EXHIBIT 1.1
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTES DUE NOT LESS THAN
[___] MONTHS FROM DATE OF ISSUE
FORM OF
DISTRIBUTION AGREEMENT
[__________, 20__]
[NAMES AND ADDRESSES OF AGENTS]
Dear Sirs:
MidAmerican Energy Company, an Iowa corporation (the
"Company"), confirms its agreement with [NAMES OF AGENTS], (each, an "Agent"
and, together, the "Agents") 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 [___________,
200_] between the Company and [NAME OF TRUSTEE], as trustee (the "Trustee"). As
of the date hereof, the Company has authorized the issuance and sale of up to
$[__________] aggregate principal amount of Notes through the Agents pursuant to
the terms of this Agreement, [OF WHICH $__________ REMAINS UNSOLD]. 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
Agents 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 Agents will act as agents of
the Company in soliciting Note purchases, and (as may from time to time be
agreed to by the Company and the Agents) to the Agents 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, as amended (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, as amended (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
Notes shall be provided to the Agents by the Company for use in connection with
the offering of 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 Agents.
(a) Appointment of Agents. 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 each Agent as its agent
for the purpose of soliciting purchases of Notes from the Company by others and
agrees that, except as otherwise contemplated herein, whenever the Company
determines to sell Notes directly to an Agent or Agents 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 Agents
are authorized to appoint sub-agents or to engage the services of any other
broker or dealer in connection with the offer or sale of Notes. The Company
agrees that, during the period any Agent is acting as the Company's Agent
hereunder, the Company will not contact or solicit potential investors
introduced to it by such Agent to purchase Notes. The Company may appoint, upon
one day prior written notice to the Agents, additional persons to serve as Agent
hereunder, but 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 Agents will use their reasonable
efforts to solicit purchases of such principal amount of Notes as the Company
and the Agents 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 Agents 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 Agents will communicate to
the Company, orally or in writing, each offer to purchase Notes, other than
those offers rejected by an Agent. Each 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 such
Agent's agreement contained herein. The Company may accept or reject any
proposed purchase of Notes, in whole or in part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
purchases of Notes on behalf of the Company, each Agent shall act solely as
agent for the Company and not as principal. Each Agent shall make reasonable
efforts to assist the Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent and accepted by the
Company. Such Agent shall not have any liability to the Company in the
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event any such purchase is not consummated for any reason. Such Agent shall not
have any obligation to purchase Notes from the Company as principal, but an
Agent may agree from time to time to purchase Notes as principal. Any such
purchase of Notes by an Agent as principal shall be made pursuant to a Terms
Agreement in accordance with Section 3(b) hereof.
(d) Reliance. The Company and each Agent agree that any Notes the
placement of which such Agent arranges shall be placed by such Agent, and any
Notes purchased by such 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.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each 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 any Agent as agent or to any Agent as
principal), and as of the date of each delivery of Notes (whether through such
Agent as agent or to such Agent as principal) (the date of each such delivery to
such Agent as principal being hereafter referred to as a "Settlement Date")
(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 1933 Act Regulations.
(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
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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 Agents expressly for use in the Registration
Statement or Prospectus, it being understood and agreed that the only such
information furnished by any Agent consists of the information described as
such in the applicable Terms Agreement.
(v) Incorporated Documents. The documents incorporated by
reference in the Registration Statement, 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
Registration Statement and the Prospectus are independent public
accountants within the meaning of the 1933 Act and the 1933 Act
Regulations.
(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 or incorporated by reference
in the Registration Statement present fairly the information required to be
stated therein.
