EXHIBIT 10.81
EXECUTION COPY
STOCK PURCHASE AGREEMENT
by and among
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.,
MEHC INVESTMENT, INC.
and
MIDAMERICAN ENERGY HOLDINGS COMPANY
March 7, 2002
TABLE OF CONTENTS
PAGE
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SECTION 1. AUTHORIZATION OF PREFERRED AND COMMON STOCK.............................................1
SECTION 2. PURCHASE AND SALE.......................................................................1
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ..........................................2
3.1. Organization, Good Standing and Qualification...........................................2
3.2. Significant Subsidiaries................................................................2
3.3. Capitalization..........................................................................3
3.4. Authorization...........................................................................4
3.5. Consents and Approvals; No Conflict.....................................................4
3.6. Company Reports; Financial Statements; Undisclosed Liabilities;
Statutory Statements....................................................................5
3.7. Absence of Certain Developments.........................................................6
3.8. Litigation..............................................................................6
3.9. Compliance with Law; Permits............................................................7
3.10. Material Contracts......................................................................7
3.11. Employee Benefits.......................................................................8
3.12. Environmental Matters...................................................................8
3.13. Intellectual Property...................................................................9
3.14. Regulatory Matters......................................................................9
3.15. Tax Matters.............................................................................10
3.16. Insurance...............................................................................11
3.17. Offering of Shares......................................................................11
3.18. Investment Company......................................................................11
3.19. Accuracy of Information.................................................................11
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.........................................11
SECTION 5. COVENANTS ..............................................................................13
5.1. Covenants of the Company and the Purchaser..............................................13
5.2. Covenants of the Company................................................................13
5.3. Covenants of the Purchaser..............................................................14
SECTION 6. CLOSING CONDITIONS OF THE PURCHASER.....................................................14
SECTION 7. CLOSING CONDITIONS OF THE COMPANY.......................................................16
SECTION 8. TERMINATION, AMENDMENT AND WAIVER ......................................................17
8.1. Termination.............................................................................17
8.2. Effect of Termination...................................................................17
8.3. Amendment...............................................................................18
8.4. Waiver..................................................................................18
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SECTION 9. INTERPRETATION OF THIS AGREEMENT ............................................................18
9.1. Certain Terms Defined........................................................................18
9.2. Schedules....................................................................................19
9.3. Governing Law................................................................................19
9.4. Paragraph and Section Headings...............................................................19
SECTION 10. SURVIVAL.....................................................................................19
SECTION 11. MISCELLANEOUS................................................................................19
11.1. Notices......................................................................................19
11.2. Expenses.....................................................................................21
11.3. Publicity....................................................................................21
11.4. Submission to Jurisdiction...................................................................21
11.5. Successors and Assigns.......................................................................21
11.6. Entire Agreement; Amendment and Waiver.......................................................21
11.7. Severability.................................................................................22
11.8. Counterparts.................................................................................22
11.9. Third Party Beneficiaries....................................................................22
11.10. Guarantee....................................................................................22
Index of Defined Terms
1935 Act 10
Affiliate 18
Agreement 1
Certificate of Designation 1
Closing 2
Closing Date 2
Code 8
Common Stock 1
Company 1
Company Form 10-K 5
Company Regulatory Reports 6
Company Reports 5
Contract 5
Contracts 5
December Preferred Stock 3
Environmental Laws 9
ERISA 8
Exchange Act 6
GAAP 6
Governmental Entity 18
Hazardous Materials 9
Intellectual Property 9
Laws 7
Liens 18
March Preferred Stock 3
Material Adverse Effect 18
Material Contract 8
MidAmerican 1
Organizational Documents 2
Permits 7
Person 19
Preferred Stock 1
Purchase Agreement I
Purchase Price 2
Purchaser 1
RAP 6
Registration Rights Agreement 4
Remedial Action 9
SEC 19
Securities Act 3
Shares 2
Significant Subsidiary 3
Tax Return 11
Taxes 10
Transaction Documents 4
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of March 7, 2002 (this "Agreement"),
by and among The ▇▇▇▇▇▇▇▇ Companies, Inc., a
Delaware corporation (the
"Company"), MEUC Investment, Inc., a South Dakota corporation (the "Purchaser")
and MidAmerican Energy Holdings Company, an Iowa corporation ("MidAmerican").
WITNESSETH:
WHEREAS, the Company has authorized the issuance of up to 1,466,667
shares of its 9-7/8% Cumulative Convertible Preferred Stock, which shares will
be upon issuance convertible into authorized but unissued shares of common
stock, par value $1.00 per share, of the Company; and
WHEREAS, the Company desires to issue and sell to the Purchaser, and
the Purchaser desires to purchase from the Company, 1,466,667 shares of 9-7/8%
Cumulative Convertible Preferred Stock referred to herein, in each case upon the
terms and subject to conditions set forth in this Agreement; and
WHEREAS, the Purchaser is a wholly owned subsidiary of MidAmerican; and
WHEREAS, the Company and MidAmerican are, concurrently with the
execution of this Agreement, entering into a Purchase Agreement for the sale and
purchase of 100% of the partnership interests of ▇▇▇▇▇▇▇▇ Gas Transmission
Company (the "Purchase Agreement").
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
SECTION 1. AUTHORIZATION OF PREFERRED AND COMMON STOCK
(a) The Company has authorized and created a series of its preferred
stock, consisting of 1,466,667 shares, par value $1.00 per share, designated as
its "9-7/8% Cumulative Convertible Preferred Stock" (the "Preferred Stock"). The
terms, limitations and relative rights and preferences of the Preferred Stock
are set forth in the Certificate of Designation of the 9-7/8% Cumulative
Convertible Preferred Stock of the Company, which the Company will file on or
before the Closing Date (as defined below) with the Secretary of State of the
State of
Delaware and a copy of which is attached hereto as Exhibit A (the
"Certificate of Designation").
The Company has duly authorized and reserved for issuance the shares of
its common stock, par value $1.00 per share (the "Common Stock"), issuable upon
conversion of the Shares (as defined below).
SECTION 2. PURCHASE AND SALE
(a) Subject to the terms and conditions set forth in this Agreement and
in
reliance upon the Company's and the Purchaser's respective representations and
warranties set forth below, on the Closing Date, the Company shall issue and
sell to the Purchaser, and the Purchaser shall purchase from the Company,
1,466,667 shares of Preferred Stock (the "Shares"), at a purchase price of
$187.50 per share (the aggregate consideration to be paid by the Purchaser for
the Shares is referred to herein as the 'Purchase Price"). Such sale and
purchase shall be effected on the Closing Date by the Company executing and
delivering to the Purchaser, duly registered in the name of the Purchaser (or
such other name as the Purchaser may instruct), a duly executed stock
certificate evidencing the Shares, against delivery by the Purchaser to the
Company of the Purchase Price (net of the fee referred to in Section 2(c) below)
by wire transfer of immediately available United States dollars to such account
as the Company shall designate prior to the Closing Date.
(b) The closing of such sale and purchase (the "Closing") shall take
place concurrently with the closing of the transactions contemplated by The
Purchase Agreement, after satisfaction or waiver of the conditions set forth in
Sections 6 and 7, or at such other time as the Purchaser and the Company shall
agree in writing (the "Closing Date"), at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other location
as. the Purchaser and the Company shall mutually select.
(c) At the Closing, the Company shall pay the Purchaser a fee of
$2,750,000 for the purchase of the Shares contemplated herein, which fee the
Purchaser shall deduct from the Purchase Price payment.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that:
3.1. Organization, Good Standing and Qualification
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of
Delaware. The Company has
provided to the Purchaser a complete and correct copy of the Company's Restated
Certificate of Incorporation and By-laws, each as amended to date (collectively,
the "Organizational Documents"), which are in full force and effect.
(b) The Company has all requisite power and authority to own and lease
its properties and assets and to carry on its business as now conducted.
(c) The Company is qualified to do business as a foreign Corporation
in, and the Company is in good standing under the laws of, each jurisdiction in
which the conduct of the Company's business or the ownership, operation or
leasing of its assets or properties requires such qualification, except where
the failure to so qualify, or to be so in good standing, would not reasonably be
expected to have a Material Adverse Effect.
3.2. Significant Subsidiaries
Each significant subsidiary of the Company (as defined in Rule 1-02 of
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Regulation S-X under the Securities Act of 1933, as amended (the "Securities
Act")) (a "Significant Subsidiary") has been duly organized or formed, is
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, has all requisite power and authority to own and
lease its properties and assets and to carry on its business as now conducted
and is duly registered, qualified and authorized to transact business and is in
good standing in each jurisdiction in which the conduct of its business or the
nature of its properties requires such registration, qualification or
authorization, except where the failure to be so qualified would not reasonably
be expected to have a Material Adverse Effect. All of the issued and outstanding
equity or other participating interests of each Significant Subsidiary have been
duly authorized and validly issued, to the extent such subsidiary is a
corporation, are fully paid and non-assessable, and, to the extent owned by the
Company, are owned free and clear of any Liens (as defined in Section 9.1),
other than such Liens (1) relating to any debt financing described in the
Company Reports (as defined herein), (ii) listed on Schedule 3.2, or (iii) that
do not materially detract from the value of such equity or participation
interest.
