to act shall, subject to Section 9.4
-----------
hereof, pay over to the successor trustee all moneys at the time held by it
hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Company shall execute appropriate instruments
in writing for more fully
40
<PAGE>
and certainly vesting in and confirming to such successor such rights and
powers. Any Trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such Trustee to secure any
amounts then due it pursuant to the provisions of Section 5.6 hereof.
-----------
Upon acceptance of appointment by a successor trustee as provided in this
Section 5.10, the Company shall mail notice thereof by first-class mail to the
- ------------
Holders of Notes at their last addresses as they shall appear in the Notes
Register. If the acceptance of appointment is substantially contemporaneous
with a resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 5.9 hereof. If the Company fails
-----------
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
Notwithstanding replacement of the Trustee pursuant to this Section 5.10,
------------
the Company's obligations under Section 5.6 hereof shall continue for the
-----------
benefit of the retiring Trustee.
Section 5.11. Merger, Conversion, Consolidation or Succession to Business of
Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder, as
long as such corporation shall be eligible under the provisions of Section 5.8
-----------
hereof, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case any of the Notes shall have been authenticated but not delivered at
the time such successor to the Trustee shall succeed to the trusts created by
this Indenture, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor Trustee and deliver such Notes so
authenticated and, in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor
trustee, and in such cases such certificate shall have the full force which it
is anywhere in the Notes or in this Indenture provided that the certificate of
the Trustee shall have; provided that the right to adopt the certificate of
--------
authentication of any predecessor Trustee or to authenticate Notes in the name
of any predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
Section 5.12. Reports by Trustee.
The Trustee shall provide to the Holders the reports required to be
provided by the Trustee pursuant to Section 313 of the TIA.
41
<PAGE>
ARTICLE 6.
CONCERNING THE NOTEHOLDERS
Section 6.1. Evidence of Action Taken by Noteholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Noteholders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders, in person or by agent duly appointed in
writing, and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are received by the
Trustee. Proof of execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject to
Section 5.1 and Section 5.2 hereof) conclusive in favor of the Trustee and the
- ----------- -----------
Company, if made in the manner provided in this Article.
Section 6.2. Proof of Execution of Instruments and of Holding of Notes Record
Date.
Subject to Section 5.1 and Section 5.2 hereof, the execution of any
----------- -----------
instrument by a Noteholder or his agent or proxy may be provided in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The holding of Notes
shall be as provided by the Notes Register or by a certificate of the Registrar
thereof. The Company may set a record date for purposes of determining the
identity of Holders of Notes entitled to vote or consent to any action referred
to in Section 6.1 hereof, which record date may be set at any time or from time
-----------
to time by written notice to the Trustee for any date or dates (in the case of
any adjournment or resolicitation) not more than 60 days nor less than five days
prior to the proposed date of such vote or consent, and, thereafter,
notwithstanding any other provisions hereof, only Holders of Notes of record on
such record date shall be entitled to so vote or give such consent or to
withdraw such vote or consent.
Section 6.3. Holders to Be Treated as Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the Person in whose name any Note shall be registered upon the
Notes Register as the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, and premium, if any, on and, subject to the provisions of this Indenture,
interest on such Note and for all other purposes, and neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall be valid and to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Note.
Section 6.4. Notes Owned by Company Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal
amount of Notes have concurred in any direction, consent or waiver under this
Indenture, Notes that are owned by
42
<PAGE>
the Company or any other obligor on the Notes or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the obligor on the Notes shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether a Responsible Officer of the Trustee shall be
protected in relying on any such direction, consent or waiver, only Notes that
the Trustee actually knows are so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Notes. In case of a dispute as to such right, the advice of
counsel shall be full protection in respect of any decision made by the Trustee
in accordance with such advice. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above-described Persons, and, subject to Section 5.1 and
-----------
Section 5.2 hereof, the Trustee shall be entitled to accept such Officers'
- -----------
Certificate as conclusive evidence of the facts therein set forth and of the
fact that all Notes not listed therein are Outstanding for the purpose of any
such determination.
Section 6.5. Right of Revocation of Action Taken.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 6.1 hereof, of the taking of any action by the Holders of
-----------
the percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any Holder of a Note the serial number
of which is shown by the evidence to be included among the serial numbers of the
Notes the Holders of which have consented to such action may, by filing written
notice at the Corporate Trust Office and upon proof of holding as provided in
this Article, revoke such action so far as concerns such Note. Except as
aforesaid any such action taken by the Holder of any Note shall be conclusive
and binding upon such Holder and upon all future Holders and owners of such Note
and of any Notes issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Note. Any
action taken by the Holders of the percentage in aggregate principal amount of
the Notes specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the Holders of all such
Notes.
ARTICLE 7.
SUPPLEMENTAL INDENTURES
Section 7.1. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by a resolution of its Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Notes any property or assets;
43
<PAGE>
(b) to evidence the succession of another corporation to the Company, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company pursuant to Article 8
---------
hereof;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Board of Directors shall consider
to be for the protection of the Holders of Notes, and to make the occurrence, or
the occurrence and continuance of a Default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided that in respect of any such additional covenant,
--------
restriction, condition or provision, such supplemental indenture may provide for
a particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other Defaults) or may provide for
immediate enforcement upon such an Event of Default or may limit the remedies
available to the Trustee due solely to such an Event of Default or may limit the
right of the Holders of a majority in aggregate principal amount of the Notes to
waive such an Event of Default;
(d) to cure any ambiguity or to cure, correct or supplement any defective
provision contained herein or in the Notes, or to make such other provisions in
regard to matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or
desirable, and in any case which the Trustee and the Company shall determine (i)
are not inconsistent with this Indenture and the Notes and (ii) shall not
adversely affect the interests of the Holders of the Notes;
(e) to modify or supplement this Indenture or any indenture supplemental
hereto in such manner as to permit the qualification thereof under the TIA or
any other similar federal statute hereafter in effect; and
(f) to permit or facilitate the issuance of a series of Notes pursuant to
the provisions hereof.
The Trustee is hereby authorized to join in the execution of any such
supplemental Indenture, to make any further appropriate agreements and
stipulations that may be therein continued and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties, indemnities or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 7.1
-----------
may be executed without the consent of the Holders of any of the Notes at the
time Outstanding, notwithstanding any of the provisions of Section 7.2 hereof.
-----------
Section 7.2. Supplemental Indentures With Consent of Noteholders.
With the consent (evidenced as provided in Article 6 hereof) of the Holders
---------
of not less than a majority in aggregate principal amount of the Notes at the
time Outstanding, the
44
<PAGE>
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may, from time to time and at any time, modify this Indenture, any
indentures supplemental hereto, the Notes or the rights of the Holders of the
Notes, provided that no such supplemental indenture shall (a) change the Stated
--------
Maturity of the principal of, or any installment of principal of or interest on,
any Note, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof or impair or affect the right of any Noteholder to institute
suit for the payment thereof or change the place or currency of payment of
principal of, or interest on, any Note, in each case without the consent of the
Holder of each Note so affected, or (b) without the consent of the Holders of
all Notes then Outstanding, (i) reduce the aforesaid percentage of Notes the
consent of the Holders of which is required for any such modification, or the
percentage of Notes the consent of the Holders of which is required for any
waiver provided for in this Indenture, (ii) change any obligation of the Company
to maintain an office or agency in the places and for the purposes specified in
Section 2.4 or (iii) make any change in Section 4.9 or this Section 7.2, except
- ----------- ----------- -----------
to increase any percentages or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holders of
each Outstanding Note affected thereby.
Upon the request of the Company, accompanied by a copy of a resolution of
the Board of Directors certified by the Secretary or an Assistant Secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders and
other documents, if any, required by Section 6.1 hereof, the Trustee shall join
-----------
with the Company in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties, indemnities or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 7.2 to approve the particular form of any proposed supplemental
- -----------
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 7.2, the
-----------
Company shall mail a notice thereof by first class mail to the Holders of Notes
at their addresses as they shall appear on the Notes Register, setting forth in
general terms the substance of such supplemental indenture. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
Section 7.3. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the Holders of Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the
45
<PAGE>
terms and conditions of any such supplemental indenture shall be and be deemed
to be part of the terms and conditions of this Indenture for any and all
purposes.
Section 7.4. Documents to Be Given to Trustee.
The Trustee, subject to the provisions of Section 5.1 and Section 5.2
----------- -----------
hereof, shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such supplemental indenture complies with the
applicable provisions of this Indenture and that all conditions precedent to the
execution of such supplemental indenture have been met.
Section 7.5. Notation of Notes in Respect of Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article 7 may bear a notation in
---------
form approved by the Trustee as to any matters provided for by such supplemental
indenture or as to any action taken at any such meeting as the Company shall so
determine, and new Notes so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Notes then
Outstanding, which Notes so exchanged shall be canceled by the Trustee.
ARTICLE 8.
MERGER, CONSOLIDATION, SALE, LEASE OR CONVEYANCE
Section 8.1. Covenant Not to Merge, Consolidate, Sell, Lease or Transfer Assets
Except Under Certain Conditions.
(a) The Company shall not merge or consolidate with or into any other
person and the Company shall not sell, lease or convey all or substantially all
of its assets to any person, unless (1) the Company is the continuing
corporation, or the successor corporation or the person that acquires all or
substantially all of the Company's assets is a corporation organized and
existing under the laws of the United States or a State thereof or the District
of Columbia and expressly assumes all the Company's obligations under the Notes
and this Indenture, (2) immediately after such merger, consolidation, sale,
lease or conveyance, there is no Default or Event of Default hereunder, (3) if,
as a result of the merger, consolidation, sale, lease or conveyance, any or all
of the Company's property would become the subject of a lien that would not be
permitted by this Indenture, the Company secures the Notes equally and ratably
with the obligations secured by that lien and (4) the Company delivers or causes
to be delivered to the Trustee an Officers' Certificate and Opinion of Counsel
each stating that the merger, consolidation, sale, lease or conveyance comply
with this Indenture.
(b) Except for the sale of the properties and assets of the Company
substantially as an entirety pursuant to subsection (a) above, and other than
assets required to be sold to conform with governmental regulations, the Company
shall not sell or otherwise dispose of any assets (other than short-term,
readily marketable investments purchased for cash management purposes with funds
not representing the proceeds of other asset sales) if, on a pro forma basis,
the
46
<PAGE>
aggregate net book value of all such sales during the most recent 12-month
period would exceed 10 percent of Consolidated Net Tangible Assets computed as
of the end of the most recent fiscal quarter preceding such sale; provided,
--------
however, that any such sales shall be disregarded for purposes of this 10
- -------
percent limitation if the proceeds are invested in assets in similar or related
lines of business of the Company and, provided further, that the Company may
sell or otherwise dispose of assets in excess of such 10 percent limitation if
the proceeds from such sales or dispositions, which are not reinvested as
provided above, are retained by the Company as cash or cash equivalents or are
used by the Company to purchase Notes, which are then delivered to the Trustee
for cancellation, or to reduce or retire Indebtedness ranking pari passu in
right of payment to the Notes or indebtedness of the Company's Subsidiaries.
Section 8.2. Successor Corporation Substituted.
In case of any such merger, consolidation, sale, lease, or transfer, and
following such an assumption by the successor corporation of the Company's
obligations under the Notes and this Indenture, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein.
Such successor corporation may cause to be signed, and may issue either in
its own name or in the name of the Company prior to such succession, any or all
of the Notes issuable hereunder that theretofore shall not have been signed by
the Company and delivered to the Trustee, and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Notes that previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication and any Notes that
such successor corporation thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All of the Notes so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In case of any such merger, consolidation, sale, lease or transfer such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
In the event of any such sale or transfer (other than a transfer by way of
lease) the Company or any successor corporation, which shall theretofore have
become such in the manner described in this Article 8, shall be discharged from
---------
all obligations and covenants under this Indenture and the Notes and may be
liquidated and dissolved.
Section 8.3. Opinion of Counsel to Trustee; Officers' Certificate.
The Trustee, subject to the provisions of Section 5.1 and Section 5.2
----------- -----------
hereof, shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such merger, consolidation, sale, lease or
transfer, and any such assumption of obligations described in this Article 8,
---------
and any such liquidation or dissolution described in this Article 8, complies
---------
with the applicable provisions of this Indenture.
47
<PAGE>
ARTICLE 9.
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
Section 9.1. Satisfaction and Discharge of Indenture.
If at any time (a) the Company shall have paid or caused to be paid the
principal of and premium, if any, and interest on all the Notes Outstanding
hereunder, as and when the same shall have become due and payable, or (b) the
Company shall have delivered to the Trustee for cancellation all Notes
theretofore authenticated (other than any Notes which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided in Section
-------
2.8 hereof) or (c)(i) all such Notes not theretofore delivered to the Trustee
- ---
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and (ii) the Company shall have irrevocably deposited or caused to be deposited
with the Trustee as trust funds the entire amount in cash (other than moneys
repaid by the Trustee or any paying agent to the Company in accordance with
Section 9.4 hereof) or U.S. Government Obligations, maturing as to principal,
- -----------
premium, if any, and interest in such amounts and at such times as will insure
(without reinvestment) the availability of cash sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at maturity all
such Notes not theretofore delivered to the Trustee for cancellation, including
principal, premium, if any, and interest due or to become due to such date of
maturity as the case may be, and if, in any such case, the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
this Indenture shall cease to be of further effect (except as to (i) rights of
registration of transfer and exchange, and the Company's right to optional
redemption, (ii) substitution of apparently mutilated, defaced, destroyed, lost
or stolen Notes, (iii) rights of Holders to receive payments of principal of and
premium, if any, and interest on, the Notes upon the original stated due dates
therefor (but not upon acceleration), (iv) the rights and obligations and
immunities of the Trustee hereunder, (v) the rights of the Noteholders as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them and (vi) the maintenance by the Company of its
existence), and the Trustee, upon written demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel and at the cost and expense
of the Company, shall execute proper instruments acknowledging such satisfaction
of and discharging this Indenture; provided that the rights of Holders of the
--------
Notes to receive amounts in respect of principal of and premium, if any, and
interest on the Notes held by them shall not be delayed longer than required by
then applicable mandatory rules or policies of any securities exchange upon
which the Notes are listed.
The Company shall reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and shall compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.
48
<PAGE>
Section 9.2. Application by Trustee of Funds Deposited for Payment of Notes.
Subject to Section 9.4 hereof, all moneys deposited with the Trustee
-----------
pursuant to Section 9.1 hereof shall be held in trust and applied by it to the
-----------
payment, either directly or through any paying agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the Trustee,
of all sums due and to become due thereon for principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
Section 9.3. Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture, all
moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be repaid to it or paid to the Trustee and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
Section 9.4. Return of Moneys Held by Trustee and Paying Agent Unclaimed for
Two Years.
Any moneys deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of or premium or interest on any Note and not
applied but remaining unclaimed for two years after the date upon which such
principal, premium or interest shall have become due and payable shall, upon the
written request of the Company, be repaid to the Company by the Trustee or such
Paying Agent, and the Holder of such Note shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Company for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any Paying Agent
with respect to such moneys shall thereupon cease.
Section 9.5. Defeasance and Discharge of Indenture.
The Company will be deemed to have paid and will be discharged from any and
all obligations in respect of the Notes on the 123rd day after the deposit
referred to in subparagraph (A) below has been made, and the provisions of this
Indenture will no longer be in effect with respect to the Notes (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except as to (a) rights of registration of transfer and
exchange, and the Company's right of optional redemption, (b) substitution of
apparently mutilated, defaced, destroyed, lost or stolen securities, (c) rights
of Holders to receive payments of principal thereof and premium, if any, and
interest thereon, (d) the rights, obligations and immunities of the Trustee
hereunder, (e) the rights of the Noteholders as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them, (f) the obligations of the Company to maintain a place of payment for the
Notes under Section 3.1 hereof and (g) the maintenance by the Company of its
-----------
existence; provided that the following conditions shall have been satisfied:
--------
49
<PAGE>
(A) with reference to this Section 9.5, the Company has
-----------
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 5.8
-----------
hereof) as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Notes, (i)
money in an amount, (ii) U.S. Government Obligations, which through
the payment of interest and principal in respect thereof in accordance
with their terms (without reinvestment), will provide not later than
one day before the due date of any payment referred to in clause (x)
or (y) of this subparagraph (A) money in an amount, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, after payment of all federal, state and local taxes or
other charges and assessments in respect thereof, (x) the principal
of, premium, if any, and each installment of principal and interest on
the Outstanding Notes at the maturity date of such principal or
installment of principal or interest and (y) any mandatory sinking
fund payments or analogous payments applicable to the Notes on the day
on which such payments are due and payable in accordance with the
terms of this Indenture and the Notes;
(B) the Company has delivered to the Trustee (i) an Opinion of
Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 9.5 and will be subject to
-----------
federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit, defeasance
and discharge had not occurred, which Opinion of Counsel must be based
on (x) a change in applicable federal income tax law or related
Treasury Regulations after the date of this Indenture or (y) a ruling
of the Internal Revenue Service to the same effect and (ii) an Opinion
of Counsel to the effect that the defeasance trust does not constitute
an "investment company" under the Investment Company Act of 1940, as
amended, and after the passage of 123 days following the deposit, the
trust fund will not be subject to the effect of Section 547 of the
U.S. Bankruptcy Code or Section 15 of the New York Debtor and Creditor
Law;
(C) immediately after giving effect to such deposit, no Default
or Event of Default shall have occurred and be continuing on the date
of such deposit or during the period ending on the 123rd day after the
date of such deposit, and such deposit shall not result in a breach or
violation of, or constitute a default under, any other agreement or to
which the Company is a party or by which the Company is bound; and
(D) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be delisted
as a result of such deposit, defeasance and discharge.
