<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1996.
REGISTRATION NO. 333-4525
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
INTERCOAST ENERGY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 1311 42-1456354
(STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(I.R.S.
EMPLOYER
IDENTIFICATION
NO.)
666 GRAND AVENUE, 26TH FLOOR
DES MOINES, IOWA 50309
(515) 281-2693
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
DONALD C. HEPPERMANN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
666 GRAND AVENUE, 26TH FLOOR
DES MOINES, IOWA 50309
(515) 281-2693
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
LYNNWOOD R. MOORE, JR., ESQ. MARGO S. SCHOLIN, ESQ.
CONNER & WINTERS, A PROFESSIONAL BAKER & BOTTS, L.L.P.
CORPORATION 3000 ONE SHELL PLAZA, 910 LOUISIANA
2400 FIRST PLACE TOWER, 15 EAST 5TH HOUSTON, TEXAS 77002
STREET
TULSA, OKLAHOMA 74103-4391
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $0.01 par
value................. 8,222,500 shares $17.00 $139,782,500 $48,201(3)
</TABLE>
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- -------------------------------------------------------------------------------
(1) Includes 1,072,500 shares subject to an over-allotment option to be
granted to the Underwriters.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457.
(3) The registration fee has been previously paid by the Registrant.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
All amounts, except SEC and NASD fees, are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.......... $ 45,366
NASD filing fee.............................................. 13,656
New York Stock Exchange listing fee.......................... 125,000
Transfer agent's fees........................................ 3,000
Printing, engraving and shipping expenses.................... 125,000
Legal fees and expenses...................................... 150,000
Blue sky fees and expenses................................... 15,000
Accounting fees.............................................. 300,000
Investment advisory fees..................................... 100,000
Miscellaneous................................................ 17,978
--------
Total.................................................... $895,000(1)
========
</TABLE>
--------
(1) MidAmerican Capital, as a selling stockholder, will pay a
pro rata share of such expenses based on the ratio of the
total number of shares sold by it in the Offering to the
total number of shares sold in the Offering.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides generally that
a corporation may indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
in nature, by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) and, in a proceeding not by or in the right of the
corporation, judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with such suit or proceeding, if he
acted in good faith and in a manner believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe his conduct was unlawful. Delaware law
further provides that a corporation may not indemnify any person against
expenses incurred in connection with an action by or in the right of the
corporation if such person shall have been adjudged to be liable in the
performance of his duty to the corporation unless and only to the extent that
the court in which such action or suit was brought shall determine that,
despite the adjudication of liability but in the view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
the expenses which such court shall deem proper. The Certificate of
Incorporation and Bylaws provide that the Company shall indemnify an officer
or director against liabilities incurred by such person as authorized under
the Delaware General Corporation Law. In addition, in connection with the
Offering the Company anticipates entering into specific agreements with the
directors and officers of the Company providing for indemnification of such
persons under certain circumstances. The Certificate of Incorporation also
eliminates, subject to certain limitations, the liability of the Company's
directors for monetary damages for breach of their fiduciary duty as
directors.
The form of Underwriting Agreement included as Exhibit 1.1 provides for
indemnification of the Company and certain controlling persons under certain
circumstances, including liabilities under the Securities Act.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
The following information is furnished as to securities of the Company sold
within the past three years which were not registered under the Securities
Act. Each of the issuances and sales described below was effected and relies
upon an exemption from registration under Section 4(2) of the Securities Act,
for transactions by an
II-1
<PAGE>
issuer not involving any public offering, or other exemptions as set forth
below. Grants of options are included only to the extent that such grants are
considered to be sales. No underwriting discounts or commissions were paid in
connection with such issuances and sales.
1. On May 23, 1996, in connection with the organization of the Company,
the Company issued 7,927,500 shares of Common Stock to MidAmerican Capital
as consideration for the transfer to the Company of the stock of the
Company's operating subsidiaries valued at $104.8 million as of March 31,
1996, consisting of aggregate retained earnings of $18,683,000 and
aggregate cash capital contributions of $86,074,000.
2. Effective May 22, 1996, the Company granted stock options for the
purchase of 541,600 shares of the Common Stock to certain officers and key
employees of the Company pursuant to the Stock Plan.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits*:
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
1.1 Form of Underwriting Agreement.
3.1** Certificate of Incorporation of the Company.
3.2** Bylaws of the Company.
4.1*** Form of stock certificate for the Company's Common Stock, par value $0.01 per share.
5.1*** Opinion of Conner & Winters, A Professional Corporation.
10.1** Purchase and Sale Agreement dated March 30, 1996, between the Company and Enron
Oil & Gas Company and Enron Oil & Gas Marketing Inc.
10.2** Amendment to Purchase and Sale Agreement dated April 10, 1996, between the
Company and Enron Oil & Gas Company and Enron Oil & Gas Marketing, Inc.
10.3**** Revolving Credit Facility dated July 15, 1996, between the Company and The First
National Bank of Chicago.
10.4 Form of Administrative Services Agreement between the Company and MidAmerican
Capital Company ("MidAmerican Capital").
10.5** InterCoast Energy Company Long Term Incentive Plan.
10.6** InterCoast Energy Company Non-Employee Director Restricted Stock Plan.
10.7** Purchase and Sale Agreement dated April 12, 1996, between the Company and
InterCoast Global Management, Inc.
10.8 Form of Tax Sharing Agreement between the Company and MidAmerican Capital.
10.9 Form of Indemnification Agreement between the Company and MidAmerican Capital.
10.10*** Promissory Note dated April 12, 1996, in the original principal amount of $45,240,000
made by the Company in favor of MidAmerican Capital.
10.11**** Variable Balance Promissory Note and Loan Agreement dated May 23, 1996, in the
maximum principal amount of $65,000,000 made by the Company in favor of
MidAmerican Capital.
10.12** InterCoast Energy Company Performance Incentive Plan.
10.13** Medallion Production Company Performance Incentive Plan dated April 1992, and
addendums dated January 1994 and March 1994.
10.14*** Asset Purchase Agreement dated December 15, 1995, between GED Gas Services,
L.L.C., Unit Corporation, Kevin J. Sullivan, as Trustee of the Karen S. Sullivan Trust
dated June 9, 1992, Robert L. Bayless, Bill A. Queen, Burt B. Holmes, and Kent
Bogart, and GED Energy Services, Inc., and InterCoast Energy Company.
10.15 Form of Sublease Agreement between the Company and MidAmerican Capital.
10.16 Form of Sublease Agreement between Intercoast Gas Services Company and AmGas,
Inc.
10.17 Form of Registration Rights Agreement between the Company and MidAmerican
Capital.
21.1*** Subsidiaries of the Registrant.
23.1**** Consent of Arthur Andersen LLP.
23.2** Consent of Netherland, Sewell and Associates, Inc.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<C> <S>
23.3** Consent of Conner & Winters, A Professional Corporation
(included in Exhibit 5).
23.4** Consent of William E. Warnock, Jr.
23.5** Consent of Russell E. Christiansen.
23.6** Consent of Stanley J. Bright.
23.7** Consent of John A. Rasmussen, Jr.
23.8** Consent of George G. Daly.
23.9** Consent of Robert C. Thomas.
24.1** Power of Attorney (included in this Part II).
27.1*** Financial Data Schedule.
99.1*** Summary reserve report of Netherland, Sewell & Associates,
Inc. dated May 13, 1996.
</TABLE>
--------
*Exhibits excluded are not applicable.
**Filed with the Registration Statement on Form S-1, No. 333-4525, on
May 24, 1996.
*** Filed with Amendment No. 1 to the Registration Statement on Form
S-1, No. 333-4525, on June 28, 1996.
**** Filed with Amendment No. 2 to the Registration Statement on Form
S-1, No. 333-4525, on July 18, 1996.
(b) Financial Statement Schedules:
None.
All other schedules are omitted as inapplicable or because the required
information is contained in the financial statements or included in the
footnotes thereto.
ITEM 17. UNDERTAKINGS.
1. The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closings specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
2. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
3. The undersigned Registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(ii) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF DALLAS AND STATE OF TEXAS ON THE 23RD DAY OF JULY, 1996.
InterCoast Energy Company
/s/ Donald C. Heppermann
By: _________________________________
DONALD C. HEPPERMANN CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 3 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
NAME TITLE DATE
/s/ Donald C. Heppermann Chairman, Chief
- ------------------------------------- Executive Officer July 23, 1996
DONALD C. HEPPERMANN and Director
(Principal
Executive Officer)
/s/ Daniel E. Lonergan Vice President--
- ------------------------------------- Finance, Controller July 23, 1996
DANIEL E. LONERGAN and Treasurer
(Principal
Accounting Officer
and Principal
Financial Officer)
II-4
<PAGE>
EXHIBIT 1.1
7,150,000 Shares
INTERCOAST ENERGY COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
July __, 1996
PAINEWEBBER INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
InterCoast Energy Company, a Delaware corporation (the "Company"), and
MidAmerican Capital Company, a Delaware corporation ("Capital"), propose to sell
an aggregate of 7,150,000 shares (the "Firm Shares") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), of which 6,150,000 shares
are to be issued and sold by the Company and 1,000,000 shares are to be sold by
Capital, in each case to you and to the other underwriters named in Schedule I
(collectively, the "Underwriters"), for whom you are acting as representatives
(the "Representatives"). Capital has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 1,072,500
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b). The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares." References to the Company and the
Subsidiaries (as hereinafter defined) in this Agreement include the Company's
and the Subsidiaries' predecessors, respectively, to the extent the context so
requires.
The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company, Capital and the Representatives, acting on
behalf of the several Underwriters, and such agreement shall be set forth in a
separate written instrument substantially in the form of Exhibit A hereto (the
"Price Determination Agreement"). The Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company, Capital and the
<PAGE>
Representatives and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Price Determination Agreement. From and after the date of
the execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein" shall
be deemed to include the Price Determination Agreement.
The Company and Capital confirm as follows their respective agreements
with the Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
------------------------------
(a) On the basis of the respective representations, warranties
and agreements of the Company and Capital, herein contained and subject to all
the terms and conditions of this Agreement, (i) the Company and Capital,
severally and not jointly, agree to sell to the several Underwriters and (ii)
each of the Underwriters, severally and not jointly, agrees to purchase from the
Company and Capital at the purchase price per share for the Firm Shares to be
agreed upon by the Representatives, the Company and Capital in accordance with
Section 1(c) and set forth in the Price Determination Agreement, the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I, plus
such additional number of Firm Shares which such Underwriter may become
obligated to purchase pursuant to Section 9 hereof. Schedule I may be attached
to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement,
Capital grants the Option to the several Underwriters to purchase, severally and
not jointly, up to 1,072,500 Option Shares from Capital at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 30th day after
the date of the Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to Capital no later
than 12:00 noon, New York City time, at least two and no more than five business
days before the date specified for closing in the Option Shares Notice (the
"Option Closing Date") setting forth the aggregate number of Option Shares to be
purchased and the time and date for such purchase. On the Option Closing Date,
Capital will sell to the Underwriters the number of Option Shares set forth in
the Option Shares Notice, and each Underwriter will purchase such percentage of
the Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing, as adjusted by the Representatives in such manner as
they deem advisable to avoid fractional shares.
(c) If the Company has elected to rely on Rule 430A, the
initial public offering price per share for the Firm Shares and the purchase
price per share for the Firm Shares to be paid by the several Underwriters shall
be agreed upon and set forth in the Price Determination Agreement. In the event
such price has not been agreed upon and the Price Determination
2
<PAGE>
Agreement has not been executed by the close of business on the fourteenth
business day following the date on which the Registration Statement becomes
effective, this Agreement shall terminate forthwith, without liability of any
party to any other party except that Section 7 shall remain in effect.
2. Delivery and Payment. Delivery of the Firm Shares shall be made
--------------------
at the office of PaineWebber Incorporated, 1285 Avenue of the Americas, New
York, New York 10019 to the Representatives for the accounts of the Underwriters
against payment of the purchase price by wire transfer of immediately available
funds (i) to an account designated by the Company with respect to Firm Shares
purchased from the Company and (ii) to an account designated by Capital with
respect to Firm Shares purchased from Capital. Such payments shall be made at
10:00 a.m., New York City time, on the [third][fourth] business day after the
date on which the first bona fide offering of the Shares to the public is made
by the Underwriters or at such time on such other date, not later than ten
business days after such date, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares by the Company to the respective
Underwriters shall be borne by the Company. The cost of tax stamps, if any, in
connection with the sale of the Firm Shares and the Option Shares by Capital to
the respective Underwriters shall be borne by Capital. The Company and Capital
will pay and save each Underwriter and any subsequent holder of the Shares
harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying Federal and state stamp and other transfer taxes, if
any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and the Option
Shares.
3. Representations and Warranties of the Company. The Company
---------------------------------------------
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-04525) on
Form S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration
3
<PAGE>
statement as may have been required to the date of this Agreement, has been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary prospectus
have been delivered to the Representatives. The term "Registration Statement"
means the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A or Rule 434 of
the Rules and Regulations. If the Company files a registration statement to
register a portion of the Shares and relies on Rule 462(b) of the Rules and
Regulations for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
the "Registration Statement" shall be deemed to include the Rule 462
Registration Statement, as amended from time to time. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all applicable provisions of the Act and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment did or will contain any 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 not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not or will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
the Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the Company acknowledges that the statements in the first, third,
sixth and seventh paragraphs under the caption "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives
4
<PAGE>
specifically for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. The Company has not distributed any offering
material in connection with the offering or sale of the Shares other than the
Registration Statement, the preliminary prospectus, the Prospectus or any other
materials, if any, permitted by the Act.
(c) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit 21.1 to the
Registration Statement (the "Subsidiaries"). The Company and each of the
Subsidiaries is, and at the Closing Date will be, a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of the Subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company and each of the Subsidiaries is, and at the Closing Date will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions in which the nature of the activities conducted
by it or the character of the assets owned or leased by it makes such licensing
or qualification necessary, except where the failure to be duly licensed or
qualified or to be in good standing would not materially and adversely affect
the Company or any of the Subsidiaries or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"). All
of the outstanding shares of capital stock of the Subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable and are
owned by the Company free and clear of all liens, encumbrances and claims
whatsoever. Except for the stock of the Subsidiaries and as disclosed in the
Registration Statement, the Company does not own, and at the Closing Date will
not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any material equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the certificate of incorporation and of the by-
laws of the Company and each of the Subsidiaries and all amendments thereto have
been delivered to the Representatives or their counsel, and no material changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date; provided, however, that the Company shall
provide the Representatives and their counsel with copies of any subsequent
amendments prior to the effectiveness of such amendments.
(d) The outstanding shares of Common Stock have been, and the
Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be subject
to any preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital
stock of any Subsidiary or any such warrants, convertible securities or
obligations.
5
<PAGE>
(e) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the consolidated
financial condition of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for the
respective periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus. The pro forma
financial statements and other pro forma financial information included in the
Registration Statement or the Prospectus (i) present fairly in all material
respects the information shown therein, (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements and (iii) have been properly computed on the bases described therein.
The assumptions used in the preparation of the pro forma financial statements
and other pro forma financial information included in the Registration Statement
or the Prospectus are, in the opinion of the Company, reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein. No other financial statements or schedules of
the Company are required by the Act or the Rules and Regulations to be included
in the Registration Statement or the Prospectus. Arthur Andersen LLP (the
"Accountants"), who have reported on such financial statements and schedules,
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The statements included in the Registration
Statement with respect to the Accountants pursuant to Item 509 of Regulation S-K
of the Rules and Regulations are true and correct in all material respects.
(f) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or any material adverse change in
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and the Subsidiaries, arising for any
reason whatsoever, (ii) neither the Company nor any of the Subsidiaries has
incurred nor will it incur any material liabilities or obligations, direct or
contingent, nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions referred
to herein and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.
