Exhibit 1(b)
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTES DUE NOT LESS THAN
9 MONTHS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
_________ __, 1996
[Name and Address of Agent(s)
Dear Sirs:
MidAmerican Energy Company, an Iowa corporation (the "Company"),
confirms its agreement with _________________ (the "Agent") with respect to
the issue and sale by the Company of its Medium-Term Notes described herein
(the "Notes"). The Notes are to be issued pursuant to an indenture (the
"Indenture") dated as of _______ __, 1996 between the Company and The First
National Bank of Chicago, as trustee (the "Trustee"). As of the date hereof,
the Company has authorized the issuance and sale of up to $___,000,000
aggregate principal amount of Notes through the Agent pursuant to the terms
of this Agreement. It is understood, however, that the Company from time to
time may reduce the maximum principal amount of Notes which it may issue and
sell or authorize the issuance of additional Notes and that such additional
Notes may be sold through or to the Agent pursuant to the terms of this
Agreement, all as though the issuance of such Notes were authorized as of the
date hereof.
This Agreement provides both for the sale of Notes by the Company
directly to purchasers, in which case the Agent will act as agent of the
Company in soliciting Note purchases, and (as may from time to time be agreed
to by the Company and the Agent) to the Agent as principal for resale to
purchasers.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 333-_____) for the
registration of certain securities, including the Notes, under the Securities
Act of 1933 (the "1933 Act") and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the SEC under the
1933 Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the SEC and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration
statement (and any further registration statements which may be filed by the
Company for the purpose of registering additional Notes and in connection
with which this Agreement is included or incorporated by reference as an
exhibit) and the prospectus specifically relating to the Notes constituting a
part thereof, and any prospectus supplements specifically relating to the
Notes, including all documents incorporated therein by reference, as from
time to time amended or supplemented by the filing of documents pursuant to
the Securities Exchange Act of 1934 (the "1934 Act") or the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus
specifically relating to the Notes shall be provided to the Agent by the
Company for use in connection with the offering of the Notes which is not
required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations, the term "Prospectus" shall refer to such revised prospectus
from and after the time it is first provided to an agent for such use.
SECTION 1. APPOINTMENT AS AGENT.
(a) APPOINTMENT OF AGENT. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell
Notes directly on its own behalf, the Company hereby appoints the Agent as
its agent for the purpose of soliciting purchases of the Notes from the
Company by others and agrees that, except as otherwise contemplated herein,
whenever the Company determines to sell Notes directly to the Agent as
principal for resale to others, it will enter into a Terms Agreement
(hereafter defined) relating to such sale in accordance with the provisions
of Section 3(b) hereof. The Agent is authorized to appoint sub-agents or to
engage the services of any other broker or dealer in connection with the
offer or sale of the Notes. The Company agrees that, during the period the
Agent is acting as the Company's Agent hereunder, the Company will not
contact or solicit potential investors introduced to it by the Agent to
purchase the Notes. The Company may appoint, upon one day prior written
notice to the Agent, additional persons to serve as Agent hereunder, but
2
only if each such additional person agrees to be bound by all of the terms of
this Agreement as an agent.
(b) REASONABLE EFFORTS SOLICITATIONS; RIGHT TO REJECT OFFERS. Upon
receipt of instructions from the Company, the Agent will use its reasonable
efforts to solicit purchases of such principal amount of the Notes as the
Company and the Agent shall agree upon from time to time during the term of
this Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal
amount of Notes registered pursuant to the Registration Statement. The Agent
will have no responsibility for maintaining records with respect to the
aggregate principal amount of Notes sold, or of otherwise monitoring the
availability of Notes for sale under the Registration Statement. The Agent
will communicate to the Company, orally or in writing, each offer to purchase
Notes, other than those offers rejected by the Agent. The Agent shall have
the right, in its discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such rejection shall not be
deemed a breach of the Agent's agreement contained herein. The Company may
accept or reject any proposed purchase of the Notes, in whole or in part.
(c) SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL. In soliciting
purchases of the Notes on behalf of the Company, the Agent shall act solely
as agent for the Company and not as principal. The Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by the Agent and
accepted by the Company. The Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason.
The Agent shall not have any obligation to purchase Notes from the Company as
principal, but the Agent may agree from time to time to purchase Notes as
principal. Any such purchase of Notes by the Agent as principal shall be
made pursuant to a Terms Agreement in accordance with Section 3(b) hereof.
(d) RELIANCE. The Company and the Agent agree that any Notes the
placement of which the Agent arranges shall be placed by the Agent, and any
Notes purchased by the Agent shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company
contained herein and on the terms and conditions and in the manner provided
herein.
3
SECTION 2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to the Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether through the Agent as agent or to the Agent as
principal), as of the date of each delivery of Notes (whether through the
Agent as agent or to the Agent as principal) (the date of each such delivery
to the Agent as principal being hereafter referred to as a "Settlement
Date"), and as of any time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates of Notes or similar
changes) or there is filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating exclusively to the issuance of debt securities under the
Registration Statement, unless the Agent shall otherwise specify) (each of
the times referenced above being referred to herein as a "Representation
Date") as follows:
(i) DUE INCORPORATION AND QUALIFICATION. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the state of Iowa with corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify and be in good standing would not
have a material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company.
(ii) PUBLIC UTILITY. The Company has the legal right to function
and operate as an electric public utility company in the States of Iowa,
Illinois and South Dakota, and as a gas public utility company in the
States of Iowa, Illinois, South Dakota and Nebraska.
(iii) SUBSIDIARIES. The Company has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of Regulation C of the
rules and regulations ("1933 Act Regulations") promulgated by the
Securities and Exchange Commission ("SEC") under the Securities Act of
1933, as amended ("1933 Act").