50
<PAGE>
Section 9.6. Defeasance of Certain Obligations.
The Company may omit to comply with any term, provision, or condition set
forth in Sections 3.4, 3.5 and 8.1(b), and Section 4.1(d) (with respect to
------------ --- ------ --------------
Sections 3.4, 3.5 and 8.1(b)) and Sections 4.1(c) and (e) shall be deemed not to
- -------- --- --- ------- --------------- ---
be Events of Default on the 123rd day after the deposit referred to in
subparagraph (A) below if:
(A) with reference to this Section 9.6, the Company has
-----------
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 5.6
-----------
hereof) as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of the Notes, (i)
money in an amount, (ii) U.S. Government Obligations, which through
the payment of interest and principal in respect thereof in accordance
with their terms (without reinvestment), will provide not later than
one day before the due date of any payment referred to in clauses (x)
or (y) of this Section 9.6, money in an amount, or (iii) a combination
-----------
thereof, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a certification thereof
delivered to the Trustee, to pay and discharge, after payment of all
federal, state and local taxes or other charges and assessments in
respect thereof, (x) the principal of, premium, if any, and each
installment of principal and interest on the Outstanding Notes at the
maturity date of such principal or installment of principal or
interest and (y) any mandatory sinking fund payments or analogous
payments applicable to the Notes on the day on which such payments are
due and payable in accordance with the terms of this Indenture and the
Notes;
(B) the Company has delivered to the Trustee (i) an Opinion of
Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 9.6 and will be subject to
-----------
federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit, defeasance
and discharge had not occurred, and (ii) an Opinion of Counsel to the
effect that the defeasance trust does not constitute an "investment
company" under the Investment Company Act of 1940, as amended, and
after the passage of 123 days following the deposit, the trust fund
will not be subject to the effect of Section 547 of the U.S.
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law;
(C) immediately after giving effect to such deposit, no Event of
Default, or event that after the giving of notice or lapse of time or
both would become an Event of Default, shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after the date of such deposit, and such deposit shall
not result in a breach or violation of or constitute a default under
any other agreement or instrument to which the Company is a party or
by which the Company is bound; and
51
<PAGE>
(D) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be delisted
as a result of such deposit, defeasance and discharge.
ARTICLE 10.
REDEMPTION OF NOTES
Section 10.1. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
Section 10.2. Notice of Redemption.
Notice of redemption to the Holders of Notes to be redeemed in accordance
with any Series Supplemental Indenture shall be given by the Company by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Notes at their last addresses as they shall appear in the Notes Register.
Failure to give notice by mail, or any defect in the notice to the Holder of any
Note designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.
The notice of redemption to each Holder shall specify that the Notes are
being redeemed pursuant to this Article 10 and the applicable Series
----------
Supplemental Indenture, the date fixed for redemption, the place or places of
payment, the CUSIP and ISIN numbers (as applicable) of the Notes being redeemed,
that payment will be made upon presentation and surrender of the Notes, that
interest accrued to the date fixed for redemption will be paid as specified in
this Article and that, on and after said date, interest thereon or on the
portions thereof redeemed will cease to accrue.
Any notice of redemption of Notes to be redeemed at the option of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
At least one Business Day prior to the redemption date specified in the
notice of redemption given as provided in this Section 10.2, the Company shall
------------
deposit with the Trustee or with one or more paying agents (or, if the Company
is acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 2.5 hereof) an amount of money sufficient to redeem on the
-----------
redemption date all the Notes so called for redemption.
Section 10.3. Payment of Notes Called for Redemption.
If notice of redemption has been given as above provided, the Notes shall
become due and payable on the date and at the place stated in such notice at the
redemption price, and on and
52
<PAGE>
after said date (unless the Company shall default in the payment of such Notes
at the redemption price) interest on the Notes or portions of Notes so called
for redemption shall cease to accrue and, except as provided in Section 5.5 and
-----------
Section 9.4 hereof, such Notes shall cease from and after the date fixed for
- -----------
redemption to be entitled to any benefit or security under this Indenture, and
the Holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof. On presentation and surrender of
such Notes at a place of payment specified in said notice, said Notes shall be
paid and redeemed by the Company at the redemption price, provided that any
--------
semiannual payment of interest becoming due on the date fixed for redemption
shall be payable to the Holders of such Notes registered as such on the relevant
record date subject to the terms and provisions of Section 2.7(i) hereof.
--------------
If the Company defaults in the payment of the redemption price with respect
to any Note called for redemption, upon surrender thereof for redemption, the
principal shall, until paid or duly provided for, bear interest from the date
fixed for redemption at the rate borne by the Note.
ARTICLE 11.
MISCELLANEOUS PROVISIONS
Section 11.1. Incorporators, Shareholders, Officers and Directors of Company
Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Note, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such, or against any past,
present or future shareholder, officer or director, as such, of the Company or
of any successor, either directly or through the Company or any successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Notes by
the Holders thereof and as part of the consideration for the issue of the Notes.
Section 11.2. Provisions of the Indenture for the Sole Benefit of Parties and
Noteholders.
Nothing in this Indenture or in the Notes, expressed or implied, shall give
or be construed to give to any Person, other than the parties hereto and their
successors and the Holders (and, where expressly set forth herein, owners of
interests in any Global Note), any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained, all
such covenants and provisions being for the sole benefit of the parties hereto
and their successors and the Holders (and, where expressly set forth herein,
owners of interests in any Global Note).
Section 11.3. Successors and Assigns of Company Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind its successors and assigns,
whether so expressed or not.
53
<PAGE>
Section 11.4. Notices and Demands on Company, Trustee and Noteholders.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the Holders to or on the
Company may be given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed (until another
address of the Company is filed by the Company with the Trustee) to Edison
Mission Energy, 18101 Von Karman Avenue, Suite 1700, Irvine, California 92612,
Attention: Chief Financial Officer. Any notice, direction, request or demand by
the Company or any Noteholder to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made at the
Corporate Trust Office.
Where this Indenture provides for notice to Holders, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder entitled thereto, at his
last address as it appears in the Notes Register. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Company and Noteholders
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
Section 11.5. Statements to Be Contained in Officers' Certificates and Opinions
of Counsel.
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the Person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
54
<PAGE>
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or Opinion of Counsel may be based, insofar as it relates
to factual matters (information with respect to which is in the possession of
the Company) upon the certificate, statement or opinion of or representations by
an officer or officers of the Company, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is independent.
Section 11.6. Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of interest on or principal, or premium, if any, of
the Notes or the date fixed for redemption of any Note shall not be a Business
Day, then payment of interest, principal, or premium need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
Section 11.7. New York Law to Govern.
THIS INDENTURE SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF (OTHER THAN SECTION 5-
1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 11.8. Counterparts
. This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same agreement.
55
<PAGE>
Section 11.9. Effect of Headings
. The Article and Section Headings herein and the Table of Contents are
for convenience of reference only and shall not affect the construction hereof.
Section 11.10. Trust Indenture Act
. When this Indenture is qualified under the TIA, the mandatory
provisions thereof shall be deemed to be incorporated by reference herein.
56
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized as of the
date first written above.
EDISON MISSION ENERGY, as Company
By:______________________________________
Name: Steven D. Eisenberg
Title: Vice President and Associate
General Counsel
Attest:
By:_________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:______________________________________
Name: Mary Beth Lewicki
Title: Assistant Vice President
Attest:
By:_________________________
Name:
Title:
57
<PAGE>
EXHIBIT A
[Face of Note]
- --------------------------------------------------------------------------------
CUSIP/CINS ____________
ISIN ____________
__% [Series [ ]] Senior Notes due __________
No. ___ $____________
EDISON MISSION ENERGY
promises to pay to _____________________________________________________________
or registered assigns,
the principal sum of ___________________________________________________ DOLLARS
on _____________,_______.
Interest Payment Dates: ____________ and ____________
Record Dates: ____________ and ____________
Dated: _______________, ____
EDISON MISSION ENERGY
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By: __________________________________
Authorized Signatory
A-1
<PAGE>
[Back of Note]
___% [Series [ ]] Senior Notes due___________
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
[Insert the IAI Note Legend, if applicable pursuant to the provisions of the
Indenture]
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. Edison Mission Energy, a California corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
___% per annum from ________________, ____ until maturity. The Company will pay
interest semi-annually in arrears on ___________ and ___________ of each year,
(each an "Interest Payment Date"); provided that if any such day is not a
Business Day, then such payment will be made on the next succeeding Business
Day. Interest on this Note will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from ___________;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date in respect of this Note shall be _____________, ____. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time at a rate that is equal to the rate set forth on the face of this Note; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on this Note (except
defaulted interest) to the Person who is the registered Holder of this Note at
the close of business on the ___________ or ___________ next preceding the
Interest Payment Date, even if this Note is canceled after such record date and
on or before such Interest Payment Date, except as provided in Section 2.12 of
the Indenture with respect to defaulted interest. This Note will be payable as
to principal, premium, if any, and interest by mailing a check for such to or
upon the written order of the registered Holder of this Note entitled thereto at
its last address as it appears on the Notes Register or, upon written
application to the Trustee by a Holder of $1,000,000 or more in aggregate
principal amount of Notes, by wire transfer of immediately available funds to an
account maintained by such Holder with a bank or other financial institution.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. Paying Agent and Registrar. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any
A-2
<PAGE>
Paying Agent or Registrar without notice to any Holder. The Company or any of
its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued this Note under an Indenture, dated as
of June 28, 1999 (the "Original Indenture"), between the Company and the
Trustee, as supplemented by the [ ] Supplemental Indenture, dated as of
____________ (the "[ ] Supplemental Indenture"), between the Company and the
Trustee (the Original Indenture, as so supplemented, and as the same may be
amended, modified and further supplemented, the "Indenture"). The terms of this
Note include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S)
77aaa-77bbbb). This Note is subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling. The Notes are
unsecured obligations of the Company, and the series of Notes of which this Note
is a part is limited to $___ million in aggregate principal amount.
5. Redemption.
[Insert relevant provisions if the series of Notes is redeemable pursuant
to the applicable Supplemental Indenture]
6. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its last registered address. Subject to payment by
the Company of a sum sufficient to pay the amount due on redemption, interest on
the Notes ceases to accrue upon the date duly fixed for redemption of the Notes.
7. Denominations, Transfer, Exchange. The Notes of this series are
issuable only in registered form without coupons in denominations of $_______
and any integral multiple of $_____ in excess thereof. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
8. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
9. Amendment, Supplement. With the consent of the Holders of not less
than a majority in aggregate principal amount of the Notes at the time
Outstanding, evidenced as in the Indenture provided, the Indenture or any
supplemental indentures or the rights of the Holders of the Notes may be
modified; provided that no such modification shall (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Note, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon,
A-3
<PAGE>
or reduce any amount payable on the redemption thereof or impair or affect the
rights of any Noteholder to institute suit for the payment thereof or change the
place or currency of payment of principal of, or interest on, any Note, in each
case without the consent of the Holder of each Note so affected, or (b) without
the consent of the Holders of all Notes then outstanding, (i) reduce the
aforesaid percentage of Notes the consent of the Holders of which is required
for any such modification, or the percentage of Notes the consent of Holders of
which is required for any waiver provided for in the Indenture, (ii) change any
obligation of the Company to maintain an office or agency for payment of and
transfer and exchange of the Notes or (iii) make certain changes to provisions
relating to the waiver of past defaults or to the provisions for supplementing
the Indenture with the consent of the Holders.
10. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of principal of or premium, if any, on the Notes when the same becomes
due and payable at maturity, upon redemption or otherwise, (iii) failure by the
Company for 90 days after notice to the Company by the Trustee or the Holders of
at least 25% in principal amount of the Notes then outstanding voting as a
single class to comply with certain other agreements in the Indenture or the
Notes; (iv) default under certain other agreements relating to Indebtedness of
the Company which default results in the acceleration of such Indebtedness prior
to its express maturity; (v) certain final judgments for the payment of money
that remain undischarged for a period of 90 days; and (vi) certain events of
bankruptcy or insolvency with respect to the Company. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare the principal of all
the Notes and the interest accrued thereon to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any past
Default or Event of Default except a Default in the payment of principal of,
premium, if any, or interest on, any of the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
11. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
12. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes, the Indenture or
any indenture supplemental thereto or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Notes.
A-4
<PAGE>
13. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
14. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
[15. Additional Rights of Holders of Restricted Global Notes and Restricted
Definitive Notes. In addition to the rights provided to Holders of Notes under
the Indenture, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the Registration Rights Agreement
dated as of ____________, ____, between the Company and the parties named on the
signature pages thereof (the "Registration Rights Agreement").]
16. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Edison Mission Energy
18101 Von Karman Avenue
Suite 1700
Irvine, California 92612
Attention: Chief Financial Officer
A-5
<PAGE>
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:___________
Your Signature:__________________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*:___________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-6
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
<TABLE>
<CAPTION>
Principal Amount Signature of
Amount of decrease in Amount of increase in of this Global Note authorized officer of
Principal Amount Principal Amount following such decrease Trustee or Note
Date of Exchange of this Global Note of this Global Note (or increase) Custodian
- ---------------- ------------------- ------------------- ------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
* This schedule should be included only if the Note is issued in global form.
A-7
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Edison Mission Energy
18101 Von Karman Avenue
Suite 1700
Irvine, California 92612
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10288
Attention: Corporate Trust Administration
Re: [ ]% Senior Notes due [ ]
-----------------------------------------
Reference is hereby made to the Indenture, dated as of June 28, 1999 (the
"Indenture"), between Edison Mission Energy, as issuer (the "Company"), and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest
---------------------------------------------------------------
in the Restricted Global Note or a Definitive Note Pursuant to Rule 144A. The
- ------------------------------------------------------------------------
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest
---------------------------------------------------------------
in the Restricted Global Note or a Definitive Note pursuant to Regulation S. The
- ---------------------------------------------------------------------------
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and,
B-1
<PAGE>
accordingly, the Transferor hereby further certifies that (i) the Transfer is
not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii)
the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Restricted Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a
--------------------------------------------------------
beneficial interest in the Restricted Global Note or a Definitive Note pursuant
- -------------------------------------------------------------------------------
to any provision of the Securities Act other than Rule 144A or Regulation S. The
- ---------------------------------------------------------------------------
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof.
4. [_] Check if Transferee will take delivery of a beneficial interest
---------------------------------------------------------------
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
- --------------------------------------------------------------------
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [_] Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky
B-2
<PAGE>
securities laws of any state of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit.
______________________________________
[Insert Name of Transferor]
By:___________________________________
Name:
Title:
Dated:________________________
B-3
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE]
(a) [_] a beneficial interest in the Restricted Global Note
(CUSIP ________ ); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] Restricted Global Note (CUSIP ________); or
(ii) [_] Unrestricted Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Edison Mission Energy
18101 Von Karman Avenue
Suite 1700
Irvine, California 92612
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10288
Attention: Corporate Trust Administration
Re: [ ]% Senior Notes due [ ]
-----------------------------------------
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of June 28, 1999 (the
"Indenture"), between Edison Mission Energy, as issuer (the "Company"), and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
--------------------------------------------------------------------
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
- --------------------------------------------------------------------------------
in an Unrestricted Global Note
- ------------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without
C-1
<PAGE>
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
------------------------------------------------------------------
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
- -------------------------------------------------------------------------------
in Restricted Global Notes
- --------------------------
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the Restricted
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
C-2
<PAGE>
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation
of the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global Note
and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
____________________________________
[Insert Name of Transferor]
By:_________________________________
Name:
Title:
Dated:__________________
C-3
<PAGE>
EXHIBIT 4.2
EXECUTION COPY
================================================================================
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF JUNE 28, 1999
to
INDENTURE
dated as of June 28, 1999
between
EDISON MISSION ENERGY
and
THE BANK OF NEW YORK,
as Trustee
================================================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of June 28, 1999 (this "First
-----
Supplemental Indenture"), to the Indenture, dated as of June 28, 1999 (the
- ----------------------
"Original Indenture"), between EDISON MISSION ENERGY, a California corporation
------------------
(the "Company"), and THE BANK OF NEW YORK, a New York banking corporation (the
-------
"Trustee").