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(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened against or affecting the Company or any
of the Subsidiaries or any of their respective officers in their capacity as
such, before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might result in a Material Adverse
Effect.
(j) The Company and each of the Subsidiaries has, and at the
Closing Date will have, (i) all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on its
business as described in the Prospectus, (ii) complied in all material respects
with all laws, regulations and orders applicable to it or its business and (iii)
performed all its material obligations required to be performed by it, and is
not, and at the Closing Date will not be, in default, under any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement, lease, contract or other agreement or instrument
(collectively, a "contract or other agreement") to which it is a party or by
which its property is bound or affected. To the best knowledge of the Company
and each of the Subsidiaries, no other party under any contract or other
agreement to which it is a party is in default in any respect thereunder.
Neither the Company nor any of the Subsidiaries is, nor at the Closing Date will
any of them be, in violation of any provision of its certificate of
incorporation or by-laws.
(k) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of
the Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares.
(l) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company and is enforceable against the Company in accordance with the terms
hereof (subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles). The execution and delivery
of this Agreement by the Company and the performance of this Agreement and the
consummation of the transactions contemplated hereby and the application of the
net proceeds from the offering and sale of the Firm Shares to be sold by the
Company in the manner set forth in the Prospectus under "Use of Proceeds" will
not result in the creation or imposition of any lien, charge or encumbrance upon
any of the assets
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of the Company or any of the Subsidiaries pursuant to the terms or provisions
of, or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the certificate of incorporation or by-laws of the Company or any of the
Subsidiaries, any contract or other agreement to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries or
any of their respective properties is bound or affected, or violate or conflict
with any judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the business or
properties of the Company or any of the Subsidiaries.
(m) Except as to their interests in oil and gas leases, the
Company and each of the Subsidiaries have good and marketable title to all
properties and assets described in the Prospectus as owned by them, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company
or the Subsidiaries. Except as to their interests in oil and gas leases, the
Company and each of the Subsidiaries have valid, subsisting and enforceable
leases for the properties described in the Prospectus as leased by them, with
such exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such properties by the Company and the
Subsidiaries. The Company and each of the Subsidiaries have good and defensible
title to their respective interests in oil and gas leases, free and clear of any
security interests, mortgages, pledges, liens, encumbrances, charges, defects or
restrictions of any kind or character, other than (i) those described in the
Prospectus; (ii) liens and encumbrances under operating agreements, unitization
and pooling arrangements and gas sales contracts that secure payment of amounts
not yet due and payable and which are of a nature and scope customary in
connection with similar oil and gas drilling and producing operations; and (iii)
those that do not have a Material Adverse Effect. The Company and each of the
Subsidiaries have conducted such title investigations and have acquired their
respective interests in oil and gas leases in such manner as is customary in the
oil and gas industry. The Company and each of the Subsidiaries have complied in
all material respects with the terms of the oil and gas leases in which they
purport to own an interest, and no claim of any sort has been asserted by anyone
adverse to the rights of the Company or any Subsidiary as lessee or sublessee
under any of such leases or questioning their respective rights to the continued
possession of the leased premises under any such lease, except with respect to
any such default or claim which would not have a Material Adverse Effect. The
concessions, reservations, licenses, permits and rights to hydrocarbons held by
the Company and the Subsidiaries are valid, subsisting and enforceable with such
exceptions as are described in the Prospectus or which would not have a Material
Adverse Effect.
(n) There is no document or contract of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any Subsidiary is a party
have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against the Company or such Subsidiary in
accordance with the terms
8
<PAGE>
thereof (subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles).
(o) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(p) None of the Company or any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(r) The Shares are duly authorized for listing, subject to
official notice of issuance, on the New York Stock Exchange.
(s) Neither the Company nor any of the Subsidiaries is involved
in any material labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.
(t) The Company and the Subsidiaries own, or possess adequate
rights to use in all material respects, all patents, patent applications,
trademarks, trademark registrations, applications for trademark registration,
trade names, service marks, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential technology, information, systems, design methodologies and devices
or procedures developed or derived from the Company's business), trade secrets,
confidential information, processes and formulations (collectively,
"Intellectual Property") necessary for or used in the conduct of their
respective businesses as currently conducted. The Company has not received any
notice of conflict with the asserted rights of others with respect to their
Intellectual Property, and, to the Company's knowledge, it has not infringed and
is not infringing upon the Intellectual Property of others. To the knowledge of
the Company, no others have infringed upon or are in conflict with its
Intellectual Property.
(u) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus.
(v) The Company has complied, and until the completion of the
distribution of the Shares will comply, with all of the provisions of
(including, without limitation,
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<PAGE>
filing all forms required by) Section 517.075 of the Florida Securities and
Investor Protection Act and regulation 3E-900.001 issued thereunder with respect
to the offering and sale of the Shares.
(w) The Tax Sharing Agreement dated as of July , 1996 (the "Tax
Sharing Agreement"), the Administrative Services Agreement dated as of July ,
1996 (the "Administrative Services Agreement"), the Registration Rights
Agreement dated as of July , 1996 (the "Registration Rights Agreement"), the
Indemnification Agreement dated as of July , 1996 (the "Indemnification
Agreement") and the Sublease dated as of July , 1996 (the "Sublease"), each
between the Company and Capital, in substantially the forms filed as exhibits to
the Registration Statement, have been duly authorized, executed and delivered
by, and are the valid and binding obligations of, the Company. There is no
transaction or relationship between the Company and any affiliate of the
Company, including, without limitation, Capital, required to be described in the
Registration Statement or the Prospectus which is not described as required.
(x) The information upon which were based the estimates of
reserves in the reserve reports for the oil and gas properties of the Company
and the Subsidiaries prepared by Netherland, Sewell and Associates, Inc. (with
respect to reserves at December 31, 1994, December 31, 1995 and January 1, 1996)
and Crowell and Crowell (with respect to reserves at December 31, 1992 and
December 31, 1993) (the "Engineers"), to the extent provided by the Company or
any Subsidiary, was at the time of delivery thereof complete and accurate in all
material respects. Each Engineer is a firm of independent petroleum engineers.
Information in the Prospectus regarding estimates of reserves, future net cash
flows and present values of estimated net cash flows comply in all material
respects with the applicable requirements of Rule 4-10 of Regulation S-X and
Industry Guide 2 under the Act.
(y) The Company and the Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their businesses and the value of their properties and as is customary for
companies engaged in similar businesses in similar industries.
(z) Except as described in the Prospectus, there has been no
storage, disposal, generation, manufacture, spill, discharge, refinement,
transportation, handling or treatment of toxic wastes, hazardous wastes or
hazardous substances by the Company or any Subsidiary (or to the knowledge of
the Company, any of its predecessors in interest) at, upon or from any of the
property now or previously owned or leased or under contract for purchase by the
Company or any Subsidiary in violation of any applicable law, ordinance, rule,
regulation, order, judgement, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
result in, or which would not be reasonably likely to result in, singularly or
in the aggregate with all such violations and remedial actions, any Material
Adverse Effect. The terms "hazardous wastes," "toxic wastes" and "hazardous
substances" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
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4. Representations and Warranties of Capital. Capital represents,
-----------------------------------------
warrants and covenants to each Underwriter that:
(a) Capital is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has full
corporate power and authority to enter into this Agreement and to sell, transfer
and deliver the Shares to be sold by it pursuant to this Agreement. All
authorizations and consents necessary for the execution and delivery of this
Agreement by Capital have been given. This Agreement has been duly authorized,
executed and delivered by Capital and constitutes a valid and binding agreement
of Capital and is enforceable against Capital in accordance with the terms
hereof (subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles).
(b) Capital now has, and at the time of delivery thereof
hereunder will have, (i) good and marketable title to the Shares to be sold by
Capital hereunder, free and clear of all liens, encumbrances and claims
whatsoever and (ii) full legal right and power, and all authorizations and
approvals required by law, to sell, transfer and deliver such Shares to the
Underwriters hereunder and to make the representations, warranties and
agreements made by Capital herein. Upon the delivery of and payment for such
Shares hereunder, Capital will deliver good and marketable title thereto, free
and clear of all liens, encumbrances and claims whatsoever.
(c) On the Closing Date or the Option Closing Date, as the case
may be, all stock transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the Shares to be
sold by Capital to the several Underwriters hereunder will have been fully paid
or provided for by Capital and all laws imposing such taxes will have been fully
complied with.
(d) The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of Capital
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the acceleration of any obligation under, the certificate of incorporation or
by-laws of Capital, any contract or other agreement to which Capital is a
party or by which Capital or any of its property is bound or affected, or
violate or conflict with any ruling, decree, judgment, order, statute, rule or
regulation of any court or other governmental agency or body having jurisdiction
over Capital or the property of Capital.
(e) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by Capital of the transactions on its part contemplated
herein, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by Capital.
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(f) Capital has no knowledge of any material fact or condition
not set forth in the Registration Statement or the Prospectus which has
adversely affected, or may adversely affect, the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company, and the sale of the Shares proposed to be sold by Capital is not
prompted by any such knowledge.
(g) All information with respect to Capital contained in the
Registration Statement and the Prospectus (as amended or supplemented, if the
Company shall have filed with the Commission any amendment or supplement
thereto) complied and will comply with all applicable provisions of the Act and
the Rules and Regulations, contains and will contain all statements required to
be stated therein in accordance with the Act and the Rules and Regulations, and
does not and will 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 not misleading.
(h) To the best knowledge of Capital, the representations and
warranties of the Company contained in Section 3 are true and correct.
(i) Other than as permitted by the Act and the Rules and
Regulations, Capital has not distributed and will not distribute any preliminary
prospectus, the Prospectus or any other offering material in connection with the
offering and sale of the Shares. Capital has not taken, directly or indirectly,
any action intended, or which might reasonably be expected, to cause or result
in, under the Act or otherwise, or which has caused or resulted in,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(j) No statement, representation, warranty or covenant made by
Capital in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(k) Capital is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940, as
amended.
(l) The Tax Sharing Agreement, the Administrative Services
Agreement, the Registration Rights Agreement, the Indemnification Agreement and
the Sublease, each between the Company and Capital, in substantially the forms
filed as exhibits to the Registration Statement, have been duly authorized,
executed and delivered by, and are the valid and binding obligations of,
Capital. There is no transaction or relationship between the Company and Capital
required to be described in the Registration Statement or the Prospectus which
is not described as required.
5. Agreements of the Company and Capital. The Company (as to
-------------------------------------
Sections 5(a) through 5(n)) and Capital (as to Sections 5(i), (j), (k), (o),
(p), (q) and (r)) agree, severally and not jointly, with the several
Underwriters as follows:
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(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use every reasonable effort to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such notice in writing, (1) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the happening of any
event during the period mentioned in the second sentence of Section 5(e) that in
the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or attorney
of the Company of any other substantive communication from the Commission
relating to the Company, the Registration Statement, any preliminary prospectus
or the Prospectus. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement, the Company will
make every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. The Company will use its best efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives, without
charge, three signed copies of the Registration Statement and of any post-
effective amendment thereto, including financial statements and schedules, and
all exhibits thereto, and will furnish to the Representatives, without charge,
for transmittal to each of the other Underwriters, a copy of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
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required by law to be delivered in connection therewith. If during such period
of time any event shall occur which in the judgment of the Company or counsel to
the Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and counsel to
the Underwriters in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective
Date, the Company will furnish to the Representatives and each other Underwriter
who may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company and
Capital, jointly and severally, will pay, or reimburse if paid by the
Representatives, all costs and expenses incident to the performance of the
obligations of the Company and Capital under this Agreement, including but not
limited to costs and expenses of or relating to (1) the preparation, printing
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus, (2) the preparation and delivery of certificates
representing the Shares, (3) the printing of this Agreement, the Agreement Among
Underwriters, any Dealer Agreements and any Underwriters' Questionnaire, (4)
furnishing (including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (5) the listing of the Shares on the New York Stock
Exchange, (6) any filings
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<PAGE>
required to be made by the Underwriters with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith, (7) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 5(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) counsel
to the Company and counsel to Capital, (9) the transfer agent for the Shares,
(10) the Accountants and (11) the Engineers.
(j) If this Agreement shall be terminated by the Company or
Capital pursuant to any of the provisions hereof (otherwise than pursuant to
Section 9) or if for any reason the Company or Capital shall be unable to
perform its obligations hereunder, the Company and Capital, jointly and
severally, will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
(k) The Company and Capital will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(m) During the period of 180 days commencing at the Closing
Date, the Company will not, without the prior written consent of PaineWebber
Incorporated, grant options to purchase shares of Common Stock at a price less
than the initial public offering price.
(n) The Company will not, and will cause each of its executive
officers and directors to enter into agreements with the Representatives in the
form set forth in Exhibit B to the effect that they will not, for a period of
180 days after the commencement of the public offering of the Shares, without
the prior written consent of PaineWebber Incorporated, sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to acquire such shares
(other than pursuant to the Company's employee stock option plans or in
connection with other employee incentive compensation or director compensation
arrangements of the Company).
(o) Capital will not, for a period of 180 days after the
commencement of the public offering of the Shares, without the prior written
consent of PaineWebber Incorporated, sell, contract to sell or otherwise dispose
of any shares of Common Stock.
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(p) Capital will not, without the prior written consent of
PaineWebber Incorporated, make any bid for or purchase any shares of Common
Stock during the 120-day period following the date hereof.
(q) As soon as Capital is advised thereof, Capital will advise
PaineWebber Incorporated and confirm such advice in writing, (1) of receipt by
Capital, or by any representative of Capital, of any communication from the
Commission relating to the Registration Statement, the Prospectus or any
preliminary prospectus, or any notice or order of the Commission relating to the
Company or Capital in connection with the transactions contemplated by this
Agreement and (2) of the happening of any event during the period from and after
the Effective Date that in the judgment of Capital makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they were made,
not misleading.
(r) Capital will deliver to PaineWebber Incorporated prior to or
on the Effective Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
6. Conditions of the Obligations of the Underwriters. In addition to
-------------------------------------------------
the execution and delivery of the Price Determination Agreement, the obligations
of each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Directors of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
16
<PAGE>
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor any of the Subsidiaries shall have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of the
Subsidiaries or any of their respective officers or directors in their
capacities as such, before or by any Federal, state or local court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, in which litigation or proceeding an unfavorable ruling, decision or
finding would have a Material Adverse Effect.
(e) Each of the representations and warranties of the Company
and Capital contained herein shall be true and correct in all material respects
at the Closing Date and, with respect to the Option Shares, at the Option
Closing Date, as if made at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements herein
contained to be performed on the part of the Company and Capital and all
conditions herein contained to be fulfilled or complied with by the Company and
Capital at or prior to the Closing Date and, with respect to the Option Shares,
at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
(f) The Representatives shall have received opinions, each dated
the Closing Date and, with respect to the Option Shares, the Option Closing
Date, and satisfactory in form and substance to counsel for the Underwriters,
from Conner & Winters, counsel to the Company, to the effect set forth in
Exhibit C and from James R. Barnett, Associate General Counsel of Capital, to
the effect set forth in Exhibit D.
(g) The Representatives shall have received an opinion, dated
the Closing Date and the Option Closing Date, from Baker & Botts, L.L.P.,
counsel to the Underwriters, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Representatives.
(h) On the date of the Prospectus, the Accountants shall have
furnished to the Representatives a letter, dated the date of its delivery,
addressed to the Representatives and
17
<PAGE>
in form and substance satisfactory to the Representatives, confirming that they
are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations and with respect to the financial (including pro
forma) and other statistical and numerical information contained in the
Registration Statement. At the Closing Date and, as to the Option Shares, the
Option Closing Date, the Accountants shall have furnished to the Representatives
a letter, dated the date of its delivery, which shall confirm, on the basis of a
review in accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period from the
date of the letter referred to in the prior sentence to a date (specified in the
letter) not more than two business days prior to the Closing Date and the Option
Closing Date which would require any change in their letter dated the date of
the Prospectus, if it were required to be dated and delivered at the Closing
Date and the Option Closing Date.