4
(iv) REGISTRATION STATEMENT AND PROSPECTUS. At the time the
Registration Statement became effective, the Registration Statement
complied, and as of the applicable Representation Date will comply, in
all material respects, with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the SEC
promulgated thereunder. The Registration Statement, at the time it
became effective, did not, and at each time thereafter at which any
amendment to the Registration Statement becomes effective or any Annual
Report on Form 10-K is filed by the Company with the SEC and as of each
Representation Date, will not, contain 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. The Prospectus,
as of the date hereof does not, and as of each Representation Date will
not, contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agent expressly for use in the Registration Statement or Prospectus.
(v) INCORPORATED DOCUMENTS. The documents incorporated by reference
in any Preliminary Prospectus or the Prospectus, at the time they were or
hereafter are filed with the SEC, complied or when so filed will comply,
as the case may be, in all material respects with the requirements of the
1934 Act and the rules and regulations promulgated thereunder ("1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, did not and will at all times during the period specified in
Section 4(e) hereof not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading.
(vi) ACCOUNTANTS. The accountants who issued their reports on
the financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
5
(vii) FINANCIAL STATEMENTS. The financial statements and any
supporting schedules of the Company included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the
financial position of the Company as of the dates indicated and the
results of its operations for the periods specified; and, except as
stated therein, said financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States applied on a consistent basis; and any supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein.
(viii) AUTHORIZATION AND VALIDITY OF THIS AGREEMENT, THE INDENTURE AND
THE NOTES. This Agreement has been duly authorized and, upon execution
and delivery by the Agent, will be a valid and binding agreement of the
Company; the Indenture has been duly authorized and constitutes a valid
and binding obligation of the Company enforceable in accordance with its
terms; the Notes have been duly and validly authorized for issuance,
offer and sale pursuant to this Agreement and, when issued, authenticated
and delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in the
Prospectus or pursuant to any Terms Agreement, the Notes will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms; except as enforcement of the Indenture and
the Notes may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting the enforcement of creditors' rights generally and general
equitable principles; the Notes and the Indenture will be substantially
in the form heretofore delivered to the Agent and conform in all material
respects to all statements relating thereto contained in the Prospectus;
and the Notes will be entitled to the benefits provided by the Indenture.
(ix) MATERIAL CHANGES OR MATERIAL TRANSACTIONS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as may otherwise be stated therein or contemplated
thereby, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course
of business and (B) there have been no
6
material transactions entered into by the Company other than those in
the ordinary course of business.
(x) NO DEFAULTS. The Company is not in violation of its Articles of
Incorporation or bylaws, or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may be
bound; the execution and delivery of this Agreement and the Indenture and
the consummation of the transactions contemplated herein, therein and
pursuant to any applicable Terms Agreement have been duly authorized by
all necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Company is a party or by
which it may be bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
Articles of Incorporation or bylaws of the Company or any law,
administrative regulation or administrative or court order or decree.
(xi) REGULATORY APPROVALS. the Company has made all necessary filings
and obtained all necessary consents, orders or approvals from the Federal
Energy Regulatory Commission ("FERC") and the Illinois Commerce
Commission ("ICC") in connection with the issuance and sale of the Notes,
and no consent, approval, authorization, order or decree of any other
court or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement, except
such as may be required under state securities ("Blue Sky") laws.
(xiii) LEGAL PROCEEDINGS; CONTRACTS. Except as may be set forth in
the Registration Statement, there is no action, suit or proceeding before
or by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting, the Company which might, in the opinion of the Company, result
in any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company, or might materially and adversely affect its properties or
assets or might materially and adversely affect the consummation of this
Agreement, the
7
Indenture or any applicable Terms Agreement; and there are no contracts
or documents of the Company which are required to be filed as exhibits
to the Registration Statement by the 1939 Act or by the 1933 Act
Regulations which have not been so filed.
(xiii) FRANCHISES. The Company holds valid and subsisting franchises,
licenses and permits authorizing it to carry on the respective utility
businesses in which it is engaged in the territories from which
substantially all of its gross operating revenue is derived.
(x) HOLDING COMPANY. The Company is not a holding company, or a
subsidiary company of a holding company, as such terms are defined in the
Public Utility Hold Company Act of 1935, as amended. On December 1,
1996, the Company will become or became a subsidiary company of
MidAmerican Energy Holdings Company, which on such date became or will
become a holding company which, together with the Company, is exempt from
regulation under such Act, except under Section 9(a)(2) thereof.
(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any director
or officer of the Company and delivered to the Agent or to counsel for the
Agent in connection with an offering of Notes or the sale of Notes to the
agent as principal shall be deemed a representation and warranty by the
Company to the Agent as to the matters covered thereby on the date of such
certificate and at each Representation Date subsequent thereto.
SECTION 3. SOLICITATIONS AS AGENT; PURCHASES AS PRINCIPAL.
(a) SOLICITATIONS AS AGENT. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, the Agent agrees, as the agent of the Company, to use its
reasonable efforts to solicit offers to purchase the Notes upon the terms and
conditions set forth herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agent, as agent,
commencing at any time for any period of time or permanently. Upon receipt
of instructions from the Company, the Agent will forthwith suspend
solicitation of purchases from the Company until such time as the Company has
advised the Agent that such solicitation may be resumed.
8
The Company agrees to pay the Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto. The Agent may allow any portion of the
commission payable pursuant hereto to dealers or purchasers in connection
with the offer and sale of any Notes.
The purchase price, interest rate, maturity date and other terms of the
Notes shall be agreed upon by the Company and the Agent and set forth in a
pricing supplement to the Prospectus to be prepared following each acceptance
by the Company of an offer for the purchase of Notes. Except as may be
otherwise provided in such supplement to the Prospectus, the Notes will be
issued in denominations of $100,000 or any larger amount that is an integral
multiple of $1,000. All Notes sold through the Agent as agent will be sold
at 100% of their principal amount unless otherwise agreed to by the Company
and the Agent.
