Exhibit 1.1
$600,000,000
EDISON MISSION ENERGY
$600,000,000 9.875% Senior Notes Due April 15, 2011
PURCHASE AGREEMENT
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April 2, 2001
Credit Suisse First Boston Corporation,
Westdeutsche Landesbank Girozentrale (Dusseldorf),
c/o Credit Suisse First Boston
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Edison Mission Energy, a California corporation (the "Company"),
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proposes, subject to the terms and conditions stated herein, to issue and sell
to Credit Suisse First Boston Corporation ("CSFBC") and Westdeutsche Landesbank
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Girozentrale (Dusseldorf), the initial purchasers (the several "Purchasers")
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$600,000,000 principal amount of its 9.875% Senior Notes Due April 15, 2011 (the
"Notes") to be issued under an Indenture to be dated as of April 5, 2001 (the
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"Indenture"), by and between the Company and United States Trust Company of New
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York, as trustee (the "Trustee").
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The Company hereby agrees with the several Purchasers as follows:
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
(a) The Company has prepared a preliminary offering circular dated
March 22, 2001 (as it may be amended or supplemented, the "Preliminary
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Offering Circular") and a final offering circular dated April 2, 2001
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(as it may be amended or supplemented, the "Offering Circular") relating
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to the Notes. For purposes of this Agreement, the Preliminary Offering
Circular and the Offering Circular shall include any documents or portions
thereof incorporated by reference therein as set forth under the caption
"Incorporation of Documents by
Reference" therein. Copies of the Preliminary Offering Circular and the
Offering Circular have been delivered by the Company to the Purchasers. The
Preliminary Offering Circular was on the date thereof accurate in all
material respects and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Offering Circular is as
of its date (and any amendment or supplement thereto will be as of its
date) accurate in all material respects and does not (and, as of the
Closing Date (as defined below), will not) contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Preliminary
Offering Circular or the Offering Circular in reliance upon and in
conformity with written information furnished to the Company by any
Purchaser through CSFBC specifically for inclusion therein, it being
understood and agreed that the only such information is that described as
such in Section 6(b) hereof. Except as disclosed in the
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Offering Circular, on the date of this Agreement, the Company's Annual
Report on Form 10-K most recently filed with the Securities and Exchange
Commission (the "Commission"), and all subsequent reports (collectively,
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the "Exchange Act Reports") which have been filed by the Company with the
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Commission or sent to its shareholders pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), do not include any untrue
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statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such documents, when they were filed
with the Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder.
(b) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
California, is duly qualified to do business as a foreign corporation, and
is a corporation in good standing in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification (except where the failure to so qualify would not have a
material adverse effect on the 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 the Financing Documents, as hereinafter defined, (a
"Material Adverse Effect"). Each subsidiary of the Company has been duly
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organized and is validly existing as a corporation, general partnership,
limited partnership, limited liability company or other entity, as the case
may be, in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business as a foreign corporation,
general partnership, limited partnership, limited liability company or
other entity, as the case may be, and is a corporation, general
partnership, limited partnership, limited liability company or other
entity, as the case may be, in good standing in each jurisdiction in which
its ownership or lease of property or the conduct of its business requires
such qualification, except
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where the failure to so qualify would not have a Material Adverse Effect.
The Company and each subsidiary of the Company have all necessary power and
authority (corporate and other) to own or lease their respective properties
and to conduct the respective businesses in which they are engaged as
described in the Offering Circular. One hundred percent of the outstanding
shares of capital stock of the Company are owned by The Mission Group, a
California corporation. All of the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid
and nonassessable. All of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of each subsidiary
owned by the Company, directly or through subsidiaries, is owned free and
clear from liens, encumbrances and defects except as pledged to lenders in
connection with financings involving the Company's subsidiaries as
permitted under the terms of the Notes as described in the Offering
Circular.
(c) The Company has all power and authority necessary to execute
and deliver this Agreement, the Notes, the Indenture, the Exchange Notes
referred to in the Offering Circular (the "Exchange Notes") and the
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Registration Rights Agreement referred to in the Offering Circular
(the "Registration Rights Agreement" and, together with this Agreement,
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the Notes, the Exchange Notes and the Indenture, the "Financing
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Documents") and to perform its
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obligations hereunder and thereunder. The execution, delivery and
performance by the Company of the Financing Documents and its compliance
with the provisions hereof and thereof will not breach or (except as
contemplated by the Financing Documents) result in the creation or
imposition of any lien, charge or encumbrance upon any material asset of
the Company or any subsidiary thereof (a "Material Asset") pursuant to the
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terms of, or constitute a breach of, or default under, the corporate
charter or by-laws of the Company or similar organizational documents of
any subsidiary thereof or any agreement, indenture or other instrument to
which the Company or any subsidiary thereof is a party or by which the
Company or any subsidiary thereof is bound (in each case which is material
to the Company or any subsidiary thereof) or to which any Material Asset is
subject, or any law, order, rule, regulation, judgment or decree of any
court or governmental agency having jurisdiction over the Company or any
subsidiary thereof or any Material Asset of the Company or any subsidiary
thereof; and, except as completed on or prior to the Closing Date or as
required by applicable state securities laws, no consent, authorization or
order of, or filing or registration by the Company with, any court,
governmental agency or body or third party is required in connection with
the issuance and sale of the Notes by the Company or the execution,
delivery and performance by the Company of the Financing Documents, except
for the order of the Commission declaring the Exchange Offer Registration
Statement or the Shelf Registration Statement (each as defined in the
Registration Rights Agreement) effective.
(d) Neither the Company nor any subsidiary thereof is in violation
of its corporate charter, by-laws or other organizational documents.
Except as
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described in or contemplated by the Offering Circular, none of the Company
or any of its subsidiaries (i) is in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance and observance of any material term,
representation, covenant or condition contained in any material lease,
license, indenture, mortgage, deed of trust, note, bank loan or other
evidence of indebtedness or any other agreement, understanding or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any Material Asset may be
bound or affected, which default would have a Material Adverse Effect, or
(ii) is in violation of any law, ordinance, governmental rule or regulation
or court decree to which it may be subject, which violation would have a
Material Adverse Effect.