-------
WHEREAS, the Company and the Trustee have heretofore executed and
delivered the Original Indenture to provide for the issuance from time to time
of Notes (as defined in the Original Indenture) of the Company, to be issued in
one or more series;
WHEREAS, Sections 2.1, 2.2 and 7.1 of the Original Indenture provide,
------------ --- ---
among other things, that the Company and the Trustee may enter into indentures
supplemental to the Original Indenture for, among other things, the purpose of
establishing the designation, form, terms and provisions of Notes of any series
as permitted by Sections 2.1, 2.2 and 7.1 of the Original Indenture;
------------ --- ---
WHEREAS, the Company (i) desires the issuance of a series of Notes to
be designated as hereinafter provided and (ii) has requested the Trustee to
enter into this First Supplemental Indenture for the purpose of establishing the
designation, form, terms and provisions of the Notes of such series;
WHEREAS, all action on the part of the Company necessary to authorize
the issuance of said Notes under the Original Indenture and this First
Supplemental Indenture (the Original Indenture, as supplemented by this First
Supplemental Indenture, being hereinafter called the "Indenture") has been duly
---------
taken.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
That, in order to establish the designation, form, terms and
provisions of, and to authorize the authentication and delivery of, said Notes,
and in consideration of the acceptance of said Notes by the Holders thereof and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
-----------
(a) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed thereto in the Original Indenture.
(b) The rules of interpretation set forth in the Original Indenture
shall be applied hereto as if set forth in full herein.
(c) For all purposes of this First Supplemental Indenture, except as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the
<PAGE>
following respective meanings (such meanings shall apply equally to both the
singular and plural forms of the respective terms):
"Comparable Treasury Issue" means the United States Treasury security
-------------------------
selected by Credit Suisse First Boston Corporation or an affiliate as having a
maturity comparable to the remaining term of the Notes that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Comparable Treasury Price" means the average of three Reference
-------------------------
Treasury Dealer Quotations obtained by the Trustee in respect of the Notes to be
redeemed on the applicable redemption date.
"Reference Treasury Dealer Quotation" means, with respect to each
-----------------------------------
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by a Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third Business day preceding the redemption date.
"Reference Treasury Dealers" means Credit Suisse First Boston
--------------------------
Corporation (so long as it continues to be a primary U.S. Government securities
dealer) and any two other primary U.S. Government securities dealers chosen by
the Company. If Credit Suisse First Boston Corporation ceases to be a primary
U.S. Government securities dealer, the Company will appoint in its place another
nationally recognized investment banking firm that is a primary U.S. Government
securities dealer.
"Remaining Scheduled Payments" means, with respect to each Note that
----------------------------
the Company is redeeming, the remaining scheduled payments of the principal and
interest that would be due after the related redemption date if such Note were
not redeemed. However, if the redemption date is not a scheduled interest
payment date with respect to that Note, the amount of the next succeeding
scheduled interest payment on that Note will be reduced by the amount of
interest accrued on such Note to the redemption date.
"Series A Notes" shall have the meaning ascribed thereto in Section
-------------- -------
2.1(a) hereof.
- ------
"Treasury Rate" means, with respect to any redemption date, an annual
-------------
rate equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasure Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
the redemption date. The semiannual equivalent yield to maturity will be
computed as of the third business day immediately preceding the redemption date.
2
<PAGE>
ARTICLE II.
THE TERMS OF THE NOTES
----------------------
SECTION 2.1. Terms of 7.73% Senior Notes due June 15, 2009.
---------------------------------------------
(a) There is hereby created one series of Notes designated: 7.73%
Senior Notes due June 15, 2009, in the aggregate principal amount of
$600,000,000 (the "Series A Notes"). The Series A Notes may forthwith be
--------------
executed by the Company and delivered to the Trustee for authentication and
delivery by the Trustee in accordance with the provisions of Section 2.3 of the
-----------
Original Indenture.
(b) Each of the Series A Notes shall have and be subject to such
other terms as provided in the Indenture and shall be evidenced by one or more
Notes in the form of Exhibit A to the Indenture.
---------
SECTION 2.2. Interest and Principal.
----------------------
The Series A Notes will mature on June 15, 2009 and will bear interest
at the rate of 7.73% per annum. The Company will pay interest on the Series A
Notes on each June 15 and December 15, beginning on December 15, 1999, to the
holders of record on the immediately preceding June 1 or December 1. Interest
on the Series A Notes shall accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from June 28, 1999.
SECTION 2.3. Redemption.
----------
The Company at its option may, at any time, redeem the Series A Notes,
in whole or in part, upon payment of a redemption price equal to (A) the greater
of (i) 100% of the principal amount of the Series A Notes to be redeemed and
(ii) the sum of present values of the Remaining Scheduled Payments on the Series
A Notes being redeemed discounted to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at a rate
equal to the Treasury Rate plus 37.5 basis points, plus (B) accrued and unpaid
interest, if any, on the principal amount of Notes being redeemed to the
redemption date.
ARTICLE III.
MISCELLANEOUS
-------------
SECTION 3.1. Execution of Supplemental Indenture.
-----------------------------------
This First Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Original Indenture and, as provided in the
Original Indenture, this First Supplemental Indenture forms a part thereof.
3
<PAGE>
SECTION 3.2. Concerning the Trustee.
----------------------
The recitals contained herein and in the Series A Notes, except with
respect to the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this First Supplemental Indenture or of the Series A
Notes.
SECTION 3.3. Counterparts.
------------
This First Supplemental Indenture 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 3.4. GOVERNING LAW.
-------------
THIS FIRST SUPPLEMENTAL INDENTURE AND EACH NOTE OF THE SERIES CREATED
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
4
<PAGE>
IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized as of the date first above written.
EDISON MISSION ENERGY
By: ______________________________
Name: Steven D. Eisenberg
Title: Vice President and Associate
General Counsel
THE BANK OF NEW YORK, as Trustee
By: ______________________________
Name: Mary Beth Lewicki
Title: Assistant Vice President
5
<PAGE>
Exhibit 5.1
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
FOUR TIMES SQUARE
NEW YORK, NY 10036
(212) 735-3000
February 18, 2000
Edison Mission Energy
18101 Von Karman Avenue
Irvine, California 92612
Re: Edison Mission Energy
Registration Statement on Form S-4
----------------------------------
Ladies and Gentlemen:
We are acting as special counsel to Edison Mission Energy, a
California corporation (the "Company"), in connection with the public offering
of $600,000,000 aggregate principal amount of the Company's 7.73% Senior Notes
due June 15, 2009 (the "Exchange Notes"). The Exchange Notes are to be issued
pursuant to an exchange offer (the "Exchange Offer") in exchange for a like
principal amount of the issued and outstanding 7.73% Senior Notes due June 15,
2009 of the Company (the "Original Notes") under the Indenture, dated as of June
28, 1999, as supplemented by a First Supplemental Indenture, dated as of June
28, 1999 (as so supplemented, the "Indenture"), between the Company and The Bank
of New York, as Trustee (the "Trustee"), as contemplated by the Registration
Rights Agreement, dated as of June 23, 1999 (the "Registration Rights
Agreement"), by and among the Company, Credit Suisse First Boston Corporation,
Lehman Brothers Inc. and SG Cowen Securities Corp.
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-4 relating to the Exchange Notes to be filed with the
Securities and Exchange Commission (the "Commission") on the date hereof under
the Act (the "Registration
<PAGE>
Statement"); (ii) an executed copy of the Registration Rights Agreement; (iii)
an executed copy of the Indenture; (iv) the Articles of Incorporation of the
Company; (v) the By-Laws of the Company, as amended to date; (vi) certain
resolutions adopted by the Board of Directors of the Company relating to the
Exchange Offer, the issuance of the Original Notes and the Exchange Notes, the
Indenture and related matters; (vii) the Form T-1 of the Trustee filed as an
exhibit to the Registration Statement; and (viii) the form of the Exchange
Notes. We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of executed documents or documents to be executed, we have assumed
that the parties thereto, other than the Company, had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect thereof on such parties. As to any facts material to
the opinions expressed herein which we have not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Our opinions set forth herein are limited to California corporate law
and the laws of the State of New York which are normally applicable to
transactions of the type contemplated by the Exchange Offer and to the extent
that judicial or regulatory orders or decrees or consents, approvals, licenses,
authorizations, validations, filings, recordings or registrations with
governmental authorities are relevant, to those required under such laws (all of
the foregoing being referred to as "Opined on Law"). We do not express any
opinion with respect to the law of any jurisdiction other than Opined on Law or
as to the effect of any such law on the opinions herein stated.
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the Exchange Notes (in the form examined by us) have been duly
executed and authenticated in accordance with the terms of the Indenture and
have been delivered upon consummation
2
<PAGE>
of the Exchange Offer against receipt of Original Notes surrendered in exchange
therefor in accordance with the terms of the Exchange Offer, the Exchange Notes
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
In rendering the opinion set forth above, we have assumed that the
execution and delivery by the Company of the Indenture and the Exchange Notes
and the performance by the Company of its obligations thereunder do not and will
not violate, conflict with or constitute a default under any agreement or
instrument to which the Company or its properties is subject, except that we do
not make this assumption for those agreements and instruments which have been
identified to us by the Company as being material to it and which are listed as
exhibits to the Registration Statement.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP
3
<PAGE>
EXHIBIT 10.1
EXECUTION COPY
$600,000,000
EDISON MISSION ENERGY
7.73% Senior Notes due June 15, 2009
REGISTRATION RIGHTS AGREEMENT
-----------------------------
June 23, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
SG COWEN SECURITIES CORP.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
In connection with the issue and sale of $600 million in aggregate
principal amount of 7.73% Senior Notes due June 15, 2009 (the "Initial Notes")
-------------
issued by Edison Mission Energy, a California corporation (the "Company"),
-------
pursuant to the terms of the Indenture (as defined below) and as an inducement
to Credit Suisse First Boston Corporation, Lehman Brothers Inc. and SG Cowen
Securities Corp. (the "Initial Purchasers") to enter into the Purchase
------------------
Agreement, dated June 23, 1999 (the "Purchase Agreement"), among the Company and
------------------
the Initial Purchasers, the Company hereby agrees to provide the registration
rights set forth in this Registration Rights Agreement (this "Agreement") for
---------
the benefit of the holders of the Initial Notes. The execution of this
Agreement is a condition to the purchase of the Initial Notes under the Purchase
Agreement.
SECTION 1. Definitions. Capitalized terms used herein without
-----------
definition shall have the respective meanings ascribed thereto, whether
expressly or by reference to another agreement or document, in the Indenture.
The definitions set forth in this Agreement shall equally apply to both the
singular and plural forms of the terms defined. As used in this Agreement, the
following terms shall have the following meanings:
"Advice" shall have the meaning set forth in the last paragraph of
------
Section 5 of this Agreement.
"Affiliate", with respect to any Person, shall mean any other Person
---------
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common
<PAGE>
control with such first Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities or by contract or otherwise. For purposes of Section 2, an
"Affiliate" of the Company shall mean and include, in addition, any Person
deemed an affiliate thereof under the Securities Act or the Exchange Act in
connection with the Exchange Offer.
"Closing Date" shall mean the date of the initial issuance and sale of
------------
the Initial Notes.
"Commission" shall mean the United States Securities and Exchange
----------
Commission.
"Company" shall have the meaning set forth in the first paragraph of
-------
this Agreement.
"Cure Date" shall have the meaning set forth in Section 4(a) of this
---------
Agreement.
"Effective Date" shall mean the date which is 270 days after the
--------------
Closing Date.
"Effective Period" shall have the meaning set forth in Section 3(a) of
----------------
this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer" shall have the meaning set forth in Section 2(a) of
--------------
this Agreement.
"Exchange Offer Registration Statement" shall have the meaning set
-------------------------------------
forth in Section 2(a) of this Agreement.
"Exchange Period" shall have the meaning set forth in Section 2(a) of
---------------
this Agreement.
"Exchange Notes" shall have the meaning set forth in Section 2(a) of
--------------
this Agreement.
A "holder" of Registrable Notes shall mean the registered holder of
------
such securities or any beneficial owner thereof.
"Holder Indemnified Party" shall have the meaning set forth in Section
------------------------
8(a) of this Agreement.
"Holder Information" shall have the meaning set forth in Section 8(a)
------------------
of this Agreement.
2
<PAGE>
"Illiquidity Event" with respect to the Initial Notes shall mean any
-----------------
of the following events:
(a) as of the Effective Date, both (i) an Exchange Offer
Registration Statement (which, if applicable pursuant to Section 2(a), covers
resales of such Exchange Notes) has not become effective and (ii) the
Registrable Notes are not the subject of an Initial Shelf Registration Statement
which has become effective; or
(b) the Exchange Notes offered in exchange for the Registrable Notes
are the subject of an Exchange Offer Registration Statement which was effective
(and which, if applicable pursuant to Section 2(a), covered resales of such
Exchange Notes) but which ceased to be effective for any reason prior to the end
of the Exchange Period; or
(c) the Registrable Notes are the subject of an Initial Shelf
Registration Statement or Subsequent Shelf Registration Statement which was
effective but which has ceased to be effective for any reason prior to the end
of the Effective Period.
An Illiquidity Event shall be deemed to cease to exist on the date
subsequent to the occurrence of such Illiquidity Event on which:
(i) in the case of an Illiquidity Event described in clause (a)
above, either (i) an Exchange Offer Registration Statement (which, if
applicable pursuant to Section 2(a), covers resales of the Exchange Notes
exchanged for such Registrable Notes) shall become effective and an
Exchange Offer for such Registrable Notes shall have commenced or (ii) an
Initial Shelf Registration Statement covering such Registrable Notes shall
become effective; or
(ii) in the case of an Illiquidity Event described in clause (b)
above, either (i) an Exchange Offer Registration Statement (which, if
applicable pursuant to Section 2(a), covers resales of the Exchange Notes
offered in exchange for such Initial Notes) shall become effective and an
Exchange Offer for such Registrable Notes shall have commenced pursuant to
an Exchange Offer Registration Statement or (ii) an Initial Shelf
Registration Statement covering such Registrable Notes shall become
effective; or
(iii) in the case of an Illiquidity Event described in clause (c)
above, a Subsequent Shelf Registration Statement covering such Registrable
Notes shall become effective.
"Indenture" shall mean the Indenture, dated as of June 28, 1999, and
---------
as further amended or supplemented from time to time in accordance with the
terms thereof, between the Company and the Trustee, and pursuant to which the
Initial Notes and any Exchange Notes are to be issued.
"Initial Purchasers" shall have the meaning set forth in the first
------------------
paragraph of this Agreement.
3
<PAGE>
"Initial Notes" shall have the meaning set forth in the first
-------------
paragraph of this Agreement.
"Initial Shelf Registration Statement" shall have the meaning set
------------------------------------
forth in Section 3(a) of this Agreement.
"Inspectors" shall have the meaning set forth in Section 5(m) of this
----------
Agreement.
"Managing Underwriters" shall mean the investment banker or investment
---------------------
bankers and manager or managers that shall administer an Underwritten Offering.
"NASD" shall mean the National Association of Securities Dealers, Inc.
----
"Prospectus" shall mean the prospectus included in any Registration
----------
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, and
all other amendments and supplements to the prospectus included in any
Registration Statement, including post-effective amendments and all material
incorporated by reference into such prospectus.
"Purchase Agreement" shall have the meaning set forth in the first
------------------
paragraph of this Agreement.
"Records" shall have the meaning set forth in Section 5(m) of this
-------
Agreement.
"Registrable Notes" shall mean the Initial Notes upon original
-----------------
issuance thereof and at all times subsequent thereto until, in the case of any
such Initial Note, (i) a Registration Statement covering such Initial Note, or
the Exchange Note to be exchanged for such Initial Note (and, in the case of any
Resale Note, any resale thereof), has been declared effective and such Initial
Note has been disposed of or exchanged (or, in any case where such Registration
Statement covers the resale of Resale Notes, such Initial Note has been
exchanged and the Resale Note received therefor has been resold), as the case
may be, in accordance with such effective Registration Statement, (ii) such
Initial Note is sold in compliance with Rule 144 or would be permitted to be
sold pursuant to Rule 144(k), (iii) such Initial Note shall have been otherwise
transferred and a new certificate therefor not bearing a legend restricting
further transfer shall have been delivered by or on behalf of the Company and
such Initial Note shall be tradeable by each holder thereof without restriction
under the Securities Act or the Exchange Act and without material restriction
under the applicable blue sky or state securities laws or (iv) such Initial Note
ceases to be outstanding.
"Registration Statement" shall mean any registration statement
----------------------
(including any Shelf Registration Statement) of the Company that covers any of
the Registrable Notes or the Exchange Notes, as the case may be, pursuant to the
provisions of this Agreement, including the Prospectus which is part of such
Registration Statement, amendments (including post-effective amendments) and
supplements to such Registration Statement and all exhibits and appendices to
4
<PAGE>
any of the foregoing. For purposes of the foregoing, unless the context
requires otherwise, a Registration Statement for an Exchange Offer shall not be
deemed to cover Registrable Notes held by a Restricted Person unless such
Registration Statement covers the resale of Resale Notes to be received by such
Restricted Person pursuant to such Exchange Offer and any such Initial Notes
shall continue to be Registrable Notes.
"Resale Initial Purchaser" shall have the meaning set forth in Section
------------------------
8(a) of this Agreement.
"Resale Notes" shall mean any Exchange Note received by a Restricted
------------
Person pursuant to an Exchange Offer, and at all times subsequent thereto,
until, subject to the time periods set forth herein, such Exchange Note has been
resold by such Restricted Person.