(b) PURCHASES AS PRINCIPAL. Each sale of Notes to the Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Company and the Agent shall otherwise agree) pursuant to a
separate agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, the Agent. Each such separate agreement
(which may be an oral agreement) between the Agent and the Company is herein
referred to as a "Terms Agreement". Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement between the Company and the Agent.
Each such Terms Agreement, whether oral or in writing, shall be with respect
to such information (as applicable) as is specified in Exhibit A hereto. The
Agent's commitment to purchase Notes as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by the Agent
pursuant thereto, the price to be paid to the Company for such Notes (which,
if not so specified in a Terms Agreement, shall be at a discount equivalent
to the applicable commission set forth in Schedule A hereto), the time and
place of delivery of and payment for such Notes, any provisions relating to
rights of, and default by purchasers acting together with the Agent in the
reoffering of the Notes, and such other provisions (including further terms
of the Notes) as may be mutually agreed upon. The Agent may utilize a
selling or dealer group in connection with the resale of the Notes purchased.
Such Terms
9
Agreement shall also specify the requirements for the officers' certificate,
opinions of counsel and comfort letter pursuant to Sections 7(b), 7(c) and
7(d) hereof.
(c) ADMINISTRATIVE PROCEDURES. Administrative procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agent and
the Company (the "Procedures"). The Agent and the Company agree to perform
the respective duties and obligations specifically provided to be performed
by them in the Procedures.
SECTION 4. COVENANTS OF THE COMPANY.
The Company covenants with the Agent as follows:
(a) RULE 424(B) FILING. Promptly following execution of this Agreement,
to cause the Prospectus, including as part thereof a prospectus supplement
relating to the Notes, to be filed with, or mailed for filing to, the SEC
pursuant to Rule 424(b)(2) and (3) under the 1933 Act and the Company will
promptly advise the Agent when such filing or mailing has been made. Prior
to such filing or mailing, the Company will cooperate with the Agent in the
preparation of such supplement to the Prospectus to assure that the Agent has
no reasonable objection to the form or content thereof when filed or mailed.
(b) FERC OR ICC ACTION. To advise the Agent promptly of any additional
action by the FERC or ICC pertaining to the Notes;
(c) COPIES OF 1933 ACT DOCUMENTS. To furnish promptly to the Agent and
to counsel for the Agent one signed copy of the Registration Statement as
originally filed and such amendment thereto filed prior to the date hereof
and relating to the Notes, and a copy of the Prospectus filed with the SEC,
including all documents incorporated therein by reference and all consents
and exhibits filed therewith;
(d) CONFORMED COPIES. To deliver promptly to the Agent such reasonable
number of the following documents as the Agent may request: (i) conformed
copies of the Registration Statement (excluding exhibits other than the
computation of the ratio of earnings to fixed charges, the Indenture, and
this Agreement), (ii) the Prospectus and (iii) any documents incorporated by
reference in the Prospectus;
10
(e) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. Except as otherwise
provided in subsection (q) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which
it is necessary, in the reasonable opinion of counsel for the Agent or
counsel for the Company, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, immediate
notice shall be given, and confirmed in writing, to the Agent to cease the
solicitation of offers to purchase the Notes in the Agent's capacity as agent
and to cease sales of any Notes the Agent may then own as principal pursuant
to a Terms Agreement, and the Company will promptly prepare and file with the
SEC such amendment or supplement, whether by filing documents pursuant to the
1934 Act, the 1933 Act or otherwise, as may be necessary to correct such
untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(f) AGENT'S REVIEW. Prior to filing with the SEC during the period
referred to in Section 4(e) hereof, (i) any amendment to the Registration
Statement, (ii) the Prospectus or any supplement thereto or (iii) any
document incorporated by reference in any of the foregoing or any amendment
or supplement to such incorporated document, to furnish a copy thereof to the
Agent and to counsel for the Agent, and the Company will not file any
amendment to the Registration Statement or supplement to the Prospectus
unless the Company has furnished to the Agent a copy of such document for
review prior to filing and will not file any such proposed amendment or
supplement to which the Agent reasonably objects;
(g) NOTICES TO AGENT. To advise the Agent promptly during the period
referred to in Section 4(e) hereof, (i) when any post-effective amendment to
the Registration Statement becomes effective, (ii) of any request or proposed
request by the SEC for an amendment or supplement to the Registration
Statement, to the Prospectus, to any document incorporated by reference in
any of the foregoing or for any additional information, (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the Registration
Statement or any order directed to the Prospectus or any document
incorporated therein by reference or the initiation or
11
threat of any stop order proceeding or of any challenge by the SEC to
the accuracy or adequacy of any document incorporated by reference in the
Prospectus, (iv) of receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threat of any proceeding for that purpose
and (v) of the happening of any event which makes untrue any statement of a
material fact made in the Registration Statement (insofar as the Registration
Statement relates to or covers the Notes) or the Prospectus or which requires
the making of a change in the Registration Statement or the Prospectus in
order to make any material statement therein not misleading;
(h) PREPARATION OF PRICING SUPPLEMENTS. The Company will prepare, with
respect to any Notes to be sold through or to the Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agent and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the 1933 Act not later than the close of
business of the SEC on the fifth business day after the date on which such
Pricing Supplement is first used.
(i) PROSPECTUS REVISIONS -- PERIODIC FINANCIAL INFORMATION. Except as
otherwise provided in subsection (q) of this Section, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the
first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agent, confirmed in writing, and shall cause the
Prospectus to be amended or supplemented to include or incorporate by
reference financial information with respect thereto and corresponding
information for the comparable period of the preceding fiscal year, as well
as such other information and explanations as shall be necessary for an
understanding thereof or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(j) PROSPECTUS REVISIONS -- AUDITED FINANCIAL INFORMATION. Except as
otherwise provided in subsection (q) of this Section, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company
for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of
documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include or
incorporate by reference such audited financial statements and the report or
reports, and consent or consents to such inclusion or
12
incorporation by reference, of the independent accountants with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements or as shall be
required by the 1933 Act or the 1933 Act Regulations.