(e) Except as described in or contemplated by the Offering
Circular, each of the Company and its subsidiaries (i) has properly
obtained each consent, license, approval, registration, permit,
certification, determination or other authorization (each a "Governmental
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Approval") necessary to the ownership of its property or to the conduct
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of its business as described in the Offering Circular, and (ii) is in
compliance with all terms and conditions of each such Governmental
Approval and has not received any notice of any proceedings relating to
the revocation or modification thereof except (x) in either case where the
failure to do so would not have a Material Adverse Effect and (y) such as
may be required for operating activities which are ordinarily deemed to be
ministerial in nature and which are anticipated to be obtained in the
ordinary course.
(f) Except as described in or contemplated by the Offering
Circular, each of the Company and its subsidiaries holds, as applicable,
good, legal and valid title to, or valid and enforceable leasehold or
contractual interests in, all items of real and personal property and all
other properties and assets owned by them which are material to the
business of the Company and its subsidiaries taken as a whole, free and
clear of all liens, encumbrances and claims which would materially
interfere with the conduct of the business of the Company and its
subsidiaries, taken as a whole, as described in the Offering Circular. The
Company and its subsidiaries are presently conducting their respective
businesses as described in the Offering Circular and in compliance with all
applicable rules, regulations and laws, except where such failure would not
result in a Material Adverse Effect. Each of the Company and its
subsidiaries carries insurance in such amounts and covering such risks as
is adequate for the conduct of its business and the value of its properties
and which is consistent with what is customarily carried by similar
companies engaged in similar businesses. Each of such insurance policies is
valid and in full force and effect.
(g) Xxxxxx Xxxxxxxx LLP, whose report is incorporated by reference
into the Offering Circular, is and was, during the period covered by its
report, independent with respect to the Company and its subsidiaries
within the meaning of the Exchange Act.
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(h) The Indenture and the Registration Rights Agreement have been
validly authorized by the Company and, when executed by the proper officers
of the Company (assuming the due authorization, execution and delivery
thereof by the other parties thereto) and delivered by the Company, will
constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
(x) except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and (ii)
by general equitable principles, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether in a proceeding in equity or at law and (y) subject to the
unenforceability in certain circumstances under law or court decisions of
provisions for indemnification or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to public
policy; the Notes and the Exchange Notes (as defined in the Registration
Rights Agreement) have been validly authorized by the Company, and, in the
case of the Notes, upon payment therefor on the Closing Date as provided
herein, or, in the case of the Exchange Notes, upon their issuance pursuant
to the Exchange Offer (as defined in the Registration Rights Agreement),
will be validly issued and outstanding, and will constitute obligations of
the Company entitled to the benefits of the Indenture and enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and (ii) by general equitable principles, including,
without limitation, concepts of materiality, reasonableness, good faith and
fair dealing, regardless of whether in a proceeding in equity or at law;
the summary descriptions contained in the Offering Circular of the Notes,
the Exchange Notes, the Indenture and the Registration Rights Agreement
conform in all material respects to these documents.
(i) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Purchasers, constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, (x) except as the enforceability thereof may be limited by
(i) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and (ii) by general equitable principles, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing,
regardless of whether in a proceeding in equity or at law and (y) subject
to the unenforceability in certain circumstances under law or court
decisions of provisions for indemnification or contribution to a party with
respect to a liability where such indemnification or contribution is
contrary to public policy.
(j) Except as described in the Offering Circular, there is no
litigation, proceeding or investigation pending before or by any court or
governmental agency or any arbitrator or otherwise or, to the knowledge of
the Company, threatened, against the Company or any of its subsidiaries or
to which any of their
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Material Assets is subject, including, without limitation, any audit by the
Internal Revenue Service, which, if an adverse decision were reached, would
be reasonably likely to have a Material Adverse Effect.
(k) The consolidated financial statements (including the related
notes) of the Company included in the Offering Circular comply as to form
in all material respects with the requirements applicable to registration
statements on Form S-3 under the Securities Act of 1933, as amended (the
"Securities Act") and present fairly in all material respects the financial
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condition, results of operations and changes in financial position of the
Company, at the dates and for the periods indicated, and, except as
otherwise described in the Offering Circular, have been prepared in
conformity with generally accepted accounting principles in the United
States applied on a consistent basis throughout the periods involved; the
capitalization of the Company, as set forth in the column labeled "Actual"
under the caption "Capitalization" in the Offering Circular, is accurately
described as of the date presented therein.
(l) Except as disclosed in the Offering Circular, since the date
of the latest audited financial statements included in the Offering
Circular or incorporated by reference therein, there has been no Material
Adverse Effect, nor, to the Company's knowledge, any development or event
involving a prospective Material Adverse Effect. Except as disclosed in or
contemplated by the Offering Circular and except for the dividend in the
amount of $32.5 million paid on EME's common stock on February 28, 2001,
since the date of such financial statements there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its equity capital.
(m) Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act) nor (assuming the
accuracy of the representations of the Purchasers set forth herein) any
person acting on the Company's behalf has made offers or sales of
securities under circumstances that would require the registration of the
Notes under the Securities Act.
(n) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940, as amended (the "Investment Company Act"), nor is it a closed-
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end investment company required to be registered, but not registered,
thereunder; and the Company is not and, after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as
described in the Offering Circular under the caption "Use of Proceeds," the
Company will not be an "investment company" as defined in the Investment
Company Act.
(o) No securities of the same class (within the meaning of Rule 14
4A(d)(3) under the Securities Act) as the Notes are listed on any national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
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(p) Assuming (i) the accuracy of the representations and warranties
of the Purchasers set forth herein, (ii) the compliance by the Purchasers
with their agreements herein and (iii) the Notes are offered and sold in
the manner contemplated by the Offering Circular, the offer and sale of the
Notes in the manner contemplated by this Agreement will be exempt from the
registration requirements of the Securities Act by reason of Section 4(2)
thereof and Regulation S thereunder; and it is not necessary to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
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(q) Neither the Company nor any of its affiliates, nor (assuming
the accuracy of the representations and warranties of the Purchasers set
forth herein) any person acting on its or their behalf (i) has, within the
six-month period prior to the date hereof, offered or sold in the United
States or to any U.S. person (as such terms are defined in Regulation S
under the Securities Act ("Regulation S")) the Notes or any security of the
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same class or series as the Notes or (ii) has offered or will offer or sell
the Notes (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S by means of any
directed selling efforts within the meaning of Rule 902(b) of Regulation S.
The Company, its affiliates and (assuming the accuracy of the
representations and warranties of the Purchasers set forth herein) any
person acting on its or their behalf have complied and will comply with the
offering restriction requirements of Regulation S in connection with the
offering of Notes outside the United States. The Company has not entered
and will not enter into any contractual relationship with respect to the
distribution of the Notes except for this Agreement.