(i) On the date of the Prospectus and at the Closing Date and, as
to the Option Shares, the Option Closing Date, Netherland, Sewell and
Associates, Inc. shall have furnished to the Representatives a letter, dated the
date of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
petroleum engineers with respect to the Company and with respect to certain of
the oil and gas information contained in the Registration Statement.
(j) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined
the Registration Statement and the Prospectus and (A) as of the date of
such certificate, such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue or
misleading and (B) since the Effective Date, no event has occurred as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein not untrue or misleading in any
material respect.
(ii) To the best of their knowledge after reasonable
investigation, each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii)Each of the covenants required herein to be performed
by the Company on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the delivery of such
certificate has been duly, timely and fully complied with.
18
<PAGE>
(k) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate on behalf of Capital, dated the date of its delivery, signed by the
President or any Vice President and the principal financial officer of Capital,
in form and substance satisfactory to the Representatives, to the effect that
(i), to the best of their knowledge after reasonable investigation, each of the
representations and warranties of Capital contained in this Agreement were, when
originally made, and are, at the time such certificate is delivered, true and
correct in all material respects and (ii) each of the covenants required herein
to be performed by Capital on or prior to the delivery of such certificate has
been duly, timely and fully performed and each condition herein required to be
complied with by Capital on or prior to the delivery of such certificate has
been duly, timely and fully complied with.
(l) On or prior to the Closing Date, the Representatives shall
have received the executed agreements referred to in Section 5(n).
(m) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(n) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the New York Stock Exchange upon official notice of
issuance.
(o) The Company and Capital shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company and Capital herein, as to the performance by the
Company and Capital of their respective obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
7. Indemnification.
---------------
(a) Each of the Company and Capital, jointly and severally,
(subject to the provisions of subsection (e) below), will indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), to which they,
or any of them, may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or
19
<PAGE>
damages arise out of or are based on any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading; provided, however, that the Company
-------- -------
and Capital will not be liable to the extent that such loss, claim, liability,
expense or damage is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus; and
provided, further, that this indemnity agreement with respect to any untrue
- -------- -------
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such loss, claim, liability, expense or damage
purchased Shares (or any person who controls such Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act) to the extent that a
copy of the Prospectus (as then amended or supplemented and furnished by the
Company to such Underwriter) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the sale of such Shares and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, liability, expense or damage and the Company has
complied with its obligations under Section 5(e) hereof. This indemnity
agreement will be in addition to any liability that the Company or Capital might
otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company and
Capital, each person, if any, who controls the Company or Capital within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company and Capital to each Underwriter, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of such Underwriter
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus. This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 7 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the
20
<PAGE>
idemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
will not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 7 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company and Capital or the
Underwriters, the Company, Capital and the Underwriters will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Company and
Capital from persons other than the Underwriters, such as persons who control
the Company or Capital within the meaning of the Act, officers of the Company
who signed the Registration Statement and directors of the Company, who also may
be liable for contribution) to which the Company or Capital and any one or more
of the Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and
21
<PAGE>
Capital on the one hand and the Underwriters on the other. The relative benefits
received by the Company and Capital on the one hand and the Underwriters 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 and
Capital bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Company
and Capital, on the one hand, and the Underwriters, on the other, with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or Capital, on the one hand,
or the Representatives on behalf of the Underwriters, on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
Capital and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 7(d)
shall be deemed to include, for purpose of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 7(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
7(d), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement and each director
of the Company will have the same rights to contribution as the Company, subject
in each case to the provisions hereof. Any party entitled to contribution,
promptly after receipt of notice of commencement of any action against such
party in respect of which a claim for contribution may be made under this
Section 7(d), will notify any such party or parties from whom contribution may
be sought, but the omission so to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may
have under this Section 7(d). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(e) Notwithstanding any other provision of this Section 7, the
liability of Capital under Section 7(a) or 7(d) shall be limited to the
proportion of any and all such losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses
22
<PAGE>
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as set forth in such sections, that the total
net proceeds (before deducting expenses) received by Capital from the sale of
the Shares hereunder bears to the aggregate total net proceeds (before deducting
expenses) received by the Company and Capital from the sale of the Shares
hereunder.
(f) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and Capital
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters,
(ii) acceptance of any of the Shares and payment therefor or (iii) any
termination of this Agreement.
8. Termination. The obligations of the several Underwriters under this
-----------
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company or Capital, if, prior to delivery and payment for
the Shares (or the Option Shares, as the case may be), in the sole judgment of
the Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the Nasdaq Stock Market, (ii) trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or (iv) any material adverse change in the
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred, the effect of
any of which is such as to make it, in the sole judgment of the Representatives,
impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus.
9. Substitution of Underwriters. If any one or more of the Underwriters
----------------------------
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has
23
<PAGE>
become obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by more than one-ninth of the number of Firm Shares agreed to be
purchased by such Underwriter without the prior written consent of such
Underwriter. If any Underwriter or Underwriters shall fail or refuse to purchase
any Firm Shares and the aggregate number of Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase exceeds
one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives, the Company and Capital for the purchase of
such Firm Shares are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter,
or the Company or Capital for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company or Capital
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Miscellaneous. Notice given pursuant to any of the provisions of this
-------------
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 666 Grand
Avenue, 26th Floor, Des Moines, Iowa 50309, Attention: <QUAD>Chairman and Chief
Executive Officer, with a copy to Conner & Winters, A Professional Corporation,
2400 First Place Tower, 15 East Fifth Street, Tulsa, Oklahoma, 74103, Attention:
Lynnwood R. Moore, Jr., (b) if to Capital, at the offices of Capital, 666 Grand
Avenue, 26th Floor, Des Moines, Iowa 50309, Attention: Chairman and Chief
Executive Officer, or (c) if to the Underwriters, to the Representatives at the
offices of PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New
York 10019, Attention: Corporate Finance Department. Any such notice shall be
effective only upon receipt. Any notice under Section 8 or 9 may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and Capital and of the controlling persons, directors
and officers referred to in Section 7, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from any of the
several Underwriters.
With respect to any obligation of the Company and Capital hereunder to make
any payment, to indemnify for any liability or to reimburse for any expense,
notwithstanding the fact that such obligation is a joint and several obligation
of the Company and Capital, the Underwriters (or any other person to whom such
payment, indemnification or reimbursement is owed) may pursue the Company with
respect thereto prior to pursuing Capital.
All representations, warranties and agreements of the Company and Capital
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and
24
<PAGE>
in full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any of their controlling persons and shall survive delivery
of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Representatives under
this Agreement may be taken by them jointly or by PaineWebber Incorporated.
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
OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company, Capital and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any provision
hereof waived except by an instrument in writing signed by the Representatives,
the Company and Capital.
Please confirm that the foregoing correctly sets forth the agreement among
the Company, Capital and the several Underwriters.
25
<PAGE>
Very truly yours,
INTERCOAST ENERGY COMPANY
By: ----------------------------------
Title:
MIDAMERICAN CAPITAL COMPANY
By:
----------------------------------
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ----------------------------------
Title:
26
<PAGE>
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
to be
Underwriter Purchased
----------- ---------
PaineWebber Incorporated .......................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .......................................
---------
Total .................................................. 7,150,000
=========
27
<PAGE>
EXHIBIT A
INTERCOAST ENERGY COMPANY
--------------------
PRICE DETERMINATION AGREEMENT
-----------------------------
July __ , 1996
PAINEWEBBER INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated July , 1996
(the"Underwriting Agreement"), among InterCoast Energy Company, a Delaware
corporation (the "Company"), MidAmerican Capital Company, a Delaware corporation
and the sole stockholder of the Company ("Capital"), and the several
Underwriters named in Schedule I thereto or hereto (the "Underwriters"), for
whom PaineWebber Incorporated and Merrill Lynch, Pierce, Fenner & Smith
Incorporated are acting as representatives (the "Representatives"). The
Underwriting Agreement provides for the purchase by the Underwriters from the
Company and Capital, subject to the terms and conditions set forth therein, of
an aggregate of 7,150,000 shares (the "Firm Shares") of the Company's common
stock, par value $.01 per share. This Agreement is the Price Determination
Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:
The initial public offering price per share for the Firm Shares shall be
$_______.
The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $______, representing an amount equal to the
initial public offering price set forth above, less $______ per share.
1
<PAGE>
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
Capital represents and warrants to each of the Underwriters that the
representations and warranties of Capital set forth in Section 4 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I is
a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New York
without regard to the conflict of laws principles of such State.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters, the Company and Capital, please sign and
return to the Company a counterpart hereof, whereupon this instrument along with
all counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters, the Company and Capital in accordance with its
terms and the terms of the Underwriting Agreement.
Very truly yours,
INTERCOAST ENERGY COMPANY
By:
-----------------------------
Title:
MIDAMERICAN CAPITAL COMPANY
By:
------------------------------
Title:
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<PAGE>
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By:
------------------------------
Title:
3
<PAGE>
EXHIBIT B
[DATE]
PAINEWEBBER INCORPORATED
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
In consideration of the agreement of the several Underwriters, for which
PaineWebber Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Representatives") intend to act as Representatives to underwrite a
proposed public offering (the "Offering") of 7,150,000 shares of Common Stock,
par value $.01 per share (the "Common Stock"), of InterCoast Energy Company, a
Delaware corporation (the "Company"), as contemplated by a registration
statement with respect to such shares filed with the Securities and Exchange
Commission on Form S-1 (Registration No. 333-04525), the undersigned hereby
agrees that the undersigned will not, for a period of 180 days after the
commencement of the public offering of such shares, without the prior written
consent of PaineWebber Incorporated, offer to sell, sell, contract to sell,
grant any option to sell, or otherwise dispose of, or require the Company to
file with the Securities and Exchange Commission a registration statement under
the Securities Act of 1933 to register, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other rights to
acquire shares of Common Stock of which the undersigned is now, or may in the
future become, the beneficial owner (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) (other than pursuant to the Company's employee
stock option plans or in connection with other employee incentive compensation
or director compensation arrangements of the Company).
Very truly yours,
By:
--------------------------------
Print Name:
-------------------------------
<PAGE>
EXHIBIT C
July , 1996
PaineWebber Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Gentlemen:
We have acted as counsel to InterCoast Energy Company, a Delaware
corporation (the "Company") in connection with the sale on the date hereof of an
aggregate of 7,150,000 shares (the "Shares") of the Company's common stock, par
value $.01 per share (the "Common Stock"), which shares are being sold by the
Company and Mid-American Capital Company, a Delaware corporation, to the several
underwriters (the "Underwriters") named in Schedule I to that certain
Underwriting Agreement (the "Underwriting Agreement") dated July , 1996, by and
among Company and you acting for yourselves and as representatives of the
Underwriters.
We have also acted as counsel to the Company in connection with the
preparation and filing with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"Act"), a Registration Statement on Form S-1, File No.333-04525, as subsequently
amended by Amendment Nos. 1 and 2 thereto, with respect to the Shares (the
"Registration Statement"), including the Prospectus dated July , 1996, included
in the Registration Statement (the "Prospectus").
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We are rendering this opinion to you pursuant to Section 6(f) of the
Agreement. All terms capitalized in this opinion shall have the same meanings as
in the Agreement unless otherwise defined herein. All references in this opinion
to the Agreement shall include the Price Determination Agreement.
In connection with this opinion, we have examined such certificates,
documents and instruments as we have deemed necessary as a basis for the
opinions hereinafter expressed. In our examination, we have assumed the
genuineness of all signatures, the accuracy, authenticity and completeness of
all documents, certificates and records submitted to us as originals, and the
conformity with the originals of all documents, certificates and records
submitted to us as copies. On the basis of the foregoing and subject to the
qualifications and limitations set forth herein, it is our opinion that:
1. The Company and each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
own or lease all the material assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company is the sole record owner and, to our knowledge, the sole beneficial
owner of all of the capital stock of each of the Subsidiaries.
2. All of the outstanding shares of Common Stock have been, and the
Shares, when paid for by the Underwriters in accordance with the terms of the
Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right under
(i) the statutes, judicial and administrative decisions, and the rules and
regulations of the governmental agencies of the State of Delaware, (ii) the
Company's certificate of incorporation or by-laws or (iii) any instrument,
document, contract or other agreement referred to in the Registration Statement
or any instrument, document, contract or agreement filed as an exhibit to the
Registration Statement. Except as described in the Registration Statement or the
Prospectus, to the best of our knowledge, there is no commitment or arrangement
to issue, and there are no outstanding options, warrants or other rights calling
for the issuance of, any share of capital stock of the Company or any Subsidiary
to any person or any security or other instrument that by its terms is
convertible into, exercisable for or exchangeable for capital stock of the
Company.
3. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in connection with the taking by
the Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may be required
under state securities or "Blue Sky" laws or by the by-laws and rules of the
NASD in connection with the purchase and distribution by the Underwriters of the
Shares to be sold by the Company.
2
<PAGE>
4. The authorized, issued and outstanding capital stock of the Company
is as set forth in the Registration Statement and the Prospectus under the
caption "Capitalization." The description of the Common Stock contained in the
Prospectus is complete and accurate in all material respects. The form of
certificate used to evidence the Common Stock is in due and proper form and
complies with all applicable statutory requirements.
5. The Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to (i) financial statements,
schedules and other financial data, and (ii) estimates of oil and gas reserves
and information related thereto, contained in the Registration Statement or the
Prospectus).
6. To the best of our knowledge, any instrument, document, lease,
license, contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus has
been properly described or referred to therein and any Document required to be
filed as an exhibit to the Registration Statement has been filed as an exhibit
thereto or has been incorporated as an exhibit by reference in the Registration
Statement; and, to the best of our knowledge, no default exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any Document filed or required to be filed as an exhibit
to the Registration Statement.
7. To the best of our knowledge, except as disclosed in the Registration
Statement or the Prospectus, no person or entity has the right to require the
registration under the Act of shares of Common Stock or other securities of the
Company by reason of the filing or effectiveness of the Registration Statement.
8. To the best of our knowledge, the Company is not in violation of, or
in default with respect to, any law, rule, regulation, order, judgment or
decree, except as may be described in the Prospectus or such as in the aggregate
do not now have and will not in the future have a material adverse effect upon
the operations, business or assets of the Company and the Subsidiaries, taken as
a whole.
9. All descriptions in the Prospectus of statutes, regulations or legal
or governmental proceedings are accurate and fairly present the information
required to be shown.
10. The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company, is a valid and binding agreement of the Company and, except for the
indemnification and contribution provisions thereof, as to which we express no
opinion, is enforceable against the Company in accordance with the terms
thereof, subject to the qualification that the enforceability of the Agreement
may be (i) subject to bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally; and (ii) subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity)
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<PAGE>
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
11. The execution and delivery by the Company of, and the performance by
the Company of its agreements in, the Agreement do not and will not (i) violate
the certificate of incorporation or by-laws of the Company, (ii) breach or
result in a default under, cause the time for performance of any obligation to
be accelerated under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or any of the
Subsidiaries pursuant to the terms of, (x) any indenture, mortgage, deed of
trust, loan agreement, bond, debenture, note agreement, capital lease or other
evidence of indebtedness of which we have knowledge, (y) any voting trust
arrangement or any contract or other agreement to which the Company is a party
that restricts the ability of the Company to issue securities and of which we
have knowledge or (z) any Document filed as an exhibit to the Registration
Statement, (iii) breach or otherwise violate any existing obligation of the
Company or any of the Subsidiaries under any court or administrative order,
judgment or decree of which we have knowledge or (iv) violate applicable
provisions of any statute or regulation in the States of Delaware, Oklahoma or
of the United States.
12. Delivery of certificates for the Shares to be sold by the Company
will transfer valid and marketable title thereto to each Underwriter that has
purchased such Shares in good faith and without notice of any adverse claim with
respect thereto.