3.3. Capitalization
(a) The authorized capital stock of the Company consists of 960,000,000
shares of Common Stock and 30,000,000 shares of preferred stock, par value $1.00
per share. As of February 25, 2002, (i) 543,086,004 shares of Common Stock were
issued and outstanding, (ii) 356,000 shares of preferred stock were issued and
outstanding, consisting of 342,000 shares of December 2000 Cumulative
Convertible Preferred Stock, par value $1.00 per share (the "December Preferred
Stock"), and 14,000 shares of March 2001 Mandatorily Convertible Single Reset
Preferred Stock, par value $1.00 per share (the "March Preferred Stock"), (iii)
11,918,129 shares of Common Stock were reserved for issuance under the Company's
employee stock option and equivalent plans for options which have not yet been
granted, (iv) 234,540,489 shares of Common Stock were reserved for issuance
under the Company's outstanding options, warrants and securities convertible
into or exchangeable for Common Stock or otherwise entitling the holder thereof
to acquire (whether for consideration or otherwise) or requiring the Company to
issue Common Stock, of which (A) 29,767,489 shares of Common Stock are reserved
for issuance with respect to outstanding employee stock options, (B) 150,000,000
shares of Common Stock are reserved for issuance with respect to the March
Preferred Stock, (C) 10,773,000 shares of Common Stock are reserved for issuance
with respect to the December Preferred Stock, and (D) 44,000,000 shares of
Common Stock are reserved for issuance with respect to the Company's FELINE
PACS, and (v) there were no bonds, debentures, notes or other evidences of
indebtedness issued or outstanding having the right to vote on any matters on
which the Company's stockholders may vote. Except for the shares of Common Stock
referred to in clauses (ii), (iii) and (iv), the Company has no present or
future obligation to issue, and no Person has any present or future right to
receive, any shares of Common Stock.
(b) All of the outstanding shares of Common Stock of the Company have
been duly and validly issued and are fully paid and non-assessable, and to the
knowledge of the Company were issued in accordance with all applicable United
States federal and state securities laws. Upon issuance, sale and delivery as
contemplated by this Agreement, the Shares will be duly authorized, validly
issued, fully paid and non-assessable shares of Preferred Stock, free of all
preemptive or similar rights. Upon their issuance in accordance with the terms
of the Preferred Stock, the shares of Common Stock issuable upon conversion of
the Shares will be
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duly authorized, validly issued, fully paid and non-assessable shares of Common
Stock, free of all preemptive or similar rights.
(c) Except for the rights attached to the Options issued under the
Company's employee stock option plans or as otherwise set forth on Schedule
3.3(c) hereto, there are no existing options, warrants, calls, preemptive (or
similar) rights, subscriptions, conversion or exchange obligations or other
rights, agreements, arrangements or Commitments of any character obligating the
Company to issue, transfer or sell, or cause to be issued, transferred or sold,
any shares of the capital stock of the Company or other equity interests in the
Company or any securities convertible into or exchangeable for such shares of
capital stock or other equity interests, and there are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of its capital stock or other equity interests.
(d) Except as set forth on Schedule 3.3(d), no Person has any right to
effect, or to require the Company to effect, the registration of any shares of
Common Stock. For purposes of this section 3.3(d), the term "registration" shall
mean a registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement.
3.4. Authorization
The Company has all necessary corporate power and authority to execute
and deliver this Agreement and the Registration Rights Agreement, the form of
which is attached as Exhibit B hereto (the "Registration Rights Agreement" and
together with this Agreement, the "Transaction Documents"), to perform its
obligations under the Transaction Documents and the Preferred Stock and to
consummate the transactions contemplated by the Transaction Documents and the
Preferred Stock. The execution, delivery and performance, as applicable, of the
Transaction Documents and the Preferred Stock by the Company and each of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Company. No
other corporate action on the part of the Company is necessary to authorize the
execution, delivery and performance, as applicable, of the Transaction Documents
and the Preferred Stock by the Company and each of the transactions contemplated
hereby and thereby. This Agreement constitutes, and upon execution and delivery
the Registration Rights Agreement shall constitute, a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of creditors rights and remedies.
3.5. Consents and Approvals; No Conflict
(a) Except as set forth on Schedule 3.5(a), the execution and delivery
by the Company of the Transaction Documents, the performance by the Company of
its obligations under the Transaction Documents and the Preferred Stock and the
consummation by the Company of the transactions contemplated hereby and thereby
do not require the Company or any of its subsidiaries to obtain any consent,
approval or action of, or make any filing with or
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give any notice to, any corporation, Person, firm, Governmental Entity (as
defined herein) or public or judicial authority, other than (i) compliance with
the applicable requirements of the Exchange Act (as defined herein), (ii) with
respect to the Company's obligations under the Registration Rights Agreement, as
provided therein, (iii) the filing of the Certificate of Designation in
accordance with the laws of the State of
Delaware, and (iv) other consents
approvals, actions, filings or notices that are immaterial to the consummation
of the transactions contemplated hereby and thereby.
(b) Except as set forth on Schedule 3.5(b), the execution and delivery
by the Company of the Transaction Documents do not, and the fulfillment of the
terms of the Transaction Documents and the Preferred Stock by the Company will
not, result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or permit the acceleration of rights under or
termination of, the Organizational Documents, any agreement, lease, contract,
license, note, mortgage, indenture, arrangement or other obligation ("Contracts"
and individually, a "Contract") to which the Company or its subsidiaries is a
party, or any order, judgment, rule or regulation of any Governmental Entity
having jurisdiction over the Company or any of its subsidiaries or over their
respective assets, properties or businesses, except for such breaches, defaults
and accelerations that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
3.6. Company Reports; Financial Statements; Undisclosed Liabilities;
Statutory Statements
(a) Each registration statement, report, proxy statement or information
statement prepared by the Company since December 31, 2000, including, without
limitation, the Company's Annual Report on Form 10-K for the year ended December
31, 2001 (the "company Form 10-K"), the Company's Current Reports on Form 8-K
filed January 4, 2002, January 23, 2002, January 30, 2002, February 5, 2002 and
February 19, 2002, together in each case with any documents incorporated by
reference therein, each in the form (including exhibits, annexes and any
amendments thereto) filed with the SEC (collectively, including any such reports
filed with the SEC subsequent to the date hereof, the "Company Reports"), as of
their respective dates, as amended prior to the date hereof or as supplemented
by Company Reports filed on or prior to the date hereof, did not, and any
Company Reports filed with the SEC subsequent to the date hereof will 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 made therein,
in light of the circumstances in which they were made, not misleading. Except to
the extent they may have been subsequently amended or otherwise modified prior
to the date hereof by subsequent reporting or filings, as of their respective
dates, the Company Reports (as the same may have been amended or otherwise
modified) complied in all material respects with the requirements of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the SEC thereunder applicable thereto.
(b) Each of the consolidated balance sheets included in or incorporated
by reference into the Company Reports (including the related notes and
schedules) fairly presents in all material respects the consolidated financial
position of the Company as of its date, and each of the consolidated statements
of income, stockholders' equity and cash flows included in or incorporated by
reference into the Company Reports (including any related notes and schedules)
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fairly presents in all material respects the consolidated results of operations,
retained earnings and changes in financial position of the Company for the
periods set forth therein (subject, in the case of unaudited statements included
in the Company Reports, to notes and normal year-end audit adjustments), in each
case in accordance with U.S. generally accepted accounting principles ("GAAP")
consistently applied during the periods involved.
(c) Except as disclosed on Schedule 3.6(c) and except for those
liabilities that are fully reflected or reserved against on the audited
consolidated balance sheet of the Company for the year ended December 31, 2001
heretofore furnished by the Company to the Purchaser or liabilities described in
the notes thereto (or liabilities for which neither accrual nor footnote
disclosure is required pursuant to GAAP) and liabilities incurred or accrued in
the ordinary course of business since December 31, 2001, neither the Company nor
any of its subsidiaries has any material liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due).
(d) Since December 31, 2000, the Company and each of its Significant
Subsidiaries has timely filed all material periodic statements, together with
all material exhibits, interrogatories, notes, schedules and any actuarial
opinions, affirmations or certifications or other supporting documents in
connection therewith, required to be filed with or submitted to any Governmental
Entity on forms prescribed or permitted thereby (collectively, the "Company
Regulatory Report"). The Company Regulatory Reports complied in all material
respects with all applicable Laws when filed, and no material deficiency has
been asserted with respect to any Company Regulatory Report by any Governmental
Entity.
3.7. Absence of Certain Developments
(a) Since December 31, 2001, except as disclosed in the Company Reports
filed on or before the date hereof or as set forth on Schedule 3.7(a), (i) the
Company and its subsidiaries have conducted their respective businesses only in
the ordinary course, consistent with past practice, and (ii) there has not been
(1) any Material Adverse Effect or any development or combination of
developments, that, individually or in the aggregate, has had or is reasonably
likely to have a Material Adverse Effect; (2) any material change by the Company
or any Significant Subsidiary in accounting principles, practices or methods
other than as required by GAAP, RAP (as defined below) or applicable law; or (3)
any split in share capital, combination, recapitalization, redenomination of
share capital or other similar transaction or issuance or authorization of any
issuance of any other securities in respect of, in lieu of or in substitution
for share capital of the Company. "RAP" shall mean the accounting principles
prescribed or permitted by the Federal Energy Regulatory Commission.
