CONFIDENTIALITY AGREEMENT
CONFIDENTIALITY AGREEMENT (the "Agreement"), dated as of October 1, 1999,
between MidAmerican Energy Holdings Company, an Iowa corporation (the
"Company"), and Xxxxx X. Xxxxx (the "Bidder").
W I T N E S S E T H
WHEREAS, the Company and the Bidder (each referred to herein individually
as a "Party" and together as the "Parties") are considering entering into
discussions concerning a possible transaction between them (the "Transaction");
WHEREAS, in order to permit the Bidder to evaluate fully the potential
merits of the Transaction, the Company will cause to be furnished Evaluation
Material (as defined below) to the Bidder and its Representatives (as defined
below);
NOW THEREFORE, in consideration of the premises and the mutual agreements
contained herein, the Parties agree as follows:
1. (a) As used herein, "Evaluation Material" means all data, reports,
interpretations, forecasts and records (whether in oral or written form,
electronically stored or otherwise) containing or otherwise reflecting
information concerning the Transaction, the Company or its affiliates or
subsidiaries provided by the Company or its Representatives to the Bidder or its
Representatives pursuant to the provisions of this Agreement, and all notes,
analyses, compilations, studies or other documents in tangible form (whether in
written form, electronically stored or otherwise) that contain or otherwise
reflect such information whether prepared by the Company, the Bidder or their
respective Representatives or others.
Notwithstanding the foregoing, the following will not constitute
"Evaluation Material" for purposes of this Agreement:
(i) Information that was already in the possession of the Bidder or its
Representatives prior to the date hereof and that was not acquired or
obtained from the Company;
(ii) Information that is obtained by the Bidder or its Representatives from
a source other than the Company or its
Representatives who, insofar as is known to the Bidder after
reasonable inquiry, is not prohibited by a contractual, legal or
fiduciary obligation to the Company from transmitting the information
to the Bidder or its Representatives; or
(iii) Information that is or becomes generally available to the public
other than as a result of a disclosure by the Bidder or its
Representatives in violation of the provisions of this Agreement.
(b) As used herein, "Representatives" of any Party shall mean the
subsidiaries and affiliates (as such term is used in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), of such Party
and the respective directors, officers, employees, attorneys, representatives or
agents (including, as to the Bidder, potential co-investors and financing
sources and their attorneys and other advisors working on the Transaction) of
such Party, such Party's subsidiaries and affiliates and any other persons
acting in concert with such Party in connection with the Transaction.
2. Except as hereinafter provided, without the prior written consent of the
Company, Evaluation Material will be held in confidence and not disclosed by the
Bidder or its Representatives or used by the Bidder or its Representatives other
than using such information directly or indirectly in connection with the
Bidder's or its Representatives' consideration of the Transaction. Except as
otherwise expressly provided in this Agreement, the Bidder further agrees to
disclose Evaluation Material only to (a) its Representatives who need to know
the Evaluation Material to evaluate a possible Transaction and who are informed
of its confidential nature and agree to be bound by the terms of this Agreement
and (b) each of Standard & Poor's Ratings Group, Duff & Xxxxxx Credit Rating
Co., Xxxxx'x Investors Service, Inc. and the Securities and Exchange Commission
to the extent that they need to know the Evaluation Material to evaluate a
possible Transaction, provided that they are informed of the Evaluation
Material's confidential nature and are requested to keep such information
confidential by the Bidder. The Bidder agrees to be responsible for any breach
of this Agreement by any of its Representatives (other than those who have
signed separate confidentiality agreements with the Company in respect of the
Transaction and their Representatives who are covered by such confidentiality
agreements and other than as mutually agreed in writing by the parties).
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3. Except as hereinafter provided, without the prior written consent of the
other Party, each Party agrees that it and its Representatives will not, unless
otherwise required by law or New York Stock Exchange rule or regulation,
disclose to any person (i) that any investigation, discussions or negotiations
are taking or have taken place concerning a possible Transaction, or (ii) that
the Bidder and its Representatives have requested or received Evaluation
Material, or any terms or other facts regarding a possible Transaction,
including the status thereof. The term "person" as used in this Agreement will
be interpreted broadly to include any corporation, company, governmental agency
or body, entity, partnership, group or individual.