(viii) Authorization and Validity of this Agreement, any
Applicable Terms Agreement, the Indenture and the Notes. Each of this
Agreement and any applicable Terms Agreement has been duly authorized and,
upon execution and delivery by the Agents, will be a legal, valid and
binding agreement of the Company; the Indenture has been duly authorized
and constitutes a legal, valid and binding obligation of the Company
enforceable against the Company 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
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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 legal, valid and binding obligations of the
Company enforceable against the Company 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
Agents 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 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 Restated
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, the Indenture
and any applicable Terms Agreement and the consummation of the transactions
contemplated herein and therein have been duly authorized by all necessary
corporate action and will not conflict with, constitute a breach of or
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any material property or assets of the Company or any
of its subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries may be bound or to which any of the material property or
assets of the Company or any such subsidiary is subject, nor will such
action result in any violation of the Restated 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.
(xii) 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
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the Company, threatened against or affecting, the Company which would be
reasonably likely to 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 would be reasonably likely to
materially and adversely affect its properties or assets or would be
reasonably likely to materially and adversely affect the consummation of
this Agreement, the 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
businesses in which it is engaged in the territories from which
substantially all of its gross operating revenue is derived.
(xiv) Holding Company. The Company is a subsidiary company of
MidAmerican Energy Holdings Company which is a holding company which,
together with the Company, is exempt from regulation under the Public
Utility Holding Company Act of 1935, as amended, 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 Agents or to counsel for the
Agents in connection with an offering of Notes or the sale of Notes to the
Agents as principal shall be deemed a representation and warranty by the Company
to the Agents as to the matters covered thereby on the date of such certificate
and at each Representation Date subsequent thereto.
SECTION 3. Solicitations as Agents; Purchases as Principal.
(a) Solicitations as Agents. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, each 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 Notes through any Agent, as agent, commencing at
any time for any period of time or permanently. Upon receipt of instructions
from the Company, such Agent will forthwith suspend solicitation of purchases
from the Company until such time as the Company has advised such Agent that such
solicitation may be resumed.
The Company agrees to pay each 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 Agents 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 Agents 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,
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the Notes will be issued in denominations of $[________] or any larger amount
that is an integral multiple of $[_______]. All Notes sold through any Agent as
agent will be sold at [___]% of their principal amount unless otherwise agreed
to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Notes to an Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Company and such 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, such Agent. Each such separate agreement (which may be an
oral agreement) between such 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 such Agent. Each such Terms Agreement,
whether oral or in writing, shall be with respect to such information (as
applicable) as is specified in the form of Terms Agreement attached as Exhibit A
hereto. Such 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 such 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 such Agent in the reoffering of
the Notes, and such other provisions (including further terms of the Notes) as
may be mutually agreed upon. Such Agent may utilize a selling or dealer group in
connection with the resale of the Notes purchased. Such Terms Agreement shall
also specify the requirements for the opinions of counsel, officers' certificate
and comfort letter pursuant to Sections 5(c), 5(d) and 5(e) hereof.
(c) Administrative Procedures. Administrative procedures with respect
to the sale of Notes shall be agreed upon from time to time by the Agents and
the Company (the "Procedures"). The Agents 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 Agents 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 Agents when such filing or mailing has been made. Prior to
such filing or mailing, the Company will cooperate with the Agents in the
preparation of such supplement to the Prospectus to assure that the Agents have
no reasonable objection to the form or content thereof when filed or mailed.
(b) FERC or ICC Action. To advise the Agents promptly of any
additional action by the FERC or ICC pertaining to the Notes.
7
(c) Copies of 1933 Act Documents. To furnish promptly to the Agents
and to counsel for the Agents one signed copy of the Registration Statement as
originally filed and each 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 Agents such
reasonable number of the following documents as the Agents 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.
(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 Agents 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 Note 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 Agents to cease the solicitation of offers to purchase the
Notes in each Agent's capacity as agent and to cease sales of any Notes any
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) Agents' Review. Prior to filing with the SEC during the term of
this Agreement, (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 Agents and to counsel
for the Agents, and the Company will not file any amendment to the Registration
Statement or supplement to the Prospectus unless the Company has furnished to
the Agents a copy of such document for review prior to filing and will not file
any such proposed amendment or supplement to which the Agents reasonably object.