"Restricted Person" shall mean (a) any Affiliate of the Company, (b)
-----------------
any Initial Purchaser or (c) any Affiliate of any Initial Purchaser (other than
Affiliates of such Initial Purchaser that (i) are acquiring Exchange Notes in
the ordinary course of business and do not have an arrangement with any Person
to distribute Exchange Notes and (ii) may trade such Exchange Notes without
restriction under the Securities Act).
"Rule 144" shall mean Rule 144 under the Securities Act, as such Rule
--------
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such
---------
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 415" shall mean Rule 415 under the Securities Act, as such Rule
--------
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
--------------
and the rules and regulations of the Commission promulgated thereunder.
"Shelf Notice" shall have the meaning set forth in Section 2(b) of
------------
this Agreement.
"Shelf Registration Statement" shall have the meaning set forth in
----------------------------
Section 3(b) of this Agreement.
"Special Counsel" shall mean Latham & Watkins, special counsel to the
---------------
Initial Purchasers, or any other firm acceptable to the Company, acting as
special counsel to the holders of Registrable Notes or Exchange Notes.
"Subsequent Shelf Registration Statement" shall have the meaning set
---------------------------------------
forth in Section 3(b) of this Agreement.
5
<PAGE>
"TIA" shall mean the Trust Indenture Act of 1939, as amended, and the
---
rules and regulations of the Commission promulgated thereunder.
"Trustee" shall mean The Bank of New York, its successors and any
-------
successor trustee under the Indenture.
"Underwritten Registration" or "Underwritten Offering" shall mean a
------------------------- ---------------------
registration in which securities are sold to an underwriter or group of
underwriters for reoffering to the public.
SECTION 2. Exchange Offer.
--------------
(a) Unless the Company determines in good faith that the Exchange
Offer shall not be permissible under applicable law or Commission policy, the
Company shall prepare and cause to be filed with the Commission as soon as
reasonably practicable after the Closing Date, subject to Sections 2(b) and 2(c)
of this Agreement, a Registration Statement (an "Exchange Offer Registration
---------------------------
Statement") for an offer to exchange (an "Exchange Offer") the Registrable Notes
- --------- --------------
(subject to Section 2(c)) for a like aggregate principal amount of debt
securities of the Company and are otherwise in all material respects
substantially identical to the Initial Notes (the "Exchange Notes") (and which
--------------
are entitled to the benefits of the Indenture, which shall be qualified under
the TIA in connection with such registration, or a trust indenture which is
substantially identical in all material respects to the Indenture), other than
(i) such changes to the Indenture or any such substantially identical indenture
as the Trustee and the Company may deem necessary in connection with the
Trustee's rights and duties or to comply with any requirements of the Commission
to effect or maintain the qualification thereof under the TIA and (ii) such
changes relating to restrictions on transfer set forth in the Indenture. The
Exchange Offer shall be registered under the Securities Act on the appropriate
form of Registration Statement and shall comply with all applicable tender offer
rules and regulations under the Exchange Act and with all other applicable laws.
Subject to the terms and limitations of Section 2(c), such Exchange Offer
Registration Statement may also cover any resales of Exchange Notes by any
Restricted Person, in the manner or manners designated by them which, in any
event, is reasonably acceptable to the Company.
The Company shall use its reasonable best efforts to (i) cause the
Exchange Offer Registration Statement to become effective under the Securities
Act on or prior to the Effective Date, (ii) keep the Exchange Offer open for a
period of not less than the shorter of (A) the period ending when the last
remaining Initial Note is tendered into the Exchange Offer and (B) 30 days from
the date notice is mailed to the holders of Initial Notes (provided that in no
--------
event shall such period be less than the period required under applicable
Federal and state securities laws), and (iii) maintain such Exchange Offer
Registration Statement continuously effective for a period (the "Exchange
--------
Period") of not less than the longer of (A) the period until the consummation of
the Exchange Offer and (B) 120 days after effectiveness of the Exchange Offer
Registration Statement, provided however, that in the event that all resales of
-------- -------
Exchange Notes (including, subject to the time periods set forth herein, any
Resale Securities and including, subject to the time periods set forth herein,
any resales by broker-dealers that receive Exchange Notes for their
6
<PAGE>
own account pursuant to the Exchange Offer) covered by such Exchange Offer
Registration Statement have been made, the Exchange Offer Registration Statement
need not remain continuously effective for the period set forth in clause (B)
above. Upon consummation of the Exchange Offer, the Company shall deliver to the
Trustee under the Indenture for cancellation all Initial Notes tendered by the
holders thereof pursuant to the Exchange Offer and not withdrawn prior to the
date of consummation of the Exchange Offer. Each Restricted Person shall notify
the Company promptly after re-selling all Resale Securities held by such
Restricted Person which are covered by any such Registration Statement.
Each holder of Registrable Notes to be exchanged in the Exchange Offer
(other than any Restricted Person) shall be required as a condition to
participating in the Exchange Offer to represent that (i) it is not an Affiliate
of the Company, (ii) any Exchange Notes to be received by it shall be acquired
in the ordinary course of its business and (iii) that at the time of the
consummation of the Exchange Offer it shall have no arrangement with any person
to participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes. Upon consummation of an Exchange Offer in accordance with
this Section 2 and compliance with the other provisions of this Section 2, the
Company shall, subject to Sections 2(b) and 2(c), have no further obligation to
register Registrable Notes pursuant to Section 3(a) of this Agreement; provided
--------
that the other provisions of this Agreement shall continue to apply as set forth
in such provisions.
(b) In the event that the Company reasonably determines in good faith
that (i) the Exchange Notes would not, upon receipt in the Exchange Offer by any
holder of Registrable Notes (other than any Restricted Person and other than any
holder who is not acquiring such Exchange Notes in the ordinary course of
business or who has an arrangement with any person to participate in the
distribution of such Exchange Notes), be tradeable by each holder thereof
without restriction under the Securities Act and the Exchange Act and without
restriction under applicable blue sky or state securities laws, (ii) after
conferring with counsel, the Commission is unlikely to permit the Exchange Offer
Registration Statement to become effective prior to the Effective Date (except
in the circumstances set forth in Section 2(c)) or (iii) the Exchange Offer may
not be made in compliance with applicable laws, then the Company shall promptly
deliver notice thereof (the "Shelf Notice") to the holders of the Registrable
------------
Notes and the Trustee and shall thereafter file an Initial Shelf Registration
Statement pursuant to, and otherwise comply with, the provisions of Section
3(a). Following the delivery of a Shelf Notice in accordance with this Section
2(b) and compliance with Section 3(a), the Company shall not have any further
obligation under this Section 2.
(c) In the event that the Company reasonably determines in good faith
that (i) the Exchange Notes would not, upon consummation of any resale thereof
by a Restricted Person to any Person other than another Restricted Person, be
tradeable by each holder thereof without restriction under the Securities Act
(other than applicable prospectus requirements) and the Exchange Act and without
restriction under applicable blue sky or state securities laws or (ii) the
Commission is unlikely to permit the Exchange Offer Registration Statement to
become effective prior to the Effective Date solely because such Registration
Statement covers resales of the Exchange Notes by Restricted Persons, then the
Company shall promptly deliver a Shelf Notice
7
<PAGE>
to the Restricted Persons who are holders of Registrable Notes and to the
Trustee, and the Company shall thereafter file an Initial Shelf Registration
Statement with respect to any such Registrable Notes pursuant to, and otherwise
comply with, the provisions of Section 3(a); provided that such Initial Shelf
--------
Registration Statement shall only cover resales of Registrable Notes by
Restricted Persons if a Shelf Notice is not then otherwise required to be
delivered pursuant to Section 2(b); and, provided, further that such Initial
-------- -------
Shelf Registration Statement covering Registrable Notes held by Restricted
Persons shall be kept effective for at least a period of 120 days and is not
required to remain effective with respect to Registrable Notes held by
Restricted Persons thereafter. Following the delivery of a Shelf Notice in
accordance with this Section 2(c) and compliance with Section 3(a), the Company
shall not have any further obligation under this Section 2 with respect to the
filing of an offer to exchange the Registrable Notes held by the Restricted
Persons (including, without limitation, any obligation to provide that an
Exchange Offer Registration Statement filed pursuant to Section 2(a) cover
resales of Exchange Notes by Restricted Persons); provided that the provisions
--------
of this Section 2 shall otherwise remain in full force and effect with respect
to Registrable Notes held by any person other than a Restricted Person.
SECTION 3. Shelf Registration; Registrable Notes. With respect to the
-------------------------------------
Registrable Notes, if a Shelf Notice is delivered in accordance with Section
2(b) or 2(c) of this Agreement, then the Company shall comply with the following
provisions of this Section 3:
(a) Initial Shelf Registration. The Company shall prepare and cause
--------------------------
to be filed with the Commission a Registration Statement for an offering to be
made on a continuous basis other than pursuant to an Underwritten Offer pursuant
to Rule 415 covering all of the Registrable Notes (or, if a Shelf Notice is
delivered solely pursuant to Section 2(c), all of the Registrable Notes held by
any Restricted Persons) (the "Initial Shelf Registration Statement"); provided,
------------------------------------ --------
however, that no holder shall be entitled to have its Registrable Notes covered
- -------
by such Initial Shelf Registration Statement unless such holder agrees in
writing, within 10 Business Days after actual receipt of a request therefrom, to
be bound by all the provisions of this Agreement applicable to such holder. No
holder shall be entitled to the benefits of Section 4 of this Agreement unless
and until such holder shall have provided all information reasonably requested
by the Company (after conferring with counsel), and such holder shall not be
entitled to such benefits with respect to any period during which such
information was not provided. Each holder to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such holder not materially misleading. The Initial
Shelf Registration Statement shall be an appropriate form permitting
registration of such Registrable Notes for resale by the holders thereof in the
manner or manners reasonably designated by them (but excluding any Underwritten
Offerings). The Company shall use its reasonable best efforts to (A) cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act on or prior to the Effective Date and (B) keep the Initial Shelf
Registration Statement continuously effective under the Securities Act for a
period of two years after the Closing Date (subject to extension pursuant to the
last paragraph of Section 5 and subject, with respect to Registrable Notes held
by Restricted Persons, to the limitations set forth in Section 2(c)) (such two-
year period, as it may be extended, being the "Effective Period"), or
----------------
8
<PAGE>
such shorter period ending when (1) all Registrable Notes covered by the Initial
Shelf Registration Statement have been sold or (2) a Subsequent Shelf
Registration Statement covering all of such Registrable Notes remaining unsold
has been declared effective under the Securities Act or (3) all Registrable
Notes may be sold pursuant to subsection (k) of Rule 144.
Notwithstanding any other provision hereof, the Company may postpone
or suspend the filing or the effectiveness of a Registration Statement (or any
amendments or supplements thereto), if (1) such action is required by applicable
law, or (2) such action is taken by the Company in good faith and for valid
business reasons (not including avoidance of such party's obligations
hereunder), including the acquisition or divestiture of assets, other pending
corporate developments, public filings with the Commission or other similar
events, so long as the Company promptly thereafter complies with the
requirements of Section 5(b) hereof, if applicable. Notwithstanding the
occurrence of any event referred to in the immediately preceding sentence (a
"Suspension"), such event shall not suspend, postpone or in any other manner
----------
affect the running of the time period after which an Illiquidity Event shall be
deemed to occur and, if the filing or effectiveness of a Registration Statement
is postponed or suspended as a result of a Suspension, an Illiquidity Event
shall nonetheless exist if all other requirements set forth for the occurrence
of an Illiquidity Event shall be satisfied, and the provisions of Section 4
requiring the accrual payment of additional interest, as set forth in such
Section, on the Registrable Notes, shall be applicable.
(b) Subsequent Shelf Registrations. If the Initial Shelf Registration
------------------------------
Statement or any Subsequent Shelf Registration Statement ceases to be effective
for any reason at any time during the Effective Period after the Effective Date,
the Company may attempt to obtain the withdrawal of any order suspending the
effectiveness thereof, and may amend such Initial Shelf Registration Statement
or Subsequent Shelf Registration Statement in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration Statement applicable to the Initial Notes
pursuant to Rule 415 covering all of such Registrable Notes remaining unsold (a
"Subsequent Shelf Registration Statement"). If a Subsequent Shelf Registration
---------------------------------------
Statement is declared effective, the Company shall use its reasonable best
efforts to keep such Shelf Registration Statement continuously effective for a
period after the date of such effectiveness equal in length to the length of the
Effective Period plus the aggregate number of days from the date of the order
suspending the effectiveness of the Initial Shelf Registration Statement or any
Subsequent Shelf Registration Statement to the date of the effectiveness of the
Subsequent Shelf Registration Statement. As used herein, the term "Shelf
Registration Statement" means the Initial Shelf Registration Statement and any
Subsequent Shelf Registration Statement.
SECTION 4. Additional Interest for Illiquidity.
-----------------------------------
(a) The Company acknowledges and agrees that the Initial Purchasers
(and any subsequent holders of the Initial Notes) have acquired the Initial
Notes in reliance on the covenant of the Company to use its reasonable best
efforts to (i) cause to become effective on or prior to the Effective Date (A)
the Exchange Offer Registration Statement or (B) an Initial Shelf Registration
Statement, and (ii) maintain the respective effectiveness of such Registration
9
<PAGE>
Statements as described herein. The Company further acknowledges and agrees that
the failure of the Company to fulfill such covenants will have an adverse effect
on the holders of the Initial Notes. Therefore, the Company agrees that from and
after the date on which any Illiquidity Event occurs, additional interest (in
addition to the interest otherwise payable with respect to the Registrable
Notes) shall accrue with respect to the Initial Notes until but not including
the date on which such Illiquidity Event shall cease to exist (and provided no
other Illiquidity Event with respect to any Initial Notes shall then be
continuing), at the rate of one half of one percent (0.50%) per annum, which
additional interest shall be payable by the Company to the holders of all
Initial Notes at the times, in the manner and subject to the same terms and
conditions set forth in the Indenture, as nearly as may be, as though the
interest rates provided in such Initial Notes had been increased by one half of
one percent (0.50%) per annum. Subject to the provisions of this Section 4, the
Company agrees that it shall be liable to the holders of all Initial Notes for
the payment of any and all additional interest on the Initial Notes that shall
accrue pursuant to this Section 4.
Any such additional interest accrued on any such Initial Notes but
unpaid on the date on which such interest ceases to accrue (the "Cure Date")
---------
shall be due and payable on the first interest payment date following the next
record date following such Cure Date (or the record date occurring on such Cure
Date, if such Cure Date is a record date) to the holders of record of such
Initial Notes on such record date.
(b) The Company shall promptly notify the holders of the Initial
Notes and the Trustee of the occurrence of any Illiquidity Event of which it has
knowledge.
Notwithstanding the foregoing, the Company shall not be required to
pay the additional interest described in clause (a) of this Section 4 to a
holder with respect to the Registrable Notes held by such holder if the
applicable Illiquidity Event arises by reason of the failure of such holder to
provide such information as (i) the Company may reasonably request, with
reasonable prior written notice, for use in the Shelf Registration Statement or
any Prospectus included therein to the extent the Company reasonably determines
that such information is required to be included therein by applicable law, (ii)
the NASD or the Commission may request in connection with such Shelf
Registration Statement, or (iii) is required to comply with the agreements of
such holder contained in clause (a) of Section 3 to the extent compliance
thereof is necessary for the Shelf Registration Statement to be declared
effective.
