Exhibit 4(i)
GUARANTEE AGREEMENT
Between
MidAmerican Energy Company
(as Guarantor)
and
The First National Bank of Chicago
(as Guarantee Trustee)
dated as of
, 1996
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.01. Trust Indenture Act; Application. . . . . . . . . . . . .4
SECTION 2.02. Lists of Holders of Preferred Securities. . . . . . . . .4
SECTION 2.03. Reports by the Guarantee Trustee. . . . . . . . . . . . .5
SECTION 2.04. Periodic Reports to Guarantee Trustee. . . . . . . . . .5
SECTION 2.05. Evidence of Compliance with Conditions Precedent. . . . .5
SECTION 2.06. Events of Default; Waiver . . . . . . . . . . . . . . . .5
SECTION 2.07. Events of Default; Notice . . . . . . . . . . . . . . . .5
SECTION 2.08. Conflicting Interests . . . . . . . . . . . . . . . . . .6
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE. . . . . . . . .6
SECTION 3.01. Powers and Duties of the Guarantee Trustee. . . . . . . .6
SECTION 3.02. Certain Rights of Guarantee Trustee.. . . . . . . . . . .8
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.01. Guarantee Trustee; Eligibility. . . . . . . . . . . . . 10
SECTION 4.02. Compensation and Reimbursement. . . . . . . . . . . . . 10
SECTION 4.03. Appointment, Removal and Resignation of Guarantee
Trustee.. . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.02. Waiver of Notice and Demand . . . . . . . . . . . . . . 12
SECTION 5.03. Obligations Not Affected. . . . . . . . . . . . . . . . 12
SECTION 5.04. Rights of Holders . . . . . . . . . . . . . . . . . . . 13
SECTION 5.05. Guarantee of Payment. . . . . . . . . . . . . . . . . . 13
SECTION 5.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.07. Independent Obligations.. . . . . . . . . . . . . . . . 14
ARCTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01. Subordination . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.01. Termination . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.01. Successors and Assigns. . . . . . . . . . . . . . . . . 15
SECTION 8.02. Amendments. . . . . . . . . . . . . . . . . . . . . . . 15
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SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04. Benefit . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05. Interpretation. . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.06. Governing Law . . . . . . . . . . . . . . . . . . . . . 17
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CROSS-REFERENCE TABLE
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- ----------
310(a) ..................................................... 4.01(a)
310(b) ..................................................... 4.01(c), 2.08
310(c) ..................................................... Inapplicable
311(a) ..................................................... 2.02(b)
311(b) ..................................................... 2.02(b)
311(c) ..................................................... Inapplicable
312(a) ..................................................... 2.02(a)
312(b) ..................................................... 2.02(b)
313 ..................................................... 2.03
314(a) ..................................................... 2.04
314(b) ..................................................... Inapplicable
314(c) ..................................................... 2.05
314(d) ..................................................... Inapplicable
314(e) ..................................................... 1.01, 2.05, 3.02
314(f) ..................................................... 2.01, 3.02
315(a) ..................................................... 3.01(b)
315(b) ..................................................... 2.07
315(c) ..................................................... 3.01(b)
315(d) ..................................................... 3.01(c)
316(a) ..................................................... 5.04, 2.06
316(b) ..................................................... 5.03
316(c) ..................................................... 2.02
317(a) ..................................................... Inapplicable
317(b) ..................................................... Inapplicable
318(a) ..................................................... 2.01(b)
318(b) ..................................................... 2.01
318(c) ..................................................... 2.01(a)
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________ , 1996, is executed and delivered by MidAmerican Energy Company,
an Iowa corporation (the "Guarantor"), and The First National Bank of
Chicago, as guarantee trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of MidAmerican Energy Financing [ ], a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 1996 between the Trustees of the
Issuer, MidAmerican Energy Company, as Depositor, and the several Holders (as
defined therein) the Issuer is issuing as of the date hereof $_______
aggregate liquidation amount of its _____% cumulative quarterly income
preferred securities (the "Preferred Securities") representing preferred
undivided beneficial ownership interests in the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for sale by the
Issuer and the proceeds are to be invested in $ _______ principal amount of
Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires, have
the following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
AFFILIATE:
Affiliate of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
COMMON SECURITIES:
The term "Common Securities" means the securities representing
common undivided beneficial ownership interests in the Issuer.
EVENT OF DEFAULT:
The term "Event of Default" means a default by the Guarantor on any
of its payment obligations under this Guarantee Agreement.
GUARANTEE PAYMENTS:
The term "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by or on behalf of the Issuer: (i) any accrued
and unpaid Distributions that are required to be paid on such Preferred
Securities but only if and to the extent that the Property Trustee has
available in the Payment Account funds sufficient to make such payment, (ii)
the redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption, with respect to the Preferred
Securities called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account funds
sufficient to make such payment, (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with a redemption of all of the Preferred Securities), the lesser
of (a) the aggregate of the Liquidation Amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
GUARANTEE TRUSTEE:
The term "Guarantee Trustee" means The First National Bank of
Chicago, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement
and thereafter means each such Successor Guarantee Trustee.