(g) Notices to Agents. To advise the Agents promptly during the term
of this Agreement, (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 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
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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 any of the Agents pursuant to this
Agreement, a pricing supplement with respect to such Notes in a form previously
approved by the Agents 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
Agents, 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 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 term of this Agreement, 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 Agents 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.
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(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 Agents, (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
Agents may reasonably request.
(n) Blue Sky Qualifications. The Company will endeavor, in cooperation
with the Agents, 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 Agents 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 Agents 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 file promptly
all documents required to be filed with the SEC pursuant to Section 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 prior consent
of the Agents, 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 during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in their capacity as agents pursuant to a
request from the Company and (ii) the Agents 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 an Agent.
(r) Condition to Agency Transactions. Any person who has agreed to
purchase Notes as the result of an offer to purchase solicited by an 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 shall have occurred,
subsequent to the date on which such person agreed to purchase the Notes (the
"Trade Date") or subsequent to the respective dates as of which information is
given in the Registration Statement, (A) 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, (B) any attack on, or outbreak or escalation of hostilities or act
of terrorism involving, the United States, any declaration of war by Congress or
any other national or international calamity or emergency, if in
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the reasonable judgment of such person the effect of any such attack, outbreak,
escalation, act of terrorism, declaration of war, calamity or emergency makes it
impracticable or inadvisable to purchase the Notes, (C) any material suspension
or material limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such exchange, or any
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, or (D) any banking moratorium declared by U.S. Federal
or New York authorities; or (ii) the rating assigned by any nationally
recognized securities rating 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 thereto (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 subsection (n) of this Section and of preparing and printing a Blue
Sky Memorandum, (including fees of counsel to the Agents not to exceed $[_____]
in the aggregate); the reasonable fees and expenses of counsel for the Agents;
and all other costs and expenses incident to the performance of the Company's
obligations under this Agreement (including fees and expenses of the Company's
counsel); provided that, except as provided in this Section 4(s), the Agents
shall pay their 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 Agents.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase Notes as
agent of the Company, the obligations of any purchasers of Notes sold through
such Agent as agent, and any obligation of such 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 of its covenants and agreements herein contained and to
each of the following additional terms and conditions applicable to the Notes:
(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
11
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
[__________], counsel for the Agents, 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 Agents a letter addressed to the Agents 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;
(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 an 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
12
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 in all
material respects 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 and any applicable Terms
Agreement;
(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, the 1933 Act Regulations and Sections
305(a)(2) and 305(c) of the 1939 Act (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 Agreements nor the consummation of the
transactions herein or therein contemplated, nor compliance with the terms
and provisions hereof or thereof, will conflict with, or 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
Restated Articles of Incorporation or the bylaws of the Company or of any
material agreement or instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or constitute a default thereunder, or result in the
creation or imposition of any lien, charge
13
or encumbrance of any nature whatsoever upon any of the material properties
or assets of the Company or any such subsidiary;
(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);
(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 Restated
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 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
14
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
Agents on the date hereof a certificate, dated the date hereof, of its Chief
Executive Officer, 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 in all material respects 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) and 5(h) hereof have been
fulfilled.
(e) Comfort Letter. On the date hereof, the Agents shall have received
a letter from the Company's independent public accountants dated as of the date
hereof and in form and substance satisfactory to the Agents, 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 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 three 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
15
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 three 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 Agents and the Company; and
(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 included or
incorporated by reference in the Registration Statement and Prospectus
and which are specified by the Agents, 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) Opinion of Agents' Counsel. [_________], as counsel for the
Agents, shall have furnished to the Agents 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 Agents may
reasonably require.
(g) FERC and ICC Orders. The orders of the FERC and ICC referred to in
Section 2(a)(xi) hereof shall be in full force and effect and no proceedings to
suspend the effectiveness of either such order shall be pending or threatened.