(k) STOP ORDER. If, during the period referred to in Section 4(e)
hereof, the SEC shall issue a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting
of that order at the earliest possible time;
(l) EARNINGS STATEMENT. As soon as practicable, to make generally
available to its security holders and to deliver to the Agent an earnings
statement, conforming with the requirements of Section 11(a) of the 1933 Act
and Rule 158 of the 1933 Act Regulations, covering a period of at least
twelve months beginning after the effective date of the Registration
Statement as defined in Rule 158(c) of the 1933 Act Regulations;
(m) SHAREHOLDER AND OTHER REPORTS. During the period of five years
hereafter, or such lesser period as any of the Notes shall be outstanding,
to furnish to the Agent, (i) as soon as available, a copy of each report of
the Company mailed to its shareholders or report filed by the Company with
the SEC and (ii) from time to time such other information concerning the
Company as the Agent may reasonably request;
(n) BLUE SKY QUALIFICATIONS. The Company will endeavor, in
cooperation with the Agent, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agent may designate, and will maintain such
qualifications in effect for as long as may be required for the distribution
of the Notes; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will file such statements and reports as may be required by the laws of each
jurisdiction in which the Notes have been qualified as above provided. The
Company will promptly advise the Agent of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Notes
for sale in any such state or jurisdiction or the initiating or threatening
of any proceeding for such purpose.
(o) 1934 ACT FILINGS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will
13
file promptly all documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act.
(p) STAND-OFF AGREEMENT. If required pursuant to the terms of a Terms
Agreement, between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without the
Agent's prior consent, offer or sell, or enter into any agreement to sell,
any debt securities of the Company (other than the Notes that are to be sold
pursuant to such Terms Agreement and commercial paper in the ordinary course
of business).
(q) SUSPENSION OF CERTAIN OBLIGATIONS. The Company shall not be
required to comply with the provisions of subsections (e), (i) or (j) of this
Section 4 during any period from the time (i) the Agent shall have suspended
solicitation of purchases of the Notes in its capacity as agent pursuant to
a request from the Company and (ii) the Agent shall not then hold any Notes
as principal purchased pursuant to a Terms Agreement, to the time the Company
shall determine that solicitation of purchases of the Notes should be resumed
or shall subsequently enter into a new Terms Agreement with the Agent.
(r) CONDITION TO AGENCY TRANSACTIONS. Any person who has agreed to
purchase Notes as the result of an offer to purchase solicited by the Agent
shall have the right to refuse to purchase and pay for such Notes if, on the
related settlement date fixed pursuant to the Procedures, (i) there has been,
since the date on which such person agreed to purchase the Notes (the "Trade
Date"), or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, or (ii) there shall have occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect
of which is such as to make it, in the judgment of such person, impracticable
or inadvisable to purchase the Notes, or (iii) trading in any securities of
the Company has been suspended by the SEC or a national securities exchange,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have
been required, by either of said exchanges or by order of the SEC or any
other governmental authority, or if a banking moratorium shall have been
declared by either Federal or New York authorities, or (iv) the rating
assigned by any nationally recognized securities rating
14
agency to any debt securities of the Company as of the Trade Date shall have
been lowered since that date or if any such rating agency shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company.
(s) COSTS. To pay all costs incident to the authorization, issuance,
sale and delivery of the Notes; the costs incident to the preparation,
printing and filing under the 1933 Act of the Registration Statement and the
Prospectus and any amendments, supplements and exhibits thereto; the costs
incident to the preparation, printing and filing of the documents and any
amendments and exhibits thereto required to be filed by the Company under the
1934 Act; the costs of distributing the Registration Statement as originally
filed and each amendment and post-effective amendment thereof (including
exhibits), any Preliminary Prospectus, the Prospectus and any documents
incorporated by reference in any of the foregoing documents; the costs of
printing this Agreement, the Indenture and any Terms Agreement; the costs of
any filings with the National Association of Securities Dealers, Inc.; fees
paid to rating agencies in connection with the rating of the Notes; the fees
and expenses of qualifying the Notes under the securities laws of the several
jurisdictions as provided in Section 4(n) hereof and of preparing and
printing a Blue Sky Memorandum, (including fees of counsel to the Agent not
to exceed $1,000 in the aggregate); the reasonable fees and expenses of
counsel for the Agent; and all other costs and expenses incident to the
performance of the Company's obligations under this Agreement; PROVIDED that,
except as provided in this Section 4(s),the Agent shall pay its own costs and
expenses, any transfer taxes on the Notes which they may sell and the
expenses of advertising any offering of the Notes made by the Agent;
SECTION 5. CONDITIONS OF OBLIGATIONS.