HOLDER:
The term "Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate
of the Guarantor.
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INDENTURE:
The term "Indenture" means the Indenture dated as of ___________,
1996, among the Guarantor and The First National Bank of Chicago, as trustee,
pursuant to which the Debentures are issued.
MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES:
The term "Majority in liquidation amount of the Preferred
Securities" means a vote by Holders, voting separately as a class, of more
than 50% of the aggregate liquidation amount of all Preferred Securities.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Guarantor, and delivered to the Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
PERSON:
The term "Person" means any individual, corporation, partnership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
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RESPONSIBLE OFFICER:
The term "Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
SUCCESSOR GUARANTEE TRUSTEE:
The term "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.01.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than December 1 and June 1 in
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
a date not more than 15 days prior to the delivery thereof,
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and (b) at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a List
of Holders as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Guarantee Trustee by the Guarantor.
The Guarantee Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a) of the Trust Indenture Act, subject to the provisions of
Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days
after May 15 of each year, commencing May 15, 1997, the Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act in the form and in the manner provided by
Section 313(a) of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Sections 313(b), (c) and (d) of the Trust
Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee any documents, reports and
information required, and the compliance certificate required, by Section 314
of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Guarantee
Agreement as and to the extent required by Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the
form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.07. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured
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before the giving of such notice, provided that, the Guarantee Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08. CONFLICTING INTERESTS. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement or any rights hereunder to any Person
except a Holder exercising his or her rights pursuant to Section 5.04 or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee
of its appointment to act as Successor Guarantee Trustee. The right, title
and interest of the Guarantee Trustee shall automatically vest in any
Successor Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.06), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee or such Responsible Officer was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is
not reasonably assured to it.
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SECTION 3.02. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its employees;
the Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing
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contained in this Section 3.02(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(vii) the Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by
it hereunder;
(viii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(1) may request instructions from the Holders, (2) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (3) shall be protected
in acting in accordance with such instructions; and
(ix) the Guarantee Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available
to the Guarantee Trustee shall be construed to be a duty.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act
as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such reasonable
compensation as the Guarantor and the Guarantee Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
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(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee (including the reasonable
compensation and expenses of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or
bad faith; and
(c) to indemnify each of the Guarantee Trustee and any predecessor
Guarantee Trustee for, and to hold it harmless from and against, any and all
loss, damage, claim, liability or expense, including taxes (other than taxes
based upon the income of the Guarantee Trustee) incurred without negligence
or bad faith on its part, arising out of or in connection with the acceptance
of the administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any its powers or duties hereunder.
As security for the performance of the obligations of the Guarantor
under this Section, the Guarantee Trustee shall have a lien prior to the
Preferred Securities upon all the property and funds held or collected by the
Guarantee Trustee as such, except funds held in trust for the payment of
principal of, and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
SECTION 4.03. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Guarantee Trustee and delivered to the Guarantor
and the resigning Guarantee Trustee.
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(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition any court of competent jurisdiction
for appointment of a Successor Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability
to which it applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall
in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for
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payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest
payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf
of the Holders; (iii) the Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement without first instituting a
legal proceeding against the Issuer or any other person or entity.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments
in full (without duplication).
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SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement;
provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Guarantee Agreement, if, at the time of any such payment, any amounts of
Guarantee Payments are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the
Issuer with respect to the Preferred Securities and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made PARI PASSU or
subordinate by their terms, (ii) PARI PASSU with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor. Nothing in this Section 6.01
shall apply to claims of, or payments to, the Guarantee Trustee under or
pursuant to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of the
Redemption Price of all Preferred Securities, and all accrued and unpaid
Distributions to the date of redemption, (ii) the distribution of Debentures
to Holders in exchange for all of the Preferred Securities or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder must restore
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payment of any sums paid with respect to the Preferred Securities or under
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Eleven of the
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. AMENDMENTS. This Guarantee Agreement may be amended
only by an instrument in writing entered into by the Guarantor and the
Guarantee Trustee. Except with respect to any changes which do not
materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than 66 2/3% in aggregate
liquidation amount of all the outstanding Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings of
Holders shall apply to the giving of such approval. Nothing herein contained
shall be deemed to require that the Guarantee Trustee enter into any
amendment of this Guarantee Agreement.
SECTION 8.03. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed
by the party giving such notice, and delivered, telecopied or mailed by first
class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities:
MidAmerican Energy Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
with a copy to the General Counsel of the Guarantor.
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustee's) address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Holders:
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MidAmerican Energy Financing [ ]
c/o MidAmerican Energy Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Holders of the Preferred Securities:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 8.04. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 8.05. INTERPRETATION. In this Guarantee Agreement, unless
the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06. GOVERNING LAW. This Guarantee Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of New York.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
MidAmerican Energy Company
By:
-------------------------------
Name:
Title:
The First National Bank of Chicago,
as Guarantee Trustee
By: -------------------------------
Name:
Title:
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