(h) 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 Xxxxx'x Investors Service,
Inc.
(i) 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.
(j) Other Documents. On the date hereof and on each Settlement Date
with respect to any applicable Terms Agreement, counsel to the Agents 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 Company in connection with the issuance and sale of
Notes as
16
herein contemplated shall be satisfactory in form and substance to the Agents
and to counsel to the Agents.
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 Agents, any applicable Terms Agreement) may be terminated by the
Agents 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(1) hereof,
the provisions concerning payment of expenses under Section 4(s) hereof, the
indemnity and contribution agreement set forth in Section 8 hereof, the
provisions concerning the representations, warranties and agreements to survive
delivery in Section 9 hereof and the provisions set forth under "Parties" of
Section 13 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.
(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 either 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 Agents. Any such
termination shall be without liability of any party to any other party except to
the extent provided in Section 4(s), and Section 8 hereof.
SECTION 7. Delivery of and Payment for Notes Sold through the Agents
Delivery of Notes sold through any 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, such Agent shall promptly notify the Company and deliver
the Note to the Company, and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such Agent. If such
failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such 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.
17
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent, its directors and officers, and each person, if any,
who controls such 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 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 (which consent shall not be unreasonably
withheld, delayed or conditioned); and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 8(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 such 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), it
being understood and agreed that the only such information furnished by any
Agent shall consist of the information described as such in the applicable
Terms Agreement; and provided, further, that this indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Agent from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased Notes, or any person controlling such 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 such 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
18
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 provision 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. Each Agent agrees, severally and
not jointly, 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 such 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), it being understood and agreed that the only
such information furnished by any Agent shall consist of the information
described as such in the applicable Terms Agreement.
(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 to so 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. No indemnifying party shall, without the prior written consent of
the indemnified party (which consent shall not be unreasonably withheld, delayed
or conditioned), effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or behalf of such indemnified party.
(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which (i) 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 or (ii) such
indemnity is insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, the Company and each 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 such Agent, as incurred,
(x) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Agents on the other from the
offering of the Notes or (y) if the allocation provided by clause (x) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (x) above but also the
relative fault of the Company on
19
the one hand and the Agents on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Agents on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Agents. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Agents and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Agent shall be required to contribute any amount in excess of
the amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. 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. The Agents' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section, (1) each
director and officer of an Agent, and each person, if any, who controls an Agent
within the meaning of Section 15 of the 1933 Act, shall have the same rights to
contribution as such Agent, and (2) 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 the 1933
Act, shall have the same rights to contribution as the Company.
SECTION 9. Representations, Warranties, Indemnities and Agreements to
Survive Delivery.
All representations, warranties, indemnities 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 any Agent or any
controlling person of such Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 10. 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 Agents, upon the giving of 30 days' written notice of such termination to
the other party hereto.
(b) Termination of a Terms Agreement. An Agent may terminate any Terms
Agreement, immediately upon notice to the Company at any time prior to the
Settlement Date relating thereto, if (i) there shall have occurred, subsequent
to the date of such Terms Agreement
20
or subsequent to the respective dates as of which information is given in the
Registration Statement, (A) 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, (B) any material
adverse change in the financial markets in the United States, the effect of
which is such as to make it, in the reasonable judgment of such Agent,
impracticable to market the Notes or enforce contracts for the sale of Notes,
(C) any attack on, or outbreak or escalation of hostilities or act of terrorism
involving, the United States, any declaration of war by Congress or any other
national or international calamity or emergency, if in the reasonable judgment
of such person the effect of any such attack, outbreak, escalation, act of
terrorism, declaration of war, calamity or emergency makes it impracticable or
inadvisable to purchase the Notes, (D) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market, or (E) any banking moratorium declared by U.S. Federal
or New York authorities; (ii) 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 (iii) there shall have come to such Agent's
attention any facts that would cause such 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) each 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) each 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 8 hereof,
and the provisions of Sections 9 and 13 hereof shall remain in effect.