13. The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
We hereby confirm to you that there are no actions, suits, proceedings
or investigations pending or, to our knowledge, overtly threatened in writing
against the Company or any of the Subsidiaries, or any of their respective
officers or directors in their capacities as such, before or by any court,
governmental agency or arbitrator which (i) seek to challenge the legality or
enforceability of the Agreement, (ii) seek to challenge the legality or
enforceability of any of the Documents filed, or required to be filed, as
exhibits to the Registration Statement, (iii) seek damages or other remedies
with respect to any of the Documents filed, or required to be filed, as exhibits
to the Registration Statement, (iv) except as set forth in or contemplated by
the Registration Statement and the Prospectus, seek money damages in excess of
$2,000,000 or seek to impose criminal penalties upon the Company, any of the
Subsidiaries, or any of their respective officers or directors in their
capacities as such and of which we have knowledge or (v) seek to enjoin any of
the business activities of the Company or any of the Subsidiaries or the
transactions described in the Prospectus and of which we have knowledge.
We hereby further confirm to you that we have been advised (i) by the
Commission that the Registration Statement has become effective under the Act
and that no order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has
4
<PAGE>
been instituted or is pending, threatened or contemplated, and (ii) by the New
York Stock Exchange that the Shares have been authorized for listing by that
exchange upon official notice of issuance.
In addition, we have participated in conferences with officers and other
representatives of the Company, representatives of the Representatives and
representatives of the independent certified public accountants of the Company,
at which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion); on the basis of the
foregoing, no fact has come to our attention which has caused us to believe that
the Registration Statement at the time it became effective or as of the date
hereof contained any 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 of its date and at the date
hereof contained any untrue statement of a material fact or omitted 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 (it being
understood that we are expressing no belief with respect to (i) financial
statements, schedules and other financial data, and (ii) estimates of oil and
gas reserve and information related thereto, contained in the Registration
Statement or the Prospectus).
The phrases "to our knowledge," "to the best of our knowledge," and
similar phrases as used herein refer to matters within our actual knowledge and,
except as otherwise stated herein, we have made no specific investigation or
review of any facts, documents, instrument, judgment, decrees, franchises,
permits or the like, and have made no independent search of the records of any
judicial authority or government agency.
We are members of the Oklahoma Bar and, accordingly, do not express or
purport to express any opinions with respect to any laws other than the laws of
the State of Oklahoma, the corporate laws of the State of Delaware, and the
federal laws of the United States of America. In rendering the foregoing
opinion, we have with your permission relied on or assumed the following:
(a) our opinions as to certain factual matters have been based on
certificates of officers of the Company; and
(b) with respect to our opinion in paragraph 10. hereof as to the
enforceability of the Agreement against the Company, we have, with your
permission, assumed the laws of the State of Oklahoma are identical to
the laws of the State of New York.
The certificates referred to above are in form satisfactory to us and copies
thereof have been delivered to your counsel. We and you are justified in relying
thereon.
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<PAGE>
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 6(g) of the Agreement.
Sincerely,
CONNER & WINTERS,
A Professional Corporation
LRM:pp
6
<PAGE>
EXHIBIT D
Form of Opinion
of Counsel to Capital
---------------------
Capital is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to enter into the Agreement and to sell, transfer and deliver the
Shares to be sold by it pursuant to the Agreement. All authorizations and
consents necessary for the execution and delivery of the Agreement have been
given. The delivery of the Shares to be sold by Capital to the Underwriters
pursuant to the terms of the Agreement and payment therefor by the Underwriters
will transfer good and marketable title to such Shares to the several
Underwriters purchasing such Shares, free and clear of all liens, encumbrance
and claims whatsoever.
The Agreement has been duly authorized, executed and delivered by
Capital, is a valid and binding agreement of Capital and, except for the
indemnification and contribution provisions of the Agreement, is enforceable
against Capital in accordance with the terms thereof.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by Capital, in connection with the execution, delivery and performance of
the Agreement by Capital or in connection with the taking by Capital of any
action contemplated thereby, except such as have been obtained under the Act or
the Rules and Regulations and such as may be required under state securities or
Blue Sky laws or by the by-laws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Shares to be sold by
Capital.
The execution and delivery by Capital of, and the performance by Capital
of its agreements in, the Agreement, do not and will not (i) violate the
certificate of incorporation or by-laws of Capital, (ii) breach or result in a
default under, cause the time for performance of any obligation to be
accelerated under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of Capital pursuant to the terms of, (x)
any indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement, capital lease or other evidence of indebtedness of which we have
knowledge, (y) any voting trust arrangement or any contract or other agreement
to which Capital is a party that restricts the ability of the Company to issue
securities and of which we have knowledge or (z) any other contract or other
agreement of which we have knowledge, (iii) breach or otherwise violate any
existing obligation of Capital under any court or administrative order, judgment
or decree of which we have knowledge or (iv) violate applicable provisions of
any statute or regulation in the States of Delaware, Iowa or of the United
States.
There are no transfer or similar taxes payable in connection with the
sale and delivery of the Shares to be sold by Capital to the several
Underwriters, except as specified in such opinion.
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<PAGE>
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 6(g) of the Agreement.
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably acceptable to
Underwriters' counsel as to matters governed by the laws of jurisdictions other
than the United States and the States of Iowa and Delaware, and as to matters of
fact, upon certificates of Capital and of government officials; provided that
such counsel shall state that the opinion of any other counsel is in form
satisfactory to such counsel. Copies of all such opinions and certificates shall
be furnished to counsel to the Underwriters on the Closing Date.
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Exhibit 10.4
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement (the "Agreement") is made and
entered into this ____ day of July, 1996, by and between MidAmerican Capital
Company, a Delaware corporation ("MidAmerican"), for itself and its
subsidiaries, and InterCoast Energy Company, a Delaware corporation
("InterCoast"), for itself and its subsidiaries.
RECITALS
1. InterCoast and its subsidiaries are currently wholly owned subsidiaries of
MidAmerican.
2. InterCoast is currently intending a public offering of its equity securities
which upon the date of closing of such offering (the "Closing Date") would
reduce MidAmerican's ownership below fifty percent.
3. Historically, MidAmerican and/or its affiliates have, from time to time or
on an ongoing basis, provided administrative services to InterCoast and/or
its subsidiaries.
4. Historically, InterCoast and/or its subsidiaries have, from time to time or
on an ongoing basis, provided administrative services to MidAmerican and/or
its other subsidiaries.
In consideration of the mutual covenants and agreements herein contained,
the parties agree as follows:
Article I. Applicability
1.01 InterCoast Subsidiaries; MidAmerican Subsidiaries. As used
-------------------------------------------------
hereinafter, all references to "InterCoast" shall include InterCoast Energy
Company and its subsidiaries. As used hereinafter, all references to
"MidAmerican" shall include MidAmerican Capital Company and its subsidiaries
(not including InterCoast however).
1.02 Applicability. This Agreement shall apply to Administrative Services
--------------
provided by either MidAmerican or InterCoast to the other, from time to time or
on an ongoing basis, the provision and use of which is not the subject of a
separate agreement among the parties. Administrative Services provided under
this Agreement shall be provided from time to time or on an ongoing basis as
agreed to by the parties. If a party elects to discontinue the provision or use
of an Administrative Service provided under this Agreement, such party shall
provide the other party with reasonable advanced notice of such discontinuance.
1.03 Administrative Services. For purposes of this Agreement,
-----------------------
Administrative Services shall include, but not be limited to, the following:
a. The use of office facilities including, but not limited to, office
space, conference rooms, fixtures, furniture, equipment, machinery,
supplies, personal computers, mainframe computers, computer software
and other personal property;
b. The use of airplanes, automobiles, other vehicles and equipment;
1
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c. Personal services by executive, management, professional, technical and
clerical employees; and
d. Financial services, payroll processing, employee benefits
participation, purchase order processing, billing services, mail
services, tax services, contract negotiation and administration,
engineering services, and fuel supply and transportation services.
1.04 Scheduling and Use. A party requesting services under this Agreement
------------------
shall do so by the submission of a purchase order or other request to the
providing party. Each party reserves the right to provide and schedule the
provision of Administrative Services, if such party is at the time of the
request able to provide such services with its then-current personnel and
facilities, pursuant to this Agreement so as not to unreasonably interfere with
the normal operations of the party providing such services. Neither party shall
be required by this Agreement to use the Administrative Services of the other
party available pursuant hereto.
1.05 Performance of Administrative Services. Each party shall perform the
--------------------------------------
Administrative Services with the same degree of care, skill and prudence
customarily exercised by it in respect of its own business, operations and
affairs. It is understood and agreed that the Administrative Services shall be
substantially identical in nature and quality to the Administrative Services
performed by one party for the other party immediately prior to the Closing
Date. Each party acknowledges that the Administrative Services shall be
provided only with respect to the business of the other as such business exists
as of the Closing Date or as otherwise mutually agreed by the parties. Each
party will use the Administrative Services only in accordance with all
applicable federal, state and local laws and regulations. Each party shall
provide the other party any information needed by the party providing such
Administrative Services to perform such Administrative Services.
Article II. Charges for Administrative Services
2.01 Charges. The party providing Administrative Services pursuant to
-------
this Agreement shall bill the party receiving such Administrative Services in
accordance with the following terms and conditions:
a. Each Administrative Service shall be provided on the basis of direct
labor cost attributed to providing that Administrative Service plus a
loading rate representative of the providing party's overall actual costs
to cover employee benefits, payroll taxes and overhead, plus direct non-
labor expenses, if any, for providing that Administrative Service, plus a
rental charge and\or allocation determined by cost and value studies
performed by each party for the use of fixtures, furniture, equipment,
machinery, office facilities, automobiles and airplanes or as mutually
agreed upon by the parties.
b. The loading rate shall be determined to be the base labor loading rate
specified from time to time by the providing party's accounting department.
Such loading rate shall be adjusted periodically to reflect actual periodic
changes in the underlying costs being loaded. As soon as practicable, each
party shall notify the other party in writing of
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the initial base labor loading rate to be in effect under this Agreement
and of any adjustments thereto.
2.02 Billings. The providing party shall bill the other party monthly for
--------
Administrative Services furnished hereunder. Such bills, accompanied by
supporting detail, shall be rendered as soon as practicable after the end of
each month (but not later than the 25th day of the following month) and shall be
paid within ten days after the date of invoice. If, in order to furnish such
bills within the time specified, it shall be necessary to use estimates of any
items, such estimates shall be used and the necessary corrections shall be made
at the earliest practicable time. If such bills are not timely paid, any
amounts payable hereunder will bear interest from the date due at 1% in excess
of the prime rate published in The Wall Street Journal on the date such payment
-----------------------
became past due.
III. Indemnification
3.01 Indemnification. Neither party shall have any liability under this
---------------
Agreement (including liability for its own negligence) for damages, losses or
expenses suffered by the other party as a result of the performance or non-
performance of such obligations hereunder, unless such damages, losses or
expenses are caused by or arise out of the willful misconduct or gross
negligence of such party or a breach by such party of any of the express
provisions hereof. In no event shall either party have any liability to the
other party for indirect, incidental or consequential damages that such other
party may incur or experience on account of the performance or non-performance
of such party's obligations hereunder. Subject to the limitations on liability
set forth in the preceding sentence, each party shall indemnify, defend and hold
harmless the other party and its directors, officers, employees, agents and
representative from and against all claims, liabilities, damages, losses and
expenses (including reasonable attorneys fees and expenses) caused by or arising
out of the willful misconduct or gross negligence of such indemnifying party in
the performance or non-performance of its obligations hereunder or the breach by
such indemnifying party of any of the express provisions hereof. Provided
further, that InterCoast's right to indemnification from MidAmerican shall be
limited to the amount MidAmerican is able to recover from the corporation or
party providing such Administrative Services pursuant to any agreement between
MidAmerican and such provider. The provisions of this Section 3.01 shall survive
any termination of this Agreement.
IV. Term
4.01 Term. This Agreement shall be effective on the Closing Date and
-----
continue in effect until terminated by either party upon fifty (50) days written
notice to the other party.
V. Miscellaneous
5.01 Cooperation. The parties shall cooperate to the fullest extent in
-----------
the administration of this Agreement and the provision of Administrative
Services thereunder.
5.02 Entire Agreement; Amendments. This Agreement constitutes the sole
----------------------------
and entire agreement between the parties with respect to the subject matter
herein and supersedes all
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previous proposals, oral or written, negotiations, representations, commitments
and all other communications between the parties. This Agreement shall not be
amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the parties hereto.
5.03 Assignment. This Agreement may not be assigned by either party
----------
without the prior written consent of the other party.
5.04 Access to Records.
-----------------
a. General. So long as any books, records and files retained after the
Closing Date by MidAmerican, on the one hand, and InterCoast, on the other
had, relating to the businesses, operations or assets of the other party
remain in existence and available, such other party shall have the right
upon prior written notice to inspect and copy the same at any time during
normal business hours for any proper purpose, provided that such right will
not extend to any books, records or files the disclosure of which in
accordance herewith would result in a waiver of the attorney-client, work
product or other privilege which permit non-disclosure of otherwise
relevant material in litigation or other proceedings, or which are subject
on the date hereof and at the time inspection is requested to a non-
disclosure and/or confidentiality agreement with a third party and a waiver
cannot be reasonably obtained from such third party. Each party agrees not
to destroy any such books, records or files without reasonable advance
notice to the other party or if the party who provided the notice receives
a reasonable objection from the other party to such destruction within 14
days of such notice. The provisions of this Section 5.04 shall survive any
termination of this Agreement.
b. Administrative Service Related. During the term of this Agreement and
for a period of seven years after the expiration or termination of this
Agreement, each party shall have reasonable access to and the right to
examine any and all books, documents, papers and records which pertain to
the Administrative Services provided by the other party hereunder. Each
party shall maintain all such records for a period of seven years after
expiration or termination of this Agreement, unless required by law to
maintain such records for a longer period of time.
5.05 Partial Invalidity. Wherever possible, each provision hereof shall
------------------
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforeceability without invalidating the remainder
of such invalid, illegal or unenforceable provision or provisions or any other
provision hereof, unless such a construction would be unreasonable.
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<PAGE>
5.06 Waiver. Failure by either party to insist upon strict performance of
------
any term or condition herein shall not be deemed a waiver of any rights or
remedies that either party may have against the other nor in any way to affect
the validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
5.07 Status of Parties. In the performance of the Administrative Services
-----------------
hereunder, the providing party shall be an independent contractor with authority
to control and direct the performance of the work hereunder.
5.08 Governing Law. This Agreement shall be governed by, construed and
-------------
interpreted pursuant to the laws of the State of Iowa, or is required by
applicable law, rule, regulation or decree to be disclosed.
5.09 Confidentiality. Each party will hold in trust and maintain
---------------
confidential and, except as required by law, not disclose to others without the
prior written consent of the other party, any information received by such party
from the other party or developed or otherwise in the possession of such party,
unless such information has come within the public domain, except that which has
come in the public domain through a party's breach of this Agreement, or is
lawfully available to the other party on a non-confidential basis, or is
required by applicable law, rule, regulation or decree to be disclosed. The
provisions of this Section 5.09 shall survive any termination of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Administrative Services
Agreement to be executed in their respective corporate names, by their duly
authorized representative, as of the day and year first above written.
MIDAMERICAN CAPITAL COMPANY INTERCOAST ENERGY COMPANY
By: By:
---------------------------------- ---------------------------------
Name: Name:
-------------------------------- -------------------------------
Title: Title:
------------------------------- ------------------------------
5
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EXHIBIT 10.8
TAX SHARING AGREEMENT
This Tax Sharing Agreement (the "Agreement") is made and entered into this
___ day of July 1996, by and between MidAmerican Capital Company, a Delaware
corporation ("Capital"), and InterCoast Energy Company, a Delaware corporation
("InterCoast").