(r) The proceeds to the Company from the offering of the Notes will
not be used in a manner which would violate Regulations T, U or X of the
Federal Reserve Board.
(s) Neither the Company nor any of its subsidiaries is or will,
solely as a result of their participation in the transactions contemplated
by the Operative Documents or their ownership, use or operation of the
projects described in the Offering Circular under the heading "Our
Operating Projects," be subject to (i) regulation under the Public Utility
Holding Company Act of 1935, as amended ("PUHCA") as a "public utility
company," a "holding company," or a "subsidiary" or an "affiliate" of a
holding company, except that each of the Company and its subsidiaries is a
"subsidiary" and an "affiliate" under PUHCA of Edison International, a
California corporation, which is a "holding company" that is exempt from
all regulation under PUHCA (except Section 9(a)(2) thereof) pursuant to
Section 3(a) thereof, or (ii) regulation under the Federal Power Act
("FPA"), except (A) for such rules or regulations applicable to "exempt
wholesale generators" ("EWGs") under Section 32 of PUHCA and "qualifying
facilities" ("QFs") under the Public Utility Regulatory Policies Act of
1978 ("PURPA") and
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(B) each of the EWG and power marketer subsidiaries of the Company is a
"public utility," as such term is defined under the FPA, but each such
subsidiary has been granted authority under Section 205 of the FPA to sell
electric energy, capacity and ancillary services; or (iii) state laws and
regulations in respect of the rates or the financial or organizational
regulation of utilities except that certain subsidiaries of the Company are
subject to state laws applicable to entities that make retail sales of
electric energy and other energy-related services ("Retail Service
Providers"), EWGs, "foreign utility companies" under Section 33 of PUHCA,
or QFs, and to the extent that any subsidiary of the Company is a Retail
Service Provider, that subsidiary has been granted all requisite authority
under applicable state laws and regulations to make sales of electric
energy and other energy-related services as a Retail Service Provider. In
addition, none of the Purchasers will, solely as a result of purchasing
and/or reselling the Notes pursuant to this Agreement, be a "public utility
company," an "electric utility company," a "gas utility company," a
"holding company," a "subsidiary" or an "affiliate" under PUHCA, or
otherwise subject to regulation under PUHCA, the FPA, PURPA, or rate,
financial or organizational regulation under any state law or regulation.
(t) (i) All tax returns, declarations of estimated tax and tax
reports (collectively, the "Tax Returns") required to be filed on or before
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(after consideration of any allowable extensions of time to file) the
Closing Date with respect to all federal, state or local income, gross
receipts, severance, property, productions, sales, use, license, excise,
franchise, employment, withholding or similar taxes, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties (collectively, the "Taxes") by the
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Company have been duly filed, (ii) all Taxes due on the Tax Returns
referred to in clause (i) that are required to be paid or withheld by the
Company (the "Company Taxes") have been paid or withheld in full, (iii) all
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deficiencies asserted or assessments made against the Company with respect
to Tax Returns as a result of an examination of such Tax Returns referred
to in clause (i) have been paid in full, (iv) no issues that have been
raised with respect to Company Taxes by the relevant taxing authority in
connection with an examination of Tax Returns are currently pending and (v)
no waivers of statutes of limitations have been given or requested by or
with respect to any Company Taxes, except in each case for any Company
Taxes which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with U.S.
generally accepted accounting principles have been set aside on the
Company's books.
(u) Except as disclosed in the Offering Circular, neither the
Company nor any of its subsidiaries is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), owns or operates any real property
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contaminated with any substance that is subject to any
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Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to
any Environmental Laws, which violation, contamination, liability or claim
could individually or in the aggregate reasonably be expected to have a
Material Adverse Effect; and the Company has no knowledge of any pending
investigation which might lead to such a claim.
(v) The Company and its subsidiaries own, possess or can acquire on
reasonable terms adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "Intellectual Property Rights")
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necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property Rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(w) The Company is subject to Section 13 or 15(d) of the Exchange
Act.
(x) During the consecutive twelve-month period prior to each date
as of which the following representations are made or deemed made, (i) no
steps have been taken to terminate any "pension plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended, together with any successor statute of similar import and together
with the regulations thereunder ("ERISA"), to which the Company, any
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subsidiary thereof or any member of a controlled group of corporations
treated as a single employer together with the Company or any subsidiary
thereof under Section 414(b) or 414(c) of the Internal Revenue Code of
1986, as amended (the "Code") or Section 4001 of ERISA (the "Controlled
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Group") sponsors, contributed to or under which any such entity may incur
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any liability (each a "Pension Plan"), (ii) no contribution failure has
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occurred with respect to any Pension Plan sufficient to give rise to a lien
under Section 302(f) of ERISA or Section 412 of the Code and (iii) no
condition exists or event or transaction has occurred with respect to any
Pension Plan which could reasonably be expected to result in the incurrence
by the Company, any subsidiary thereof or any member of the Controlled
Group of any material liability (other than liabilities incurred in the
ordinary course of maintaining the Pension Plan), fine or penalty and none
of the following events or conditions, either individually or in the
aggregate, has resulted or is reasonably likely to result in a material
liability to the Company, any subsidiary thereof or any member of the
Controlled Group: (w) any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of Pension Benefit
Guaranty Corporation Reg. Section 2615; (x) a complete or partial
withdrawal from any "multiemployer plan," as defined in Section 4001(a)(3)
of ERISA (the "Multiemployer Plan"), by the Company, any subsidiary thereof
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or any member of the Controlled Group; (y) any liability of the Company,
any subsidiary thereof or any member of the Controlled Group under ERISA if
the Company, any subsidiary thereof or any member of the Controlled Group
under ERISA were to withdraw completely from all Multiemployer Plans as of
the annual valuation date most closely preceding the date on which this
representation is made or deemed made; or (z) the "reorganization" (within
the meaning of Section 4241 of ERISA) or "insolvency" (within the meaning
of Section 4245 of ERISA) or any Multiemployer Plan. None of the Company,
any subsidiary thereof or any member of the Controlled Group has any
contingent liability with respect to any post-retirement benefit under a
"welfare plan" (as defined in Section 3(1) of ERISA) which could reasonably
be expected to have a Material Adverse Effect, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
(y) The proceeds from the sale of Notes will be utilized by the
Company as described under the section of the Offering Circular entitled
"Use of Proceeds."
2. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at an aggregate purchase price of 9 % of the principal amount
thereof plus accrued interest from April 5, 2001 to the Closing Date (as
hereinafter defined) (the "Purchase Price"), the respective principal amounts of
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the Notes set forth opposite the names of the several Purchasers on Schedule 1
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hereto. The Company shall not be obligated to deliver any Notes to be delivered,
except upon payment of all of the Notes to be purchased on the Closing Date as
provided herein.
The Company will deliver against payment of the Purchase Price the
Notes in the form of one or more permanent global Notes in definitive form (the
"Global Notes") deposited with the Trustee as custodian for The Depository Trust
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Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
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Interests in any permanent Global Notes will be held only in book-entry form
through DTC, except in the limited circumstances described in the Offering
Circular. Payment of the Purchase Price for the Notes shall be made by the
Purchasers in Federal (same day) funds by official check or checks or wire
transfer to an account at a bank acceptable to CSFBC drawn to the order of the
Company, at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at 9:30 A.M., (New York time), on April 5, 2001 or at such other place or
time not later than seven full business days thereafter as CSFBC and the Company
determine, such time being herein referred to as the "Closing Date", against
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delivery to the Trustee, as custodian for DTC, of the Global Notes representing
all of the Notes. The Global Notes will be made available for inspection at the
above office of Xxxxxx & Xxxxxxx at least 24 hours prior to the Closing Date.
Notwithstanding the foregoing, any Notes sold to Institutional
Accredited Investors (as hereinafter defined) pursuant to Section 3(c) shall be
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issued in definitive, fully registered form and shall bear the legend relating
thereto set forth under the caption
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"Transfer Restrictions" in the Offering Circular, but shall be paid for in the
same manner as any Notes to be purchased by the Purchasers hereunder and to be
offered and sold by it in reliance on Rule 144A under the Securities Act.
3. Representations by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Company
that it is an "accredited investor" within the meaning of Regulation D
under the Securities Act.
(b) Each Purchaser severally acknowledges that the Notes have not
been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons except pursuant to an exemption from the registration requirements
of the Securities Act. Each Purchaser severally represents and agrees that
it has offered and sold the Notes, and will offer and sell the Notes, as
part of its distribution at any time only in accordance with Rule 903 or
Rule 144A under the Securities Act ("Rule 144A") or to a limited number of
Institutional Accredited Investors (as defined below) in accordance with
subsection (c). Accordingly, neither such Purchaser nor its affiliates, nor
any persons acting on its or their behalf, have engaged or will engage in
any directed selling efforts with respect to the Notes, and such Purchaser,
its affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation S
and Rule 144A.
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) Each Purchaser severally agrees that it may offer and sell
Notes in definitive, fully registered form to a limited number of
institutions, each of which is reasonably believed by such Purchaser to be
an "accredited investor" within the meaning of Rule 501(a)(1), (2) or (3)
under the Securities Act or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3) of
Regulation D under the Securities Act (each, an "Institutional Accredited
------------------------
Investor"); provided that each such Institutional Accredited Investor
--------
executes and delivers to such Purchaser or its representative and the
Company, prior to the consummation of any sale of Notes to such
Institutional Accredited Investor, a Purchaser's Letter in substantially
the form included in the Offering Circular (a "Purchaser's Letter").
------------------
(d) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Notes except for any
such arrangements with the other Purchaser or affiliate thereof or with the
prior written consent of the Company.
(e) Each Purchaser severally agrees that it and each of its
affiliates has not offered and sold the Notes and will not offer or sell
the Notes in the United
11
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media
or broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect to resales made
in reliance on Rule 144A of any of the Notes, to deliver either with the
confirmation of such resale or otherwise prior to settlement of such resale
a notice to the effect that the resale of such Notes has been made in
reliance upon the exemption from the registration requirements of the
Securities Act provided by Rule 144A.
(f) Each Purchaser severally represents and agrees that: (i) it has
not offered or sold and prior to the date six months after the date of
issue of the Notes will not offer or sell any Notes to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in
the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done
by it in relation to the Notes in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection
with the issue of the Notes to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
4. Certain Agreements of the Company. The Company agrees with the
Purchasers that:
(a) The Company will advise the Purchasers promptly of any proposal
to amend or supplement the Offering Circular and will not effect such
amendment or supplementation without the Purchasers' consent. If, at any
time prior to the completion of the resale of the Notes by the Purchasers,
any event occurs as a result of which, in the reasonable judgment of the
Company, the Purchasers or counsel to the Purchasers, the Offering Circular
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any such time to amend
or supplement the Offering Circular to comply with any applicable law, the
Company promptly will notify the Purchasers of such event and promptly will
prepare, at the Company's own expense, an amendment or supplement which
will correct such statement or omission or effect such compliance. Neither
the Purchasers' consent to, nor their delivery to offerees or
12
investors of, any such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 5.
---------
(b) The Company will furnish to the Purchasers copies of the
Preliminary Offering Circular, the Offering Circular and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as the Purchasers reasonably request, and the Company will
furnish to the Purchasers on the date hereof two copies of the Offering
Circular certified as being true, complete and correct by a duly authorized
officer of the Company, together with certified copies of the independent
accountants' consents with respect to the incorporation by reference of
their reports therein. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, and for so long as the sale of the
Notes is reliant upon the exception afforded by Rule 144A, the Company will
promptly furnish or cause to be furnished to the Purchasers and, upon the
request of holders and prospective purchasers of the Notes, to such holders
and purchasers, copies of the information required to be delivered to
holders and prospective purchasers of the Notes pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order to
permit compliance with Rule 144A in connection with resales by such holders
of the Notes. The Company will pay the expenses of printing and
distributing to the Purchasers and such holders and purchasers all such
documents.
(c) The Company will arrange for the qualification of the Notes for
sale and the determination of their eligibility for investment under the
laws of such jurisdictions in the United States and Canada as the
Purchasers designate and will continue such qualifications in effect so
long as required for the resale of the Notes by the Purchasers, provided
that the Company will not be required to qualify as a foreign corporation
in any jurisdiction in which it is not now qualified or to file a general
consent to service of process in any such jurisdiction.