4. All Evaluation Material in tangible form (whether in written form,
electronically stored or otherwise), including analyses, compilations, studies,
personal notes, or other documents (whether in written form, electronically
stored or otherwise) prepared by the Bidder or any of its Representatives, will
be returned or retained by the Bidder or its Representatives, in the Bidder's
discretion, and except as otherwise provided in this Agreement, all retained
Evaluation Material (whether in written form, electronically stored or
otherwise) will continue to be subject to this Agreement.
5. If either Party or any of its Representatives is requested or required
to disclose any Evaluation Material (or to disclose that any investigation,
discussions or negotiations are taking or have taken place concerning a possible
Transaction) pursuant to an interrogatory, requests for documents or information
in legal proceedings, a subpoena, court order, civil investigative demand or
similar judicial process or other oral or written request issued by a court of
competent jurisdiction or by a federal, state or local governmental or
regulatory body, the Party receiving such request or being so required (the
"Obligor") will provide the other Party with prompt written notice of any such
request or requirement so that the other Party or any of its Representatives may
seek an appropriate protective order or other appropriate remedy or waive
compliance with the provisions of this Agreement. If such order or other remedy
is not obtained, or the other Party waives compliance with the provisions of
this Agreement, the Obligor or its Representatives, as the case may be, will
disclose only that portion of the Evaluation Material (or information relating
to any such investigation, discussions or negotiations) that it is advised by
counsel that it is legally required to so disclose and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
accorded the Evaluation Material or information so disclosed.
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6. This Agreement does not constitute or create any obligation of the
Company to provide any Evaluation Material or other information to the Bidder,
but merely defines the rights, duties and obligations of the Parties with
respect to the Evaluation Material to the extent it may be disclosed or made
available. Under no circumstances is the Company obligated to disclose or make
available any information, including any Evaluation Material, that the Company
in its sole discretion determines not to disclose. The Parties (i) acknowledge
that neither the Company nor any of its Representative makes any representation
or warranty, either express or implied, as to the accuracy or completeness of
any Evaluation Material, and (ii) agree, to the fullest extent permitted by law,
except as may be provided in a Definitive Agreement (as defined below), that
neither Party, nor any Representative of either Party shall have any liability
to the other Party or any of the other Party's Representatives on any basis
(including, without limitation, in contract, tort, under federal or state
securities laws or otherwise) as a result of the Parties' participation in
evaluating a possible Transaction, the review by the Bidder of the Company or
the use of the Evaluation Material by the Bidder or its Representatives in
accordance with the provisions of this Agreement. Each Party agrees that it is
not entitled to rely on the accuracy or completeness of the Evaluation Material.
Each Party understands and agrees that no contract or agreement providing for a
Transaction shall be deemed to exist unless and until a definitive agreement
providing for a Transaction (a "Definitive Agreement") has been executed and
delivered, and each Party hereby waives, in advance, any claims (including,
without limitation, breach of contract) in connection with a Transaction unless
and until the Parties shall have entered into a Definitive Agreement. The
Parties also agree that unless and until a Definitive Agreement between the
Parties has been executed and delivered, neither Party has any legal obligation
of any kind whatsoever with respect to any such Transaction by virtue of this
Agreement or any other written or oral expression with respect to such
Transaction except, in the case of this Agreement, for the matters specifically
agreed to herein. For purposes of this paragraph, the term "Definitive
Agreement" does not include an executed letter of intent or any other
preliminary written agreement, nor does it include any written or verbal
acceptance of any offer or bid on the part of either Party. Only those
representations and warranties made in a Definitive Agreement and subject to
such limitations and restrictions as may be specified therein will have any
legal effect.