The obligations of the Agent to solicit offers to purchase the Notes as
agent of the Company, the obligations of any purchasers of the Notes sold
through the Agent as agent, and any obligation of the Agent to purchase Notes
pursuant to a Terms Agreement or otherwise will be subject to the accuracy of
the representations and warranties on the part of the Company herein and to
the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance
and observance by the Company of all its covenants and agreements herein
contained and to each of the following additional terms and conditions
applicable to the Notes:
15
(a) NO STOP ORDER. No stop order suspending the effectiveness of the
Registration Statement nor any order directed to any document incorporated by
reference in the Prospectus shall have been issued and prior to that time no
stop order proceeding shall have been initiated or threatened by the SEC and
no challenge shall have been made by the SEC to the accuracy or adequacy of
any document incorporated by reference in the Prospectus; any request of the
SEC for inclusion of additional information in the Registration Statement or
the Prospectus or otherwise shall have been complied with and there shall be
no material adverse change in the financial condition of the Company;
(b) LEGAL MATTERS. All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the
Indenture, any Terms Agreement, the Notes, the form of the Registration
Statement, the Prospectus (other than financial statements and other
financial data) and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all respects to
Sidley & Austin, counsel for the Agent, and the Company shall have furnished
to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters;
(c) OPINION OF COMPANY COUNSEL. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esq., counsel
to the Company, shall have furnished to the Agent a letter addressed to the
Agent and dated the date hereof stating his opinion to the effect that:
(i) the Company is a validly organized and existing corporation in
good standing under the laws of the State of Iowa; and the Company is a
subsidiary of MidAmerican Energy Holdings Company, an Iowa corporation,
both of which are exempt from regulation under the Public Utility Holding
Company Act of 1935, as amended, except under Section 9(a)(2) thereof;
(ii) this Agreement and each Terms Agreement, if any, has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company in accordance with its terms, except as
rights to indemnity hereunder may be limited by applicable law and except
as enforcement hereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights generally and
general principles of equity;
16
(iii) the Indenture is in due and proper form, has been duly and
validly authorized by the necessary corporate action, has been duly and
validly executed and delivered and is a valid instrument legally binding
on the Company, except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equitable principles;
(iv) the Notes are in due and proper form; the issue and sale of the
Notes by the Company in accordance with the terms of this Agreement have
been duly and validly authorized by the necessary corporate action; the
Notes, when duly executed (which execution may include facsimile
signatures of officers of the Company), authenticated and delivered to
the purchasers or to the Agent pursuant to any Terms Agreement, against
payment of the agreed consideration therefor, will constitute legal,
valid and binding obligations of the Company enforceable in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting enforcement of creditors'
rights generally or by general equitable principles; and each holder of
Notes will be entitled to the benefits of the Indenture;
(v) the Notes, the Indenture and any Terms Agreement conform as to
legal matters with the statements concerning them made in the Prospectus,
and such statements accurately set forth the matters respecting the
Notes, the Indenture and the Terms Agreement required to be set forth in
the Prospectus;
(vi) the Indenture is qualified under the 1939 Act;
(vii) the orders of the FERC and the ICC referred to in Section
2(a)(xi) hereof pertaining to the Notes have been duly entered and, to
the best of the knowledge of such counsel, are still in force and effect;
and no further approval, authorization, consent, certificate or order of
any state or federal commission or regulatory authority (other than in
connection or compliance with the provisions of the securities or Blue
Sky laws of any jurisdiction) is necessary with respect to the issue and
sale of the Notes as contemplated by this Agreement;
17
(viii) the Registration Statement has become effective under the
1933 Act and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or threatened under the 1933 Act;
(ix) the Registration Statement and the Prospectus and each
amendment or supplement thereto comply as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations (except that such counsel need express no opinion as to the
financial statements and financial or statistical data contained therein);
(x) such counsel does not know of any legal or governmental
proceeding required to be described in the Prospectus which is not
described as required, or of any contract or document of a character
required to be described or incorporated in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
which is not described, incorporated or filed as required;
(xi) neither the execution and delivery of this Agreement and the
Indenture nor the issuance and sale of the Notes in accordance with the
terms of this Agreement or Terms Agreement nor the consummation of the
transactions therein contemplated, nor compliance with the terms and
provisions thereof, will conflict with, violate or result in a breach of
any law, any administrative regulation or any court decree known to such
counsel to be applicable to the Company, conflict with or result in a
breach of any of the terms, conditions or provisions of the Articles of
Incorporation or the by-laws of the Company or of any material agreement
or instrument known to such counsel to which the Company is a party or by
which the Company is bound or constitute a default thereunder, or result
in the creation or imposition of any lien, charge or encombrance of any
nature whatsoever upon any of the properties or assets of the Company;
(xii) the documents referred to in Section 2(a)(v) hereof, as of
their respective filing dates, complied as to form in all material
respects with the applicable requirements of the 1934 Act and the 1934
Act Regulations (except that such counsel does not need to express any
opinion as to the financial statements and financial or statistical data
contained therein);
18
(xiii) the statements made in the Prospectus which are stated
therein to have been made on the authority of such counsel have been
reviewed by him and, as to matters of law and legal conclusion, are
correct;
(xiv) the Company is a public utility authorized by its Articles of
Incorporation to carry on the businesses in which it is engaged, as set
forth in the Prospectus; the Company has the legal right to function and
operate as an electric public utility company in the States of Iowa,
Illinois and South Dakota, and as a gas public utility company in the
States of Iowa, Illinois, South Dakota and Nebraska; and the franchises
and permits of the Company are valid and subsisting and authorize the
Company to carry on the utility businesses in which it is engaged in the
communities and territory covered by such franchises and permits;
(xv) the descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings and contracts
and other documents are accurate and fairly present the information
required to be presented; and
(xvi) except as set forth in the Prospectus, (A) there are no
pending legal proceedings to which the Company is a party or in which any
of its property is the subject which are material to the Company, other
than ordinary routine legal proceedings incident to the business in which
the Company is engaged, and (B) there are no material pending
administrative or judicial proceedings to which the Company is a party or
in which any of its property is the subject arising under any federal,
state or local provisions regulating the discharge of materials into the
environment or otherwise relating to the protection of the environment,
and, to the best of the knowledge of said counsel, no such proceedings
are threatened by governmental authorities;
and such letter shall additionally state that nothing has come to the
attention of such counsel that would lead him to believe that the
Registration Statement, at the time it became effective, and if an amendment
to the Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the SEC subsequent to the effectiveness of the
Registration Statement, then at the time such amendment became effective or
at the time of the most recent such filing, and at the date hereof, or (if
such opinion is being delivered in connection with a Terms Agreement pursuant
to Section 3(b) hereof) at the date of any Terms Agreement and at the
Settlement Date with respect thereto as the case may be, contains
19
or contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as amended or
supplemented at the date hereof, or (if such opinion is being delivered in
connection with a Terms Agreement pursuant to Section 3(b) hereof) at the
date of any Terms Agreement and at the Settlement Date with respect thereto,
as the case may be, contains or contained any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) OFFICERS' CERTIFICATE. The Company shall have furnished to the
Agent on the date hereof a certificate, dated the date hereof, of its
Chairman of the Board, its President or a Vice President and its Treasurer
or an Assistant Treasurer stating that, to the best of their knowledge
after reasonable investigation, the representations and warranties of the
Company in Section 2 hereof are true and correct as of the date hereof; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 5(a), 5(g), 5(h)and 5(i) hereof have been
fulfilled;
(e) COMFORT LETTER. On the date hereof, the Agent shall have
received a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. dated as of the date hereof and
in form and substance satisfactory to the Representative, to the effect
that:
(i) They are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act
Regulations.