(d) During the period of three years hereafter, the Company will
furnish to the Purchasers as soon as available after the end of each fiscal
year, a copy of such notices and reports as it is required to deliver to
the Trustee or any holder of the Notes under Section 3.4 of the Indenture,
-----------
and the Company will furnish to each Purchaser (i) as soon as available, a
copy of each report and any definitive proxy statement of the Company filed
with the Commission under the Exchange Act or mailed to shareholders and
(ii) from time to time, such other information concerning the Company as
the Purchasers may reasonably request.
(e) During the period of two years after the Closing Date, the
Company will, upon request, furnish to each Purchaser and any holder of
Notes a copy of the restrictions on transfer applicable to the Notes.
(f) During the period of two years after the Closing Date (or such
other period as the Commission may specify for the unrestricted resale of
Notes which constitute "restricted securities" under Rule 144 under the
Securities Act ("Rule 144")), the Company will not, and will not permit any
of its affiliates (as
13
defined in Rule 144) to, resell any of the Notes that have been reacquired
by any of them which constitute "restricted securities" under Rule 144.
(g) During the period of two years after the Closing Date, the
Company will not be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and the
Company is and will not become a closed-end investment company required to
be registered, but not registered, under the Investment Company Act.
(h) The Company will pay all expenses incidental to the performance
of its obligations under this Agreement, the Indenture and the other
Financing Documents, including (i) the fees and expenses of the Trustee and
its counsel, and (ii) all expenses in connection with the execution, issue,
authentication, packaging, initial delivery, preparation and printing of
the Notes, the Indenture, the other Financing Documents, the Preliminary
Offering Circular, the Offering Circular and amendments and supplements
thereto and any other document relating to the issuance, offer, sale and
delivery of the Notes and the Exchange Notes. The Company agrees to pay for
any reasonable expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Notes for sale under the
laws of such jurisdictions in the United States and Canada as CSFBC
designates and the printing of memoranda relating thereto, and for any fees
charged by investment rating agencies for the rating of the Notes and the
Exchange Notes. The Company agrees to reimburse the Purchasers for all
reasonable travel expenses of the Purchasers and the Company's officers and
employees and any other reasonable expenses of the Purchasers and the
Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Notes from the Purchasers. The Company agrees
to pay for expenses incurred in distributing Preliminary Offering Circulars
and Offering Circulars (including any amendments and supplements thereto)
to the Purchasers and for the reasonable fees and expenses of counsel to
the Purchasers.
(i) In connection with the offering of the Notes, until the earlier
of (x) 180 days following the Closing Date and (y) the date the Purchasers
shall have notified the Company of the completion of the resale of the
Notes, neither the Company nor any of its affiliates has or will, either
alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest in
any Notes or attempt to induce any person to purchase any Notes; and
neither the Company nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Notes.
(j) The Company will not, until 30 days following the Closing Date,
without the prior written consent of the Purchasers, pursuant to Rule 144A,
Regulation S or an offering registered under the Securities Act, offer,
sell or contract to sell, or otherwise dispose of, directly or indirectly,
or announce the offering of, any debt securities issued or guaranteed by
the Company (other than
14
the Notes). The Company will not, at any time, offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, pledge, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act or the safe harbor of Regulation S thereunder to cease to be
applicable to the offer and sale of the Notes.
5. Conditions of the Obligations of the Purchasers. The respective
obligations of the Purchasers to purchase and pay for the Notes will be subject
to the accuracy as of the date hereof and as of the Closing Date of the
representations and warranties made by the Company herein (except for those
representations and warranties expressly stated to relate to an earlier
specified date, which must be accurate as of such earlier specified date), to
the accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated no more than
three business days prior to the date of this Agreement, of Xxxxxx Xxxxxxxx
LLP confirming that they are independent certified public accountants with
respect to the Company under Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants ("AICPA"), and
-----
its interpretations and rulings, and to the effect that:
(i) in their opinion the financial statements examined by
them and incorporated by reference into the Offering Circular comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules
and regulations thereunder
(ii) they have performed the procedures specified by the
AICPA for a review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements incorporated by
reference into the Offering Circular;
(iii) on the basis of the review referred to in clause (i)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused
them to believe that:
(A) any material modifications should be made to the
unaudited financial statements incorporated by reference into
the Offering Circular for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not
more
15
than three days prior to the date of this Agreement, there was
any change in the capital stock or any increase in long-term
debt of the Company and its consolidated subsidiaries or, at
the date of the latest available balance sheet read by such
accountants, there was any decrease in consolidated net current
assets or stockholder's equity, as compared with amounts shown
on the latest balance sheet incorporated by reference into the
Offering Circular; or
(C) for the period from the closing date of the
latest income statement incorporated by reference into the
Offering Circular to the closing date of the latest available
income statement read by such accountants there were any
decreases, as compared with the corresponding period of the
previous year, in total operating revenues or in net income;
except in the case of clauses (B) and (C) above, for changes,
increases or decreases which the Offering Circular or documents
incorporated by reference therein disclose have occurred or may occur
or which are described in such letter;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Circular and the documents
incorporated by reference therein (in each case to the extent that
such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter;
(v) they have read the unaudited pro forma statement of
capitalization included in the Offering Circular and have inquired of
certain officials of the Company about the basis for their
determination of the pro forma adjustments and have proved the
arithmetic accuracy of the application of the pro forma adjustments
to the historical amounts in the unaudited pro forma statement of
capitalization; and
(vi) on the basis of the review referred to in clause (v)
above, nothing came to their attention that caused them to believe
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of the pro forma statement of
capitalization.
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred: (i) a change in U.S. or
international financial, political or
16
economic conditions or currency exchange rates or exchange controls as, in
the judgment of CSFBC, is material and adverse and makes it inadvisable to
proceed with completion of the offering or sale of and payment for the
Notes as contemplated in the Offering Circular; (ii) any change, or any
development or event involving a prospective change, in or affecting the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries, taken as a whole, which, in
the judgment of a majority in interest of the Purchasers including CSFBC,
materially impairs the investment quality of the Notes or is material and
adverse and makes it inadvisable to proceed with completion of the offering
or sale of and payment for the Notes as contemplated in the Offering
Circular; (iii) any downgrading in the rating of any debt securities of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act) or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iv) any material
suspension or material limitation of trading in securities generally on the
New York Stock Exchange, or any setting of minimum prices for trading on
such exchange or any suspension of trading of any securities of the Company
or Edison International, Inc. ("EIX") on any exchange or in the over the
---
counter market; (v) the occurrence of any voluntary or involuntary
bankruptcy or similar proceeding, filing or similar process by or against
Southern California Edison Company or EIX, (vi) any banking moratorium
declared by U.S. Federal or New York State authorities; or (vii) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress of the United States or any
other change in financial markets or substantial national or international
calamity or emergency if, in the judgment of a majority in interest of the
Purchasers including CSFBC, the effect of any such outbreak, escalation,
declaration, change, calamity or emergency makes it inadvisable to proceed
with completion of the offering or sale of and payment for the Notes as
contemplated in the Offering Circular.