3.8. Litigation
Except as set forth on Schedule 3.8 or in the Company Reports filed on
or before the date hereof, there is no legal action, suit, arbitration or other
legal, administrative or other governmental investigation, inquiry or proceeding
(whether federal, state, local or foreign) pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or any
subsidiary or any of their respective properties, assets or businesses which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect
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or prevent or materially delay the consummation of the transactions contemplated
by the Transaction Documents and the Preferred Stock. Except as set forth in
Schedule 3.8, neither the Company nor any Significant Subsidiary is subject to
any order, writ, judgment, injunction, decree, determination or award of any
Governmental Entity which would reasonably be expected to have a Material
Adverse Effect.
3.9. Compliance with Law; Permits
(a) The businesses of the Company and each of its subsidiaries have
been (since December 31, 2000), and are being, conducted in compliance in all
material respects with all applicable federal, state, local or non-U.S. laws,
statutes, ordinances, rules, regulations (including, without limitation, the
rules of any applicable self-regulatory organization recognized by the SEC),
rulings, written interpretations, judgments, orders, injunctions, decrees,
arbitration awards, agency requirements, licenses or permits of any Governmental
Entity of competent jurisdiction (collectively, "Laws"), except as disclosed in
the Company Reports filed on or before the date hereof and except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Company Reports filed on or before the date
hereof, neither the Company nor its subsidiaries has received written notice of
a violation of any Law, which, if violated, would reasonably be expected to have
a Material Adverse Effect. Except as set forth in Schedule 3.9 or as set forth
in the Company Reports filed prior to the date hereof and for regulatory
examinations or reviews conducted in the ordinary course, no material
investigation or review by any Governmental Entity with respect to the Company
or any of its subsidiaries is as of the date hereof pending or, to the knowledge
of the Company, threatened, which would reasonably be expected to have a
Material Adverse Effect.
(b) The Company and its subsidiaries have all licenses, permits,
franchises or other governmental authorizations (collectively, "Permits")
necessary for the ownership of their assets or properties or for the conduct of
their respective businesses, except for those Permits which, if violated or not
obtained, would not reasonably be expected to have a Material Adverse Effect.
3.10. Material Contracts
(a) Neither the Company nor any of its subsidiaries is in default (or
would be in default with notice or lapse of time, or both) under, is in
violation (or would be in violation with notice or lapse of time, or both) of,
or has otherwise breached, any Material Contract which default, alone or in the
aggregate with all other such defaults, would reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 3.10, each Material
Contract to which the Company or any of its subsidiaries is a party is in full
force and effect and is binding upon the Company or its subsidiary and, to the
best of the Company's knowledge, is binding upon such other parties, in each
case in accordance with its terms. There are no unresolved disputes involving
the Company or any of its subsidiaries under any Material Contract which if
resolved in a manner adverse to the Company would reasonably be expected to have
a Material Adverse Effect. "Material Contract" means any Contract that is
material to the properties, assets, liabilities, financial condition, business,
operations or net income of the Company and its subsidiaries, taken as a whole.
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3.11. Employee Benefits
Each "employee benefit plan" (as defined under Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA")) maintained by
the Company or any entity which would be treated as a single employer with the
Company under Section 4l4(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code") have been operated and administered in all material
respects in accordance with all presently applicable provisions of ERISA and the
Code; no "reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company would have any
material liability; the Company has not incurred and no condition exists that
presents a material risk to the Company of incurring a material liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Code; and each "pension plan"
for which the Company would have any material liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification.
3.12. Environmental Matters
(a) Except as disclosed in the Company Reports filed on or before the
date hereof and except as disclosed on Schedule 3.12, (i) there has been no
storage, disposal, generation, manufacture, refinement, transportation, handling
or treatment of Hazardous Materials by the Company or any of its subsidiaries
(or, to the knowledge of the Company, any of their predecessors in interest) at,
upon or from any of the property now or previously owned or leased by the
Company or its subsidiaries in violation of any Environmental Laws or which
would require Remedial Action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any violation or
Remedial Action which would not have, or would not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; and (ii) there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any Hazardous
Materials due to or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect.
(b) Except as disclosed in the Company Reports filed on or before the
date hereof and except as would not reasonably be likely to have a Material
Adverse Effect, (i) neither the Company nor any of its subsidiaries has received
any written notice, claim, demand, suit or request for information from any
Governmental Entity or private entity with respect to any liability or alleged
liability under any Environmental Law, nor to the knowledge of the Company has
any other entity whose liability, in whole or in part, may be attributed to the
Company or any of its subsidiaries, received any such notice, claim, demand,
suit or request for information; and (ii) neither the Company nor any of its
subsidiaries has ongoing negotiations
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with or agreements with any Governmental Entity or other Person or entity
relating to any Remedial Action or other claim arising under or related to any
Environmental Law.
(c) For purposes of this Agreement, the following terms shall have the
following meanings:
"Environmental Laws" shall mean any statute, regulation, ordinance,
order, decree, treaty, agreement, compact, common law duty or other requirement
of United States, tribal, state, local, Canadian (federal or provincial) or
international law relating to protection of human health, safety or the
environment (including, without limitation, ambient air, surface water,
groundwater, wetlands, soil, surface and subsurface strata).
"Hazardous Materials" shall mean any chemicals; pollutants,
contaminants, wastes, toxic substances, hazardous substances, hazardous
materials, hazardous wastes, radioactive materials, petroleum or petroleum
products.
"Remedial Action" shall mean any action required to: (i) clean up,
remove or treat Hazardous Materials; (ii) prevent a release or threat of release
of any Hazardous Material; (iii) perform pre-remedial studies, investigations or
post-remedial monitoring and care; or (iv) cure a violation of Environmental
Law.
3.13. Intellectual Property
Each of the Company and its subsidiaries owns, or is licensed or
otherwise possesses legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
technology, know-how, computer software programs or applications, and tangible
or intangible proprietary information or materials, including trade secrets
(collectively, "Intellectual Property") that are used in, and material to, the
business of the Company and its subsidiaries as currently conducted, and any
such patents, trademarks, trade names, service marks and copyrights held by the
Company and/or its subsidiaries are valid and subsisting except, in any such
case, as would not be reasonably expected to have a Material Adverse Effect. To
the knowledge of the Company, neither the Company nor any of its subsidiaries is
infringing, or has received any notice of any asserted infringement by any of
them of, any rights of a third party with respect to any Intellectual Property
which, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.
3.14. Regulatory Matters
The Company is not (i) a "public utility company" or a "holding
company," or (ii) an "affiliate" or "subsidiary company" of a holding company or
public utility company as such terms are defined in the Public Utility Holding
Company Act of 1935 (the "1935 Act"). No approval of (i) the SEC under the 1935
Act, or (ii) the Federal Energy Regulatory Commission under either the Natural
Gas Act of 1938 or the Federal Power Act is required in connection with the
execution of this Agreement or the consummation of the transactions contemplated
hereby.
-9-
3.15. Tax Matters
(a) Except as set forth in Schedule 3.15, (i) the Company and its
Significant Subsidiaries have timely filed with the appropriate governmental
authorities all income and other material Tax Returns (as hereinafter defined)
required to be filed by or with respect to the Company and its subsidiaries or
their operations or assets, and such Tax Returns are true, correct and complete
in all material respects, (ii) all material Taxes (as hereinafter defined) due
with respect to taxable years for which the Company or any subsidiary's Tax
Returns were filed, all material Taxes required to be paid on an estimated or
installment basis, and all material Taxes required to be withheld with respect
to the Company or its employees, operations or assets have been timely paid or,
if applicable, withheld and paid to the appropriate taxing authority in the
manner provided by law, (iii) the reserve for Taxes set forth on the audited
consolidated balance sheet of the Company as of December 31, 2001 heretofore
furnished by the Company to the Purchaser is adequate in all material respects
for the payment of all Taxes through the date thereof and no material Taxes
(other than with respect to the disposition of assets) have been incurred after
December31, 2001 which were not incurred in the ordinary course of business,
(iv) there are no Liens for Taxes upon the assets of the Company or any of its
Significant Subsidiaries (except for Liens for current Taxes not yet due and
payable), (v) no Federal, state, local or foreign audits, administrative
proceedings or court proceedings are pending with regard to any material Taxes
or Tax Returns of the Company or any of its Significant Subsidiaries and there
are no material outstanding deficiencies or assessments asserted or proposed,
and any such proceedings, deficiencies or assessments shown in Schedule 3.15 are
being contested in good faith through appropriate proceedings, (vi) there are no
outstanding agreements, consents or waivers extending the statutory period of
limitations applicable to the assessment of any material Taxes or deficiencies
against the Company or any of its Significant Subsidiaries, or with respect to
their operations or assets, and (vii) the federal income Tax Returns of the
Company and its Significant Subsidiaries have been examined by the Internal
Revenue Service (or the applicable statutes of limitation for the assessment of
federal income Taxes for such periods have expired) for all periods through and
including December 31, 1993.