SECTION 11. 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 any such notice shall be effective when
received at the address specified below.
If to the Company:
MidAmerican Energy Company
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
21
Attention: Treasurer Fax: 000-000-0000
If to the Agents:
[CONTACT INFORMATION FOR AGENTS]
or at such other address as such party or parties may designate from time to
time by notice duly given in accordance with the terms of this Section 11.
SECTION 12. 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, without regard to principles of conflicts of laws. Any suit, action or
proceeding brought by the Company against the Agents 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 13. Parties.
This Agreement shall inure to the benefit of and be binding upon each
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 8 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
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 14. 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.
22
If the foregoing is in accordance with each 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 each Agent and the Company in accordance with its terms.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By:__________________________________
Name:
Title:
Accepted:
[SIGNATURE BLOCKS FOR AGENTS]
23
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay the Agents, 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:
PRINCIPAL
PERCENT OF MATURITY RANGES AMOUNT
-------------------------- ------
[FROM [__] MONTHS BUT LESS THAN 1 YEAR............. .[__]%
FROM 1 YEAR BUT LESS THAN [__] MONTHS.............. .[__]%
FROM [__] MONTHS BUT LESS THAN [__] YEARS.......... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS.......... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS.......... .[__]%
FROM [__] YEARS BUT LESS THAN [__] YEARS........... .[__]%
FROM [__] TO [__] YEARS............................ .[__]%]
SCHEDULE A-1
EXHIBIT A
MIDAMERICAN ENERGY COMPANY
Notes
[____]% Series due 20[__]
FORM OF
TERMS AGREEMENT
[__________ ___, 20___]
[NAMES AND ADDRESSES OF UNDERWRITERS]
Dear Sirs:
MidAmerican Energy Company, an Iowa corporation ("MEC"), confirms its
agreement with [NAMES OF UNDERWRITERS] (collectively, the "Underwriters") with
respect to the issue and sale by MEC of its Notes, [___]% Series due 20[__] (the
"Notes"). The Notes are to be issued pursuant to the Indenture, dated as of
[__________ ___, 20__] (the "Indenture"), between MEC and [NAME OF TRUSTEE], as
trustee.
This Terms Agreement is entered into pursuant to, and hereby incorporates
by reference all of the terms of, the Distribution Agreement, dated [__________
___, 20__] (the "Distribution Agreement"), among MEC and [NAMES OF AGENTS], as
Agents thereunder. Capitalized terms used in this Terms Agreement have the
definitions given to them in the Distribution Agreement.
SECTION 1. Representations and Warranties. MEC represents and warrants to
the Underwriters as of the date hereof and as of the Settlement Date for the
purchase, sale and delivery of the Notes to the Underwriters, that the
representations and warranties of MEC in Section 2 of the Distribution Agreement
are true and correct (except to the extent that such representations and
warranties are specifically limited to a prior date, in which case such
representations and warranties were true and correct as of such prior date).
SECTION 2. Purchase and Offering. Subject to the terms and conditions
hereof and incorporated by reference herein and in reliance upon the
representations and warranties herein set forth and incorporated by reference
herein, XXX agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter agrees, severally and not jointly, to purchase from MEC, at the
purchase price and on the other terms set forth in Schedule I hereto, the
principal amount of the Notes set forth opposite its name in Schedule I hereto,
and the Notes shall have the terms set forth in Schedule I hereto, which is
incorporated by reference in this Terms Agreement.
EXHIBIT A-1
SECTION 3. Conditions to the Obligations of the Underwriters. The
respective obligations of the Underwriters under this Terms Agreement with
respect to the Notes are subject to the accuracy, on the date hereof and on the
Settlement Date, of the representations and warranties of MEC contained, and
incorporated by reference, herein, to the performance by MEC of its obligations
contained in the Distribution Agreement and this Terms Agreement, and to the
satisfaction of the conditions contained in the Distribution Agreement.