SECTION 5. Registration Procedures. In connection with the
-----------------------
registration of any Registrable Notes or Exchange Notes pursuant to Sections 2
and 3 hereof, the Company shall use its reasonable best efforts to effect such
registration to permit the sale of such Registrable Notes or Exchange Notes in
accordance with any permitted intended method or methods of disposition thereof,
and pursuant thereto the Company shall:
(a) prepare and cause to be filed with the Commission a Registration
Statement or Registration Statements as prescribed by Sections 2 and 3 of this
Agreement, and use its reasonable best efforts to cause each such Registration
Statement to become effective and
10
<PAGE>
remain effective for the applicable period as provided herein; provided,
--------
however, that (i) during the period in which the Initial Registration Statement
- -------
is open for the Restricted Persons, the Company shall afford any Restricted
Person which is a holder of Registrable Notes or Exchange Notes and the Special
Counsel, upon such holder's written request to the Company, an opportunity to
review copies of all such documents proposed to be filed, and (ii) if such
filing is pursuant to Section 3, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto (including documents that
would be incorporated therein by reference after the initial filing of the
Registration Statement), the Company shall afford the Special Counsel for all
holders of the Registrable Notes covered by such Registration Statement an
opportunity to review copies of all such documents proposed to be filed;
(b) prepare and cause to be filed with the Commission such amendments
and post-effective amendments to each Shelf Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the
applicable period as provided herein; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act, the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder with respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so supplemented in
accordance with the intended methods of disposition by the sellers of
Registrable Notes covered thereby set forth therein;
(c) if a Shelf Registration Statement is filed pursuant to Section 3
hereof, notify the selling holders of Registrable Notes promptly after the
Company becomes aware thereof, and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or Prospectus or the initiation of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes for offer or sale in any
jurisdiction, or the initiation of any proceeding for such purpose, (v) of the
existence of any fact known to the Company which results in such Registration
Statement or related Prospectus or any document incorporated therein by
reference containing any untrue statement of a material fact or omitting to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (which notice may be accompanied by an instruction that such
notice constitutes material non-public information and to suspend the use of the
prospectus until the requisite changes have been made, and which instruction
shall require that such holders shall not communicate such material non-public
information to any third party and shall not sell or purchase, or offer to sell
or purchase, any securities of the Company after receipt of such notice) and
(vi) if the Company reasonably determines that the filing of a post-effective
amendment to such Registration Statement would be appropriate;
11
<PAGE>
(d) if a Shelf Registration Statement is filed pursuant to Section 3,
use its reasonable efforts to prevent the issuance of any order suspending the
effectiveness of a Registration Statement or of any order preventing or
suspending the use of a Prospectus or suspending the qualification (or exemption
from qualification) of any of the Registrable Notes for sale in any jurisdiction
and, if any such order is issued, to obtain the withdrawal of any such order at
the earliest possible moment;
(e) if a Shelf Registration Statement is filed pursuant to Section 3,
furnish to each selling holder of Registrable Notes who so requests (at such
holder's address set forth in the Securities Register) without charge, one
conformed copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(f) if a Shelf Registration Statement is filed pursuant to Section 3,
deliver to each selling holder of Registrable Notes without charge, as many
copies of the Prospectus (including each preliminary prospectus) and each
amendment or supplement thereto as such persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling holders of Registrable Notes and the underwriters, if any, in
connection with the offering and sale of the Registrable Notes covered by such
Prospectus and any amendment or supplement thereto;
(g) prior to any public offering of Registrable Notes, register or
qualify, or cooperate with the selling holders of Registrable Notes, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the securities
or blue sky laws of such jurisdictions within the United States as the selling
holders reasonably request in writing (provided that, if Registrable Notes are
offered other than through an Underwritten Offering, the Company agrees to cause
its counsel to perform blue sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(g)); keep each
such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective; and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Notes covered by the applicable
Registration Statement; provided, however, that the Company will not be required
to qualify as a foreign corporation, or to do business, to file a general
consent or take any action which would subject it to service of process in any
jurisdiction or take any action which would subject itself to taxation in any
such jurisdiction;
(h) if a Shelf Registration Statement is filed pursuant to Section 3,
cooperate with the Trustee and the selling holders of Registrable Notes to
facilitate the timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company, and enable such Registrable Notes to be in such authorized
denominations and
12
<PAGE>
registered in such names as the holders may reasonably request at least three
Business Days prior to any such sale;
(i) if a Shelf Registration Statement is filed pursuant to Section 3,
upon the occurrence of any event contemplated by Section 5(c), prepare a
supplement or post-effective amendment to the Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Notes, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. If the Company so notifies the holders to suspend the
use of the Prospectus after the occurrence of such an event, the holders shall
suspend use of the Prospectus, and not communicate such material non-public
information to any third party, and not sell or purchase, or offer to sell or
purchase, any securities of the Company, until the Company has amended or
supplemented the Prospectus to correct such misstatement or omission;
(j) use its reasonable best efforts to cause the Registrable Notes
covered by the Registration Statement to continue to be rated by the rating
agencies that initially rated the Initial Notes during the period that the
Registration Statement is required hereunder to remain effective (it being
acknowledged, however, that the foregoing shall not be deemed to require the
Company to maintain the rating of such Registrable Notes at the rating given the
Initial Notes);
(k) prior to the effective date of the first Registration Statement
relating to the Registrable Notes or the Exchange Notes, as the case may be, (i)
provide the Trustee with printed certificates for such securities in definitive
form or in a global form eligible for deposit with The Depository Trust Company
and (ii) provide a CUSIP number for such Registrable Notes or Exchange Notes
represented by such certificates;
(l) if a Shelf Registration Statement is filed pursuant to Section 3,
enter into such reasonably required agreements and take all other appropriate
actions in order to expedite or facilitate the registration or the disposition
of such Registrable Notes;
(m) in the event of any Underwritten Offering (which shall only be
undertaken at the option of the Company), if a Shelf Registration Statement is
filed pursuant to Section 3, make available prior to the filing thereof for
inspection by a representative of the holders of a majority in aggregate
principal amount of the Registrable Notes being sold, and the Special Counsel,
on the one hand, or underwriter on the other hand (collectively, the
"Inspectors"), during reasonable business hours, all financial and other
----------
records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), and cause the officers, directors and employees
-------
of the Company to supply all relevant information as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities; provided, however, that, as a condition to supplying such
-------- -------
information, the Company shall receive an agreement in writing from the Special
Counsel agreeing that any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by such Inspector (other than as to
holders of Registrable Notes) and by any holders
13
<PAGE>
of Registrable Notes receiving such information, unless (i) disclosure of such
information is required pursuant to applicable law or by court or administrative
order, (ii) disclosure of such information is, in the reasonable opinion of
counsel to the Company, necessary to avoid or correct a misstatement or omission
of a material fact in the Registration Statement, Prospectus or any supplement
or post-effective amendment thereto or disclosure is otherwise required by law,
(iii) such information becomes generally available to the public other than as a
result of a disclosure by any Inspector or any such holder of Registrable Notes
in violation of this Section 5(m) or (iv) such information is approved for
release by the Company, in writing;
(n) use its best efforts to cause the Indenture or the trust
indenture provided for in Section 2, as the case may be, to be qualified under
the TIA not later than the effective date of such Registration Statement; and,
in connection therewith, cooperate with the Trustee under the Indenture and the
holders of the Registrable Notes to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use its best efforts to cause such Trustee to execute,
all documents as may be required to effect such changes, and all other forms and
documents required to be filed with the Commission to enable the Indenture or
the trust indenture provided for in Section 2 to be so qualified in a timely
manner;
(o) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission.
For purposes of the covenants set forth in this Section 5, references
to a Shelf Registration Statement, including a Shelf Registration Statement
filed pursuant to Section 3, shall be deemed to include any Registration
Statement, filed pursuant to Section 2, which covers, for the period set forth
therein, resales of Exchange Notes held by Restricted Persons as provided in
Section 2, and, in connection with such resales such Restricted Persons shall be
entitled to exercise all rights, receive all notices and copies of documents,
and otherwise receive all benefits afforded to sellers or holders of Registrable
Notes under this Section 5 in connection with a Shelf Registration Statement.
Without limiting the generality of the foregoing, the Company agrees to fulfill
its obligations set forth in Sections 5(a), (b), (c), (d), (e), (f), (h), (i),
(l) and (m) with respect to any such Registration Statement filed pursuant to
Section 2 insofar as it covers such resales.
The Company may require each seller of Registrable Notes as to which
any registration is being effected, as a condition thereto, to furnish to the
Company such information regarding the holder and the distribution of such
Registrable Notes as the Company may, from time to time, request in writing,
including without limitation stating that (i) it is not an Affiliate of the
Company, (ii) the amount of Registrable Notes held by such holder prior to the
Exchange Offer, (iii) the amount of Registrable Notes owned by such holder to be
exchanged in the Exchange Offer and representing that such holder is not engaged
in, and does not intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the Exchange Notes to be
issued, and (iv) it is acquiring the Exchange Notes in its ordinary course of
business and to covenant and agree to promptly notify the Company if any such
information so provided by such seller ceases to be true and correct and will
promptly
14
<PAGE>
thereafter furnish the Company with corrected information. The Company may
exclude from such registration the Registrable Notes of any Person who fails to
furnish such information within a reasonable time after receiving such request.
Each holder of Registrable Notes agrees by acquisition of such
Registrable Notes that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii),
5(c)(v) or 5(c)(vi) hereof, such holder shall forthwith discontinue disposition
of such Registrable Notes covered by such Registration Statement or Prospectus
until such holder is advised in writing (the "Advice") by the Company that the
------
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto and, if so directed by the Company, such
holder will deliver to the Company (at such holder's expense) all copies in its
possession, other than permanent file copies then in such holder's possession,
of the prospectus covering such Registrable Notes current at the time of receipt
of such notice, or certify in writing as to the destruction thereof. In the
event the Company shall give any such notice, the length of the Effective Period
shall be extended by the number of days during such period from and including
the date of the giving of such notice to and including the date when each seller
of Registrable Notes covered by such Registration Statement shall have received
(x) the copies of the supplemented or amended Prospectus contemplated by Section
5(i) or (y) the Advice.
---
SECTION 6. Delivery of Prospectus; Notification Upon Resale. The
------------------------------------------------
Initial Purchasers acknowledge that it is the position of the staff of the
Commission that any broker-dealer that receives Exchange Notes for its own
account in exchange for Registrable Notes pursuant to the Exchange Offer must
deliver a prospectus in connection with any resale of such Resale Securities.
By so acknowledging, such Initial Purchasers shall not be deemed to admit that,
by delivering a prospectus, it is an underwriter within the meaning of the
Securities Act
Each Initial Purchaser shall notify the Company promptly upon the
completion of the resale of the Resale Securities received by such Initial
Purchaser pursuant to the Exchange Offer.
SECTION 7. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2,
3 and 4; provided, however, that the Company shall bear or reimburse the holders
-------- -------
for the reasonable fees and disbursements of only one counsel, the Special
Counsel, in accordance with the terms of the Purchase Agreement; provided,
--------
further, however, that if the Company opts for an Underwritten Offering, the
- ------- -------
Company shall not be responsible for any fees and expenses of any underwriter,
including any underwriting discounts and commissions or any legal fees and
expenses of counsel to the underwriters (except for the reasonable fees and
disbursements of counsel in connection with state securities or blue sky
qualification of any of the Registrable Notes or the Exchange Notes).
SECTION 8. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to (A) indemnify and hold harmless each holder
of Registrable Notes (including any Initial Purchaser which holds Registrable
Notes, including
15
<PAGE>
Resale Securities, for its own account (each, a "Resale Initial Purchaser") and
------------------------
each Person, if any, who controls any such Person within the meaning of either
the Securities Act or the Exchange Act and each director, officer, employee or
agent of each such Person (each a "Holder Indemnified Party") against any and
------------------------
all losses, claims, damages or liabilities, joint or several, to which they or
any of them are 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 any Registration Statement covering
Registrable Notes held by such person or any Prospectus relating to any such
Registration Statement, or any amendment thereof or supplement thereto and all
documents incorporated by reference therein, 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 light of the circumstances in which
they were made, not misleading, and (B) reimburse each such Holder Indemnified
Party for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company 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 any such untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement or Prospectus, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information relating to such holder
provided by such holder to the Company specifically for use therein
(collectively, the "Holder Information"); provided, further, however, that the
------------------ -------- ------- -------
indemnity obligations arising out of this Section 8 with respect to any untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary Prospectus shall not inure to the benefit of any holder or any
controlling Person of such holder, to the extent that a prospectus relating to
such Registrable Notes or the Exchange Notes, as the case may be, was required
to be delivered by such holder under the Securities Act in connection with such
sale and any such loss, claim, damage or liability of such holder results from
the fact that such holder failed to send or deliver to the Person asserting any
such losses a copy of the final Prospectus with or prior to the delivery of the
written confirmation of the sale of the Registrable Notes or the Exchange Notes,
as the case may be, and such final Prospectus would have cured the untrue
statement or omission giving rise to such losses if the Company had previously
furnished copies thereof to such holder. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) As a condition to the inclusion of a holder's Registrable Notes
in a Registration Statement, such holder shall agree to (i) indemnify and hold
harmless the Company and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act, and each director, officer,
employee or agent of each such person, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them are
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 a Registration Statement covering Registrable Notes
held by such holder or any Prospectus relating to any such Registration
Statement or in any amendment thereof or supplement thereto, 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 light of the circumstances
in which they were made, not misleading, and
16
<PAGE>
(ii) reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred; in
each and every case under clause (i) and (ii) above to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in such Registration Statement or Prospectus or in
any amendment thereof or supplement thereto, in reliance upon and in conformity
with the Holder Information. This indemnity agreement will be in addition to any
liability which any such holder may otherwise have. In no event shall the
liability of any selling holder of Registrable Notes hereunder be greater in
amount than the dollar amount of the proceeds (net of payment of all expenses)
received by such holder upon the sale (or, in the case of Resale Securities, the
resale) of the Registrable Notes giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under this Section
8 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 this
Section 8, notify the indemnifying party in writing of the commencement thereof
(enclosing a copy of all papers served); but the omission to so notify the
indemnifying party (i) shall not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action
and such omission results in the forfeiture by the indemnifying party or
material impairment of substantial rights and defenses and (ii) shall not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligations provided in
paragraph (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 shall 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. After notice from the indemnifying party to such
indemnified party of its election to so assume the defense of such claim or
action, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than costs
of investigation; provided that if (i) the defendants in any such action include
both the indemnified party and the indemnifying party, and the indemnified party
shall have received an opinion of counsel reasonably acceptable to the
indemnifying party that representation of both parties by the same counsel would
be inappropriate due to actual or likely conflicts of interest between them, or
(ii) the indemnifying party shall not have employed counsel for the indemnified
party to represent the indemnified party within a reasonable time after notice
of the institution of such action, then the indemnified party or parties shall
have the right to select one firm of separate counsel (in addition to the fees
and expenses of local counsel) to assert any separate legal defenses and to
otherwise defend such action on behalf of such indemnified party or parties. No
indemnifying party shall be liable for any settlement of any action or claim for
monetary damages which an indemnified party may effect without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in Section 8(a) or (b) hereof
is for any reason, other than as specified in such provisions, unavailable to or
insufficient to hold harmless an indemnified party, then each indemnifying party
shall contribute to the aggregate losses,
17
<PAGE>
claims, damages or liabilities (or actions in respect thereof) referred to in
Section 8(a) or (b) hereof in such proportion as is appropriate to reflect the
relative fault and benefits to the Company on the one hand and such holders on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof) as
well as any other relevant equitable considerations. The relative fault of the
Company and such holders shall be determined by reference to, among other
things, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any untrue statement or omission. The
obligations of the holders in this Section 8(d) are several in proportion to
their respective obligations hereunder and not joint. Notwithstanding the
provisions of this Section 8(d), in no event shall any holder of Registrable
Notes be required to contribute any amount which is in excess of (i) the
aggregate principal amount of Initial Notes sold or exchanged by such holder
less (ii) the amount of any damages that such person has otherwise been required
to pay by reason of such alleged untrue statement or omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each Holder Indemnified Party shall have the same rights to contribution as a
holder, and each person who controls the Company within the meaning of either
the Securities Act or the Exchange Act and each officer, director, employee and
agent of such person, shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this Section
8(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this Section 8(d), notify such party or parties from whom contribution may
be sought; but the omission to so notify such party or parties (x) shall not
relieve the party or parties from whom contribution may be sought from any
liability under this paragraph (d) unless and to the extent it did not otherwise
learn of such action and such omission results in the forfeiture by the party or
parties from whom contribution may be sought or material impairment of
substantial rights and defenses and (y) shall not, in any event, relieve such
party or parties from any obligations other than under this Section 8(d).
(e) The provisions of this Section 8 will remain in full force and
effect, regardless of any investigation made by or on behalf of any holder of
Registrable Notes, the Initial Purchasers, the Company or any of the officers,
directors or controlling persons referred to in this Section 8 and will survive
the sale (or, in the case of Resale Securities, the resale) by a holder of
Registrable Notes of such Registrable Notes.
18
<PAGE>
SECTION 9. Underwritten Registrations (If Any). No holder may
-----------------------------------
participate in any Underwritten Registration, which Underwritten Registration
shall only be undertaken at the option of the Company, unless such holder (a)
agrees to sell such holder's Initial Notes on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
SECTION 10. Termination. In the event that no Initial Notes are sold
-----------
to the Initial Purchasers pursuant to the Purchase Agreement, this Agreement
shall automatically terminate, without liability on the part of any party. Upon
the fulfillment of all obligations on the part of the Company to register the
Initial Notes as set forth herein (including maintaining the effectiveness of
any applicable Registration Statements), this Agreement shall terminate;
provided that the provisions of Sections 7 and 8 hereof shall survive any
termination and remain in full force and effect.
SECTION 11. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company neither has, as of the
--------------------------
date hereof, entered into, nor shall, on or after the date hereof, enter into,
any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Notes herein or otherwise conflicts
with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of holders
of at least a majority of the then outstanding aggregate principal amount of the
Registrable Notes (or, after the consummation of any Exchange Offer in
accordance with Section 2, of Exchange Notes); provided that, with respect to
any matter that directly or indirectly affects the rights of any Restricted
Person hereunder occurring within the period in which the Initial Registration
Statement is open for the Restricted Persons, the Company shall obtain the
written consent of each such Restricted Person against which such amendment,
modification, supplement, waiver or consent is to be effective. Notwithstanding
the foregoing (except for the foregoing proviso), a waiver or consent to
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Notes whose securities are
being sold or exchanged pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other holders of Registrable Notes
may be given by holders of at least a majority in aggregate principal amount of
the Registrable Notes being sold or exchanged by such holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Resale Initial Purchasers and
that does not directly or indirectly affect the rights of holders of Registrable
Notes or Exchange Notes may be given by each of the Resale Initial Purchasers
affected thereby.