(b) The Company has not filed a consent to the application of Section
341(f) of the Code.
(c) For purposes of this Agreement, "Taxes" means all taxes, charges,
fees, levies or other assessments imposed by any United States Federal, state,
or local taxing authority or by any non-U.S. taxing authority, including but not
limited to, income, gross receipts, excise, property, sales, use, transfer,
payroll, license, ad valorem, value added, withholding, social security,
franchise, estimated, severance, stamp, and other taxes (including any interest,
fines, penalties or additions attributable to or imposed on or with respect to
any such taxes, charges, fees, levies or other assessments).
(d) For purposes of this Agreement, "Tax Return" means any return,
report, information return or other document (including any related or
supporting information and, where applicable, profit and loss accounts and
balance sheets) with respect to Taxes.
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3.16. Insurance
The Company and each of its Significant Subsidiaries Carry, or are
covered by, insurance in such amounts and covering such risks as the Company
reasonably believes is adequate for the conduct of their respective businesses
and the value of their respective properties and as the Company reasonably
believes is customary for companies engaged in similar businesses in similar
industries.
3.17. Offering of Shares
Neither the Company nor any Person acting on its behalf has taken or
will take any action (including, without limitation, any offering of any
securities of the Company under circumstances which would require, under the
Securities Act, the integration of such offering with the offering and sale of
the Shares) which would subject the offering, issuance or sale of the Shares
hereunder to the registration requirements of Section 5 of the Securities Act.
3.18. Investment Company
The Company is not, and, after giving effect to the transactions
contemplated hereby, will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended.
3.19. Accuracy of Information
None of the representations, warranties or statements of the Company
contained in this Agreement, or in the schedules or exhibits hereto, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or statements
not misleading. The projections previously provided to the Purchaser in
connection with this Agreement and identified on Schedule 3.19 were made in good
faith and based on reasonable assumptions.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser and MidAmerican represent and warrant to the Company as
follows:
(a) The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of South Dakota, and it has the
requisite corporate power and authority to execute and deliver the Transaction
Documents, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby, and has taken all necessary
action to authorize the execution, delivery and performance of the Transaction
Documents. MidAmerican is corporation duly organized, validly existing and in
good standing under the laws of the State of Iowa, and it has the requisite
corporate power and authority to execute and deliver the Transaction Documents,
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, and has taken all necessary action
to authorize the execution, delivery and performance of the Transaction
Documents. No other action on the part of the Purchaser or MidAmerican is
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necessary to authorize the execution, delivery and performance of the
Transaction Documents by the Purchaser or MidAmerican and each of the
transactions contemplated hereby and thereby.
(b) This Agreement constitutes, and upon execution and delivery the
Registration Rights Agreement shall constitute, a valid and binding obligation
of the Purchaser and MidAmerican, enforceable against the Purchaser and
MidAmerican in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
(c) The execution and delivery by the Purchaser and MidAmerican of the
Transaction Documents do not, and the fulfillment of the terms hereof and
thereof by the Purchaser and MidAmerican will not, result in a breach of any of
the terms, conditions or provisions of, or constitute a default under, or permit
the acceleration of rights under or termination of, the Purchaser's or
MidAmerican's organizational documents, any material Contract to which the
Purchaser or MidAmerican is a party, or any order, judgment, rule or regulation
of any Governmental Entity having jurisdiction over the Purchaser or MidAmerican
or over their assets, properties or businesses, except for such defaults that
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Purchaser and MidAmerican and its subsidiaries,
taken as a whole.
(d) The Purchaser is an "accredited investor" as defined in Rule 501 of
Regulation D promulgated under the Securities Act. The Purchaser is purchasing
the Shares and any shares of Common Stock issued on conversion of the Shares for
investment for its own account and not with a view to, or for sale in connection
with, any distribution thereof or of any shares of Common Stock issued on
conversion of the Shares in violation of the Securities Act. The Purchaser
(either alone or together with its advisors) has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment in the Shares and is capable of bearing
the economic risks of such investment.
(e) The Purchaser currently has sufficient immediately available funds
in cash or cash equivalents and will on the Closing Date have sufficient
immediately available funds, in cash, to pay the Purchase Price and to pay any
other amounts payable pursuant to this Agreement and to effect the transactions
contemplated hereby.
(f) The Purchaser understands that the Company is relying on the
statements contained herein to establish an exemption from registration under
federal and state securities laws.
(g) The Purchaser understands that each certificate or other document
evidencing any of the Shares shall be endorsed with the legend in the form set
forth in Section 5.3(b).
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SECTION 5. COVENANTS
5.1. Covenants of the Company and the Purchaser
Subject to the terms and conditions of this Agreement, each of the
parties shall use reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary or desirable under
applicable legal requirements, to consummate and make effective the transactions
contemplated by this Agreement. If at any time after the Closing Date, any
further action is necessary or desirable to carry out the purposes of this
Agreement, the parties hereto shall use their reasonable best efforts to take or
cause to be taken all such necessary or desirable action and execute, deliver
and file, or cause to be executed, delivered and filed, all necessary or
desirable documentation.
5.2. Covenants of the Company
(a) Between the date of this Agreement and the Closing Date, the
Company will promptly advise the Purchaser of any action or event of which it
becomes aware which has the effect of making incorrect, any of the Company's
representations or warranties or which has the effect of rendering any of the
Company's covenants incapable of performance;
(b) From the date hereof until the Closing Date, the Company will (i)
furnish to the Purchaser and its authorized representatives such financial and
operating data and other information relating to the Company and its
subsidiaries as such Persons may reasonably request, and (ii) instruct its
counsel, independent accountants and financial advisors to cooperate reasonably
with the Purchaser and its authorized representatives in its investigation of
the Company. Any investigation pursuant hereto shall be conducted in such manner
as not to interfere unreasonably with the conduct of the business of the
Company. In addition, from the date hereof until the Closing Date, the Company
will provide the Purchaser with copies of all financial information, reports and
presentations delivered to the lenders under the Company's principal credit
facilities, subject to customary confidentiality terms and conditions.
(c) After the date hereof and prior to the Closing Date, except as (1)
expressly provided for in this Agreement, (ii) set forth on Schedule 3.5(b) or
(iii) consented to in writing by the Purchaser (which consent shall not be
unreasonably withheld or delayed), the Company will not:
(i) split, combine or reclassify any shares of the
Company's capital stock;
(ii) declare or pay any dividend or distribution (whether
in cash, stock or property) in respect of its Common
Stock, other than its regular quarterly dividend, or
call for redemption, redeem or repurchase any of its
Common Stock;
(iii) take any action, or knowingly omit to take any
action, that would, or that would reasonably be
expected to, result in (A) any of the representations
and warranties of the Company set forth in Section 3
becoming untrue, or (B) any of the conditions to the
obligations of the Purchaser set forth in
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Section 6 not being satisfied; or
(iv) enter into any agreement or commitment to do any of
the foregoing.
(d) Prior to the Closing, the Company will take all actions necessary
to file the Certificate of Designation with the Secretary of State of the State
of
Delaware.
(e) If, following completion of the ▇▇▇▇▇▇▇▇ Substitution (as such term
is defined in the Consent Solicitation Statement, dated February 25, 2002, of
the Company), the Company or any of its Affiliates owns any share or shares of
the March 2001 Mandatorily Convertible Single Reset Preferred Stock, par value
$1.00 per share, of the Company, the Company will cancel any such share or
shares as soon as reasonably practicable after it is permitted to do so under
the terms of the ▇▇▇▇▇▇▇▇ Share Trust Amended and Restated Trust Agreement,
dated March 28, 2001, by Wilmington Trust Company, as Share Trustee, ▇▇▇▇▇▇▇▇
Share Trust, and the Company. The Company will use its reasonable best efforts
to cause the ▇▇▇▇▇▇▇▇ Substitution to occur prior to September 30, 2002.
5.3. Covenants of the Purchaser
(a) The Purchaser covenants that it will not sell or otherwise transfer
the Shares (or any shares of Common Stock acquired upon conversion of the
Shares)to any Person except pursuant to an effective registration under the
Securities Act or in a transaction which, in the opinion of counsel reasonably
satisfactory to the Company, qualifies as an exempt transaction under the
Securities Act and the rules and regulations promulgated thereunder.
(b) The certificates evidencing the Shares and the shares of Common
Stock issuable upon conversion of the Shares will bear the following legend
reflecting the foregoing restrictions on the transfer of such securities:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT'), AND MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT
OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY, QUALIFIES AS AN EXEMPT TRANSACTION UNDER
THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER."
The Company shall remove this legend from the certificates evidencing such
securities as promptly as practicable following the registration of such
securities under the Securities Act or such earlier time as such securities are
no longer subject to restriction on transfer under the Securities Act.
SECTION 6. CLOSING CONDITIONS OF THE PURCHASER
The obligations of the Purchaser to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction on or prior to the Closing Date
of the following conditions, any one
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or more of which may be waived by the Purchaser in accordance with Section 8.4:
(a) All representations and warranties made by the Company in this
Agreement shall be true and correct in all material respects (except for such
representations and warranties that are qualified as to materiality or Material
Adverse Effect, which shall be true and correct in all respects) on and as of
the Closing Date as if again made by the Company on and as of such date.