[SECTION 4. STAND-OFF AGREEMENT. BETWEEN THE DATE OF THIS TERMS AGREEMENT
AND THE SETTLEMENT DATE, MEC WILL NOT, WITHOUT THE PRIOR CONSENT OF THE
UNDERWRITERS, OFFER OR SELL, OR ENTER INTO ANY AGREEMENT TO SELL, ANY DEBT
SECURITIES OF MEC (OTHER THAN THE NOTES AND COMMERCIAL PAPER IN THE ORDINARY
COURSE OF BUSINESS).]
SECTION 5. Information Furnished by Underwriters. For purposes of Sections
2(a)(iv), 8(a)(iii) and 8(b) of the Distribution Agreement, the only information
furnished to the Company by any Underwriter for use in the Prospectus consists
of (i) the following information in the Prospectus furnished on behalf of each
Underwriter: [Describe Information], and (ii) the following information in the
prospectus supplement furnished on behalf of [Name of Underwriter]: [Describe
Information].
SECTION 6. Governing Law. This Terms Agreement and all rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any suit, action or proceeding brought by MEC against the
Underwriters in connection with or arising under this Terms 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 7. Parties. This Terms Agreement shall inure to the benefit of and
be binding upon the Underwriters and MEC and their respective successors.
Nothing expressed or mentioned in this Terms 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 8 of the Distribution Agreement and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Terms Agreement or any provision herein contained. This
Terms Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto and their respective
successors and said controlling persons and officers and directors 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 8. Several Obligations. The obligations of the Underwriters
hereunder are several and not joint.
SECTION 9. Execution in Counterparts. This Terms 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.
EXHIBIT A-2
If the foregoing is in accordance with the Underwriters' understanding of
our agreement, please sign and return to MEC a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Underwriters and MEC in accordance with its terms.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By: ___________________________
Name:
Title:
Accepted:
[SIGNATURE BLOCKS FOR UNDERWRITERS]
EXHIBIT A-3
SCHEDULE I
This is Schedule I to the Terms Agreement, dated [_________ ___, 20__], entered
into pursuant to the Distribution Agreement, dated [__________ ___, 20__], among
MidAmerican Energy Company and [NAMES OF AGENTS], as Agents thereunder.
Capitalized terms used but not defined in this Schedule have the meanings given
to such terms in the Distribution Agreement.
Agents:
[NAMES OF AGENTS]
SEC Registration Number: 333-
Designation of Notes: [___]% Series due 20[__]
Terms of Notes:
--------------
Principal Amount: $[___________]
Issue Price: 100% Other:
Authorized Denominations: $1,000 and integral multiples of $1,000 Other:
Original Issue Date: [_________ ___, 20__]
Stated Maturity: [_________ ___, 20__]
Extension of Stated Maturity: MEC does not have the option to extend the stated maturity.
MEC does have the option to extend the stated maturity.
Extension Period(s): _____ period(s) of [one] [two] [three] [four]
[five] year(s)
Final Maturity Date:
Form: The notes are book-entry notes.
The notes are certificated notes.
Fixed Rate Notes
Interest Rate:
Interest Payment Dates: January 15 and July 15 Other:
Interest Rate Reset: MEC does not have the option to reset the interest rate.
MEC does have the option to reset the interest rate.