(ii) In their opinion, the financial statements and supporting
schedule(s) of the Company audited by them and included or
incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations with respect
to registration statements on Form S-3 and the 1934 Act and the 1934
Act Regulations.
(iii) They have performed specified procedures, not constituting
an audit, including a reading of the latest available interim
financial statements of the Company, a reading of the minute books of
the Company since the end of the most recent fiscal year with respect
to which an audit report has been issued, inquiries of and
20
discussions with certain officials of the Company responsible for
financial and accounting matters with respect to the unaudited
consolidated financial statements of the Company included in the
Registration Statement and Prospectus and the latest available
interim unaudited financial statements of the Company, and such
other inquiries and procedures as may be specified in such letter,
and on the basis of such inquiries and procedures nothing came to
their attention that caused them to believe that: (A) the
unaudited consolidated financial statements of the Company included
in the Registration Statement and Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations or were
not fairly presented in conformity with generally accepted
accounting principles in the United States applied on a basis
substantially consistent with that of the audited financial
statements included therein, or (B) at a specified date not more
than five days prior to the date of such letter, there was any
change in the capital stock or any increase in long-term debt of
the Company or any decrease in the common shareholders' equity of
the Company other than for the declaration of regular quarterly
dividends, in each case as compared with the amounts shown on the
most recent balance sheet of the Company included in the
Registration Statement and Prospectus or, during the period from
the date of such balance sheet to a specified date not more than
five days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the
preceding year, in operating revenues or net income of the Company,
except in each such case as set forth in or contemplated by the
Registration Statement and Prospectus or except for such exceptions
(e.g. inability to determine such decreases because of insufficient
accounting information available after the date of such most
recent balance sheet) enumerated in such letter as shall have been
agreed to by the Representative and the Company.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement
and the Prospectus, and the limited procedures referred to in
clause (iii) above, they have carried out certain other specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are
21
included or incorporated by reference in the Registration Statement
and Prospectus and which are specified by the Agent, and have found
such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records
of the Company identified in such letter.
(f) ADDITIONAL COMFORT LETTER. On the date hereof, the Agent
shall have received from Deloitte & Touche LLP a letter dated the date
hereof and in form and substance satisfactory to the Agent, to the effect
of Section 5(e)(i) and (ii).
(g) OPINION OF AGENT'S COUNSEL. ▇▇▇▇▇▇ & ▇▇▇▇▇▇, as counsel for
the Agent, shall have furnished to the Agent the date hereof such
opinions with respect to the validity of the Notes and with respect to
the Registration Statement, the Prospectus, and other related matters as
the Agent may reasonably require;
(h) FERC AND ICC ORDERS. The orders of the FERC and ICC referred
to in Section 2(p) hereof shall be in full force and effect and no
proceedings to suspend the effectiveness of either such order shall be
pending or threatened;
(i) RATINGS. Subsequent to the execution of this Agreement, there
shall not have been any decrease in the ratings of any of the Company's
debt securities by Standard & Poor's Rating Service or ▇▇▇▇▇'▇ Investors
Service Inc.; and
(j) NO MATERIAL ADVERSE CHANGE. Subsequent to the date of the
most recent financial statements incorporated by reference in the
Prospectus, there shall have been no material adverse change in the
condition (financial or otherwise), business or results of operations of
the Company, except as set forth in the Registration Statement and the
Prospectus, including the documents incorporated by reference therein,
as of the effective date of this Agreement.
(k) OTHER DOCUMENTS. On the date hereof and on each Settlement
Date with respect to any applicable Terms Agreement, counsel to the
Agent shall have been furnished with such documents and opinions as such
counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the
22
Company in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the
Agent and to counsel to the Agent.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the Agent, any applicable Terms Agreement) may be terminated by the
Agent by notice to the Company at any time and any such termination shall be
without liability of any party to any other party, except that the covenant
regarding provision of an earnings statement set forth in Section 4(l)
hereof, the provisions concerning payment of expenses under Section 4(s)
hereof, the indemnity and contribution agreement set forth in Section 9
hereof, the provisions concerning the representations, warranties and
agreements to survive delivery in Section 10 hereof and the provisions set
forth under "Parties" of Section 14 hereof shall remain in effect.
Section 6. Conditions to the Obligations of the Company. The obligations
of the Company to sell and deliver the Notes are subject to the following
conditions precedent:
(a) NO STOP ORDER. At or before the date hereof, no stop order
suspending the effectiveness of the Registration Statement nor any order
directed to any document incorporated by reference in the Prospectus shall
have been issued and prior to that time no stop order proceeding shall have
been initiated or threatened by the SEC and no challenge shall have been
made by the SEC to the accuracy or adequacy of any document incorporated by
reference in the Prospectus; any request of the SEC for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with; and
(b) FERC AND ICC ORDERS. The orders of the FERC and the ICC referred
to in Section (2)(a)(xi) hereof shall be in full force and effect and no
proceeding to suspend the effectiveness of such order shall be pending or
threatened.