(b) The Company shall have performed in all material respects all
obligations required under this Agreement to be performed by it on or before the
Closing Date.
(c) The Purchaser shall have received a certificate, dated the Closing
Date, signed by the Chief Executive Officer or the Chief Financial Officer of
the Company, certifying that the conditions specified in the foregoing
paragraphs (a) and (b) of this Section 6 hereof have been fulfilled.
(d) The Purchaser shall have received from the General Counsel of the
Company an opinion, dated the Closing Date, with respect to the matters set
forth in Exhibit C hereto.
(e) The Company shall have executed the Registration Rights Agreement.
(f) The Certificate of Designation shall have been filed by the Company
with the Secretary of State of the State of
Delaware.
(g) All conditions to the obligations of the parties to the Purchase
Agreement to consummate the transactions contemplated by such agreement shall
have been satisfied or waived (other than conditions set forth in Sections 5.11
and 6.5 of such agreement) and the Company shall be ready, willing and able to
close such transaction.
(h) During the period from December 31, 2001 to the Closing Date, there
shall not have been any fact, circumstance or development that has had or would
reasonably be expected to have a Material Adverse Effect.
(i) The consents, waivers, authorizations and approvals set forth on
Schedules 3.5(a) and 3.5(b) shall have been duly obtained and shall be in full
force and effect on the Closing Date.
(j) No preliminary or permanent injunction or other order issued by any
Governmental Entity, nor any statute, rule, regulation, decree or executive
order promulgated or enacted by any Governmental Entity, which declares the
Transaction Documents or the Preferred Stock invalid or unenforceable in any
respect or which prevents the consummation of the transactions contemplated
hereby or thereby, shall be in effect; and no action or proceeding before any
Governmental Entity shall have been instituted by a Governmental Authority or
other person or threatened by any Governmental Entity which seeks to prevent or
delay the consummation of the transactions contemplated by the Transaction
Documents or the Preferred Stock or which challenges the validity or
enforceability of the Transaction Documents or the
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Preferred Stock.
(k) There shall not have occurred since the date of this Agreement any
downgrading in the rating accorded any of the Company's senior unsecured
securities below BBB-, Baa3 or BBB- by any one of Standard & Poor's Ratings
Services, ▇▇▇▇▇'▇ Investors Service and Fitch Ratings, respectively.
SECTION 7. CLOSING CONDITIONS OF THE COMPANY
The obligations of the Company to effect the transactions contemplated
by this Agreement shall be subject to the satisfaction on or prior to the
Closing Date of the following conditions, any one or more of which may be waived
by the Company in accordance with Section 8.4:
(a) All representations and warranties made by the Purchaser in this
Agreement shall be true and correct in all material respects (except for such
representations and warranties that are qualified as to materiality or Material
Adverse Effect, which shall be true and correct in all respects) on and as of
the Closing Date as if again made by the Purchaser on and as of such date.
(b) The Purchaser shall have performed in all material respects all
obligations required under this Agreement to be performed by it on or before the
Closing Date.
(c) The Company shall have received a certificate, dated the Closing
Date, signed by the Chief Executive Officer or the Chief Financial Officer of
the Purchaser, certifying that the conditions specified in the foregoing
paragraphs (a) and (b) of this Section 7 hereof have been fulfilled.
(d) No preliminary or permanent injunction or other order issued by any
Governmental Entity, nor any statute, rule, regulation, decree or executive
order promulgated or enacted by any Governmental Entity, which declares the
Transaction Documents or the Preferred Stock invalid or unenforceable in any
respect or which prevents the consummation of the transactions contemplated
hereby or thereby, shall be in effect; and no action or proceeding before any
Governmental Entity shall have been Instituted by a Governmental Authority or
other person or threatened by any Governmental Entity which seeks to prevent or
delay the consummation of the transactions contemplated by the Transaction
Documents or the Preferred Stock or which challenges the validity or
enforceability of the Transaction Documents or the Preferred Stock.
(e) All conditions to the obligations of the parties to the Purchase
Agreement to consummate the transactions contemplated by such agreement shall
have been satisfied or waived (other than conditions set forth in Sections 5.11
and 6.5 of such agreement) and the Purchaser shall be ready, willing and able to
close such transaction.
(f) The consents, waivers, authorizations and approvals set forth on
Schedules 3.5(a) and 3.5(b) shall have been duly obtained and shall be in full
force and effect on the Closing Date.
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SECTION 8: TERMINATION, AMENDMENT AND WAIVER
8.1. Termination
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing:
(a) by mutual written consent of the Company and the Purchaser;
(b) by the Company, in the event that the Purchaser fails to comply
with any of its covenants or agreements contained herein, or breaches its
representations and warranties contained herein, such failure to comply or
breach, if curable, is not cured within 10 days after receipt by the Purchaser
of notice specifying particularly such failure to comply or breach, and such
failure to comply or breach would result in the failure to satisfy the
conditions set forth in Sections 7(a) and/or 7(b);
(c) by the Purchaser, in the event that the Company fails to comply
with any of its covenants or agreements contained herein, or breaches its
representations and warranties contained herein, such failure to comply or
breach, if curable, is not cured within 10 days after receipt by the Company of
notice specifying particularly such failure to comply or breach, and such
failure to comply or breach would result in a failure to satisfy the conditions
set forth in Section 6(a) and/or 6(b);
(d) by the Company or the Purchaser, in the event that a Governmental
Entity shall have issued an order, decree or ruling or taken any other action
(which order, decree or ruling the parties hereto shall use their reasonable
best efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the transactions contemplated by this Agreement and which is not
subject to appeal;
(e) by the Company or the Purchaser at any time after June 15, 2002; or
(1) by the Company or the Purchaser, in the event that the Purchase
Agreement has been terminated.
8.2. Effect of Termination
In the event of termination and abandonment of this Agreement pursuant
to Section 8.1, written notice thereof shall forthwith be given to the other
party hereto and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by the Company or
the Purchaser. If this Agreement is terminated as provided herein, no party to
this Agreement shall have any liability or further obligation to any other party
to this Agreement except as provided in Sections 11.1 and 11.2 hereof; provided,
however, that no termination of this Agreement pursuant to this Section 8 shall
relieve any party of liability for a grossly negligent or wilful and, in either
case, material breach of any provision of this Agreement occurring before such
termination.
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8.3. Amendment
This Agreement may be amended, modified or supplemented only by a
written instrument executed by the parties hereto.
8.4. Waiver
The Purchaser or the Company may, by written notice to the other party
(i) extend the time for the performance of any of the obligations or other
actions of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties of the other party contained in this Agreement or
in any documents delivered pursuant to this Agreement by the other party, (iii)
waive compliance with any of the covenants of the other party contained in this
Agreement, (iv) waive performance of any of the obligations of the other party
or (v) waive fulfillment of any of the conditions to its own obligations under
this Agreement or in any documents delivered pursuant to this Agreement by the
other party. The waiver by either party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach, whether or not similar, unless such waiver specifically states that it
is to be construed as a continuing waiver.
SECTION 9. INTERPRETATION OF THIS AGREEMENT
9.1. Certain Terms Defined
As used in this Agreement, the following terms have the respective
meanings set forth below:
Affiliate: shall mean a Person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned Person.
Governmental Entity: shall mean any U.S. or non-U.S. (a) federal,
state, county, local or municipal governmental, administrative or regulatory
authority, agency, commission, tribunal, body or political subdivision thereof,
(b) other governmental, quasi-governmental, regulatory or self-regulatory
entity, (c) court or administrative tribunal, or (d) arbitration tribunal or
other non-Governmental Entity with applicable jurisdiction.
Liens: shall mean any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind.
Material Adverse Effect: shall mean a material adverse effect on the
assets, properties, business, operations, net income or financial condition of
the Company and its subsidiaries taken as a whole, it being understood that none
of the following shall be deemed to constitute a Material Adverse Effect; (1)
any effect resulting from entering into this Agreement or the announcement of
the transactions contemplated by this Agreement; and (ii) any effect resulting
from changes in the United States or global economy as a whole, except for such
effects which disproportionately impact the Company and its subsidiaries, taken
as a whole.
-18-
Person: shall mean an individual, corporation, association, trust,
limited liability company, limited partnership, limited liability partnership,
partnership, incorporated organization, other entity or group (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, and a Governmental
Entity.
SEC: shall mean the Securities and Exchange Commission.
9.2. Schedules
The numbers assigned to the disclosure schedules are given for
reference purposes only. Any matter or item disclosed on any disclosure schedule
shall not be deemed to be material (whether singularly or in the aggregate) or
deemed to give rise to circumstances which may result in a Material Adverse
Effect solely by reason of it being so disclosed herein. Any matter or item
disclosed pursuant to any disclosure schedule shall be deemed to be disclosed
for all purposes under the Agreement reasonably related thereto and any matter
disclosed in one disclosure schedule will be deemed disclosed with respect to
another disclosure schedule if such disclosure is made in such a way as to make
its direct relevance with respect to such other disclosure schedule readily
apparent.