Reset Date(s):
Reset Formula:
Record Dates: January 1 and July 1 Other:
Floating Rate Notes
Initial Interest Rate:
Interest Rate Basis:
Commercial Paper Rate
LIBOR
Designated LIBOR Page: LIBOR Reuters, page ____ LIBOR Telerate, page ____
Prime Rate
Treasury Rate
Other:
Interest Reset Period: Daily Weekly Monthly Quarterly
Semiannual beginning in ________ and ________ Annual beginning in ________
Interest Reset Dates: As specified in the Prospectus Other:
Interest Payment Period: Monthly Quarterly Semiannual Annual
Interest Payment Dates:
Third Wednesday of each month Third Wednesday of each March, June, September and December
Third Wednesday of each ________ and ________ Third Wednesday of each _________
Other:
Interest Determination Date: As specified in the Prospectus Other:
Calculation Date: As specified in the Prospectus Other:
Index Maturity:
Spread: None _____ basis points
Spread Reset: MEC does not have the option to reset the spread.
MEC does have the option to reset the spread.
Reset Date(s):
Reset Formula:
Spread Multiplier: None
Spread Multiplier Reset: MEC does not have the option to reset the spread multiplier.
MEC does have the option to reset the spread multiplier.
Reset Date(s):
Reset Formula:
Maximum Interest Rate: None
Minimum Interest Rate: None
Calculation Agent: Bank One Trust Company, National Association Other:
Original Issue Discount Notes
Yield-to-Maturity:
Amortizing Notes. An amortization schedule is attached to this Schedule and is incorporated in this
Schedule by reference.
Redemption: The notes may not be redeemed prior to maturity at the option of MEC.
The notes may be redeemed prior to maturity at the option of MEC. The redemption
provisions are attached to this Schedule as Annex 1.
Repayment: The notes may not be repaid prior to maturity at the option of the holders.
The notes may be repaid prior to maturity at the option of the holders.
Repayment Date(s): At any time On the following dates:
Repayment Price:
Sinking Fund: The notes do not have the benefit of sinking fund provisions.
The notes do have the benefit of sinking fund
provisions. A schedule of mandatory sinking fund payments
is attached to this Schedule and is incorporated in this
Schedule by reference.
Renewal: The notes are not renewable at the option of the holders.
The notes are renewable at the option of the holders
Principal amount of Notes to be severally purchased by each Agent:
Agent Amount
[___________] $[___________]
[___________] [___________]
Total Principal Amount of Notes $[___________]
Agents' Discount: [___]%
Settlement Date: [__________ ___, 20__]
Settlement Time: At or about [_____] [A.M.] [P.M.]
Location of Closing: New York, New York
Payment Instructions: MidAmerican Energy Company, Account No. [_________], [NAME
OF BANK], ABA No. [________]
[STAND-OFF PERIOD: AS STATED IN SECTION 4 OF THE FOREGOING TERMS AGREEMENT.]
[INCLUDE IF APPLICABLE]
ANNEX 1
REDEMPTION PROVISIONS
The notes will be redeemable as a whole at any time or in part, from
time to time, at the option of MidAmerican Energy Company, at a redemption price
equal to the sum of (a) the greater of (i) 100% of the principal amount of the
notes being redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon from the redemption date to
the maturity date, computed by discounting such payments, in each case, to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus [___] basis points, plus (b)
accrued interest on the principal amount thereof to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the trustee after consultation with
MidAmerican Energy Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities", or (ii) if such release (or any successor release) is
not published or does not contain such prices on such Business Day, the average
of the Reference Treasury Dealer Quotations actually obtained by the trustee for
such redemption date. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the average, as
determined by the trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m.
on the third Business Day preceding such redemption date.
"Reference Treasury Dealer" means each of [NAMES OF UNDERWRITERS], and
their respective successors; provided, however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), MidAmerican Energy Company shall substitute
therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of the notes to be
redeemed. If, at the time notice of redemption is given, the redemption moneys
are not held by the trustee, the redemption may be made subject to their receipt
on or before the date fixed for redemption and such notice shall be of no effect
unless such moneys are so received. Upon payment of the redemption price, on and
after the redemption date interest will cease to accrue on notes or portions
thereof called for redemption.
Capitalized terms used but not defined in this annex have the meanings
given to such terms in MidAmerican Energy Company's prospectus dated
[___________ ___, 20__].