19
<PAGE>
(c) Notices. All notices and other communications (including, without
-------
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing and delivered by hand delivery,
registered first-class mail, next-day air courier or telecopier:
(i) if to a holder of Registrable Notes, at the most current address
given by such holder to the Company in accordance with the provisions of
this Section 11(c), which address initially is, with respect to the Initial
Purchasers, at the address set forth in the Purchase Agreement and
thereafter at the address for such holders of Registrable Notes set forth
in the Security Register applicable to such Registrable Notes; and
(ii) if to the Company, initially at the address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 11(c).
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed; one Business Day
after being timely delivered to a next-day air courier; and when received, if
telecopied.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the parties
hereto, including, without limitation and without the need for an express
assignment or any consent by the Company thereto, subsequent holders of
Registrable Notes.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement and the rights and duties of the
-------------
parties hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York. Each of the parties hereto hereby submits to the
non-exclusive jurisdiction of the Federal and State Courts of 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.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every
20
<PAGE>
other respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent permitted
by law.
(i) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement, is intended by the parties as a final expression of their agreement,
and is intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This Agreement, together with the Purchase Agreement, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(j) Notes Held by the Company, etc. Whenever the consent or approval
------------------------------
of holders of a specified percentage of principal amount of Registrable Notes is
required hereunder, Registrable Notes held by the Company or any of its
Affiliates (other than subsequent holders of Registrable Notes if such
subsequent holders are deemed to be Affiliates solely by reason of their
holdings of such Registrable Notes) shall not be counted in determining whether
such consent or approval was given by the holders of such required percentage.
21
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
EDISON MISSION ENERGY
By:__________________________________
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed
and accepted as of the date first
above written
CREDIT SUISSE FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
SG COWEN SECURITIES CORP.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By:_______________________________________
Name:
Title:
<PAGE>
Exhibit 12.1
EDISON MISSION ENERGY
Computation of the Ratio of Earnings to Fixed Charges
(In Thousands)
<TABLE>
<CAPTION>
Nine months Nine months
ended ended
September 30, September 30,
1999 1998 1998 1997 1996 1995 1994
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before taxes and
extraordinary item $ 183,022 $ 158,356 $ 202,579 $ 185,515 $ 174,110 $ 95,008 $ 84,413
Adjustments:
Fixed charges, as below 299,903 196,191 260,439 275,426 261,885 187,296 169,645
Interest capitalized (21,065) (12,575) (26,300) (15,000) (64,400) (58,300) (48,725)
Equity in earnings of equity
method investments (60,148) (38,555) (45,984) (76,694) (72,272) (48,815) 54
Dividends from equity method
investments 42,389 28,226 49,208 82,576 72,787 60,251
----------------------------------------------------------------------------------------
Earnings as adjusted $ 444,101 $ 331,643 $ 439,942 $ 451,823 $ 372,110 $ 235,440 $ 205,387
========================================================================================
Fixed Charges:
Interest on indebtedness
(expense and capitalized) $ 283,962 $ 184,733 $ 245,220 $ 260,249 $ 246,895 $ 176,031 $ 167,601
Dividends on preferred
securities 14,388 9,905 13,149 13,167 13,100 10,095 744
Interest portion of rental
expense 1,553 1,553 2,070 2,010 1,890 1,170 1,300
----------------------------------------------------------------------------------------
$ 299,903 $ 196,191 $ 260,439 $ 275,426 $ 261,885 $ 187,296 $ 169,645
========================================================================================
Ratio of Earnings to Fixed
Charges 1.5 1.7 1.7 1.6 1.4 1.3 1.2
========================================================================================
</TABLE>
<PAGE>
LIST OF SUBSIDIARIES
- ----------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- ----------------------------------------------------------------------------
Adelaide Ventures Limited Cayman Islands
- ----------------------------------------------------------------------------
Aguila Energy Company California
- ----------------------------------------------------------------------------
Anacapa Energy Company California
- ----------------------------------------------------------------------------
Arrowhead Energy Company California
- ----------------------------------------------------------------------------
Balboa Energy Company California
- ----------------------------------------------------------------------------
Beheer-en Beleggingsmaatschappij Botara B.V. The Netherlands
- ----------------------------------------------------------------------------
Bergen Point Energy Company California
- ----------------------------------------------------------------------------
Blue Ridge Energy Company California
- ----------------------------------------------------------------------------
Bretton Woods Energy Company California
- ----------------------------------------------------------------------------
Camino Energy Company California
- ----------------------------------------------------------------------------
Capistrano Cogeneration Company California
- ----------------------------------------------------------------------------
Centerport Energy Company California
- ----------------------------------------------------------------------------
Chesapeake Bay Energy Company California
- ----------------------------------------------------------------------------
Chester Energy Company California
- ----------------------------------------------------------------------------
Chestnut Ridge Energy Co California
- ----------------------------------------------------------------------------
Chickahominy River Energy Corp. Virginia
- ----------------------------------------------------------------------------
Clayville Energy Company California
- ----------------------------------------------------------------------------
Colonial Energy Company California
- ----------------------------------------------------------------------------
Collins Generation I, LLC Delaware
- ----------------------------------------------------------------------------
Collins Generation II, LLC Delaware
- ----------------------------------------------------------------------------
Collins Generation III, LLC Delaware
- ----------------------------------------------------------------------------
Collins Generation VI, LLC Delaware
- ----------------------------------------------------------------------------
Collins Holdings EME, LLC Delaware
- ----------------------------------------------------------------------------
Coronado Energy Company California
- ----------------------------------------------------------------------------
Delaware Energy Conservers, Inc. Delaware
- ----------------------------------------------------------------------------
Del Mar Energy Company California
- ----------------------------------------------------------------------------
Desert Sunrise Energy Company Nevada
- ----------------------------------------------------------------------------
Devereaux Energy Company California
- ----------------------------------------------------------------------------
Eastern Sierra Energy Company California
- ----------------------------------------------------------------------------
East Maine Energy Company California
- ----------------------------------------------------------------------------
EcoElectrica Holdings, Ltd. Cayman Islands
- ----------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- -------------------------------------------------------------------------------
EcoElectrica Ltd. Cayman Islands
- -------------------------------------------------------------------------------
Edison Alabama Generating Company California
- -------------------------------------------------------------------------------
Edison First Power Holdings I California
- -------------------------------------------------------------------------------
Edison Mission Ausone Pty. Ltd. Australia
- -------------------------------------------------------------------------------
Edison Mission De Laide Pty Ltd. Australia
- -------------------------------------------------------------------------------
Edison Mission Energy Asia Pte. Ltd. Singapore
- -------------------------------------------------------------------------------
Edison Mission Australia Limited Australia
- -------------------------------------------------------------------------------
Edison Mission Energy Fuel California
- -------------------------------------------------------------------------------
Edison Mission Energy Fuel Services, Inc. California
- -------------------------------------------------------------------------------
Edison Mission Energy Funding Corp. Delaware
- -------------------------------------------------------------------------------
Edison Mission Energy Global Management, Delaware
Inc.
- -------------------------------------------------------------------------------
Edison Mission Energy Holdings Pty. Ltd. Australia
- -------------------------------------------------------------------------------
Edison Mission Energy Interface Ltd. British Columbia
- -------------------------------------------------------------------------------
Edison Mission Energy International B.V. The Netherlands
- -------------------------------------------------------------------------------
Edison Mission Energy Oil & Gas California
- -------------------------------------------------------------------------------
Edison Mission Energy Petroleum California
- -------------------------------------------------------------------------------
Edison Mission Energy Services B.V. The Netherlands
- -------------------------------------------------------------------------------
Edison Mission Energy Taupo Limited New Zealand
- -------------------------------------------------------------------------------
Edison Mission Finance Co. California
- -------------------------------------------------------------------------------
Edison Mission Financial Marketing & California
Trading Co.
- -------------------------------------------------------------------------------
Edison Mission Fuel Resources, Inc. California
- -------------------------------------------------------------------------------
Edison Mission Fuel Transportation, Inc. California
- -------------------------------------------------------------------------------
Edison Mission Holdings Co. California
- -------------------------------------------------------------------------------
Edison Mission Marketing & Trading, Inc. California
- -------------------------------------------------------------------------------
Edison Mission Midwest Holdings Co. Delaware
- -------------------------------------------------------------------------------
Edison Mission Operation & Maintenance, Inc. California
- -------------------------------------------------------------------------------
Edison Mission Operation & Maintenance The Netherlands
Services B.V.
- -------------------------------------------------------------------------------
Edison Mission Overseas Co. Delaware
- -------------------------------------------------------------------------------
Edison Mission Overseas Ltd. United Kingdom
- -------------------------------------------------------------------------------
Edison Mission O&M Thailand
- -------------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- -----------------------------------------------------------------------------
Edison Mission Project Co. Delaware
- -----------------------------------------------------------------------------
Edison Mission Utilities Pty Ltd. Australia
- -----------------------------------------------------------------------------
Edison Mission Vendesi Pty Ltd. Australia
- -----------------------------------------------------------------------------
El Dorado Energy Company California
- -----------------------------------------------------------------------------
EME Adelaide Energy Ltd. United Kingdom
- -----------------------------------------------------------------------------
EME Caliraya B.V. The Netherlands
- -----------------------------------------------------------------------------
EME del Caribe Cayman Islands
- -----------------------------------------------------------------------------
EME del Caribe Holding GmbH Austria
- -----------------------------------------------------------------------------
EME Generation Holdings Limited United Kingdom
- -----------------------------------------------------------------------------
EME Homer City Generation L.P. Pennsylvania
- -----------------------------------------------------------------------------
EME Kalayaan B.V. The Netherlands
- -----------------------------------------------------------------------------
EME Monet Ltd. United Kingdom
- -----------------------------------------------------------------------------
EME Royale New Zealand
- -----------------------------------------------------------------------------
EME Tri Gen B.V. The Netherlands
- -----------------------------------------------------------------------------
EME UK International LLC Delaware
- -----------------------------------------------------------------------------
EME Victoria B.V. The Netherlands
- -----------------------------------------------------------------------------
EME Victoria Generation Ltd. United Kingdom
- -----------------------------------------------------------------------------
EMP, Inc. Oregon
- -----------------------------------------------------------------------------
Energy Capital Partnership Australia
- -----------------------------------------------------------------------------
First Hydro Finance plc United Kingdom
- -----------------------------------------------------------------------------
First Hydro Holdings Company United Kingdom
- -----------------------------------------------------------------------------
Four Counties Gas Company California
- -----------------------------------------------------------------------------
Gippsland Power Pty. Ltd. Australia
- -----------------------------------------------------------------------------
Global Generation B.V. The Netherlands
- -----------------------------------------------------------------------------
Global Power Investors, Inc. California
- -----------------------------------------------------------------------------
Hanover Energy Company California
- -----------------------------------------------------------------------------
Holtsville Energy Company California
- -----------------------------------------------------------------------------
Homer City Property Holdings, Inc. California
- -----------------------------------------------------------------------------
Hydro Energy B.V. The Netherlands
- -----------------------------------------------------------------------------
Iberica de Energias Spain
- -----------------------------------------------------------------------------
Iberian Hy-Power Amsterdam B.V. The Netherlands
- -----------------------------------------------------------------------------
Indian Bay Energy Company California
- -----------------------------------------------------------------------------
Jefferson Energy Company California
- -----------------------------------------------------------------------------
Kings Canyon Energy Company California
- -----------------------------------------------------------------------------
<PAGE>
- -----------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- -----------------------------------------------------------------------------
Kingspark Energy Company California
- -----------------------------------------------------------------------------
Lakeview Energy Company California
- -----------------------------------------------------------------------------
Laguna Energy Company California
- -----------------------------------------------------------------------------
LaJolla Energy Company California
- -----------------------------------------------------------------------------
Latrobe Power Partnership Australia
- -----------------------------------------------------------------------------
Latrobe Power Pty. Ltd. Australia
- -----------------------------------------------------------------------------
Lehigh River Energy Company California
- -----------------------------------------------------------------------------
Longview Cogeneration Company California
- -----------------------------------------------------------------------------
Loy Yang Holdings Pty Ltd Australia
- -----------------------------------------------------------------------------
Loyvic Pty. Ltd. Australia
- -----------------------------------------------------------------------------
Madera Energy Company California
- -----------------------------------------------------------------------------
Madison Energy Company California
- -----------------------------------------------------------------------------
Majestic Energy Limited United Kingdom
- -----------------------------------------------------------------------------
Maplekey Holdings Ltd. United Kingdom
- -----------------------------------------------------------------------------
Maplekey UK Finance Limited United Kingdom
- -----------------------------------------------------------------------------
Maplekey UK Limited United Kingdom
- -----------------------------------------------------------------------------
MEC Esenyurt B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC IES B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC India B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Indo Coal B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Indonesia B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC International B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC International Holdings B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Laguna B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Perth B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Priolo B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC San Pascual B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Sidi Krir B.V) The Netherlands
- -----------------------------------------------------------------------------
MEC Sumatra B.V. The Netherlands
- -----------------------------------------------------------------------------
MEC Wales B.V. The Netherlands
- -----------------------------------------------------------------------------
Midwest Generation EME, LLC Delaware
- -----------------------------------------------------------------------------
Mission/Eagle Energy Company California
- -----------------------------------------------------------------------------
Mission Energy Company (UK) Limited United Kingdom
- -----------------------------------------------------------------------------
Mission Energy Construction Services, Inc. California
- -----------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- --------------------------------------------------------------------------------
Mission Energy Development Australia Pty Ltd Australia
- --------------------------------------------------------------------------------
Mission Energy Generation, Inc. California
- --------------------------------------------------------------------------------
Mission Energy Holdings, Inc. California
- --------------------------------------------------------------------------------
Mission Energy Holdings International, Inc. California
- --------------------------------------------------------------------------------
Mission Energy Indonesia California
- --------------------------------------------------------------------------------
Mission Energy Italia s.r.l. Italy
- --------------------------------------------------------------------------------
Mission Energy (Kwinana) Pty. Ltd. Australia
- --------------------------------------------------------------------------------
Mission Energy Mexico California
- --------------------------------------------------------------------------------
Mission Energy New York, Inc. California
- --------------------------------------------------------------------------------
Mission Energy Ventures Australia Pty. Ltd. Australia
- --------------------------------------------------------------------------------
Mission Energy Wales Company California
- --------------------------------------------------------------------------------
Mission Energy Westside, Inc. California
- --------------------------------------------------------------------------------
Mission Hydro Limited Partnership United Kingdom
- --------------------------------------------------------------------------------
Mission Hydro (UK) Limited United Kingdom
- --------------------------------------------------------------------------------
Mission Triple Cycle Systems Company California
- --------------------------------------------------------------------------------
Mission Victoria Partnership Australia
- --------------------------------------------------------------------------------
North Jackson Energy Company California
- --------------------------------------------------------------------------------
Northern Sierra Energy Company California
- --------------------------------------------------------------------------------
Ortega Energy Company California
- --------------------------------------------------------------------------------
Panther Timber Company California
- --------------------------------------------------------------------------------
Paradise Energy Company California
- --------------------------------------------------------------------------------
Pleasant Valley Energy Company California
- --------------------------------------------------------------------------------
Pocono Fuels Company California
- --------------------------------------------------------------------------------
Pride Hold Limited United Kingdom
- --------------------------------------------------------------------------------
Prince George Energy Company California
- --------------------------------------------------------------------------------
Quartz Peak Energy Company California
- --------------------------------------------------------------------------------
Rapid Energy Limited United Kingdom
- --------------------------------------------------------------------------------
Rapidan Energy Company California
- --------------------------------------------------------------------------------
Reeves Bay Energy Company California
- --------------------------------------------------------------------------------
Ridgecrest Energy Company California
- --------------------------------------------------------------------------------
Rillington Holdings Limited Gibraltar
- --------------------------------------------------------------------------------
<PAGE>
- ----------------------------------------------------------------------------
ENTITY JURISDICTION OF ORGANIZATION
- ----------------------------------------------------------------------------
Rio Escondido Energy Company California
- ----------------------------------------------------------------------------
Riverport Energy Company California
- ----------------------------------------------------------------------------
San Gabriel Energy Company California
- ----------------------------------------------------------------------------
San Joaquin Energy Company California
- ----------------------------------------------------------------------------
San Juan Energy Company California
- ----------------------------------------------------------------------------
San Pascual Cogeneration Company The Netherlands
International B.V. (P)
- ----------------------------------------------------------------------------
San Pedro Energy Company California
- ----------------------------------------------------------------------------
Santa Ana Energy Company California
- ----------------------------------------------------------------------------
Santa Clara Energy Company California
- ----------------------------------------------------------------------------
Silver Springs Energy Company California
- ----------------------------------------------------------------------------
Silverado Energy Company California
- ----------------------------------------------------------------------------
Sonoma Geothermal Company California
- ----------------------------------------------------------------------------
South Coast Energy Company California
- ----------------------------------------------------------------------------
Southern Sierra Energy Company California
- ----------------------------------------------------------------------------
Southern Sierra Gas Company California
- ----------------------------------------------------------------------------
Southwestern Generation B.V. The Netherlands
- ----------------------------------------------------------------------------
Thorofare Energy Company California
- ----------------------------------------------------------------------------
Traralgon Power Pty. Ltd. Australia
- ----------------------------------------------------------------------------
Viejo Energy Company California
- ----------------------------------------------------------------------------
Vista Energy Company New Jersey
- ----------------------------------------------------------------------------
Western Sierra Energy Company California
- ----------------------------------------------------------------------------
<PAGE>
EXHIBIT 23.1
[LOGO OF ARTHUR ANDERSEN]
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference of our report on the consolidated financial statements of Edison
Mission Energy, dated March 15, 1999 included in Edison Mission Energy's Annual
Report on Form 10-K for the year ended December 31, 1998 and to all references
to our Firm included in or made a part of the prospectus, which is part of this
registration statement.