(c) The Company shall have furnished to the Purchasers a
certificate, dated as of the Closing Date, of its Chief Executive Officer
or Chief Financial Officer and a Vice President stating that (i) the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and after giving effect to the
consummation of the transactions contemplated by this Agreement (except
representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties are true
and correct in all material respects as of such earlier date), (ii) the
Company has complied with all its agreements and has satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Date contained herein and (iii) subsequent to the respective dates
of the most recent financial statements incorporated by reference in the
Offering Circular, there has been no Material Adverse Effect, nor any
development or event involving a prospective Material Adverse Effect,
except as described in or contemplated by the Offering Circular.
17
(d) The Purchasers shall have received a letter, dated the Closing Date,
of Xxxxxx Xxxxxxxx LLP that meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be a
date not more than three days prior to the Closing Date for the purposes of this
subsection.
(e) The Purchasers shall have received (i) an opinion, dated the Closing
Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the
Company, in form and substance reasonably satisfactory to the Purchasers,
regarding the likelihood that the assets and liabilities of the Company would be
consolidated with those of EIX if EIX were to be subject to bankruptcy
proceedings and (ii) an opinion, dated the Closing Date, of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special counsel for the Company, in form and
substance reasonably satisfactory to the Purchasers, to the following effect:
(i) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of California
and has the corporate power and authority to execute, deliver and perform
its obligations under each of the Operative Documents, as defined in the
opinion, and to carry on its business and to own, lease and operate its
properties as described in the Offering Circular.
(ii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The issuance and sale of the Notes and the Exchange Notes have
been duly authorized by the Company, and when the Notes are duly
authenticated in accordance with the terms of the Indenture and delivered
to and paid for by the Purchasers as contemplated by the Purchase
Agreement, the Notes will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(iv) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance, or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
18
(v) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that (a) enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance, or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and (b) the enforceability
of indemnification and contribution provisions may be limited by federal
and state securities laws or the public policies underlying such laws.
(vi) The issuance and sale of the Notes by the Company, the
execution and delivery of each of the Purchase Agreement, the Indenture and
the Registration Rights Agreement by the Company, the compliance by the
Company with the terms thereof and the consummation by the Company of the
transactions contemplated thereby will not (i) require any consent,
approval, authorization, or other order of, or qualification with, any
Governmental Authorities, (ii) conflict with the corporate charter or the
by-laws, (iii) constitute a violation of or default under the terms of any
Applicable Contract, as defined in the opinion, (except that such counsel
will not express any opinion as to any covenant, restriction or provision
of any such agreement or instrument with respect to financial covenants,
ratios or tests or any aspect of the financial condition or results of
operations of the Company) or (iv) violate or conflict with, or result in
any contravention of, any Applicable Law, as defined in the opinion, or any
Applicable Order, as defined in the opinion. Such counsel will note that,
for the purposes of clause (i) of this paragraph (vi), such counsel will
not express any opinion with respect to the United States federal
securities laws, which are addressed in paragraph (vii) below, or as to any
state or foreign securities or Blue Sky laws or any opinion as to any
registrations, qualifications, filings and others required in connection
with the registration obligations of the Company under the Registration
Rights Agreement.
(vii) Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 1 of the Purchase Agreement
and of the Purchasers' representations and warranties set forth in Section
3 of the Purchase Agreement, (ii) the due performance by the Company of the
agreements set forth in Section 4 of the Purchase Agreement, (iii) the
Purchasers' compliance with the offering and transfer procedures and
restrictions described in the Offering Circular, (iv) the accuracy of the
representations and agreements made in accordance with the Purchase
Agreement and the Offering Circular by purchasers to whom the Purchasers
initially resell the Notes and (v) that purchasers to whom the Purchasers
initially resell the Notes receive a copy of the Offering
19
Circular prior to such sale, the offer, sale and delivery of the Notes to
the Purchasers, and purchase of the Notes by the Purchasers, in the manner
contemplated by the Purchase Agreement and the Offering Circular, and the
initial resale of the Notes by the Purchasers in the manner contemplated in
the Offering Circular and the Purchase Agreement, do not require
registration under the Securities Act, and the Indenture does not require
qualification under the Trust Indenture Act of 1939, as amended, it being
understood that such counsel will not express any opinion as to any
subsequent resale of any Note.
(viii) The Company is not and, after giving effect to the offering
and sale of the Notes and the application of the net proceeds thereof as
described in the Offering Circular will not be, subject to registration or
regulation as an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
(ix) The Notes and the Indenture conform, in all material respects,
to the descriptions thereof contained in the Offering Circular.
(x) Neither the Company nor any of its subsidiaries is or will,
solely as a result of their participation in the transactions contemplated
by the Operative Documents or their ownership, use or operation of the
projects described in the Offering Circular under the heading "Our
Operating Projects," be subject to (i) regulation under PUHCA as a "public
utility company," a "holding company," or a "subsidiary" or an "affiliate"
of a holding company, except that each of the Company and its subsidiaries
is a "subsidiary" and an "affiliate" under PUHCA of Edison International, a
California corporation, which is a "holding company" that is exempt from
all regulation under PUHCA (except Section 9(a)(2) thereof) pursuant to
Section 3(a) thereof, or (ii) regulation under the FPA, except (A) for such
rules or regulations applicable to EWGs under Section 32 of PUHCA and QFs
under PURPA and (B) each of the EWG and power marketer subsidiaries of the
Company is a "public utility," as such term is defined under the FPA, but
each such subsidiary has been granted authority under Section 205 of the
FPA to sell electric energy, capacity and ancillary services; or (iii)
state laws and regulations in respect of the rates or the financial or
organizational regulation of utilities except that certain subsidiaries of
the Company are subject to state laws applicable to Retail Service
Providers, EWGs, "foreign utility companies" under Section 33 of PUHCA, or
QFs, and to the extent that any subsidiary of the Company is a Retail
Service Provider, that subsidiary has been granted all requisite authority
under applicable state laws and regulations to make sales of electric
energy and other energy-related services as a Retail Service Provider. In
addition, none of the Purchasers will, solely as a result of purchasing
and/or reselling the Notes pursuant to this Agreement, be a "public utility
company," an "electric utility company," a "gas utility company," a
"holding company," a "subsidiary" or an "affiliate" under
20
PUHCA, or otherwise subject to regulation under PUHCA, the FPA, PURPA, or
rate, financial or organizational regulation under any state law or
regulation.