7. The Parties acknowledge that they are, and that their respective
Representatives who are informed as to the matters that are the subject of this
Agreement will be made, (i) aware that the United States securities laws would
(A) require disclosure relating to the formation of any "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to the Company's
voting
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securities and (B) prohibit any person who has material non-public information
about a company from purchasing or selling securities of such company, or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities and (ii) familiar with the Exchange Act and the rules and regulations
promulgated thereunder to the extent they relate to the matters referred to in
this paragraph 7. The Bidder agrees that it will not use or permit any third
party to use, and that it will each use reasonable best efforts to assure that
none of its Representatives will use or permit any third party to use, any
Evaluation Material in contravention of the United States securities laws,
including the Exchange Act or any rules and regulations promulgated thereunder.
8. Without the Company's written consent, for a period of one year from the
date hereof, neither the Bidder nor its Representatives or affiliates will
directly or indirectly solicit or direct anyone else to solicit any current
officer or key employee of the Company or any of its affiliates (i) to terminate
his or her employment or other relationship with the Company or its affiliates;
or (ii) unless a Definitive Agreement in respect of the Transaction has been
executed by the Parties, to seek or accept employment or other affiliation with
the Bidder or its affiliates.
9. The Bidder agrees that it shall not, and shall cause each of its
affiliates (other than the Company and its subsidiaries) and Representatives,
not to, unless and until such Party shall have received the prior written
invitation or approval of a majority of directors of the Company (it being
understood that the execution of this Agreement by the Parties does not
constitute such an invitation other than in respect of a consensual and
confidential (except to the extent that disclosure by the Bidder is required by
law) proposal to be made by the Bidder with respect to the Transaction (the
"Proposal")), directly or indirectly (i) make any proposal to acquire (other
than in connection with the Proposal), acquire or agree to acquire any
securities of the other Party or any of its subsidiaries, any warrant or option
to acquire any such securities, any security convertible into or exchangeable
for any such securities or any other right to acquire any such securities, other
than (A) pursuant to a Definitive Agreement between the Parties regarding the
Transaction, (B) purchases made in the ordinary course of business as a broker
or dealer in securities, (C) option exercises pursuant to option agreements
entered into with the Company, (D) in the case of individuals and their
affiliated trusts, pursuant to open market purchases consistent with their past
practice with respect to the Company's securities, and (E) such other categories
of permitted purchases of securities as may be mutually agreed upon by the
Parties in a Definitive Agreement, (ii) seek or propose (other than pursuant to
the Proposal) any merger, consolidation, business
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combination, tender or exchange offer, sale or purchase of assets or securities,
dissolution, liquidation, restructuring, recapitalization or similar
transactions involving the Company or any of its subsidiaries, other than (A)
pursuant to a Definitive Agreement between the Parties regarding the Transaction
and (B) any such transaction sought or proposed by the Bidder on behalf of the
Company and its Representatives solely in his capacity as an officer or director
thereof, (iii) make, or in any way participate in, any "solicitation" of proxies
or consents (whether or not relating to the election or removal of directors)
within the meaning of Rule 14a-1 under the Exchange Act with respect to any
securities of the Company or any of its subsidiaries, or seek to advise or
influence any person with respect to the voting of any securities of the Company
or any of its subsidiaries, or demand a copy of the stock ledger list of
stockholders, or any other books and records of the Company or any of its
subsidiaries, in all cases other than (A) pursuant to a Definitive Agreement
between the Parties regarding the Transaction and (B) any such action taken by
the Bidder on behalf of the Company solely in his capacity as an officer or
director of the Company, (iv) other than in connection with the Proposal,
otherwise act, alone or in concert with others, to seek to control or influence,
in any manner, the management, Board of Directors or policies of the Company or
any of its subsidiaries, (v) other than in connection with the Proposal, form,
join or in any way participate in a "group" (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to any of the foregoing, (vi) other
than in connection with the Proposal, have any discussions or enter into any
arrangements, understandings or agreements (whether written or oral) with, or
advise, finance, assist or encourage, any other person in connection with any of
the foregoing, or make any investment in any other person that engages, or
offers or proposes to engage, in any of the foregoing (it being understood that,
without limiting the generality of the foregoing, other than with respect to the
Proposal, the Bidder shall not be permitted to act as a joint bidder or
co-bidder with any other person with respect to the Company or any of its
subsidiaries), other than (A) pursuant to a Definitive Agreement between the
Parties regarding the Transaction and (B) any such action taken by the Bidder on
behalf of the Company solely in his capacity as an officer or director of the
Company, or (vii) make any publicly disclosed proposal regarding any of the
foregoing, unless required by law or New York Stock Exchange rule or regulation.