/s/ Arthur Andersen LLP
Los Angeles, California
February 17, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-4 of Edison Mission Energy of our report dated 30 September
1999 relating to the financial statements of Fiddlers Ferry and Ferrybridge C
Power Stations appearing in the Current Reports on the two Form 8-K/A filings of
Edison Mission Energy dated 19 July 1999. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers
PricewaterhouseCoopers
London
United Kingdom
18 February 2000
<PAGE>
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_________________
Edison Mission Energy
(Exact name of obligor as specified in its charter)
California 95-4031807
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
18101 Von Karman Avenue
Suite 1700
Irvine, California 92612
(Address of principal executive offices) (Zip code)
_________________
7.73% Senior Notes due June 15, 2009
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 19th day of January, 2000.
THE BANK OF NEW YORK
By: /s/ MARYBETH LEWICKI
---------------------------
Name: MARYBETH LEWICKI
Title: VICE PRESIDENT
<PAGE>
________________________________________________________________________________
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........ $ 6,394,412
Interest-bearing balances................................. 3,966,749
Securities:
Held-to-maturity securities............................... 805,227
Available-for-sale securities............................. 4,152,260
Federal funds sold and Securities purchased under 1,449,439
agreements to resell......................................
Loans and lease financing receivables:
Loans and leases, net of unearned
income.................................................. 37,900,739
LESS: Allowance for loan and
lease losses............................................ 572,761
LESS: Allocated transfer risk
reserve................................................. 11,754
Loans and leases, net of unearned income,
allowance, and reserve.................................. 37,316,224
Trading Assets............................................. 1,646,634
Premises and fixed assets (including capitalized leases)... 678,439
Other real estate owned.................................... 11,571
Investments in unconsolidated subsidiaries and associated 183,038
companies.................................................
Customers' liability to this bank on acceptances 349,282
outstanding...............................................
Intangible assets.......................................... 790,558
Other assets............................................... 2,498,658
-----------
Total assets............................................... $60,242,491
===========
LIABILITIES
Deposits:
In domestic offices....................................... $26,030,231
Noninterest-bearing....................................... 11,348,986
Interest-bearing.......................................... 14,681,245
In foreign offices, Edge and Agreement subsidiaries, and 18,530,950
IBFs......................................................
Noninterest-bearing....................................... 156,624
Interest-bearing.......................................... 18,374,326
Federal funds purchased and Securities sold under 2,094,678
agreements to repurchase.................................
Demand notes issued to the U.S.Treasury.................... 232,459
Trading liabilities........................................ 2,081,462
Other borrowed money:
With remaining maturity of one year or less............... 863,201
With remaining maturity of more than one year through 449
three years..............................................
With remaining maturity of more than three years.......... 31,080
Bank's liability on acceptances executed and outstanding... 351,286
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
Subordinated notes and debentures......................... 1,308,000
Other liabilities......................................... 3,055,031
-----------
Total liabilities......................................... 54,578,827
===========
EQUITY CAPITAL
Common stock.............................................. 1,135,284
Surplus................................................... 815,314
Undivided profits and capital reserves.................... 3,759,164
Net unrealized holding gains (losses) on (15,440)
available-for-sale securities............................
Cumulative foreign currency translation adjustments....... (30,658)
-----------
Total equity capital...................................... 5,663,664
-----------
Total liabilities and equity capital..................... $60,242,491
===========
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni Directors
Alan R. Griffith
Gerald L. Hassell
________________________________________________________________________________
<PAGE>
Exhibit 99.1
LETTER OF TRANSMITTAL
EDISON MISSION ENERGY
Offer for all Outstanding
7.73% Senior Notes due June 15, 2009
in Exchange for
7.73% Senior Notes due June 15, 2009
Which Have Been Registered Under
the Securities Act of 1933, as Amended,
Pursuant to the Prospectus, dated , 2000
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON ,
2000, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
Delivery To: The Bank of New York, Exchange Agent
By Hand or Overnight Delivery: By Registered or Certified Mail:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street, 7E
Corporate Trust Services Window New York, NY 10286
Ground Level Attention: Reorganization Section
New York, NY 10286
Attention: Reorganization Section
For Information Call:
(212) 815-6333
By Facsimile Transmission
(for Eligible Institutions Only):
(212) 571-3080
Confirm by Telephone:
(212) 815-6333
Delivery of this instrument to an address other than as set forth above, or
transmission of instructions via facsimile other than as set forth above, will
not constitute a valid delivery.
<PAGE>
The undersigned acknowledges that he or she has received the Prospectus,
dated , 2000 (the "Prospectus"), of Edison Mission Energy, a
California corporation (the "Company"), and this Letter of Transmittal (the
"Letter"), which together constitute the Company's offer (the "Exchange Offer")
to exchange an aggregate principal amount of up to $600,000,000 of the Company's
7.73% Senior Notes due June 15, 2009 (the "Exchange Notes") which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for a like principal amount of the Company's issued and outstanding 7.73% Senior
Notes due June 15, 2009 (the "Original Notes") from the registered holders
thereof (the "Holders").
For each Original Note accepted for exchange, the Holder of such Original
Note will receive an Exchange Note having a principal amount equal to that of
the surrendered Original Note. The Exchange Notes will bear interest from the
most recent date to which interest has been paid on the Original Notes or, if no
interest has been paid on the Original Notes, from June 28, 1999. Accordingly,
registered Holders of Exchange Notes on the relevant record date for the first
interest payment date following the consummation of the Exchange Offer will
receive interest accruing from the most recent date to which interest has been
paid or, if no interest has been paid, from June 28, 1999. Original Notes
accepted for exchange will cease to accrue interest from and after the date of
consummation of the Exchange Offer. Holders of Original Notes whose Original
Notes are accepted for exchange will not receive any payment in respect of
accrued interest on such Original Notes otherwise payable on any interest
payment date the record date for which occurs on or after consummation of the
Exchange Offer.
This Letter is to be completed by a holder of Original Notes either if
certificates are to be forwarded herewith or if a tender of certificates for
Original Notes, if available, is to be made by book-entry transfer to the
account maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer--Book-Entry Transfer" section of the Prospectus and an Agent's
Message is not delivered. Tenders by book-entry transfer may also be made by
delivering an Agent's Message in lieu of this Letter. The term "Agent's
Message" means a message, transmitted by the Book-Entry Transfer Facility to,
and received by, the Exchange Agent and forming a part of a Book-Entry
Confirmation (as defined below), which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the tendering participant,
which acknowledgment states that such participant has received and agrees to be
bound by this Letter and that the Company may enforce this Letter against such
participant. Holders of Original Notes whose certificates are not immediately
available, or who are unable to deliver their certificates or confirmation of
the book-entry tender of their Original Notes into the Exchange Agent's account
at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other
documents required by this Letter to the Exchange Agent on or prior to the
Expiration Date, must tender their Original Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1.
Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Original Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Original Notes should be listed on a separate signed schedule affixed hereto.
2
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES 1 2 3
- -----------------------------------------------------------------------------------------------------
Aggregate
Principal Principal
Name(s) and Address(es) of Registered Holder(s) Certificate Amount of Amount
(Please fill in, if blank) Number(s)* Original Note(s) Tendered**
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL
- -----------------------------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the
Original Notes represented by the Original Notes indicated in column 2. See Instruction 2.
Original Notes tendered hereby must be in denominations of principal amount of $1,000 and any
integral multiple thereof. See Instruction 1.
- -----------------------------------------------------------------------------------------------------
</TABLE>
[_] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _____________________________________________
Account Number_____________________ Transaction Code Number________________
By crediting the Original Notes to the Exchange Agent's account at the
Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP") and by
complying with applicable ATOP procedures with respect to the Exchange Offer,
including transmitting to the Exchange Agent a computer-generated Agent's
Message in which the holder of the Original Notes acknowledges and agrees to be
bound by the terms of, and makes the representations and warranties contained
in, this Letter, the participant in the Book-Entry Transfer Facility confirms on
behalf of itself and the beneficial owners of such Original Notes all provisions
of this Letter (including all representations and warranties) applicable to it
and such beneficial owner as fully as if it had completed the information
required herein and executed and transmitted this Letter to the Exchange Agent.
[_] CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ___________________________________________
Window Ticket Number (if any) _____________________________________________
Date of Execution of Notice of Guaranteed Delivery ________________________
Name of Institution Which Guaranteed Delivery _____________________________
If Delivered by Book-Entry Transfer, Complete the Following:
Account Number_______________ Transaction Code Number_____________________
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
3
<PAGE>
Name:______________________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Original Notes that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that such Original Notes were acquired by such broker-dealer as a
result of market-making or other trading activities and, that it must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale transaction, including the delivery of a
prospectus that contains information with respect to any selling holder required
by the Securities Act in connection with any resale of the Exchange Notes.;
however, by so acknowledging and by delivering such a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. If the undersigned is a broker-dealer that will
receive Exchange Notes, it represents that the Original Notes to be exchanged
for the Exchange Notes were acquired as a result of market-making activities or
other trading activities.
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Original Notes indicated above. Subject to, and effective upon, the acceptance
for exchange of the Original Notes tendered hereby, the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to such Original Notes as are being tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the undersigned's true and lawful agent and attorney-in-fact with
respect to such tendered Original Notes, with full power of substitution, among
other things, to cause the Original Notes to be assigned, transferred and
exchanged. The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Original
Notes, and to acquire Exchange Notes issuable upon the exchange of such tendered
Original Notes, and that, when the same are accepted for exchange, the Company
will acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim when
the same are accepted by the Company. The undersigned hereby further represents
that any Exchange Notes acquired in exchange for Original Notes tendered hereby
will have been acquired in the ordinary course of business of the person
receiving such Exchange Notes, whether or not such person is the undersigned,
that neither the Holder of such Original Notes nor any such other person is
participating in, intends to participate in or has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes and that neither the Holder of such Original Notes nor any such
other person is an "affiliate," as defined in Rule 405 under the Securities Act,
of the Company.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the Exchange Notes issued pursuant to the Exchange Offer in
exchange for the Original Notes may be offered for resale, resold and otherwise
transferred by Holders thereof (other than any such Holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such Holders' business and such Holders have no
arrangement with any person to participate in the distribution of such Exchange
Notes. However, the SEC has not considered the Exchange Offer in the context of
a no-action letter and there can be no assurance that the staff of the SEC would
make a similar determination with respect to the Exchange Offer as in other
circumstances. If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Notes and has no arrangement or understanding to
participate in a distribution of Exchange Notes. If any Holder is an affiliate
of the Company, is engaged in or intends to engage in or has any arrangement or
understanding with respect to the distribution of the Exchange Notes to be
acquired pursuant to the Exchange Offer, such Holder (i) could not rely on the
applicable interpretations of the staff of the SEC and (ii) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Original
Notes, it represents that the Original Notes to be exchanged for the Exchange
Notes were acquired by it as a result of market-making activities or other
trading activities and acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes; however, by so acknowledging and by delivering a prospectus
meeting the requirements of the Securities Act, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Original Notes tendered hereby. All
authority conferred or agreed to be conferred in this Letter and every
obligation of the undersigned hereunder shall be binding upon the successors,
assigns, heirs, executors, administrators, trustees in bankruptcy and legal
representatives of the undersigned and shall not be affected by, and shall
survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in "The Exchange
Offer--Withdrawal Rights" section of the Prospectus.
5
<PAGE>
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Original Notes for any Original Notes not
exchanged) in the name of the undersigned or, in the case of a book-entry
delivery of Original Notes, please credit the account indicated above maintained
at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated
under the box entitled "Special Delivery Instructions" below, please send the
Exchange Notes (and, if applicable, substitute certificates representing
Original Notes for any Original Notes not exchanged) to the undersigned at the
address shown above in the box entitled "Description of Original Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL
NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE
ORIGINAL NOTES AS SET FORTH IN SUCH BOX ABOVE.
<TABLE>
<CAPTION>
- ------------------------------------------------------- -------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4) (See Instructions 3 and 4)
- ------------------------------------------------------- -------------------------------------------------
<S> <C>
To be completed ONLY if certificates for Origi- To be completed ONLY if certificates for
nal Notes not exchanged and/or Exchange Notes are Original Notes not exchanged and/or Exchange
to be issued in the name of and sent to someone Notes are to be sent to someone other than the
other than the person or persons whose signature(s) person or persons whose signature(s) appear(s)
appear(s) on this Letter above, or if Original Notes on this Letter above or to such person or
delivered by book-entry transfer which are not ac- persons at an address other than shown in the
cepted for exchange are to be returned by credit to box entitled "Description of Original Notes" on
an account maintained at the Book-Entry Transfer this Letter above.
Facility other than the account indicated above.
Issue Exchange Notes and/or Original Notes to: Mail Exchange Notes and/or Original Notes to:
Name(s)______________________________________________ Name(s)__________________________________________
(Please Type or Print) (Please Type or Print)
_____________________________________________________ _________________________________________________
(Please Type or Print) (Please Type or Print)
Address______________________________________________ Address__________________________________________
_____________________________________________________ _________________________________________________
(Zip Code) (Zip Code)
(Complete Substitute Form W-9)
[_] Credit unexchanged Original Notes delivered
by book-entry transfer to the Book-Entry
Transfer Facility account set forth below.
_____________________________________________________
Book-Entry Transfer Facility
Account Number, if applicable)
- ------------------------------------------------------- -------------------------------------------------
</TABLE>
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT'S MESSAGE IN
LIEU THEREOF (TOGETHER WITH THE CERTIFICATES FOR ORIGINAL NOTES OR A BOOK-ENTRY
CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED
DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE.
6
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete Accompanying Substitute Form W-9 Below)
X____________________________________ _____________________________, 2000
X____________________________________ _____________________________, 2000
(Signature(s) of Owner) (Date)
Area Code and Telephone Number____________________________________________
If a holder is tendering any Original Notes, this Letter must be signed by
the registered holder(s) as the name(s) appear(s) on the certificate(s) for the
Original Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.
Name(s):__________________________________________________________________
(Please Type or Print)
Capacity:_________________________________________________________________
Address:__________________________________________________________________
__________________________________________________________________________
(Including Zip Code)
SIGNATURE GUARANTEE
(If required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution:__________________________________________________
(Authorized Signature)
__________________________________________________________________________
(Title)
__________________________________________________________________________
(Name and Firm)
Dated:_____________________________________________________________, 2000
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer for the
7.73% Senior Notes Due June 15, 2009 of Edison Mission Energy
in Exchange for the
7.73% Senior Notes Due June 15, 2009 of Edison Mission Energy
Which Have Been Registered Under the
Securities Act of 1933, as Amended
1. Delivery of this Letter and Notes; Guaranteed Delivery Procedures.
This Letter is to be completed by holders of Original Notes either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus and an Agent's Message is
not delivered. Tenders by book-entry transfer may also be made by delivering an
Agent's Message in lieu of this Letter. The term "Agent's Message" means a
message, transmitted by the Book-Entry Transfer Facility to and received by the
Exchange Agent and forming a part of a Book-Entry Confirmation, which states
that the Book-Entry Transfer Facility has received an express acknowledgment
from the tendering participant, which acknowledgment states that such
participant has received and agrees to be bound by the Letter of Transmittal and
that the Company may enforce the Letter of Transmittal against such participant.
Certificates for all physically tendered Original Notes, or Book-Entry
Confirmation, as the case may be, as well as a properly completed and duly
executed Letter (or manually signed facsimile hereof or Agent's Message in lieu
thereof) and any other documents required by this Letter, must be received by
the Exchange Agent at the address set forth herein on or prior to the Expiration
Date, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Original Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof
Holders whose certificates for Original Notes are not immediately available
or who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Original
Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to
such procedures, (i) such tender must be made through an Eligible Institution,
(ii) prior to 5:00 P.M., New York City time, on the Expiration Date, the (as
defined below) Exchange Agent must receive from such Eligible Institution a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by facsimile transmission,
mail or hand delivery), setting forth the name and address of the holder of
Original Notes and the amount of Original Notes tendered, stating that the
tender is being made thereby and guaranteeing that within three New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Original
Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case
may be, together with a properly completed and duly executed Letter (or
facsimile thereof or Agent's Message in lieu thereof) with any required
signature guarantees and any other documents required by this Letter will be
deposited by the Eligible Institution with the Exchange Agent, and (iii) the
certificates for all physically tendered Original Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, together with a
properly completed and duly executed Letter (or facsimile thereof or Agent's
Message in lieu thereof) with any required signature guarantees and all other
documents required by this Letter, are received by the Exchange Agent within
three NYSE trading days after the date of execution of the Notice of Guaranteed
Delivery.