(xi) In addition, such counsel has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants of the Company, the Purchasers and
representatives of the Purchasers' counsel, at which the contents of the
Offering Circular (which, for purposes of the opinion, will include certain
information specifically incorporated by reference therein) and related
matters were discussed and, although such counsel is not passing upon, and
does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Offering Circular and has made
no independent check or verification thereof, on the basis of the
foregoing, no facts have come to such counsel's attention which have led
such counsel to believe that the Offering Circular, as of its date and as
of the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that such counsel does not express
any opinion or belief with respect to the financial statements, schedules
and other financial or statistical data included therein or excluded
therefrom.
(f) The Purchasers shall have received an opinion, dated the Closing
Date, of Xxxxxx X. Xxxxxxxxx, Vice President and Associate General Counsel of
the Company, in form and substance reasonably satisfactory to the Purchasers, to
the following effect:
(i) The Company is duly qualified to do business as a foreign
corporation in good standing in all jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(ii) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or any
of its subsidiaries or to which any of their respective Material Assets is
subject, that are not disclosed in the Offering Circular and which are
reasonably likely to have a Material Adverse Effect or to materially affect
the issuance of the Notes or the consummation of the other transactions
contemplated by the Operative Documents.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The issuance and sale of the Notes and the Exchange Notes have
been duly authorized by the Company, and the Notes, when duly executed and
authenticated in accordance with the terms of the Indenture and delivered
to and paid for by the Purchasers as contemplated by the
21
Purchase Agreement, will be valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or
in equity).
(v) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance, or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
(vi) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that (a) enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance, or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) and (b) the enforceability
of indemnification and contribution provisions may be limited by federal
and state securities laws or the public policies underlying such laws.
(vii) The issuance and sale of the Notes by the Company, the
execution and delivery of each of the Purchase Agreement the Indenture and
the Registration Rights Agreement by the Company, the compliance by the
Company with the terms thereof and the consummation by the Company of the
transactions contemplated thereby will not (i) except as completed on or
prior to the Closing Date require any consent, approval, authorization, or
other order of, or qualification with, any court, regulatory body,
administrative agency, or governmental body of any state or the United
States of America having jurisdiction over the Company (other than any
registrations, qualifications, filings and orders required in connection
with the registration obligations of the Company under the Registration
Rights Agreement), (ii) conflict with the Articles of Incorporation, by-
laws or other organizational documents of the Company or any of its
subsidiaries, (iii) to the best of such counsel's knowledge, constitute a
violation of or default under the terms or provisions of any
22
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument, in each case which is material to the Company and its
subsidiaries, taken as a whole, to which the Company or its subsidiaries is
bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject (except that such counsel does not express any
opinion as to any covenant, restriction or provision of any such agreement
or instrument with respect to financial covenants, ratios or tests or any
aspect of the financial condition or results of operations of the Company
or any of its subsidiaries) or (iv) violate or conflict with, or result in
any contravention of, any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their Material Assets. Such counsel
will note that, for the purposes of clause (i) of this paragraph (vii),
such counsel does not express any opinion with respect to the United States
federal securities laws or any state or foreign securities or Blue Sky
laws.
(viii) Except as disclosed in the Offering Circular, the Company and
its subsidiaries (a) have obtained each Governmental Approval which is
material to the ownership of their respective properties or to the conduct
of their businesses as described in the Offering Circular and (b) are in
compliance with all terms and conditions of such Governmental Approvals,
except (x) in either case, where the failure to do so is not reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect, (y) for Governmental Approvals that may be required for future
activities which are ordinarily deemed to be ministerial in nature and
which are anticipated to be obtained in the ordinary course, and (z) for
Governmental Approvals for activities that are not yet required which have
not yet been obtained but which have been or will be applied for in the
ordinary course and which are anticipated to be obtained in the ordinary
course.
(g) The Purchasers shall have received an opinion, dated the Closing
Date, from Stadtmauer Bailkin, LLP, counsel to the Trustee, in respect of the
enforceability of the Financing Documents to which the Trustee is a party and
the authentication of the Notes by the Trustee, which opinion shall be
satisfactory in all respects to the Purchasers and their counsel.
(h) The Purchasers shall have received from Xxxxxx & Xxxxxxx, special
counsel for the Purchasers, such opinion or opinions as the Purchasers
reasonably request, dated the Closing Date, with respect to the Offering
Circular and certain other matters, and the Company shall have furnished to such
counsel such documents as it requests for the purpose of enabling it to pass
upon such matters.
(i) The Company and CSFBC shall have entered into the Registration Rights
Agreement and the Purchasers shall have received counterparts, conformed
23
as executed, thereof and each other document entered into by the Company in
connection with the transactions contemplated by this Agreement.
(j) There shall exist at and as of the Closing Date no conditions that
would constitute an Event of Default (or an event that with notice or the lapse
of time, or both, would constitute an Event of Default) under the Indenture.
(k) (i)(A) Xxxxx'x Investors Services, Inc. ("Moody's") shall have
-------
delivered to the Company and the Purchasers a final rating letter, setting forth
a rating of Baa3 or better with respect to the Notes, and (B) Standard & Poor's
Ratings Services ("S&P") shall have delivered to the Company and the Purchasers
---
a final rating letter, setting forth a rating of BBB- or better with respect to
the Notes, (ii) each of Moody's and S&P shall have delivered to the Company a
letter confirming the ratings with respect to the other debt securities of the
Company after giving effect to the transactions contemplated in this Agreement
and (iii) neither of Moody's nor S&P shall have announced that it has under
surveillance or review, with possible negative implications, its rating of the
Notes or any other debt securities of the Company.
(l) The Notes shall have been accepted for settlement through the
facilities of DTC, the Euroclear System or Clearstream Banking S.A., as
applicable, for "book-entry" transfer of the Notes.