RECITALS
--------
1. As of the date of this Agreement, Capital owns 100% of the common
stock of InterCoast and Capital and InterCoast are members of the same
consolidated group for federal income tax purposes.
2. InterCoast is currently intending an initial public offering of its
equity securities (the "Offering") which upon the date of the closing
of such Offering (the "Closing Date") would reduce Capital's ownership
of InterCoast to less than 80% and would further result in InterCoast
no longer being a member of the same consolidated group for federal
income tax purposes as Capital.
3. Capital and InterCoast desire to set forth their intentions with
respect to certain matters relating to determining and computing tax
liability for the time periods prior to the Closing Date, to
procedures the parties will follow with respect to tax proceedings and
other matters relating to taxes.
In consideration of the mutual covenants and agreements herein contained,
Capital and InterCoast agree as follows:
1. Capital and InterCoast Tax Sharing.
A. InterCoast Obligation. From and after the Closing Date, InterCoast
----------------------
shall pay Capital (Capital and its corporate parent and direct and indirect
subsidiaries, except the members of the InterCoast Group as defined below
shall be collectively referred to as the "MidAmerican Group") the dollar
value as calculated in Section 1(C) below of any federal, state or local
income tax liability (including without limitation deficiencies, interest,
and penalties) relating to InterCoast, its subsidiaries and their
respective businesses and operations (collectively the "InterCoast Group")
with respect to (1) any items of income, deduction, and credit accruing to
the InterCoast Group on or before the Closing Date, and (2) any taxes of
the InterCoast Group for any taxable year or period ending prior to, or on
the Closing Date.
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B. Capital Obligation. From and after the Closing Date, Capital shall pay
------------------
InterCoast the dollar value as calculated in Section 1(C) below of any federal,
state or local income tax benefits (including without limitation the tax
benefits related to deductions, credits, losses, and carryovers) relating to the
InterCoast Group with respect to (1) any items of income, deduction, and credit
accruing to the InterCoast Group on or before the Closing Date, and (2) any tax
refunds of the InterCoast Group for any taxable year or period ending prior to,
or on the Closing Date.
C. Tax Payment Computation.
-----------------------
1. Method of Calculation. For purposes of computing and allocating taxes
---------------------
pertaining to the filing, amendment, or audit of tax returns for all
taxable periods ending on or before the Closing Date, the MidAmerican
Group will compute its tax liability as if it and the InterCoast Group
were separate consolidated tax groups (the resulting amount shall be
referred to as the "MidAmerican Group Stand-Alone Tax Liability"). The
MidAmerican Group will then compute its tax liability as if it and the
InterCoast Group were one consolidated group (the resulting amount
shall be referred to as the "MidAmerican Group Consolidated Tax
Liability"). The arithmetic difference between the MidAmerican Group
Stand-Alone Tax Liability and the MidAmerican Group Consolidated Tax
Liability shall be referred to as the "Tax Allowance". InterCoast
shall be entitled to, or responsible for, as the case may be, all Tax
Allowances resulting from taxable events occurring prior to the
Closing Date.
2. Capital Payment. In accordance with Section 1(C)(1) above, if
---------------
the MidAmerican Group Consolidated Tax Liability is less than the
MidAmerican Group Stand-Alone Tax Liability, Capital will pay an
amount equal to the Tax Allowance to InterCoast pursuant to Section
1(D) below.
3. InterCoast Payment . In accordance with Section 1(C)(1) above, if
-------------------
the MidAmerican Group Consolidated Tax Liability is greater than the
MidAmerican Group Stand-Alone Tax Liability, InterCoast will pay
Capital an amount equal to the Tax Allowance to Capital pursuant to
Section 1(D) below.
D. Tax Payments. The MidAmerican Group makes quarterly estimated payments
------------
of taxes during each tax year and then makes one or more adjustments
relating to taxes paid after each respective tax year (the date upon which
the MidAmerican Group makes an estimated payment of taxes or the date upon
which the MidAmerican Group makes an adjustment shall be referred to as a
"Tax Determination Date"). Prior to each Tax Determination Date, the
MidAmerican
2
<PAGE>
Group shall make the calculations required by this Agreement. Capital
shall be required within 10 days after the Tax Determination Date: (i)
to provide InterCoast with notice setting forth a summary of the
calculations required by this Section (the "Tax Determination Notice")
and (ii) to make any payment to InterCoast required to be made by
Capital in accordance with this Section. InterCoast shall be required
to make any payment to Capital required by this Section within 10 days
of receipt of the Tax Determination Notice, regardless of whether
InterCoast objects to such calculation in accordance with the
following paragraph.
The calculations made by the MidAmerican Group pursuant to this
Section 1(c) shall be conclusive as to InterCoast unless a written
objection is provided to Capital by InterCoast within 30 days of
receipt of the Tax Determination Notice (notwithstanding that
InterCoast may have made the payment in accordance with the preceding
paragraph). If written objection is timely made by InterCoast, and if
the parties are unable to agree upon the correct calculations, the
disputed issue shall be submitted to Arthur Andersen LLP or another
accounting firm of recognized national standing selected by Capital in
its reasonable discretion, whose determination will be final. All
costs and expenses relating to the accounting firm's determination
shall be shared equally. In the event the parties agree to a different
determination or the accounting firm's review results in a different
calculation, appropriate payments shall be made in accordance with the
payment procedures in Section 1(D).
2. Filing of Tax Returns.
A. Tax Returns. The federal, state, and local consolidated, combined, or
-----------
separate corporate income or franchise tax returns of the MidAmerican Group
and the InterCoast Group for the period ended December 31, 1996 shall be
prepared and filed by the MidAmerican Group. Such returns shall include the
results of operations of the MidAmerican Group for the periods ended on or
before December 31, 1996 and of the InterCoast Group for the periods ended
on or before the Closing Date, except in cases where certain states may
require inclusion of the InterCoast Group with the MidAmerican Group on a
combined basis for periods ending after the Closing Date. With respect to
all taxable periods including periods ending on or before the Closing Date,
the MidAmerican Group in consultation with the InterCoast Group, shall make
all computations, allocations, determinations, and elections affecting the
MidAmerican Group and the InterCoast Group consistent with prior period
returns of the group consisting of the MidAmerican Group and the InterCoast
Group in accordance with the U.S. Treasury regulations promulgated under
Section 1502 of the Internal Revenue Code (the "Code") and with state and
local income tax laws and regulations. Subject to the right to payment from
InterCoast as provided in this Agreement, Capital shall pay or discharge
any and all
3
<PAGE>
federal, state, and local income or franchise taxes, assessments, interest,
penalties or deficiencies reflected on such returns.
B. Refunds and Amended Returns. Only Capital, after consulting with
---------------------------
InterCoast, shall make, or cause to make application for refund and file
original or amended reports, returns, and filings for the periods ended on
or before the Closing Date for InterCoast.
3. Tax Proceedings.
A. Notice of Adjustment. In the event the Internal Revenue Service or any
--------------------
State Department of Revenue proposes in a letter or a notice of
deficiency an adjustment to the federal or state income tax liability
of the InterCoast Group, which adjustment, if sustained, may result in
an obligation on the part of InterCoast to pay Capital pursuant to the
terms of this Agreement, Capital shall promptly upon receipt of notice
of any such proposed adjustment or assertion, but not later than 20
days prior to the last day for submitting a protest to the Internal
Revenue Service or State Department of Revenue with respect to any
such proposed adjustment, notify InterCoast in writing of such
proposed adjustment and or any action taken or proposed to be taken by
the Internal Revenue Service or State Department of Revenue with
respect thereto (the "Notice of Adjustment") and if timely requested
by InterCoast in writing, request to the extent so permitted by law an
extension of time to file a formal protest to such proposed
adjustment. The omission by Capital to so notify InterCoast shall not
relieve InterCoast of any payment obligation set forth in this
Agreement.
B. Notice of Contest. InterCoast shall within 30 days of receipt of the
-----------------
Notice of Adjustment, provide Capital with notice that it requests
Capital to contest such proposed adjustment described in the Notice of
Adjustment (the "Notice to Contest") in accordance with this Section
3.
C. Probable Threshold. Upon receipt by Capital of the Notice to Contest,
------------------
Capital shall request a legal opinion from counsel selected by Capital
with regards to the likelihood of success in contesting the proposed
adjustments which are set forth in the Notice of Adjustment, unless
Capital in its sole discretion determines the likelihood of success is
probable and a legal opinion is not necessary. The cost to prepare
such opinion shall be paid for by InterCoast. If counsel provides an
opinion to the effect that it is "probable" that such contest will be
successful (the "Probable Opinion"), then Capital shall have the
option to take the following actions: (1) immediately take action to
contest such proposed adjustment in accordance with Section 3(D) below
and/or (2) immediately or at any time during the proceeding decide not
to contest such proposed adjustment, in which event InterCoast shall
be entitled to receive payment from Capital calculated in
4
<PAGE>
accordance with Section 1 as if the proposed adjustment set forth in
the Notice of Adjustment had been determined in InterCoast's favor,
whether or not such proposed adjustment actually is determined in
InterCoast's favor. Capital shall notify InterCoast of its initial
decision regarding which option it has chosen within 10 days of
receipt of the Probable Opinion. If Capital's initial decision is to
contest such proposed adjustment, Capital shall notify InterCoast
promptly if at a later time it decides not to further contest such
proposed adjustment. If a Probable Opinion is not received, after
consultation with InterCoast, Capital shall nonetheless have the
option to contest such proposed adjustment and to take any and all
other action it so elects (provided that in such event the costs, fees
and expenses shall be the responsibility of Capital).
D. Administrative and Judicial Proceedings. If Capital elects to contest
---------------------------------------
such proposed adjustment after receiving a Probable Opinion or waiving
such requirement, Capital shall select counsel to contest such
proposed adjustment and shall be entitled, subject to Section 3(C),
after good faith consultation with InterCoast, to (i) forego any
administrative appeals, proceedings, hearings or conferences with the
Internal Revenue Service or any state or local tax authority, (ii)
refrain from paying any tax assessed and contest any deficiency, or
(iii) pay any tax assessed and claim a refund; provided, however, that
if Capital pays such tax (including any interest and/or penalty),
InterCoast shall be required to reimburse Capital for such payment
within 10 days of receipt by InterCoast of an invoice from Capital;
and further provided that Capital shall keep InterCoast fully informed
in respect thereof and consult in good faith with InterCoast regarding
the contest of such proposed adjustment including choice of forum.
Capital shall, upon the conclusion of any administrative proceedings,
promptly notify InterCoast of the outcome of such proceedings, and
shall notify InterCoast at least 30 days in advance of the last date
for filing a petition in any court of competent jurisdiction. In the
event of an unfavorable resolution of administrative proceedings,
Capital (x) shall be required to contest any proposed adjustment
beyond the level of administrative proceedings if requested by
InterCoast within 15 days after receipt by Capital of such written
notice, (y) shall consider in good faith any advice offered by
InterCoast concerning the court of competent jurisdiction in which the
adjustment is most likely to be favorably resolved and (z) shall keep
InterCoast informed as to the progress of any litigation and, if
requested by InterCoast, shall consult with InterCoast and consider in
good faith (i) any recommendations by InterCoast concerning the
conduct of such proceedings, and (ii) InterCoast's request for an
opportunity to be present and represented by InterCoast's counsel at
all formal and informal proceedings before the judicial forum or with
opposing counsel and shall endeavor in good faith to permit
InterCoast's counsel an opportunity to review and comment in advance
on all submissions in connection with such litigation. Capital shall
take such reasonable action during the course of such proceedings as
Capital deems
5
<PAGE>
advisable after good faith consultation with InterCoast (whenever in
Capital's good faith judgment such consultation is practicable) to
preserve as a basis for appeal any legal issue which InterCoast or
InterCoast's counsel has identified in writing. Capital shall be
required to appeal any adverse judicial determination only if (A) an
appeal is timely requested in writing by InterCoast and (B) Capital is
furnished with an opinion from counsel selected by Capital, at
InterCoast's expense, to the effect that it is "probable" that the
appeal will prevail.
E. Payment of Costs and Fees. For so long as Capital shall contest or
-------------------------
continue to contest any claim or assertion by the Internal Revenue
Service or any state or local tax authority under the terms of this
Agreement, InterCoast shall pay Capital, in addition to the tax if
paid by Capital in accordance with 3(D), all reasonable fees, costs
and expenses associated with such contest. InterCoast shall pay
Capital within 10 days of receipt by InterCoast of an invoice from
Capital. If InterCoast fails to make the payment within 10 days after
Capital provides written notice of such nonpayment to InterCoast,
Capital shall have no further obligation to contest such proposed
adjustment. If such bills are not timely paid, any amounts payable
hereunder will bear interest from the date due at 1% in excess of the
prime rate published in The Wall Street Journal on the
-----------------------
date such payment became past due.
4. Other Tax Matters.
A. InterCoast hereby covenants and agrees that except as set forth
herein, InterCoast shall not make any elections or allocations, for
federal, state, or local income tax purposes which are permitted by law
which would have an adverse impact on Capital or the MidAmerican Group
without the prior written consent of Capital.
B. Capital hereby covenants and agrees to make an election to apportion
InterCoast's share of the limitation under Internal Revenue Code Section
383 to InterCoast if any minimum tax credit is allocated to InterCoast.
5. Miscellaneous.
A. Cooperation. Capital and InterCoast shall cooperate with each other
-----------
with respect to the preparation of tax returns pursuant to Section 2 and
proceedings under Section 3 including access to all necessary personnel and
records and with respect to any other matter relating to this Agreement as
reasonably requested by a party.
B. Third Party Beneficiary. This Agreement shall be binding upon the
-----------------------
parties hereto and their respective successors and assigns and has been
entered into for the benefit of
6
<PAGE>
MidAmerican Energy Company ("MEC"), and its successors and assigns, and,
notwithstanding that MEC is not a party hereto, MEC shall be entitled to
the full benefits of this Agreement and to enforce the covenants and
agreements contained herein.
C. Entire Agreement; Amendments. Except as otherwise specifically provided
----------------------------
herein, this Agreement constitutes the sole and entire agreement between
the parties with respect to the subject matter herein and supersedes all
previous oral or written proposals, commitments, agreements and all other
communications between the parties. This Agreement shall not be amended,
modified or supplemented except by a written instrument signed by an
authorized representative of each of the parties hereto.
D. Assignment. This Agreement may not be assigned by either party without
----------
the prior written consent of the other party.
E. Partial Invalidity. Wherever possible, each provision hereof shall be
------------------
interpreted in such a manner as to be effective and valid under applicable
law, but in any case any one or more of the provisions contained herein
shall, for any reason, be held invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceable provision or
provisions or any other provision hereof, unless such a construction would
be unreasonable.
F. Waiver. Failure by either party to insist upon the strict performance of
------
any term or condition herein shall not be deemed a waiver of any rights or
remedies that either party may have against the other nor in any way affect
the validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or
subsequent breach.
G. Governing Law. This Agreement shall be governed by, construed and
-------------
interpreted pursuant to the laws of the State of Iowa.
H. Expenses. All charges for labor and direct out-of-pocket expenses
--------
shall be in accordance with the Administrative Services Agreement then in
effect between the parties, and if no such agreement is then in effect, as
mutually agreed upon by the parties.
I. Confidentiality. Each party will hold in trust and maintain
---------------
confidential and, except as required by law, not disclose to others without
the prior written consent of the other party, any information received by
such party from the other party or developed or otherwise in the possession
of such party, unless such information has come within the public domain,
except that which has come in the public domain through a party's breach of
this Agreement, or is lawfully available to the other party on a non-
confidential basis or is required by applicable law, rule, order,
regulation or decree to be disclosed.
7
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Tax Sharing Agreement to
be duly executed as of the day and year first above written.