In case any of the conditions specified above in this Section 6 shall not
have been fulfilled on the date hereof, this Agreement may be terminated by
the Company by delivering written notice of termination to the Agent. Any
such termination shall be without liability of any party to any other party
except to the extent provided in Sections 4(s), and 9 hereof.
23
SECTION 7. DELIVERY OF AND PAYMENT FOR NOTES SOLD THROUGH THE AGENT.
Delivery of Notes sold through the Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a Note on the date
fixed for settlement, the Agent shall promptly notify the Company and
deliver the Note to the Company, and, if the Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to the
Agent. If such failure occurred for any reason other than default by the
Agent in the performance of its obligations hereunder, the Company will
reimburse the Agent on an equitable basis for its loss of the use of the
funds for the period such funds were credited to the Company's account.
SECTION 8 ADDITIONAL COVENANTS OF THE COMPANY.
The Company covenants and agrees with the Agent that:
(a) REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each acceptance by
the Company of an offer for the purchase of Notes, and each delivery of Notes
to the Agent pursuant to a Terms Agreement, shall be deemed to be an
affirmation by the Company that the representations and warranties of the
Company contained in this Agreement and in any certificate theretofore
delivered to the Agent pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of
delivery to the purchaser or the agent of such purchaser, or to the Agent, of
the Note or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such time).
(b) SUBSEQUENT DELIVERY OF CERTIFICATES. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates of Notes or similar changes, and, unless the Agent shall
otherwise specify, other than by an amendment or supplement which relates
exclusively to an offering of securities other than the Notes) or there is
filed with the SEC any document incorporated by reference into the Prospectus
(other than any Current Report on Form 8-K relating exclusively to the
issuance of securities other than Notes under the Registration
24
Statement, unless the Agent shall otherwise specify) or (if required pursuant
to the terms of a Terms Agreement) the Company sells Notes to the Agent
pursuant to a Terms Agreement, the Company shall furnish or cause to be
furnished to the Agent forthwith a certificate dated the date of filing with
the SEC of such supplement or document, the date of effectiveness of such
amendment, or the date of such sale, as the case may be, in form satisfactory
to the Agent to the effect that the statements contained in the certificate
referred to in Section 5(d) hereof which was last furnished to the Agent is
true and correct at the time of such amendment, supplement, filing or sale,
as the case may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to
in said Section 5(d), modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such certificate.
(c) SUBSEQUENT DELIVERY OF LEGAL OPINIONS. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in
the interest rates of the Notes or similar changes or solely for the
inclusion of additional financial information, and, unless the Agent shall
otherwise specify, other than by an amendment or supplement which relates
exclusively to an offering of securities other than the Notes) or there is
filed with the SEC any document incorporated by reference into the Prospectus
(other than any Current Report on Form 8-K or Quarterly Report on Form 10-Q,
unless the Agent shall otherwise specify), or (if required pursuant to the
terms of a Terms Agreement) the Company sells Notes to the Agent pursuant to
a Terms Agreement, the Company shall furnish or cause to be furnished
forthwith to the Agent and to counsel to the Agent a written opinion of ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esq., counsel to the Company, or other counsel
satisfactory to the Agent, dated the date of filing with the SEC of such
supplement or document, the date of effectiveness of such amendment, or the
date of such sale, as the case may be, in form and substance satisfactory to
the Agent, of the same tenor as the opinion referred to in Section 5(c)
hereof, but modified, as necessary, to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of
such opinion; or, in lieu of such opinion, counsel last furnishing such
opinion to the Agent shall furnish the Agent with a letter to the effect that
the Agent may rely on such last opinion to the same extent as though it was
dated the date of such letter authorizing reliance (except that
25
statements in such last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such letter authorizing reliance).
(d) SUBSEQUENT DELIVERY OF COMFORT LETTERS. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains
additional financial information or, (if required pursuant to the terms of a
Terms Agreement) the Company sells Notes to the Agent pursuant to a Terms
Agreement, the Company shall cause ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP forthwith to furnish
the Agent a letter, dated the date of effectiveness of such amendment,
supplement or document with the SEC , or the date of such sale, as the case
may be, in form satisfactory to the Agent, of the same tenor as the portions
of the letter referred to in clauses (i) and (ii) of Section 5(e) hereof but
modified to relate to the Registration Statement and Prospectus, as amended
and supplemented to the date of such letter, and of the same general tenor as
the portions of the letter referred to in clauses (iii) and (iv) of said
Section 5(e) with such changes as may be necessary to reflect changes in the
financial statements and other information derived from the accounting
records of the Company; PROVIDED, HOWEVER, that if the Registration Statement
or the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless any other information included therein of an
accounting, financial or statistical nature is of such a nature that, in the
reasonable judgment of the Agent, such letter should cover such other
information.
Section 9. Indemnification. (a) INDEMNIFICATION OF THE AGENT. The
Company agrees to indemnify and hold harmless the Agent within the meaning
of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Prospectus (or any amendment or supplement thereto) or the
omission or
26
alleged omission therefrom of a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred,
(including, subject to Section 9(c) hereof, the fees and disbursements
of counsel) reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and PROVIDED, FURTHER, that this indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of the Agent from whom the person asserting any such losses,
liabilities, claims, damages or expenses purchased Notes, or any person
controlling the Agent, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any such amendment or
supplement thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of
the Agent to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Notes to such person and if the
Prospectus (as so amended or supplemented, but excluding documents
incorporated or deemed to be incorporated by reference therein) would have
corrected the defect giving rise to such loss, liability, claim, damage or
expense, it being understood that this
27
proviso shall have no application if such defect shall have been corrected in
a document which is incorporated or deemed to be incorporated by reference in
the Prospectus.