9.3. Governing Law
This Agreement shall be governed by and construed in accordance with
the internal and substantive laws of
Delaware and without regard to any
conflicts of laws concepts which would apply the substantive law of some other
jurisdiction.
9.4. Paragraph and Section Headings
The headings of the sections and subsections and any table of contents
of this Agreement are solely for convenience of reference and shall not affect
the meaning or interpretation of this Agreement or any term or provision hereof.
SECTION 10. SURVIVAL
The respective representations and warranties of the parties hereto
contained herein or in any certificates or other documents delivered pursuant to
this Agreement on the Closing shall not survive the Closing. The covenants and
agreements of the parties hereto shall survive the Closing in accordance with
their terms.
SECTION 11. MISCELLANEOUS
11.1. Notices
(a) All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed to have been duly made or
delivered, if delivered personally or sent by overnight courier or facsimile
(with evidence of confirmation of receipt), in each case to the parties at the
following addresses:
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(1) if to the Purchaser or MidAmerican:
MEHC Investment, Inc.
do MidAmerican Energy Holdings Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. / ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(2) if to the Company:
The ▇▇▇▇▇▇▇▇ Companies
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other persons or at such other addresses as shall be furnished by either
party by like notice to the other, and such notice or communication shall be
deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 11.1 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 11.1.
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11.2. Expenses
Except as otherwise expressly provided in this Agreement, all legal,
accounting, financial advisory and other fees, costs and expenses of a party
hereto incurred in connection with this Agreement and the performance of the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
11.3. Publicity
On or prior to the Closing Date, neither party shall, nor shall it
permit its affiliates to, issue or cause the publication of any press release or
other announcement with respect to this Agreement or the transactions
contemplated hereby without the consent of the other party hereto.
Notwithstanding the foregoing, in the event any such press release or
announcement is required by law or stock exchange rule to be made by the party
proposing to issue the same, such party shall use its reasonable best efforts to
consult in good faith with the other party prior to the issuance of any such
press release or announcement.
11.4. Submission to Jurisdiction
With respect to any suit, action or proceeding initiated by a party to
this Agreement arising out of, under or in connection with this Agreement or the
transactions contemplated hereby, the Company and the Purchaser each hereby
submit to the exclusive jurisdiction of any state or federal court sitting in
the State of
Delaware and irrevocably waive, to the fullest extent permitted by
law, any objection that they may now have or hereafter obtain to the laying of
venue in any such court in any such suit, action or proceeding.
11.5. Successors and Assigns
The rights and obligations of the parties hereto shall inure to the
benefit of and shall be binding upon the authorized successors and permitted
assigns of each party. Neither party hereto may assign its rights or obligations
under this Agreement or designate another person (i) to perform all or part of
its obligations under this Agreement or (ii) to have all or part of its rights
and benefits under this Agreement, in each case without the prior written
consent of the other party. Notwithstanding the prior sentence, the Purchaser
may assign any of its rights (but not its obligations) under this Agreement to
one or more of the wholly-owned subsidiaries of MidAmerican (so long as such
assignment does not delay the Closing or impose any additional costs on the
Company), it being understood that such assignment will not release Purchaser
from its obligations hereunder. In the event of any assignment in accordance
with the terms of this Agreement, the assignee shall specifically assume and be
bound by the provisions of the Agreement by executing and agreeing to an
assumption agreement reasonably acceptable to the Company.
11.6. Entire Agreement; Amendment and Waiver
The Transaction Documents and the Certificate of Designation represent
the entire agreement and understanding of the parties with reference to the
transactions set forth herein and therein and no representations or warranties
have been made in connection with the
-21-
Transaction Documents and the Certificate of Designation other than those
expressly set forth herein or in the Schedules, exhibits, certificates and other
documents delivered in accordance herewith or therewith. The Transaction
Documents and the Certificate of Designation supersede all prior negotiations,
discussions, correspondence, communications, understandings and agreements
between the parties relating to the subject matter of the Transaction Documents
and the Certificate of Designation and all prior drafts of the Transaction
Documents and the Certificate of Designation, all of which are merged into the
final executed versions of the Transaction Documents and the Certificate of
Designation, as the case may be. No prior drafts of the Transaction Documents
and the Certificate of Designation and no words or phrases from any such prior
drafts shall be admissible into evidence in any action or suit involving the
final executed versions of the Transaction Documents and the Certificate of
Designation, as the case maybe.
11.7. Severability
This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.
11.8. Counterparts
Facsimile transmission of any signed original document and/or
retransmission of any signed facsimile transmission shall be the same as
delivery of an original. At the request of the Company or the Purchasers, the
parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
11.9. Third Party Beneficiaries
Nothing in this Agreement shall confer upon any person or entity not a
party to this Agreement, or the legal representatives of such person or entity,
any rights or remedies of any nature or kind whatsoever under or by reason of
this Agreement.
11.10. Guarantee
MidAmerican guarantees performance by the Purchaser of the Purchaser's
obligations under this Agreement.
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IN WITNESS WHEREOF, the Company, the Purchaser and MidAmerican have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
--------------------------------
Title:
--------------------------------
MEHC INVESTMENT, INC.
By: [Signature Illegible]
Name:
---------------------------------
Title
--------------------------------
MIDAMERICAN ENERGY HOLDINGS
COMPANY
By: [Signature Illegible]
Name:
---------------------------------
Title
---------------------------------
[Signature Page to
Stock Purchase Agreement]
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 27, 2002, between MEHC
Investment, Inc., a South Dakota corporation (the "Investor"), and The ▇▇▇▇▇▇▇▇
Companies, Inc., a
Delaware corporation (the 'Company").
RECITALS
WHEREAS, the Investor has, pursuant to the terms of the
Stock Purchase
Agreement, dated as of March 7, 2002 (the "
Stock Purchase Agreement"), by and
among the Company, the Investor and MidAmerican Energy Holdings Company, agreed
to purchase 1,466,667 shares of 9-7/8% Cumulative Convertible Preferred Stock,
par value $1.00 per share, of the Company (the "Preferred Stock") and
WHEREAS, the shares of Preferred Stock are convertible into shares of
Common Stock, par value $1.00 per share, of the Company (the "Common Stock") and
WHEREAS, the Company has agreed, as a condition precedent to the
Investor's obligations under the
Stock Purchase Agreement, to grant the Investor
certain registration rights; and
WHEREAS, the Company and the Investor desire to define the registration
rights of the Holders (as defined below) on the terms and subject to the
conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and subject to and on the terms and conditions herein set forth,
the parties hereto agree as follows:
SECTION 1. DEFINITIONS
In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the respective meaning set forth below:
Agreement: shall mean this Registration Rights Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to this Registration Rights Agreement as the
same may be in effect at the time such reference becomes operative;
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Conversion Shares: shall mean any of the shares of Common Stock issued
or issuable upon conversion of the Preferred Stock and any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange for
or replacement of, the Conversion Shares;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities. For purposes
of this Agreement, the Company may deem and treat the registered holder of
Registrable Securities as the Holder and absolute owner thereof, and the Company
shall not be affected by any notice to the contrary;
Other Stockholders: shall mean Persons who, by virtue of agreements
with the Company, are entitled to have their Company securities (other than
Registrable Securities) registered;
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
Register, registered and registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
Registrable Securities: shall mean the Conversion Shares. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (A) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (B) they shall have been sold to the public pursuant to Rule 144
under the Securities Act, as such Rule may be amended from time to time ("Rule
144"), (C) in the case of a Piggyback Registration pursuant to Section 2(b), at
such time as they are eligible to be sold by the Holder thereof pursuant to
paragraph (k) of Rule 144 ("Rule 144(k)"), (D) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force, or (D) they
shall have ceased to be outstanding;
Registration Expenses: shall mean all expenses incurred by the Company
in compliance with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and expenses of one counsel for all the
Holders (not to exceed $50,000 in each instance), blue sky fees and expenses and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
Securities Act: shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
-2-
SECTION 2. REGISTRATION RIGHTS
(a) Demand Registration.