MIDAMERICAN CAPITAL COMPANY INTERCOAST ENERGY COMPANY
By: By:
---------------------------- ----------------------------
Name: Name:
-------------------------- --------------------------
Title: Title:
------------------------- -------------------------
8
<PAGE>
EXHIBIT 10.9
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement"), dated as of the ___ of
July, 1996, is entered into between MidAmerican Capital Company, a Delaware
corporation ("Capital") and InterCoast Energy Company, a Delaware corporation
("InterCoast").
WHEREAS, upon the completion of an initial public offering of shares of
common stock of InterCoast (the "Offering"), InterCoast will cease to be a
wholly owned subsidiary of Capital.
WHEREAS, in connection with the Offering, InterCoast has filed a
registration statement with the Securities and Exchange Commission under the
Securities Act of 1933 (the "1933 Act") and distributed a preliminary
prospectus;
WHEREAS, the parties desire to provide for certain indemnification between
the parties hereto after the date hereof relating to or arising out of or
resulting from their respective businesses, operations and assets or the above
mentioned registration statement and preliminary prospectus, in each case as set
forth in this Agreement;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the terms set out
-----------
below shall have the indicated meanings (such meanings applying equally to the
singular and plural forms thereof):
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of
---------
the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as in effect on January 1,
1996.
"Capital Group" shall mean Capital, its parent, MidAmerican Energy Company,
-------------
an Iowa corporation ("MEC"), and all of its Subsidiaries except the
members of the InterCoast Group.
"Effective Date" shall mean the date upon which the closing of the Offering
--------------
occurs.
"InterCoast Group" shall mean InterCoast and all Subsidiaries of
----------------
InterCoast.
A "person" shall mean an individual, a corporation, a partnership, limited
------
liability company, a joint venture, a trust or unincorporated
organization, a joint stock company or similar organization, a
governmental or any political subdivision thereof, or any other legal
entity.
"Subsidiary," or "Subsidiaries" with respect to a specified person, shall
---------- ------------
mean any person(s) whose accounts are included in the consolidated
financial statements of the specified person and its Subsidiaries prepared
in accordance with generally accepted accounting principles
1
<PAGE>
in effect at the time. The Subsidiaries of InterCoast as of the date
hereof include InterCoast Oil and Gas Company (formerly known as Medallion
Production Company), Medallion California Properties Company, Continental
Power Exchange, Inc., InterCoast Gas Services Company, a Delaware
corporation, InterCoast Gas Services Company, an Oklahoma corporation, GED
Energy Services, Inc., InterCoast Power Marketing Company and InterCoast
Trade & Resources Inc.
Section 2. Indemnification by InterCoast and Capital.
------------------------------------------
(a) InterCoast - General. InterCoast shall indemnify and hold harmless
each member of the Capital Group and each person who is or was a director,
officer, employee or agent of any such member, or is or was serving at the
request of any such member as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, from and against any and all losses, claims, damages and
liabilities, and shall promptly reimburse them, as and when incurred, for
any legal and other costs and expenses (including, without limitation,
reasonable attorneys' fees, any amount paid in settlement of any
litigation commenced or threatened, if such settlement is effected with
the written consent of InterCoast, and any and all expenses reasonably
incurred in investigating, preparing or defending any litigation,
commenced or threatened, or any claim whatsoever or in enforcing the
obligations of InterCoast under this indemnity) arising out of or related
in any manner to (i) the businesses, operations or assets conducted or
owned or formerly conducted or owned by any of the members of the
InterCoast Group (which include those businesses of the InterCoast Group
that were part of the Capital Group prior to the Offering) prior to, on or
after the Effective Date (other than any such loss, claim damage or
liability resulting from the gross negligence or willful misconduct of a
Capital Group member or person seeking indemnification), (ii) the failure
to employ, the termination of the employment or any other actions
regarding employment, as a result of the corporate restructuring related
to the Offering, of any person who had been employed by the Capital Group
or the InterCoast Group prior to the Effective Date (provided such
failure, termination or action occurs not later than the Effective Date)
(iii) any reduction or loss of employment benefits, as a result of the
corporate restructuring relating to the Offering, of any person employed
by the InterCoast Group, including but not limited to benefits provided by
health and other welfare plans, 401(k) plans, qualified or nonqualified
pension or retirement plans, bonus or incentive compensation plans, stock
plans or other similar employee benefit plans or (iv) any breach by
InterCoast of its representations, warranties and agreements made herein .
(b) Capital - General. Capital shall indemnify and hold harmless each
member of the InterCoast Group and any person who is or was a director,
officer, employee or agent of any such member, or is or was serving at the
request of any such member as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, from and against any and all losses, claims, damages and
liabilities, and shall promptly
2
<PAGE>
reimburse them, as and when incurred, for any legal or other costs and
expenses (including, without limitation, reasonable attorneys' fees, any
amount paid in settlement of any litigation commenced or threatened, if
such settlement is effected with the written consent of Capital, and any
and all expenses reasonably incurred in investigating, preparing or
defending any litigation, commenced or threatened, or any claim whatsoever
or in enforcing the obligations of Capital under this indemnity) arising
out of or related in any manner to (i) the businesses, operations or
assets conducted or owned or formerly conducted or owned by any of the
members of the Capital Group (which exclude those businesses, operations
or assets of the InterCoast Group that were part of the Capital Group
prior to the Offering) prior to, on or after the Effective Date (other
than any such loss, claim damage or liability resulting from the gross
negligence or willful misconduct of an InterCoast Group member or person
seeking indemnification) and (ii) any breach by Capital of its
representations, warranties and agreements made herein.
(c) InterCoast - Securities Laws. With respect to the Offering, InterCoast
shall indemnify and hold harmless, to the extent permitted by law, each
member of the Capital Group and each person who is or was a director,
officer, employee or agent of any such member, or is or was serving at the
request of any such member as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, from and against any and all losses, claims, damages and
liabilities, and shall promptly reimburse them, as and when incurred, for
any legal and other costs and expenses (including, without limitation,
reasonable attorneys' fees, any amount paid in settlement of any
litigation commenced or threatened, if such settlement is effected with
the written consent of InterCoast, and any and all expenses reasonably
incurred in investigating, preparing or defending any litigation,
commenced or threatened, or any claim whatsoever or in enforcing the
obligations of InterCoast under this indemnity), caused by any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof
or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such information was furnished
in writing to InterCoast by Capital expressly for use therein.
(d) Capital - Securities Laws. With respect to the Offering, Capital will
furnish to InterCoast in writing such information concerning Capital as
InterCoast reasonably requests for use in connection with the registration
statement or prospectus and Capital shall indemnify and hold harmless, to
the extent permitted by law, each member of the InterCoast Group and each
person who is or was a director, officer, employee or agent of any such
member, or is or was serving at the request of any such member as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, from and against any and all
losses, claims, damages and liabilities, and shall promptly reimburse
them, as and when incurred, for any legal and other costs and expenses
(including, without limitation, reasonable attorneys' fees, any amount
paid in settlement of any litigation commenced or threatened, if such
settlement is effected with the written consent of Capital,
3
<PAGE>
and any and all expenses reasonably incurred in investigating, preparing
or defending any litigation, commenced or threatened, or any claim
whatsoever or in enforcing the obligations of Capital under this
indemnity) caused by any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is contained in any
information so furnished in writing by Capital expressly for use therein.
In no event shall the liability of Capital hereunder or under the
underwriting agreement entered into with respect to the Offering be
greater in amount than the dollar amount of the net proceeds, before
deducting expenses, received by Capital in the Offering. With respect to
the Offering, InterCoast acknowledges and agrees that no member of the
Capital Group has furnished in writing to InterCoast any information for
use in the registration statement, prospectus or any amendments or
supplements thereto, except for the name and address of Capital and the
number of shares of InterCoast common stock being sold by Capital.
(e) Securities Laws - Contribution. If the indemnification provided for in
Section 2(c) or 2(d) is unavailable to an indemnified party in respect of
any losses, claims, damages, liabilities or judgments referred to herein,
then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
judgments in such proportion as is appropriate to reflect the relative
fault of each such party in connection with such statements or omissions
or alleged statements or omissions, as well as well any other relevant
equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact related to
information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. InterCoast and Capital agree that it would not
be just and equitable if contribution pursuant to this Section 2(e) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
the immediately preceding sentence. The amount paid or payable by a party
as a result of losses, claims, damages, liabilities or judgments shall be
deemed to include, subject to the limitation set forth in Section 3, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigation or defending and such action or claim.
Notwithstanding the provisions of this Section 2(e), Capital shall not be
required to contribute an amount in excess of the amount by which the
total net proceeds received by Capital upon the sale of InterCoast stock
in the Offering exceeds the amount of any damages which Capital 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 is not guilty of
such fraudulent misrepresentation.
4
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(f)(i) Effective as of May 23, 1996, all of the rights and obligations of
Capital related to the agreements set forth on Schedule A hereto are hereby
assigned and transferred by Capital to InterCoast, provided the agreements
permit such assignment and result in the release of all Capital's
obligations under or in respect thereto. With respect to such agreements,
InterCoast hereby accepts such assignment and assumes such obligations. For
all other agreements, InterCoast shall use reasonable efforts to obtain
promptly the release of Capital from all of its respective obligations
under or in respect to the agreements set forth on Schedule A hereto, and
Capital shall cooperate with InterCoast in obtaining such releases,
provided that neither party shall be required to incur any non-de minimis
liability in doing so. Capital shall not unilaterally terminate or withdraw
any agreement set forth on Schedule A and shall abide by the terms of such
agreements; provided, however, that Capital shall be entitled to
unilaterally terminate and/or withdraw from any such agreement effective
any time after September 30, 1996, upon prior written notice to InterCoast
that it intends to terminate such agreement and if such agreement (a)
provides for such termination or withdrawal and (b) does not require a
payment to the other party to such agreement of any termination, withdrawal
or similar fees (except a de minimis fee) or Capital pays such fee.
InterCoast shall reimburse Capital for its direct costs, if any, of
maintaining the agreements pending the procurement of the releases
contemplated hereby. Each party agrees to notify the other within a
reasonable time after any such agreement is terminated and/or Capital is
released from all of its respective obligations under or in respect to any
such agreement. (ii) InterCoast shall indemnify and hold harmless Capital
from and against any and all losses, claims, damages, expenses and
liabilities relating to, resulting from, or arising out of, any of the
agreements set forth on Schedule A. (g) Notwithstanding the foregoing
provisions of this Section 2, any and all understandings and agreements
between the parties regarding their respective rights and obligations for
the payment of and indemnification for federal, state and local taxes shall
be set forth in a separate tax sharing agreement between the parties in
effect as of the Effective Date which shall be the sole governing document
between the parties relating thereto.
Section 3. Procedure for Indemnification. Each party indemnified under
-----------------------------
Section 2 shall, promptly after receipt of notice of the commencement of any
action against such indemnified party in respect of which indemnity may be
sought, notify the indemnifying party in writing of the commencement thereof.
The omission of any indemnified party to so notify an indemnifying party of any
such action shall not relieve the indemnifying party from any liability in
respect of such action which it may have to such indemnified party on account of
the indemnity agreement contained in Section 2, unless the indemnifying party
was prejudiced by such omission, and in no event shall relieve the indemnifying
party from any other liability which it may have to such indemnified party. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it may wish, to
assume the defense thereof, with counsel satisfactory in any case to the
indemnified party, and, after notice from the indemnifying party to
5
<PAGE>
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof. If the indemnifying party so assumes the
defense thereof, it may not agree to any settlement of such action as the result
of which any remedy or relief, other than monetary damages for which the
indemnifying party shall be responsible hereunder, shall be applied to or
against the indemnified party, without the prior written consent of the
indemnified party. If the indemnifying party does not assume the defense
thereof, it shall be bound by any settlement to which the indemnified party
agrees, irrespective of whether the indemnifying party consents thereto. If any
settlement of any claim is effected by the indemnified party prior to
commencement of any action relating thereto, the indemnifying party shall be
bound thereby only if it has consented in writing thereto. In any action
hereunder in which the indemnifying party has assumed the defense thereof, the
indemnified party shall continue to be entitled to participate in the defense
thereof, with counsel satisfactory to the indemnifying party, at the cost of the
indemnified party.
Section 4. Survival of Indemnification; Prior Knowledge. The
--------------------------------------------
indemnification provisions of Sections 2 and 3 shall survive the Offering and
any investigation made at any time by either of the parties hereto. Actual
prior knowledge by any indemnified party with respect to any matter as to which
indemnification may be sought shall not constitute a defense to any indemnified
party's rights to indemnification pursuant to the provisions hereof.
Section 5. Representations and Warranties. As an inducement to enter into
------------------------------
this Agreement, each party represents to and agrees with the other that as of
the date hereof and as of the Effective Date:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation and has all requisite
corporate power to own, lease and operate its properties, to carry on its
business as presently conducted and to carry out the transactions contemplated
by this Agreement;
(b) it has duly and validly taken all corporate action necessary to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby;
(c) this Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency moratorium or other similar laws
affecting the enforcement of creditors' rights generally from time to time in
effect, and subject to equitable limitations on the availability of the remedy
of specific performance); and
(d) none of the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby or the compliance with any of the
provisions of this Agreement
6
<PAGE>
will (i) conflict with or result in a breach of any provision of its corporate
charter or bylaws, (ii) breach, violate or result in a default under any of the
terms of any agreement or other instrument or obligation to which it is a party
or by which it or any of its properties or assets may be bound or (iii) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
it or affecting any of its properties or assets.
Section 6. Matters Relating to the Offering. All expenses incident to the
--------------------------------
Offering, including without limitation all registration, listing and filing
fees, transfer agent fees, fees and expenses of compliance with securities or
blue sky laws, printing, engraving and shipping expenses, and fees and
disbursements of legal counsel and the independent certified public accountants,
investment advisory fees (all such expenses being herein called "Registration
Expenses"), will be paid by InterCoast, except that Capital shall pay a pro rata
share of the Registration Expenses based upon the ratio of the total number of
shares of common stock of InterCoast sold by Capital in the Offering to the
total number of shares of common stock of InterCoast sold in the Offering, and
except that each party will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of its liability insurance,
and its underwriting discounts and commissions.
Section 7. Injunctions. Irreparable damage would occur in the event that
-----------
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Therefore, the parties hereto
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court having jurisdiction, such remedy being in
addition to any other remedy to which they may be entitled at law or in equity.
Section 8. Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such which may be hereafter declared invalid, void or unenforceable. In the
event that any such term, provision covenant or restriction is so held to be
invalid, void or unenforceable, the parties hereto shall use their best efforts
to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision covenant or
restriction.
Section 9. Assignment. Except by operation of law or in connection with
----------
the sale or transfer of all or substantially all of the assets of a party
hereto, this Agreement shall not be assignable, in whole or in part, directly or
indirectly, by either party hereto without the prior written consent of the
other, and any attempt to assign any rights or obligations arising under this
Agreement without such consent shall be void; provided, however, that the
provisions of this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective permitted successors
and assigns.
7
<PAGE>
Section 10. Further Assurances. Subject to the provisions hereof, the
------------------
parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby. Subject to the provisions hereof, each of
the parties shall, in connection with entering into this Agreement, performing
its obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws, regulations, orders and decrees, obtain all required
consents and approvals and make all required filings with any governmental
agency, other regulatory or administrative agency, commission or similar
authority and promptly provide the other with all such information as the other
may reasonably request in order to be able to comply with the provisions of this
sentence.
Section 11. Parties in Interest. Except for the rights of the parties
-------------------
indemnified pursuant to Section 2 of this Agreement, nothing herein expressed or
implied is intended or shall be construed to confer any right or benefit upon
any person other than the parties hereto and their respective Subsidiaries and
permitted successors and assigns.
Section 12. Waivers, Etc. No failure or delay on the part of the parties
------------
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No amendment, modification or waiver of any provision of this
Agreement nor consent to any departure by the parties therefrom shall in any
event be effective unless the same shall be in writing and signed by the chief
executive officer or the chief financial officer of each party in the case of
amendments or modifications, or by the chief executive officer or the chief
financial officer of the waiving or consenting party, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
Section 13. Setoff. All payments to be made by either party under this
------
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.