(b) INDEMNIFICATION OF THE COMPANY. The Agent agrees to indemnify
and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any
and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Agent expressly for use
in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) GENERAL. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify an indemnifying
party shall not relieve such indemnifying party from any liability which it
may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of
such action. In no event shall the indemnifying parties be liable for the
fees and expenses of more than one counsel (in addition to any local
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances.
(d) CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreements provided
for in this Section 9 are for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with their terms, the
Company and the Agent shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreements incurred by the Company and the Agent, as
incurred, in such proportions that the Agent is responsible for that
portion represented by the percentage that the total commissions and
underwriting discounts received
28
by such Agent to the date of such liability bears to the total sales
price from the sale of Notes sold to or through such Agent to the date
of such liability and the Company is responsible for the balance;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any,
who controls the Agent within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Agent, and each director
of the Company and each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the
meaning of Section 15 of 1933 Act, shall have the same rights to
contribution as the Company.
SECTION 10. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agent or any
controlling person of any Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 11. TERMINATION.
(a) TERMINATION OF THIS AGREEMENT. This Agreement (excluding any Terms
Agreement) may be terminated for any reason, at any time by either the
Company or the Agent upon the giving of 30 days' written notice of such
termination to the other party hereto.
(b) TERMINATION OF A TERMS AGREEMENT. The Agent may terminate any Terms
Agreement, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto (i) if there has been, since the date of
such Terms Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there shall have occurred any material adverse change in the
financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect
of which is
29
such as to make it, in the judgment of Agent, impracticable to market the
Notes or enforce contracts for the sale of the Notes, or (iii) if trading in
any securities of the Company has been suspended by the SEC or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required, by either of said exchanges or by order of
the SEC or any other governmental authority, or if a banking moratorium shall
have been declared by either Federal or New York authorities, or (iv) if the
rating assigned by any nationally recognized securities rating agency to any
debt securities of the Company as of the date of any applicable Terms
Agreement shall have been lowered since that date or if any such rating
agency shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any debt
securities of the Company, or (v) if there shall have come to the Agent's
attention any facts that would cause the Agent to believe that the
Prospectus, at the time it was required to be delivered to a purchaser of
Notes, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances existing at the time of such delivery, not misleading.
(c) GENERAL. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agent shall
be entitled to any commission earned in accordance with the third paragraph
of Section 3(a) hereof, (ii) if at the time of termination (a) the Agent
shall own any Notes purchased pursuant to a Terms Agreement with the
intention of reselling them or (b) an offer to purchase any of the Notes has
been accepted by the Company but the time of delivery to the purchaser or his
agent of the Note or Notes relating thereto has not occurred, the covenants
set forth in Sections 4 and 7 hereof shall remain in effect until such Notes
are so resold or delivered, as the case may be, and (iii) the covenant set
forth in Section 4(s) hereof, the indemnity and contribution agreements set
forth in Section 9 hereof, and the provisions of Sections 4(s), 10 and 14
hereof shall remain in effect.
SECTION 12. NOTICES.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail
or by telex, telecopier or telegram, and
30
any such notice shall be effective when received at the address specified
below.
If to the Company:
MidAmerican Energy Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Agent:
__________________________________
__________________________________
__________________________________
Attention: __________________________________
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 12.
SECTION 13. GOVERNING LAW.
This Agreement and all the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in the State of New
York. Any suit, action or proceeding brought by the Company against the
Agent in connection with or arising under this Agreement shall be brought
solely in the state or federal court of appropriate jurisdiction located in
the Borough of Manhattan, The City of New York.
SECTION 14. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the
Agent and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Section 9 and their heirs and legal representatives, any legal
or equitable right, remedy or claim under or in respect of this Agreement or
any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of
the parties hereto and respective successors and said controlling persons and
officers and directors
31
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes shall be deemed to be a
successor by reason merely of such purchase.
SECTION 15. Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
If the foregoing is in accordance with the Agent's understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agent and the Company in accordance with its terms.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By:____________________________
Name:
Title:
Accepted:
______________________
Agent
By: ________________________________
Name:
Title:
32
EXHIBIT A
The following terms, if applicable, shall be agreed to by the Agent and
the Company pursuant to each Terms Agreement:
Principal Amount: $_______
Interest Rate:
If Fixed Rate Note, Interest Rate:
Interest Payment Dates:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Initial Interest Reset Date:
Spread, if any:
Spread Multiplier, if any:
Interest Rate Reset:
Interest Payment Dates:
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Rate Reset Period:
Interest Payment Period:
Interest Payment Date:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Stand-off Period (if any):
Additional Terms:
Also, agreement as to whether the following will be required:
Legal Opinion pursuant to Section 5(c)of the
Distribution Agreement.
Officer's Certificate pursuant to Section 5(d)
of the Distribution Agreement.
Comfort Letter pursuant to Section 5(e) of the
Distribution Agreement.
SCHEDULE A
As compensation for the services of the Agent hereunder, the Company
shall pay the Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
--------------- ----------------
From 9 months but less than 1 year............. .125%
From 1 year but less than 18 months............ .150%
From 18 months but less than 2 years........... .200%
From 2 years but less than 3 years............. .250%
From 3 years but less than 4 years............. .350%
From 4 years but less than 5 years............. .450%
From 5 years but less than 6 years............. .500%
From 6 years but less than 7 years............. .550%
From 7 years but less than 10 years............ .600%
From 10 years but less than 15 years........... .625%
From 15 years but less than 20 years........... .675%
From 20 years to 30 years...................... .750%