(i) Request for Registration. Upon the written request of one
or more Holders of not less than 20% of the Registrable Securities
(calculated on an as-converted basis) (the "Requesting Holders") that
the Company effect the registration of all or a part of such Holders'
Registrable Securities (which request shall specify the intended method
of disposition of such Registrable Securities) (a "Demand
Registration"), the Company will:
(1) promptly give written notice of the proposed registration
to all other Holders; and
(2) as soon as reasonably possible, use its reasonable best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution (in accordance with the
intended methods as aforesaid) of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within 15
days after written notice from the Company is given under Section
2(a)(i)(1) above; provided that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant to
this Section 2(a):
(A) If such registration is prohibited by applicable
law;
(B) For a period of 30 days before the anticipated
consummation of a public offering by the Company of its equity
securities and 90 days subsequent to the consummation of such
public offering;
(C) In any particular jurisdiction in which the
Company would be required to execute a general consent to
service of process in effecting such registration,
qualification or compliance, unless the Company is already
subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or
regulations thereunder;
(D) After the Company has effected three (3) Demand
Registrations pursuant to this Section 2(a) and such
registrations have been declared or ordered effective and the
sales of such Registrable Securities shall have closed;
(E) If the Registrable Securities requested by all
Holders to be registered pursuant to such request do not
constitute at least 20% of the Registrable Securities
(calculated on an as-converted basis);
-3-
(F) Within 90 days after the effective date of a
previous Demand Registration or a previous registration under
which the Requesting Holders had piggyback rights pursuant to
Section 2(b) hereof wherein the Requesting Holders were
permitted to register, and sold, at least 50% of the
Registrable Securities requested to be included therein;
(G) If the Company shall furnish to the Requesting
Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of
Directors it would be in the best interests of the Company to
defer such Demand Registration because such registration would
jeopardize any other material corporate transaction of the
Company or would require the disclosure of material non-public
information, then the Company shall have the right to defer
filing a registration statement for such Demand Registration
for a period not to exceed sixty (60) days from the date of
receipt of written request from the Requesting Holders;
provided, however, that the Company shall not exercise such
right more than once in any (12) twelve-month period.
The registration rights set forth in this Section 2 may be assigned, in
whole or in part, to any transferee of Registrable Securities (who shall be
bound by all obligations of this Agreement).
(ii) Underwriting. If the Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2(a). The Holders whose shares are to
be included in such registration and the Company shall enter into an
underwriting agreement in customary form (including in the case of the
Company customary indemnification and contribution) with the
representative of the underwriter or underwriters selected for such
underwriting by the Holders of more than 50% of the Registrable
Securities (calculated on an as-converted basis) to be registered and
reasonably acceptable to the Company. The Holders may, at their option,
require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such
Holders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holders. Any such
Holder shall not be required to make any representations or warranties
to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, such
Holder's Registrable Securities and such Holder's intended method of
distribution and any other representation required by law.
(iii) Priority on Demand Registration. Notwithstanding any
other provision of this Section 2(a), whenever the Company shall effect
a Demand Registration pursuant to this Section 2(a) in connection with
an underwritten offering by one or more Holders of Registrable
Securities, if the representative of the underwriter or underwriters
selected for such underwriting advises the Company and the Holders in
writing that in their opinion the number of shares of Registrable
Securities proposed to be included in
-4-
any such registration exceeds the number of securities which can be
sold in such offering, the number of shares included in such
registration by the Holders shall be reduced to such number of shares
of Registrable Securities which in the opinion of such representative
can be sold. If the number of shares which can be sold is less than the
number of shares of Registrable Securities proposed to be registered,
the amount of Registrable Securities to be so sold shall be allocated
first, to the shares of Registrable Securities requested to be
registered by the Requesting Holders and then pro rata among the other
Holders of Registrable Securities desiring to participate in such
registration on the basis of the amount of such Registrable Securities
initially proposed to be registered by such other Holders. No
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration.
(iv) Inclusion of Other Shares in Underwritten Demand
Registration. Whenever the Company shall effect a registration pursuant
to this Section 2(a) in connection with an underwritten offering by one
or more Holders of Registrable Securities, no securities other than
Registrable Securities shall be included among the securities covered
by such registration unless the managing underwriter of such offering
shall have advised each holder of Registrable Securities to be covered
by such registration in writing that the inclusion of such other
securities would not adversely affect such offering. If the managing
underwriter shall thereafter advise the Company and the Holders that
the inclusion of some or all of such securities would adversely affect
such offering, the Company shall include in such registration and
offering: (i) first, the Registrable Securities, in accordance with
Section 2(a)(iii) and (ii) second, to the extent additional securities
may be included, the securities of the Company and the Other
Stockholders, in such relative amounts as they shall agree, or failing
agreement, as the managing underwriter shall advise.
(v) Registration Statement Form. Registrations under this
Section 2(a) shall be on such appropriate registration form of the
Commission (i) as shall be selected by the Holders of more than 50% of
the Registrable Securities so to be registered and as shall be
reasonably acceptable to the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the
intended method or methods of disposition specified in their request
for such registration. The Company agrees to include in any such
registration statement all information which, in the opinion of counsel
to the holders of Registrable Securities and counsel to the Company, is
required to be included.
(b) Piggyback Registration.
(i) If the Company shall determine to register any of its
equity securities (other than Registrable Securities) under the
Securities Act either for its own account or for the account of Other
Stockholders, other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration
statement covering the sale of Registrable Securities (a "Piggyback
Registration"), the Company will:
-5-
(1) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(2) subject to Section 2(b)(iii) below, include in such
registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting of equity securities
involved therein, all the Registrable Securities specified in a written
request or requests, made by the Holders within fifteen (15) days after
receipt of the written notice from the Company described in clause (i)
above. Such written request may specify all or a part of the Holders'
Registrable Securities. The Company may postpone or withdraw the filing
or effectiveness of a Piggyback Registration at any time in its sole
discretion.
(ii) Underwriting. If the registration of which the Company
gives notice pursuant to Section 2(b)(i)(1) is for a registered public
offering involving an underwriting of equity securities, the Company
shall so advise each of the Holders as a part of such notice. In such
event, the right of each of the Holders to registration pursuant to
this Section 2(b) shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent provided herein. If any
Piggyback Registration is an underwritten primary offering of equity
securities, the Company shall have the sole right to select the
managing underwriter or underwriters to administer any such offering.
The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form (including in the case of the Company
customary indemnification and contribution) with the representative of
the underwriter or underwriters selected for underwriting by the
Company. The Holders may, at their option, require that any or all of
the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters shall
also be made to and for the benefits of such Holders and that any or
all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the
obligations of such Holders. Any such Holder shall not be required to
make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such Holder, such Holder's Registrable Securities
and such Holder's intended method of distribution and any other
representation required by law.
(iii) Priority on Piggyback Registrations. The number of
equity securities requested to be included in such Piggyback
Registration shall be subject to the following allocation priority:
(1) If a Piggyback Registration is an underwritten
primary registration of equity securities on behalf of the Company, and
the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such
registration exceeds the number of equity securities which can be sold
in such offering, the Company shall include in such registration (i)
first, the equity securities the Company proposes to sell, (ii) second,
the Registrable Securities requested to be
-6-
included therein by the Holders, pro rata among such Holders on the
basis of the number of shares requested to be registered by such
Holders or as such Holders may otherwise agree and (iii) third, other
equity securities requested to be included in such registration by
Other Stockholders.
(2) If Piggyback Registration is an underwritten secondary
registration of equity securities on behalf of Other Stockholders of
the Company's securities, and the managing underwriters shall advise
the Company in writing that in their opinion the number of equity
securities requested to be included in such registration exceeds the
number of equity securities which can be sold in such offering, the
Company shall include in such registration (i) first, the equity
securities proposed to be included therein by the holders requesting
such registration, (ii) second, the equity securities requested to be
included in such registration by the Company; (iii) third, the
Registrable Securities requested to be included therein by the Holders,
pro rata among such Holders on the basis of the number of shares
requested to be registered by such Holders or as such Holders may
otherwise agree and (iv) fourth, other equity securities requested to
be included in such registration by Other Stockholders not otherwise
included in clause (i) above.
The Company shall so advise all holders of securities
requesting registration, and the number of shares of equity securities
that are entitled to be included in any such registration. If the
Holder disapproves of the terms of any such underwriting, he may elect
to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other equity securities
excluded or withdrawn from such underwriting shall be withdrawn from
such registration. Notwithstanding anything herein to the contrary, if
the Company has previously filed a registration statement with respect
to Registrable Securities pursuant to Section 2(a) hereof or pursuant
to this Section 2(b), and if such previous registration has not been
withdrawn or abandoned, the Company shall not be obligated to cause to
become effective any other registration of any of its securities under
the Securities Act, whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least three
months has elapsed from the effective date of such previous
registration.
The registration of convertible debt and the underlying equity
securities into which such debt converts shall not be deemed a
registration of equity securities for purposes of this Section 2(b).
(c) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of their shares so registered.
(d) Registration Procedures. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will as soon as
reasonably possible:
-7-
(i) prepare and file with the Commission the requisite
registration statement to effect such registration as soon as
reasonably possible and, in any event, in the case of a registration
pursuant to Section 2(a), not later than thirty (30) days after receipt
of the registration request from the Requesting Holders and thereafter
use its reasonable best efforts to cause such registration statement to
become effective as soon as reasonably possible;
(ii) use its reasonable best efforts to keep such registration
effective for a period of one hundred twenty (120) days or until the
Holders, as applicable, have completed the distribution described in
the registration statement relating thereto, whichever first occurs;
provided, however, that (A) such 120-day period shall be extended for a
period of time equal to the period during which the Holders refrain
from selling any securities included in such registration in accordance
with provisions in Section 2(d)(vii) hereof; and (B) in the case of any
registration of Registrable Securities on Form S-3 which are intended
to be offered on a continuous or delayed basis, such 120-day period
shall be extended until all such Registrable Securities are sold, but
in any event not exceeding two years, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided further that applicable rules
under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective
amendment which (y) includes any prospectus required by Section 10(a)
of the Securities Act or (z) reflects facts or events representing a
material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information
required to be included in (y) and (z) above to be contained in
periodic reports filed pursuant to Section 12 or 15(d) of the Exchange
Act in the registration statement;
(iii) furnish to each seller of Registrable Securities covered
by such registration statement and each Requesting Holder such number
of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus contained in such registration
statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request;
(iv) use its reasonable best efforts to register or qualify
all Registrable Securities and other securities covered by such
registration statement under such other securities or blue sky laws of
such jurisdictions where an exemption is not available and as such
seller thereof and each Requesting Holder shall reasonably request, to
keep such registration or qualification in effect for so long as such
registration statement remains in effect, and take any other action
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the securities
owned by such seller.