Section 14. Changes of Law. If, due to any change in applicable law or
--------------
regulations or the interpretation thereof by any court of law or other governing
body having jurisdiction subsequent to the date of this Agreement, performance
of any provision of this Agreement or any transaction contemplated by this
Agreement shall become impracticable or impossible, then the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such
provision.
Section 15. Confidentiality. Subject to any contrary requirement of law
---------------
and the right of each party to enforce its rights hereunder in any legal action,
each party shall keep strictly confidential and shall cause its employees and
agents to keep strictly confidential, any information which it or any of its
agents or employees may acquire pursuant to, or in the course of performing its
obligations under, any provision of this Agreement; provided, however, that such
obligation to maintain
8
<PAGE>
confidentiality shall not apply to information which (a) at the time was in the
public domain not as a result of acts by the receiving party, (b) was in the
possession of the receiving party at the time of disclosure, or (c) is required
by applicable law, rule, order, regulation or decree to be disclosed.
Section 16. Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties with respect to the subject matter hereof.
Section 17. Headings. Descriptive headings are for convenience only and
--------
shall not control or affect the meaning or construction of any provision of this
Agreement.
Section 18. Counterparts. For the convenience of the parties, any number
------------
of counterparts of this Agreement may be executed by the parties hereto, and
each such executed counterpart shall be, and shall be deemed to be, an original
instrument.
Section 19. Notices. All notices, consents, requests, instructions,
-------
approvals and other communications provided for herein shall be validly given,
made or served, if in writing and delivered personally, by telegram, by
telefacsimile (receipt of which is confirmed by the party receiving such
telefacsimile) or sent by registered mail, postage prepaid to:
Capital at:
MidAmerican Capital Company
666 Grand Avenue, 26th Floor
Des Moines, IA 50309
Attn: President
Fax: (515) 281-2312
InterCoast at:
InterCoast Energy Company
666 Grand Avenue, 26th Floor
Des Moines, IA 50309
Attn: Chairman and Chief Executive Officer
Fax: (515) 281-2581
or to such other address as any party may, from time to time, designate in a
notice given in a like manner. Any notice given under this Agreement shall be
deemed delivered when received at the appropriate address.
Section 20. Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of Iowa
applicable to contracts made and to be performed therein without giving effect
to the principles of conflicts of laws.
9
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers, each of whom is duly authorized, as of
the day and year first written above.
MIDAMERICAN CAPITAL COMPANY
By:________________________
Name:______________________
Title:_____________________
INTERCOAST ENERGY COMPANY
By:________________________
Name:______________________
Title:_____________________
10
<PAGE>
Schedule A
1. Parent Guarantees provided for the benefit of members of the InterCoast
Group as set forth on Exhibit 1 to this Schedule A.
2. Letters of Credit provided for the benefit of the InterCoast Group as set
forth on Exhibit 1 to this Schedule A.
3. The Bonds provided for the benefit of the InterCoast Group as set forth on
Exhibit 1 to this Schedule A.
4. The Promissory Notes provided for the benefit of the InterCoast Group as set
forth as follows:
a. Promissory Note signed by Joe Cooney dated December 6, 1995;
b. Promissory Note signed by Ken Blenk dated February 1, 1995;
c. Promissory Note signed by Judy Bohrofen dated September 1, 1995.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 1
ISSUE EXPIRATION DOCUMENT
LEGAL NAME DATE DATE AMOUNT NUMBER DESCRIPTION
<S> <C> <C> <C> <C> <C>
1. Parent Guarantees
REFCO Incorporated 12/21/95 12/31/96 N/A ICE guaranteed GED's broker transactions/fees
to REFCO.
Cargill Investor Services, Inc. 2/6/96 02/01/97 $ 3,000,000 ICE guaranteed GED's broker transactions/fees
to Cargill Investor Services, Inc., not to
exceed $3,000,000.
Cargill Investor Services, Inc. 2/1/96 02/01/97 $ 3,000,000 ICE guaranteed ITR's broker transactions/fees
to Cargill Investor Services, Inc., not to
exceed $3,000,000.
Merrill Lynch Capital Services, Inc. 3/1/96 03/31/97 $ 3,000,000 ICE guaranteed ITR's broker transactions/fees
to Merrill Lynch Capital Services, Inc., not
to exceed $3,000,000.
Paribas Futures, Inc. 6/10/96 05/31/97 $ 2,000,000 ICE guaranteed ITR's broker transactions/fees
to Paribas Futures, not to exceed
$2,000,000.
Enron Capital & Trade Resources 4/16/96 N/A $ 2,000,000 ICE guaranteed payment of GED's swap, option,
Corp. or other financially-settled derivative
transactions with Enron Capital & Trade
Resources Corp.
Misc/Broker Guarantee Subtotal $ 13,000,000
Amoco Energy Trading Corp 3/26/96 03/31/97 $ 900,000 ICE guaranteed payment of GED's natural gas
Aquila Energy Marketing Co 3/14/96 03/31/97 $ 500,000 purchases from producers.
Eagle Gas Marketing Company 4/16/96 04/30/97 $ 600,000
Enogex Services Corp. 4/16/96 04/30/97 $ 600,000
Exxon Company, USA 3/26/96 10/31/96 $ 700,000
Global Petroleum Corp 3/14/96 03/31/97 $ 700,000
GPM Corporation 3/26/96 03/31/97 $ 1,000,000
Helmerich & Payne, Inc. 4/1/96 03/31/97 $ 1,000,000
Meridian Oil Inc. 4/16/96 04/30/97 $ 1,000,000
Mewbourne Oil Company 3/11/96 10/31/96 $ 700,000
Mid Continent Market Center, Inc. 3/26/96 03/31/97 $ 250,000
National Gas & Electric L.P. 3/26/96 03/31/97 $ 500,000
Panhandle Eastern Corp 3/31/96 03/31/97 $ 300,000
Sonet Marketing Company, L.P. 4/16/96 04/30/97 $ 1,000,000
Texaco Inc. 4/10/96 03/31/97 $ 1,000,000
Tristar Gas Marketing Co. 4/30/96 04/30/97 $ 200,000
UMC Petroleum Corp 3/14/96 03/31/97 $ 1,000,000
Northern Natural Gas Company 3/31/96 03/31/97 $ 75,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ISSUE EXPIRATION DOCUMENT
LEGAL NAME DATE DATE AMOUNT NUMBER DESCRIPTION
<S> <C> <C> <C>
Scana Energy Marketing, Inc. 1/1/96 12/31/96 $ 1,500,000
Seagull Marketing Services, Inc. 5/6/96 04/30/97 $ 1,000,000
Unimark, L.L.C. 3/26/96 10/31/96 $ 600,000
Vastar Gas Marketing, Inc. 5/22/96 05/22/97 $ 800,000
Western Gas Resources, Inc. 4/19/96 04/30/97 $ 1,500,000
Williams Energy Services Company 3/11/96 03/31/97 $ 1,000,000
Williams Field Services Company 3/26/96 03/31/97 $ 90,000
GED Guarantee Subtotal $ 18,516,000
Southern Electronic Distributors, 1/12/95 12/31/96 $ 50,000 ICE guaranteed payment of CPE's
USA Enterprises, Inc. 10/27/95 no expiration date $ 50,000 computer hardware/software/
Merisel Americas, Inc. 10/27/95 no expiration date $ 50,000 peripheral purchases from
suppliers.
CPE Guarantee Subtotal $ 160,000
AIG Trading 1/26/96 02/28/97 $ 2,000,000 ICE quaranteed payment of
Tenaska Marketing Ventures 1/26/96 02/28/97 $ 2,000,000 ITR's natural gas purchases
Amoco Energy Trading Corp. 4/25/96 03/31/97 $ 1,500,000 from sellers.
Amoco Production Company 2/27/96 03/31/97 $ 1,500,000
Aquila Energy 2/27/96 03/31/97 $ 500,000
Bankers Trust Company 2/27/96 03/31/97 $ 1,500,000
Catex Vitol Gas Inc. 2/27/96 03/31/97 $ 750,000
Coastal Gas Marketing 2/27/96 03/31/97 $ 1,000,000
Coral Energy Resources L.P. 2/27/96 03/31/97 $ 1,000,000
Eastex Hydrocarbons Inc. 2/27/96 03/31/97 $ 500,000
Energy Source, Inc. 2/27/96 03/31/97 $ 500,000
Enron Capital & Trade Resources 2/27/96 03/31/97 $ 1,500,000
ENRON Corp. 2/28/96 03/31/97 $ 2,000,000
Hadson Gas Systems 2/27/96 03/31/97 $ 500,000
MG Natural Gas Corp. 2/27/96 03/31/97 $ 500,000
National Gas & Electric L.P. 2/27/96 03/31/97 $ 500,000
Noram Energy Services, Inc. 2/27/96 03/31/97 $ 750,000
PanEnergy Corp. 6/20/96 06/30/97 $ 3,000,000
PanEnergy Trading & Marketing Svcs 3/19/96 03/31/97 $ 1,500,000
Panhandle Eastern Pipeline Company 2/27/96 03/31/97 $ 50,000
Texaco, Inc. 4/10/96 03/31/97 $ 1,250,000
Tide West Trading 2/27/96 03/31/97 $ 500,000
Trunkline Gas Company 2/27/96 03/31/97 $ 50,000
West Coast Gas Services (USA), Inc 2/27/96 03/31/97 $ 500,000
Transok Gas Company 3/11/96 03/31/97 $ 500,000
TECO Gas Marketing Company 3/19/96 03/31/97 $ 1,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ISSUE EXPIRATION DOCUMENT
LEGAL NAME DATE DATE AMOUNT NUMBER DESCRIPTION
ITR Guarantee Subtotal $26,850,000
<S> <C> <C> <C> <C> <C>
IES Utilities Company 9/29/95 09/01/96 $ 150,000 ICE guaranteed payment of IPM's purchases of
Cajun Electric Power 3/14/96 N/A N/A capacity.
Cooperative, Inc. $ 100,000
Otter Tail Power Company
IPM Guarantee Subtotal $ 250,000
Grand Total of Parent Guarantees $58,765,000
2. Letters of Credit
First National Bank of Chicago 3/20/92 05/01/97 $ 25,000 00326061 Secretary of State-OK For IOG for
operations
First National Bank of Chicago 3/31/92 04/01/97 $ 25,000 00326062 OK Corporation Comm.-Oil & Gas Div.
For IOG, Agreement to plug wells
First National Bank of Chicago 3/31/92 06/01/97 $ 250,000 00326063 Railroad Comm. TX
For IOG for operations
First National Bank of Chicago 3/31/92 03/31/97 $ 219,000 00326068 OK Tax Comm.
For IGS-(OK) Operations
Norwest Bank Minnesota, N.A. 8/27/93 06/30/97 $ 453,857 S300249 First Bank of Montana, N.A. Xeno - Battle
Creek Field. For IOG, for MMS Royalty
dispute (DKM). Cost is 75 bps.
NationsBank Texas, N.A. 6/27/94 06/30/97 $ 30,000 139659 Wyoming Board of Land Commision
For IOG
NationsBank Texas, N.A. 6/27/94 06/30/97 $ 25,000 139660 Bureau of Land Mgmt - UT
For IOG
NationsBank Texas, N.A. 6/27/94 06/30/97 $ 25,000 139661 Bureau of Land Mgmt - WY
For IOG
NationsBank Texas, N.A. 6/27/94 06/30/97 $ 25,000 139662 Bureau of Land Mgmt - ND
For IOG
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ISSUE EXPIRATION DOCUMENT
LEGAL NAME DATE DATE AMOUNT NUMBER DESCRIPTION
<S> <C> <C> <C> <C> <C>
NationsBank Texas, N.A. 10/24/95 10/23/96 $ 25,000 152893 Bureau of Land Mgmt - OK
For IOG
NationsBank Texas, N.A. 10/24/95 10/23/96 $ 25,000 152895 Bureau of Land Mgmt - NM
For IOG
NationsBank Texas, N.A. 12/6/95 12/06/96 $ 600,000 154888 OK Tax Commission.
For GED Energy Services, Inc.
Grand Total of Letters of Credit $1,952,857
</TABLE>
<TABLE>
<CAPTION>
3. Bonds
<S> <C> <C> <C> <C> <C>
Reliance Insurance Company 12/11/95 03/01/97 $ 25,000 B2576304 Railroad Commission of Texas.
Maintenance of wells so as to prevent
pollution of ground or surface water.
For GED.
Reliance Insurance Company 8/25/95 08/25/96 $ 100,000 B2576281 To Norwest Bank Iowa as agent of
Continental Power Exchange and all
other participants to secure trading
participation on CPEX system. For IPM.
Reliance Insurance Company 4/25/96 N/A $ 100,000 B2648259 To Industrial Commission of the State
of North Dakota for drilling permit.
For IOG.
Grand Total of Bonds $ 225,000
</TABLE>
<PAGE>
EXHIBIT 10.15
SUBLEASE AGREEMENT
BETWEEN
MIDAMERICAN CAPITAL COMPANY
AND
INTERCOAST ENERGY COMPANY
This Sublease Agreement (the "Sublease") is entered into this ____ day of
July 1996, by and between MidAmerican Capital Company ("MCC") and InterCoast
Energy Company ("ICE").
Recitals
--------
1. MCC is a party to sublease agreements dated July 1, 1995 with
MidAmerican Energy Company (the "MEC Sublease") pursuant to which it
subleases certain office space on the 7th and 26th Floors of the Ruan
Center in Des Moines, Iowa (the "Subleased Space"). MidAmerican Energy
Company subleases the space on the 7th floor from Bankers Trust Company
pursuant to a sublease dated May 25, 1995 and Bankers Trust Company
leases the 7th floor space from Ruan Center Corporation pursuant to a
lease originally dated February 1, 1979, as amended; and MidAmerican
Energy Company leases the 26th floor space from Ruan Center Corporation
pursuant to a lease originally dated December 31, 1975, as amended
(collectively referred to herein as the "Underlying Leases")
2. ICE is currently a wholly owned subsidiary of MCC and it or its wholly
owned subsidiaries currently occupy a portion of the Subleased Space.
ICE is currently intending an initial public offering of its common
stock (the "IPO") which upon the date of the closing of such IPO (the
"Closing Date") would result in MCC owning less than 50% of the common
stock of ICE.
3. On the Closing Date, ICE desires to continue to use a portion of the
Subleased Space and MCC, subject to the terms and conditions herein,
desires to allow ICE to continue to use a portion of the Subleased
Space.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, MCC and ICE agree as follows:
1. Premises. MCC subleases to ICE, and ICE sublets from MCC the allocable
--------
portion of the Subleased Space, which ICE currently occupies and uses or as
agreed to by MCC and ICE from time to time (the "Allocable Space") together with
rights of access to and from such
1
<PAGE>
Allocable Space through common space in the Subleased Space. As between ICE and
MCC, all leasehold improvements made to the Subleased Space prior to the
commencement of the term of this Sublease shall continue to be MCCs.
2. Term. The term of this Sublease shall commence on the Closing Date and
----
shall terminate the earlier of (a) the termination of MEC Sublease or (b) upon
90 days prior written notice by ICE to MCC that it no longer desires to use the
Allocable Space or by MCC to ICE that ICE may no longer use the Allocable Space,
provided neither party shall give such notice to the other party prior to
September 30, 1996.