The method of delivery of this Letter, the Original Notes and all other
required documents is at the election and risk of the tendering holders, but the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. If Original Notes are sent by mail, it is suggested that the
mailing be registered mail, properly insured, with return receipt requested,
made sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date.
8
<PAGE>
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders (not applicable to noteholders who tender by book-entry
transfer).
If less than all of the Original Notes evidenced by a submitted certificate
are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Original Notes to be tendered in the box above entitled
"Description of Original Notes--Principal Amount Tendered. " A reissued
certificate representing the balance of nontendered Original Notes will be sent
to such tendering holder, unless otherwise provided in the appropriate box on
this Letter, promptly after the Expiration Date. All of the Original Notes
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated.
3. Signatures on this Letter; Bond Powers and Endorsements; Guarantee of
Signatures.
If this Letter is signed by the registered holder of the Original Notes
tendered hereby, the signature must correspond exactly with the name as written
on the face of the certificates without any change whatsoever.
If any tendered Original Notes are owned of record by two or more joint
owners, all of such owners must sign this Letter.
If any tendered Original Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered holder or holders of the
Original Notes specified herein and tendered hereby, no endorsements of
certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Original Notes are to be reissued, to
a person other than the registered holder, then endorsements of any certificates
transmitted hereby or separate bond powers are required. Signatures on such
certificate(s) must be guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Original Notes or signatures on bond
powers required by this Instruction 3 must be guaranteed by a firm that is a
financial institution (including most banks, savings and loan associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program (each an "Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Original Notes are tendered: (i) by a registered
holder of Original Notes (which term, for purposes of the Exchange Offer,
includes any participant in the Book-Entry Transfer Facility system whose name
appears on a security position listing as the holder of such Original Notes) who
has not completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on this Letter, or (ii) for the account of an Eligible
Institution.
4. Special Issuance and Delivery Instructions.
9
<PAGE>
Tendering holders of Original Notes should indicate in the applicable box
the name and address to which Exchange Notes issued pursuant to the Exchange
Offer and or substitute certificates evidencing Original Notes not exchanged are
to be issued or sent, if different from the name or address of the person
signing this Letter. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Noteholders tendering Original Notes by book-entry transfer may
request that Original Notes not exchanged be credited to such account maintained
at the Book-Entry Transfer Facility as such noteholder may designate hereon. If
no such instructions are given, such Original Notes not exchanged will be
returned to the name and address of the person signing this Letter.
5. Taxpayer Identification Number.
Federal income tax law generally requires that a tendering holder whose
Original Notes are accepted for exchange must provide the Company (as payor)
with such holder's correct Taxpayer Identification Number ("TIN") on Substitute
Form W-9 below, which in the case of a tendering holder who is an individual, is
his or her social security number. If the Company is not provided with the
current TIN or an adequate basis for an exemption from backup withholding, such
tendering holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, the Exchange Agent may be required to withhold 31% of the
amount of any reportable payments made after the exchange to such tendering
holder of Exchange Notes. If withholding results in an overpayment of taxes, a
refund may be obtained.
Exempt holders of Original Notes (including, among others, all corporations
and certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of
Taxpayer Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions.
To prevent backup withholding, each tendering holder of Original Notes must
provide its correct TIN by completing the Substitute Form W-9 set forth below,
certifying, under penalties of perjury, that the TIN provided is correct (or
that such holder is awaiting a TIN) and that (i) the holder is exempt from
backup withholding, or (ii) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
a failure to report all interest or dividends or (iii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to backup
withholding. If the tendering holder of Original Notes is a nonresident alien
or foreign entity not subject to backup withholding, such holder must give the
Exchange Agent a completed Form W-8, Certificate of Foreign Status. These forms
may be obtained from the Exchange Agent. If the Original Notes are in more than
one name or are not in the name of the actual owner, such holder should consult
the W-9 Guidelines for information on which TIN to report. If such holder does
not have a TIN, such holder should consult the W-9 Guidelines for instructions
on applying for a TIN, check the box in Part 2 of the Substitute Form W-9 and
write "applied for" in lieu of its TIN. Note: Checking this box and writing
"applied for" on the form means that such holder has already applied for a TIN
or that such holder intends to apply for one in the near future. If the box in
Part 2 of the Substitute Form W-9 is checked, the Exchange Agent will retain 31%
of reportable payments made to a holder during the sixty (60) day period
following the date of the Substitute Form W-9. If the holder furnishes the
Exchange Agent with his or her TIN within sixty (60) days of the Substitute Form
W-9, the Exchange Agent will remit such amounts retained during such sixty (60)
day period to such holder and no further amounts will be retained or withheld
from payments made to the holder thereafter. If, however, such holder does not
provide its TIN to the Exchange Agent within such sixty (60) day period, the
Exchange Agent will remit such previously withheld amounts to the Internal
Revenue Service as backup withholding and will withhold 31% of all reportable
payments to the holder thereafter until such holder furnishes its TIN to the
Exchange Agent.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Original Notes to it or its order pursuant to the Exchange Offer. If,
however, Exchange Notes and/or substitute Original Notes not exchanged are to be
delivered to, or are to be registered or issued in the name of, any person other
than the registered holder of the Original Notes tendered hereby, or if tendered
Original Notes are registered in the name of any person other than the
10
<PAGE>
person signing this Letter, or if a transfer tax is imposed for any reason other
than the transfer of Original Notes to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Original Notes specified in this
letter.
7. Waiver of Conditions.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Original Notes, by execution of this Letter,
shall waive any right to receive notice of the acceptance of their Original
Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Original Notes nor shall any of them incur any liability for failure to give any
such notice.
9. Mutilated, Lost, Stolen or Destroyed Original Notes.
Any holder whose Original Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
10. Withdrawal Rights.
Tenders of Original Notes may be withdrawn at any time prior to 5:00 P.M.,
New York City time, on the Expiration Date.
For a withdrawal of a tender of Original Notes to be effective, a written
notice of withdrawal must be received by the Exchange Agent at the address set
forth above prior to 5:00 P.M., New York City time, on the Expiration Date. Any
such notice of withdrawal must (i) specify the name of the person having
tendered the Original Notes to be withdrawn (the "Depositor"), (ii) identify the
Original Notes to be withdrawn (including certificate number or numbers and the
principal amount of such Original Notes), (iii) contain a statement that such
holder is withdrawing his election to have such Original Notes exchanged, (iv)
be signed by the holder in the same manner as the original signature on the
Letter by which such Original Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer to have the
Trustee with respect to the Original Notes register the transfer of such
Original Notes in the name of the person withdrawing the tender and (v) specify
the name in which such Original Notes are registered, if different from that of
the Depositor. If Original Notes have been tendered pursuant to the procedure
for book-entry transfer set forth in "The Exchange Offer--Book-Entry Transfer"
section of the Prospectus, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Original Notes and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility (including
time of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Original Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer and no Exchange Notes will be issued with respect
thereto unless the Original Notes so withdrawn are validly retendered. Any
Original Notes that have been tendered for exchange but which are not exchanged
for any reason will be returned to the Holder thereof without cost
11
<PAGE>
to such Holder (or, in the case of Original Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus, such Original Notes will
be credited to an account maintained with the Book-Entry Transfer Facility for
the Original Notes) as soon as practicable after withdrawal, rejection of tender
or termination of the Exchange Offer. Properly withdrawn Original Notes may be
retendered by following the procedures described above at any time on or prior
to 5:00 P.M., New York City time, on the Expiration Date.
11. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, and requests for Notices of
Guaranteed Delivery and other related documents may be directed to the Exchange
Agent, at the address and telephone number indicated above.
12
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: THE BANK OF NEW YORK
<TABLE>
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND TIN:__________________________
CERTIFY BY SIGNING AND DAT- Social Security Number or
ING BELOW. Employer Identification Number
SUBSTITUTE
------------------------------------------------------------------
Form W-9 Part 2--TIN Applied For [_]
------------------------------------------------------------------
Department of the Treasury CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
Internal Revenue Service
(1) the number shown on this form is my correct TIN (or I am
waiting for a number to be issued to me),
Payor's Request for (2) I am not subject to backup withholding either because:
Taxpayer (a) I am exempt from backup withholding, or (b) I have not
Identification Number been notified by the Internal Revenue Service (the "IRS")
("TIN") and that I am subject to backup withholding as a result of a
Certification failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup
withholding and
(3) any other information provided on this form is true and
correct.
SIGNATURE_______________________________ DATE___________________
- ---------------------------------------------------------------------------------------------------------
You must cross out item(2) of the above certification if you have been notified by the IRS that you are
subject to backup with holding because of underreporting of interest or dividends on your tax return
and you have not been notified by the IRS that you are no longer subject to backup withholding.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
________________________________________________________________________________
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of the exchange, 31
percent of all reportable payments made to me thereafter will be withheld until
I provide a number.
Signature __________________________________ Date ________________
________________________________________________________________________________
13
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
EDISON MISSION ENERGY
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Edison Mission Energy (the "Company") made pursuant to the
Prospectus, dated , 2000 (the "Prospectus"), if certificates for the
outstanding 7.73% Senior Notes due June 15, 2009 of the Company (the "Original
Notes") are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach The Bank of New York, as exchange agent (the
"Exchange Agent") prior to 5:00 P.M., New York City time, on the Expiration Date
of the Exchange Offer. Such form may be delivered or transmitted by facsimile
transmission, mail or hand delivery to the Exchange Agent as set forth below.
In addition, in order to utilize the guaranteed delivery procedure to tender
Original Notes pursuant to the Exchange Offer, a completed, signed and dated
Letter of Transmittal (or facsimile thereof or Agent's Message in lieu thereof)
must also be received by the Exchange Agent prior to 5:00 P.M., New York City
time, on the Expiration Date. Capitalized terms not defined herein are defined
in the Prospectus.
Delivery to: The Bank of New York, Exchange Agent
By Registered or Certified Mail: By Hand or Overnight Delivery:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Section Ground Level
New York, New York 10286
Attention: Reorganization Section
For Information Call:
(212) 815-6333
By Facsimile Transmission
(For Eligible Institutions Only):
(212) 571-3080
Confirm by Telephone:
(212) 815-6333
Delivery of this instrument to an address other than as set forth above, or
transmission of instructions via facsimile other than as set forth above, will
not constitute a valid delivery.
<PAGE>
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Original Notes set forth below pursuant to the
guaranteed delivery procedure described in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Original Notes Tendered: *
$_______________________________________
Certificate Nos. (if available): If Original Notes will be delivered
bybook-entry transfer to The
Depository Trust Company, provide
account number.
________________________________________
Total Principal Amount Represented by
Original Notes Certificate(s):
$_______________________________________ Account Number_______________________
________________________________________________________________________________
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
________________________________________________________________________________
PLEASE SIGN HERE
X ______________________________________________ ________________________
X ______________________________________________ ________________________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: _________________________________________
Must be signed by the holder(s) of Original Notes as their name(s)
appear(s) on certificates for Original Notes or on a security position listing,
or by person(s) authorized to become registered holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person must
set forth his or her full title below.
Please print name(s) and address(es)
Name(s): ___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
Capacity: ___________________________________________________________________
Address(es): ___________________________________________________________________
__________________
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a financial institution (including most banks, savings and
loan associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchanges Medallion Program, hereby guarantees
that the certificates representing the principal amount of Original Notes
tendered hereby in proper form for transfer, or timely confirmation of the book-
entry transfer of such Original Notes into the Exchange Agent's account at The
Depository Trust Company pursuant to the procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus, together with
any required signature guarantee and any other documents required by the Letter
of Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three New York Stock Exchange trading days after the
Expiration Date.
______________________________________ ________________________________________
Name of Firm Authorized Signature
______________________________________ ________________________________________
Address Title
______________________________________ Name: __________________________________
Zip Code (Please Type of Print)
Area Code and Tel. No.________________ Dated: _________________________________
NOTE: DO NOT SEND CERTIFICATES FOR ORIGINAL NOTES WITH THIS FORM. CERTIFICATES
FOR ORIGINAL NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY
EXECUTED LETTER OF TRANSMITTAL.
<PAGE>
Exhibit 99.3
EDISON MISSION ENERGY
OFFER FOR ALL OUTSTANDING
7.73% SENIOR NOTES DUE JUNE 15, 2009
IN EXCHANGE FOR
7.73% SENIOR NOTES DUE JUNE 15, 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
To Our Clients:
Enclosed for your consideration is a Prospectus, dated , 2000 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Edison Mission
Energy (the "Company") to exchange its 7.73% Senior Notes due June 15, 2009,
which have been registered under the Securities Act of 1933, as amended (the
"Exchange Notes"), for its outstanding 7.73% Senior Notes due June 15, 2009 (the
"Original Notes"), upon the terms and subject to the conditions described in the
Prospectus and the Letter of Transmittal. The Exchange Offer is being made in
order to satisfy certain obligations of the Company contained in the
Registration Rights Agreement dated June 23, 1999, by and among the Company and
the initial purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the
Original Notes held by us for your account but not registered in your name. A
tender of such Original Notes may only be made by us as the holder of record and
pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Original Notes held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Original Notes on your behalf in accordance
with the provisions of the Exchange Offer. The Exchange Offer will expire at
5:00 P.M., New York City time, on , 2000, unless extended by the
Company. Any Original Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Original Notes.
2. The Exchange Offer is subject to certain conditions set forth in
the Prospectus in the section captioned "The Exchange Offer--Conditions to
the Exchange Offer."
3. Any transfer taxes incident to the transfer of Original Notes from
the holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 P.M., New York City time, on
, 2000, unless extended by the Company.
<PAGE>
If you wish to have us tender your Original Notes, please so instruct
us by completing, executing and returning to us the instruction form on the back
of this letter. The Letter of Transmittal is furnished to you for information
only and may not be used directly by you to tender Original Notes.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Edison
Mission Energy with respect to its Original Notes.
This will instruct you to tender the Original Notes held by you for the
account of the undersigned, upon and subject to the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal.
The undersigned expressly agrees to be bound by the enclosed Letter of
Transmittal and that such Letter of Transmittal may be enforced against the
undersigned.
Please tender the Original Notes held by you for my account as indicated
below:
7.73% Senior Notes due June 15, 2009 $________________ (Aggregate
Principal Amount of Original Notes)
[_] Please do not tender any Original Notes held by you for my
account.
Dated: , 2000
Signature(s): __________________________________________________________________
Print Name(s) here: ____________________________________________________________
(Print Address(es)): ___________________________________________________________
(Area Code and Telephone Number(s)): ___________________________________________
(Tax Identification or Social Security Number(s)): _____________________________
None of the Original Notes held by us for your account will be tendered
unless we receive written instructions from you to do so. Unless a specific
contrary instruction is given in the space provided, your signature(s) hereon
shall constitute an instruction to us to tender all the Original Notes held by
us for your account.
3
<PAGE>
Exhibit 99.4
EDISON MISSION ENERGY
OFFER FOR ALL OUTSTANDING
7.73% SENIOR NOTES DUE JUNE 15, 2009
IN EXCHANGE FOR
7.73% SENIOR NOTES DUE JUNE 15, 2009,
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
To: BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Edison Mission Energy (the "Company") is offering, upon and subject to the
terms and conditions set forth in the Prospectus, dated , 2000 (the
"Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), to exchange (the "Exchange Offer") its 7.73% Senior Notes due
June 15, 2009, which have been registered under the Securities Act of 1933, as
amended, for its outstanding 7.73% Senior Notes due June 15, 2009 (the "Original
Notes"). The Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement dated
June 23, 1999, by and among the Company and the initial purchasers referred to
therein.
We are requesting that you contact your clients for whom you hold Original
Notes regarding the Exchange Offer. For your information and for forwarding to
your clients for whom you hold Original Notes registered in your name or in the
name of your nominee, or who hold Original Notes registered in their own names,
we are enclosing the following documents:
1. Prospectus dated , 2000;
2. The Letter of Transmittal for your use and for the information of
your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer if certificates for Original Notes are not immediately available or
time will not permit all required documents to reach the Exchange Agent
prior to the Expiration Date (as defined below) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Original Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The Bank of New York, the Exchange
Agent for the Exchange Offer.
Your prompt action is requested. The Exchange Offer will expire at 5:00
p.m., New York City time, on , 2000, unless extended by the Company
(the "Expiration Date"). Original notes tendered pursuant to the Exchange Offer
may be withdrawn at any time before the Expiration Date.
<PAGE>
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof), with any required signature guarantees and any other required
documents, should be sent to the Exchange Agent and certificates representing
the Original Notes should be delivered to the Exchange Agent, all in accordance
with the instructions set forth in the Letter of Transmittal and the Prospectus.
If a registered holder of Original Notes desires to tender, but such
Original Notes are not immediately available, or time will not permit such
holder's Original Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Original Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Original Notes pursuant to the Exchange Offer,
except as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to The Bank
of New York, the Exchange Agent for the Exchange Offer, at its address and
telephone number set forth on the front of the Letter of Transmittal.
Very truly yours,
EDISON MISSION ENERGY
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