(m) The Company shall have furnished to the Purchasers (i) a copy of the
resolutions of its Board of Directors or committees thereof, certified by the
Secretary or Assistant Secretary of the Company as of the Closing Date, duly
authorizing the execution, delivery and performance of this Agreement and any
other documents executed by or on behalf of it in connection with this
Agreement, (ii) certified copies of its organizational documents and, (iii) if
applicable, incumbency certificates or certified copies of powers-of-attorney,
if any, pursuant to which officers of such entity shall execute this Agreement
and any other documents executed by or on behalf of it in connection with this
Agreement.
(n) The Purchasers shall have received, in form and substance
satisfactory to the Purchasers, copies of such opinions, certificates, letters
and documents as the Purchasers reasonably request.
6. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Purchaser, its
directors and officers and each person, if any, who controls such Purchaser
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any breach of any of the representations
and warranties of the Company contained herein or any untrue statement or
alleged untrue
24
statement of any material fact contained in the Offering Circular, or any
amendment or supplement thereto or any of the information incorporated by
reference therein, or any related Preliminary Offering Circular or any of the
information 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 the light of the circumstances under
which they were made, not misleading, including any losses, claims, damages or
liabilities arising out of or based upon the Company's failure to perform its
obligations under Section 4(a) of this Agreement, and will reimburse each
------------
Purchaser for any legal or other expenses reasonably incurred by such Purchaser
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
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 an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Purchaser through CSFBC specifically for use therein, it
being understood and agreed that the only such information consists of the
information described as such in subsection (b) below; and provided further
that, with respect to any untrue statement or omission in the Preliminary
Offering Circular, this indemnity agreement shall not inure to the benefit of a
Purchaser on account of any loss, claim, damage, liability or action arising
from the sale of any Notes to any person by such Purchaser to the extent such
sale was an initial resale by such Purchaser, if such Purchaser failed to send
or give a copy of the Offering Circular, as the same may be amended or
supplemented, to that person and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in the Preliminary Offering Circular was corrected in the Offering Circular
and the Offering Circular was made available to such Purchaser prior to the sale
of the Notes.
(b) Each Purchaser will, severally and not jointly, indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Offering Circular, or any
amendment or supplement thereto, or any related Preliminary Offering Circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Purchaser through CSFBC specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection with
investigating or
25
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Purchaser consists of the following information in the Offering
Circular: the third paragraph, the second sentence of the fourth paragraph, the
sixth paragraph, the second sentence of the eighth paragraph, the ninth
paragraph, the tenth paragraph and the last paragraph under the caption "Plan of
Distribution"; provided, however, that the Purchasers shall not be liable for
any losses, claims, damages or liabilities arising out of or based upon the
Company's failure to perform its obligations under Section 4(a) of this
------------
Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent the
indemnified party and their respective controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified party against the indemnifying party under this Section 6 (i)
-------------
if the employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action, (ii) if, in
the written opinion of counsel to either the indemnifying party or the
indemnified party, representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest between them, and in
that event the fees and expenses of one firm of separate counsel (in addition to
the fees and expenses of local counsel) shall be paid by the indemnifying party,
or (iii) if the indemnifying party shall have failed to appoint acceptable
counsel within a reasonable period of time. No indemnifying party shall, without
the prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter
26
of such action and does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Purchasers on the other from the offering of the Notes or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Purchasers from the Company under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Purchasers on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages, or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Notes purchased by it
were resold exceeds the amount of any damages which such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Purchasers' obligations in this subsection (d)
to contribute are several in proportion to their respective purchase obligations
and are not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the Purchasers may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act.
27
7. Default of Purchasers. If any Purchaser or Purchasers default in its or
their obligations to purchase Notes hereunder and the aggregate principal amount
of Notes that such defaulting Purchaser or Purchasers agreed but failed to
purchase does not exceed 10% of the total principal amount of Notes, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Notes by
other persons, including any of the Purchasers, but if no such arrangements are
made by the Closing Date, the non-defaulting Purchasers shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Notes that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of Notes
with respect to which such default or defaults occur exceeds 10% of the total
principal amount of Notes and arrangements satisfactory to CSFBC and the Company
for the purchase of such Notes by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Purchaser or the Company, except as provided in Section 8.
---------
As used in this Agreement, the term "Purchaser" includes any person substituted
for a Purchaser under this Section. Nothing herein will relieve a defaulting
Purchaser from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes. If this Agreement is terminated pursuant to Section 7
---------
or if for any reason (including the failure by the Company to satisfy any
condition pursuant to Section 5 hereof), the purchase of the Notes by the
---------
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 4 and the respective
---------
obligations of the Company and the Purchasers pursuant to Section 6 shall remain
---------
in effect. If the purchase of the Notes by the Purchasers is not consummated for
any reason, other than solely as a result of the termination of this Agreement
pursuant to Section 7 or the occurrence of any event specified in clause (iv),
(vi) or (vii) of Section 5(b), the Company will reimburse the Purchasers for all
out-of-pocket expenses (including reasonable fees and disbursements of one
separate counsel) reasonably incurred by them in connection with the offering of
the Notes.
9. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered or telegraphed and confirmed to the
Purchasers, c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, X.X. 10010-3629, Attention: Transactions Advisory Group with a copy to
Westdeutsche Landesbank Girozentrale (Dusseldorf) c/o Westdeutsche Landesbank
Girozentrale, New York Branch, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, X.X.
10036, Attention: Global Structured Finance/Energy Group or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 00000
Xxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000 (Fax: (000) 000-0000),
Attention: Chief Financial Officer.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 6, and no other person will have any
---------
right or obligation hereunder, except that holders of Notes shall be entitled to
enforce the agreements for their benefit contained in the second and third
sentences of Section 4(b) hereof against the Company as if such holders were
------------
parties thereto.
11. Representation of Purchasers. CSFBC will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by CSFBC will be binding upon all the Purchasers.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
THE COMPANY HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
If the foregoing is in accordance with the Purchasers' understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
EDISON MISSION ENERGY
By: /s/ X. Xxxx Xxxxxx
------------------
Name: X. Xxxx Xxxxxx
Title: Treasurer
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION,
acting on behalf of itself and
as the representative of the
several Purchasers
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
Schedule 1
----------
Purchaser Principal Amount of Notes
--------- -------------------------
Credit Suisse First Boston Corporation $540,000,000
Westdeutsche Landesbank Girozentrale 60,000,000
(Dusseldorf)
Total $600,000,000