(v) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other
-8-
federal or state governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) use its reasonable best efforts to furnish or cause to be
furnished, on the date that such Registrable Securities are delivered
to the underwriters for sale, if such securities are being sold through
underwriters or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect
to such securities becomes effective, (1) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders participating in
such registration, addressed to the underwriters, if any, and to the
Holders participating in such registration and (2) a letter, dated as
of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the
Holders participating in such registration, addressed to the
underwriters, if any, and if permitted by applicable accounting
standards, to the Holders participating in such registration.
(vii) notify each seller of Registrable Securities covered by
such registration statement and each Requesting Holder, at any time
when a prospectus relating thereto is required to be delivered under
the Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made, and at the request of any such seller or holder promptly prepare
and furnish to such seller or holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an 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 not misleading in the light of
the circumstances under which they are made;
(viii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act, and will furnish to each such
seller and each Requesting Holder at least two business days prior to
the filing thereof a copy of any amendment or supplement to such
registration statement or prospectus and shall not file any thereof to
which any such seller or any Requesting Holder shall have reasonably
objected on the grounds that such amendment or supplement does not
comply in all material respects with the requirements of the Securities
Act or of the rules or regulations thereunder;
-9-
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of
such registration statement; and
(x) use its reasonable best efforts to list all Registrable
Securities covered by such registration statement on any national
securities exchange on which Registrable Securities of the type covered
by such Registration Statement are then listed.
Each Holder agrees by acquisition of such Registrable Securities that
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 2(d)(vii), such Holder will forthwith discontinue such
Holder's disposition of Registrable Securities pursuant to the registration
statement relating to such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
2(d)(vii).
(e) Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, each Requesting Holder and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such access
to its financial and other records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of such Holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, employees, agents and
attorneys, and each Person controlling each of the Holders, with
respect to each registration which has been effected pursuant to this
Section 2, and each underwriter, if any, and each person who controls
any underwriter, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to
any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each of the Holders, each of
its officers, directors, employees, agents and attorneys, and each
Person controlling each of the Holders, each such underwriter and each
Person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided
that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission
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based upon written information furnished to the Company by the Holders
or underwriter and stated to be specifically for use therein.
(ii) Each of the Holders will, indemnify the Company, each of
its officers, directors, employees, agents and attorneys, and each
underwriter, if any, of the Company's securities covered by
registration statement in which such Holder's Registrable Securities
are included, each person who controls the Company or such underwriter,
each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder against
all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such
Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements by such Holder therein not misleading, and will reimburse
the Company and such Other Stockholders, officers, directors,
employees, agents, attorneys underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated
to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an
amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Promptly after receipt by an Indemnified Party under
this Section 2(f) (an "Indemnified Party") of notice of the
commencement of any action for which such Indemnified Party is entitled
to indemnification under this Section 2(f), such Indemnified Party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 2(1) (the "Indemnifying Party"),
notify the Indemnifying Party of the commencement thereof in writing;
but the omission to so notify the Indemnifying Party will not relieve
it from any liability under clauses (i) or (ii) above unless and to the
extent such failure results in the forfeiture by the Indemnifying Party
of substantial rights and defenses. 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; provided, however, that if (i) the use of counsel chosen by the
Indemnifying Party to represent the Indemnified Party would present
such counsel with a conflict of interest, (ii) the defendants in any
such action include both the Indemnified Party and the Indemnifying
Party and the Indemnified Party shall have been advised by counsel that
there may be one or more legal defenses available to it and/or other
Indemnified Parties that are different from or additional to those
available to the Indemnifying Party, or (iii) the Indemnifying Party
shall not have employed counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party within a
reasonable time after receipt by the Indemnifying Party of notice of
the institution of such action, then, in each such case, the
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Indemnifying Party shall not have the right to direct the defense of
such action on behalf of such Indemnified Party or parties and such
Indemnified Party or parties shall have the right to select separate
counsel to defend such action on behalf of such Indemnified Party or
parties. After notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense thereof and approval by
such Indemnified Party of counsel appointed to defend such action, the
Indemnifying Party will not be liable to such Indemnified Party under
this 2(f) for any legal or other expenses, other than reasonable costs
of investigation, subsequently incurred by such Indemnified Party in
connection with the defense thereof, unless (i) the Indemnified Party
shall have employed separate counsel in accordance with the proviso to
the immediately preceding sentence (it being understood, however, that
in connection with such action the Indemnifying Party shall not be
liable for the expenses of more than one separate counsel (in addition
to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same
general allegations or circumstances representing the Indemnified
Parties who are parties to such action or actions) or (ii) the
Indemnifying Party has authorized in writing the employment of counsel
for the Indemnified Party at the expense of the Indemnifying Party.
After such notice from the Indemnifying Party to such Indemnified
Party, the Indemnifying Party will not be liable for the costs and
expenses of any settlement of such action effected by such Indemnified
Party without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed). Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f)
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party
and of the Indemnified Party 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 Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement
shall be controlling.
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(g) Information by the Holders. A Holder holding Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 2.
(h) Rule 144 Reporting. With a view to making available to the Holder
the benefits of certain rules and regulations of the Commission which may permit
the sale of restricted securities to the public without registration, until the
earlier of (A) such date as all of the Registrable Securities, held by such
Holder have been sold in a registration pursuant to the Securities Act or
pursuant to Rule 144 (or any similar rule then in effect) or (B) such date as
all of the Registrable Securities held by such Holder are eligible to be sold
without restriction pursuant to Rule 144(k), the Company agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 at all times;
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act at any time after it has
become subject to such reporting requirements; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 (or
any similar rule then in effect), and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as the
Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing the Holder to sell any such
securities without registration.
(i) Termination. The registration rights set forth in this Section 2
shall not be available to any Holder if all of the Registrable Securities held
by such Holder have been sold in a registration pursuant to the Securities Act
or pursuant to Rule 144 (or any similar rule then in effect) or in the case of
the piggyback registration rights set forth in Section 2(b), if all of the
Registrable Securities held be such Holder are eligible to be sold pursuant to
Rule 144(k).
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal and substantive laws of
Delaware and without regard
to any Conflicts of Laws concepts which would apply the substantive law of some
other jurisdiction.
(c) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
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(d) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if delivered personally or sent by overnight courier or sent by
facsimile (with evidence of confirmation of receipt) to the parties at the
following addresses:
(i) If to the Company, to:
The ▇▇▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Holder, to:
MEHC Investment, Inc.
do MidAmerican Energy Holdings Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. / ▇▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Or to such other persons or at such other addresses as shall be
furnished by either party by like notice to the other, and such notice or
communication shall be deemed to have been given or made as of the date so
delivered or mailed. No change in any of such addresses shall be effective
insofar as notices under this Section 3(d) are concerned unless such changed
address is
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located in the United States of America and notice of such change shall have
been given to such other party hereto as provided in this Section 3(d).
(e) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Holders
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Holders may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Holders in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(f) Successors and assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties.
(g) Entire Agreement. This Agreement represents the entire agreement
and understanding of the parties with respect to the subject matter hereof and
no representations or warranties have been made in connection with this
Agreement other than those expressly set forth herein or in certificates and
other documents delivered in accordance herewith. This Agreement supersedes all
prior negotiations, discussions, correspondence, communications, understanding
and agreements between the parties relating to the subject matter of this
Agreement and all prior drafts of this Agreement, all of which are merged into
this Agreement. No prior drafts of this Agreement and no words or phrases from
any such prior drafts shall be admissible into evidence in any action or suit
involving this Agreement.
(h) Waivers and Amendments. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, only with the written
consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities (calculated on an as-converted basis).
(i) Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
(j) Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission shall be the
same as delivery of any original. At the request of the Company or the Holder,
the parties will confirm facsimile transmission by signing a duplicate original
document. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
-15-
(k) Registration Rights. The Company represents, warrants and agrees
that it is not, and will not be, bound by the provisions of any registration
rights agreement which are in conflict with this Agreement.
(1) Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
(m) Consent to Jurisdiction; Exclusive Forum. With respect to any suit,
action or proceeding initiated by a party to this Agreement arising out of,
under or in connection with this Agreement or the transactions contemplated
hereby, each of the Company and the Holder hereby submit to the exclusive
jurisdiction of any state or federal court sitting in the State of Delaware and
irrevocably waive, to the fullest extent permitted by law, any objection that
they may now have or hereafter obtain to the laying of venue in any such court
in any such suit, action or proceeding.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:
Title:
MEHC INVESTMENT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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