The Bidder also agrees during such period not to make any proposal or statement,
or disclose to a third party any intention, plan or arrangement, whether written
or oral, inconsistent with the foregoing (unless otherwise expressly permitted
pursuant to the terms of this Agreement) or request the Company directly or
indirectly to amend, waive or terminate any provision of this paragraph
(including this sentence) if the proposal, statement or request would require
public disclosure under the federal securities laws.
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10. Each Party acknowledges that remedies at law are inadequate to protect
against breach of this Agreement and hereby in advance agrees, without prejudice
to any rights to judicial relief it may otherwise have, to the granting of
equitable relief in the event of a breach, including injunction, in the other
Party's favor without proof of actual damages. Each Party agrees not to seek,
and agrees to waive any requirement for the securing or posting of, a bond in
connection with a Party seeking or obtaining such relief.
11. If any term or provision of this Agreement, or any application thereof
to any circumstances, shall, to any extent and for any reason, be held to be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to circumstances other than those to which it is held
invalid or enforceable, shall not be affected thereby and shall be construed as
if such invalid or unenforceable provision had never been contained herein and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
12. Except as provided in paragraph 8 of this Agreement, this Agreement
shall be effective for a period of three years from the date hereof.
13. This Agreement shall constitute the entire agreement between the
parties with regard to the subject matter hereof. No modification, amendment or
waiver shall be binding without the written consent of the parties hereto. This
Agreement shall inure to the benefit of and be binding upon each of the Parties
and their respective successors and assigns, provided, however, that neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the Parties hereto without the prior written consent of
the other Party, and no assignment of any right, interest or obligation shall
release any such assigning Party therefrom unless that other Party shall have
consented to such release in writing specifically referring to the right,
interest or obligation from which such assigning Party is to be released. It is
further understood and agreed that no failure or delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
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15. Any person who at any time after the date hereof becomes a
Representative of either Party shall be deemed to be such Party's
Representative, for the purposes of this Agreement, regardless of whether such
person was such Representative on the date hereof; all references to affiliates
or subsidiaries contained in this Agreement shall apply with equal force and
effect to any and all Representatives of such referenced affiliates or
subsidiaries.
16. Any notice to the Company hereunder shall be made in writing, by first
class mail, by overnight courier or by facsimile with original copy to follow by
first class mail, overnight courier of by facsimile with original copy to follow
by first class mail or overnight courier to MidAmerican Energy Holdings Company,
000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, Attn: Xxxxxx X.
XxXxxxxx, facsimile number (000) 000-0000. Any notice to the Bidder hereunder
shall be made in writing, by first class mail, by overnight courier or by
facsimile with original copy to follow by first class mail or overnight courier
to Xxxxx X. Xxxxx, c/o MidAmerican Energy Holdings Company, 000 Xxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000, facsimile number (000) 000-0000.
17. This Agreement may be executed in counterparts and signature pages
exchanged by facsimile, and each counterpart shall be deemed to be an original,
but both counterparts of which shall constitute the same agreement.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date and year first above written.
MIDAMERICAN ENERGY HOLDINGS
COMPANY
By:
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Name: Xxxxxx X. XxXxxxxx
Title: Senior Vice President, Mergers
and Acquisitions
---------------------------------
Xxxxx X. Xxxxx
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