3. Rent and Other Payments. For use of the Allocable Space, ICE shall pay MCC
-----------------------
for the use of the Allocable Space a pro rata amount of the monthly rental
payment and other monthly payments and charges (including but not limited to
utilities, parking, operation and maintenance expenses and the monthly
amortization of leasehold improvements) made or incurred by MCC for the
Subleased Space based upon the percentage of Allocable Space to Subleased Space
and with respect to the space on the 7th Floor, based upon the historical
practice of the parties. MCC shall invoice ICE by the 25th day of the calendar
month for the following months payment. ICE shall pay MCC by the 1st business
day of the following calendar month. If, in order to furnish such bills within
the time specified, it shall be necessary to use estimates of any items, such
estimates shall be used and the necessary corrections shall be made at the
earliest practicable time. If such bills are not timely paid, any amounts
payable hereunder will bear interest from the date due at 1% in excess of the
prime rate published in The Wall Street Journal on the date such payment became
-----------------------
past due.
4. Indemnity, Insurance and Waiver of Subrogation. MCC and ICE hereby agree to
----------------------------------------------
indemnify, defend, and hold each other harmless from any and all liabilities,
losses, damages, claims and expenses, including reasonable attorneys fees,
arising from any act, omission, or negligence of the other party, including its
respective officers, contractors, licensees, agents, servants, employees,
guests, invitees or visitors in or about the Subleased Space. ICE shall
maintain premises liability insurance reasonably acceptable to MCC during the
term of this Sublease. ICE shall also maintain during the term of this Sublease
adequate property insurance covering its property, fixtures and improvements on
the Allocable Space. Both parties, to the extent insurance is in effect, shall
first seek recovery from any insurance in its favor before making any claim
against the other party for recovery for loss, damage, or injury resulting from
any event or casualty. To the extent that such insurance is in force and
collectable, and to the extent permitted by law, MCC and ICE each hereby release
and waive all right of recovery against the other or by anyone claiming through
or under each of them by way of subrogation or otherwise for any such loss,
damage, or injury which is covered by insurance.
5. Compliance with MEC Sublease and the Underlying Leases. MCC has provided
------------------------------------------------------
ICE with a copy of the MEC Sublease and the Underlying Leases and ICE
acknowledges receipt thereof. This Sublease is subject to obtaining the
necessary consents from the landlords, if any. This Sublease is subject to all
terms of the MEC Sublease and the Underlying Leases as they
2
<PAGE>
apply to the Allocable Space with the same force and effect except as
specifically provided herein. All of the terms with which MCC is bound to comply
under the MEC Sublease and the Underlying Leases shall, to the extent they apply
to the Allocable Space and except as otherwise provided herein, be binding upon
and between ICE and MCC. ICE agrees not to take any action or fail to take any
action in connection with its use of the Allocable Space a result of which would
be MCC's violation of any of the terms and conditions of the MEC Sublease or the
Underlying Leases, the provisions of which are hereby incorporated by reference.
ICE acknowledges and agrees that MCC has the right to modify or otherwise amend
the MEC Sublease without the consent of ICE.
6. Notices. All notices and other communications shall be considered given if
-------
delivered personally, or by facsimile (receipt of which is confirmed by the
party receiving such facsimile), or sent by registered mail, postage prepaid, to
the addresses set forth below, or to such other address as either party may from
time to time designate as to itself by like notice.
7. Governing Law. This Sublease shall be governed by the laws of the State of
-------------
Iowa, without giving effect to the principles of the conflict of laws thereof.
8. Amendment. This Sublease may be amended or supplemented at any time
---------
provided that any such amendment or supplement shall be made in writing and
signed by each of the parties hereto.
9. Assignment. ICE may not assign this Sublease and the rights, duties,
----------
obligations and privileges hereunder with the prior written consent of MCC.
10. Entire Agreement. This Sublease constitutes the entire agreement between
----------------
the parties relating to the subject matter hereof.
11. Counterparts. This Sublease may be executed in any number of counterparts,
------------
each of which shall be deemed to be an original but all which together will
constitute but one agreement.
12. Section Headings. The section headings contained herein are for
----------------
convenience only and shall not affect in any way the interpretation of any of
the provisions contained herein.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
the date first above written.
MIDAMERICAN CAPITAL COMPANY
By: ___________________________________
Title: ________________________________
Address: 666 Grand Avenue
P. O. Box 657
Des Moines, Iowa 50303-0657
INTERCOAST ENERGY COMPANY
By: ___________________________________
Title: ________________________________
Address: 666 Grand Avenue
P. O. Box 657
Des Moines, Iowa 50303-0657
4
<PAGE>
EXHIBIT 10.16
SUBLEASE AGREEMENT
BETWEEN
AMGAS INC.
AND
INTERCOAST GAS SERVICES COMPANY
This Sublease Agreement (the "Sublease") is entered into this ____ day of
July 1996, by and between AmGas Inc., an Iowa corporation ("AmGas") and
InterCoast Gas Services Company, a Delaware corporation ("IGS").
Recitals
--------
1. AmGas is a party to a lease agreement dated March 1, 1994 with Dallas
Texas Quorum Limited Partnership (the "Lease") pursuant to which it
subleases certain office space on Quorum Drive in Dallas, Texas (the
"Leased Space").
2. IGS is a wholly owned subsidiary of InterCoast Energy Company
("ICE"), which is a wholly owned subsidiary of MidAmerican Capital
Company ("MCC"). IGS currently occupies a portion of the Leased Space
with AmGas, a wholly owned subsidiary of MCC. ICE is currently
intending an initial public offering of its common stock (the "IPO")
which upon the date of the closing of such IPO (the "Closing Date")
would result in MCC owning less than 50% of the common stock of ICE.
3. On the Closing Date, IGS desires to continue to use a portion of the
Leased Space and AmGas, subject to the terms and conditions herein,
desires to allow IGS to continue to use a portion of the Leased Space.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, AmGas and IGS agree as follows:
1. Premises. AmGas subleases to IGS, and IGS sublets from AmGas the
--------
allocable portion of the Leased Space, which IGS currently occupies and uses or
as agreed to by AmGas and IGS from time to time (the "Allocable Space") together
with rights of access to and from such Allocable Space through common space in
the Leased Space. As between IGS and AmGas, all leasehold improvements made to
the Leased Space prior to the commencement of the term of this Sublease shall
continue to be AmGas.
2. Term. The term of this Sublease shall commence on the Closing Date and
----
shall terminate the earlier of (a) the termination of Lease or (b) upon 90 days
prior written notice by IGS to AmGas that it no longer desires to use the
Allocable Space or by AmGas to IGS that IGS may no longer use the Allocable
Space.
1
<PAGE>
3. Rent and Other Payments. For use of the Allocable Space, IGS shall pay
-----------------------
AmGas for the use of the Allocable Space a pro rata amount of the monthly rental
payment and other monthly payments and charges (including but not limited to
utilities, parking, operation and maintenance expenses and the monthly
amortization of leasehold improvements) made or incurred by AmGas for the Leased
Space based upon the percentage of Allocable Space to Leased Space. AmGas shall
invoice IGS by the 25th day of the calendar month for the following months
payment. IGS shall pay AmGas by the 1st business day of the following calendar
month. If, in order to furnish such bills within the time specified, it shall
be necessary to use estimates of any items, such estimates shall be used and the
necessary corrections shall be made at the earliest practicable time. If such
bills are not timely paid, any amounts payable hereunder will bear interest from
the date due at 1% in excess of the prime rate published in The Wall Street
---------------
Journal on the date such payment became past due.
- -------
4. Indemnity, Insurance and Waiver of Subrogation. AmGas and IGS hereby agree
----------------------------------------------
to indemnify, defend, and hold each other harmless from any and all liabilities,
losses, damages, claims and expenses, including reasonable attorneys fees,
arising from any act, omission, or negligence of the other party, including its
respective officers, contractors, licensees, agents, servants, employees,
guests, invitees or visitors in or about the Leased Space. IGS shall maintain
premises liability insurance reasonably acceptable to AmGas during the term of
this Sublease. IGS shall also maintain during the term of this Sublease adequate
property insurance covering its property, fixtures and improvements on the
Allocable Space. Both parties, to the extent insurance is in effect, shall
first seek recovery from any insurance in its favor before making any claim
against the other party for recovery for loss, damage, or injury resulting from
any event or casualty. To the extent that such insurance is in force and
collectable, and to the extent permitted by law, AmGas and IGS each hereby
release and waive all right of recovery against the other or by anyone claiming
through or under each of them by way of subrogation or otherwise for any such
loss, damage, or injury which is covered by insurance.
5. Compliance with the Lease. AmGas has provided IGS with a copy of the Lease
-------------------------
and IGS acknowledges receipt thereof. This Sublease is subject to obtaining the
necessary consent from the landlord. This Sublease is subject to all terms of
the Lease as it applies to the Allocable Space with the same force and effect
except as specifically provided herein. All of the terms with which AmGas is
bound to comply under the Lease shall, to the extent they apply to the Allocable
Space and except as otherwise provided herein, be binding upon and between IGS
and AmGas. IGS agrees not to take any action or fail to take any action in
connection with its use of the Allocable Space a result of which would be
AmGas's violation of any of the terms and conditions of the Lease, the
provisions of which are hereby incorporated by reference. IGS acknowledges and
agrees that AmGas has the right to modify or otherwise amend the Lease without
the consent of IGS.
6. Notices. All notices and other communications shall be considered given if
-------
delivered personally, or by facsimile (receipt of which is confirmed by the
party receiving such facsimile), or sent by registered mail, postage prepaid, to
the addresses set forth below, or to such other
2
<PAGE>
address as either party may from time to time designate as to itself by like
notice.
7. Governing Law. This Sublease shall be governed by the laws of the State of
-------------
Texas, without giving effect to the principles of the conflict of laws thereof.
8. Amendment. This Sublease may be amended or supplemented at any time
---------
provided that any such amendment or supplement shall be made in writing and
signed by each of the parties hereto.
9. Assignment. IGS may not assign this Sublease and the rights, duties,
----------
obligations and privileges hereunder without the prior written consent of AmGas.
10. Entire Agreement. This Sublease constitutes the entire agreement between
----------------
the parties relating to the subject matter hereof.
11. Counterparts. This Sublease may be executed in any number of counterparts,
------------
each of which shall be deemed to be an original but all which together will
constitute but one agreement.
12. Section Headings. The section headings contained herein are for
----------------
convenience only and shall not affect in any way the interpretation of any of
the provisions contained herein.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
the date first above written.
AMGAS INC.
By:
---------------------------------
Title:
------------------------------
Address: 5000 Quorum, Suite 600
Dallas, Texas 75240
INTERCOAST GAS SERVICES COMPANY
By:
---------------------------------
Title:
------------------------------
Address: 5000 Quorum, Suite 600
Dallas, Texas 75240
3
<PAGE>
EXHIBIT 10.17
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of the ___
day of July, 1996, by and among INTERCOAST ENERGY COMPANY, a Delaware
corporation (the "Company"), and MIDAMERICAN CAPITAL COMPANY, a Delaware
corporation ("MidAmerican").
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Demand Registrations by MidAmerican.
-----------------------------------
(a) Requests for Registration. At any time beginning six months following
-------------------------
the closing of the Company's first underwritten public offering of shares of
common stock of the Company pursuant to a registration statement (the "Initial
Public Offering") and ending three years following the closing of the Initial
Public Offering (the "Demand Period"), MidAmerican may request registration
under the Securities Act of 1933, as amended (the "Securities Act"), of all or
part of its Registrable Securities (as hereinafter defined) on Form S-1 or any
other available or required form for the registration of securities for public
sale. The term "Registrable Securities" means (i) the common stock of the
Company held by MidAmerican after the consummation of the Initial Public
Offering, and (ii) any securities issued or issuable with respect to the common
stock referred to in clause (i) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. For the purpose of this Agreement, Registrable
Securities will cease to be Registrable Securities when (x) a registration
statement covering such Registrable Securities has been declared effective under
the Securities Act and such Registrable Securities have been disposed of
pursuant to such effective registration statement, (y) they are distributed to
the public pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act, or (z) they otherwise become freely tradeable. Any
registration requested pursuant to this paragraph 1(a) is referred to herein as
a "Demand Registration"; provided, however, that the aggregate number of shares
of Registrable Securities requested to be so registered by MidAmerican shall be
at least 1,000,000 (such number to be appropriately adjusted for stock splits,
stock combinations and similar transactions).
(b) Demand Registration. MidAmerican will be entitled to require two
-------------------
Demand Registrations during the Demand Period (provided, however, that the
Company shall not be obligated to effect more than one such Demand Registration
during any period of twelve consecutive months) in which MidAmerican will pay a
share of all Registration Expenses (as hereinafter defined in Section 4). A
registration will not count as a permitted Demand Registration until it has
become effective (unless such registration has not become effective due solely
to the fault of MidAmerican); provided that in any event MidAmerican will pay
<PAGE>
a share of all Registration Expenses in connection with any registration
initiated as a Demand Registration. Notwithstanding the foregoing, the Company
shall be entitled to defer the filing of any Demand Registration for a
reasonable period of time but not more than ninety days after the date such
registration statement would have otherwise been filed if the Company shall
furnish to MidAmerican a certificate signed by the Chairman or the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company the filing of a registration statement in accordance with Section 1
of this Agreement would have a material adverse effect on the Company and its
stockholders or that there exists a "Suspension Event" (as defined in subsection
1(c) below). In such event, the Demand Period shall be extended by the number
of days that the Company deferred prior to filing such registration statement.
The Company's right to defer the filing of a Demand Registration pursuant to the
provisions of the preceding sentence may not be exercised more than once during
any consecutive twelve month period.
(c) Holdback Agreements. If (i) at any time after the initial
-------------------
effectiveness of a shelf registration made pursuant to Section 1 above and prior
to the end of the Demand Period, the Company shall file a registration statement
(other than as contemplated by Section 1 hereof or on form S-4 or S-8 or in
connection with an exchange offer) with respect to its common stock or similar
securities or securities convertible into, or exchangeable or exercisable for,
such securities and (ii) with reasonable prior notice, the Company (in the case
of a non-underwritten public offering by the Company pursuant to such
registration statement) or the managing underwriter or underwriters (in the case
of an underwritten public offering by the Company pursuant to such registration
statement) shall so request, then MidAmerican shall, to the extent not
inconsistent with applicable law, refrain from effecting any public sale or
distribution of Registrable Securities (except in accordance with Section 2
hereof) during the seven days prior to, and during the 150-day period (or such
longer period as agreed upon by MidAmerican) beginning on, the effective date of
such registration statement. In addition, at any time after the initial
effectiveness of a shelf registration made pursuant to Section 1 above and prior
to the end of the Demand Period, the Company shall be entitled to require that
MidAmerican, to the extent not inconsistent with applicable law, refrain from
effecting any public sale or distribution of Registrable Securities for a
reasonable period (except in accordance with Section 2 hereof) if the Company
shall furnish to MidAmerican a certificate signed by the Chairman or the
President of the Company stating that in the good faith judgment of the Board of
Directors of the Company the public sale or distribution of Registrable
Securities would have a material adverse effect on the Company and its
stockholders or there exists a "Suspension Event" (as defined below). The
deferral shall commence on the date which such notice is received by
MidAmerican. For purposes of this Agreement, a "Suspension Event" shall exist
at such times as circumstances exist that the Company determines make it
impractical or inadvisable for the Company to file, amend or supplement the
Registration Statement or such filings or to cause the Registration Statement to
become effective or remain effective or for the sale of Registrable Securities
to occur under the Registration Statement (such circumstances to include,
without limitation, (i) pending negotiations relating to or consummation of, a
significant acquisition,
2
<PAGE>
corporate reorganization, material proposed financing, the offer or sale of
securities, or other similar transaction involving the Company, or (ii) the
occurrence of some other event (X) where any of the foregoing would require
disclosure under applicable securities laws of material information in the
Registration Statement (or any other document incorporated into the Registration
Statement by reference) that is not otherwise then required by law to be
publicly disclosed and (Y) as to which the Company has a bona fide business
purpose for preserving confidentiality. In such event, the Demand Period shall
be extended by the number of days that MidAmerican is required to defer
effecting any public sale or distribution in accordance with this Section 1(c).
(d) Selection of Underwriters and Registration Form. The Company will have
-----------------------------------------------
the right to select the investment banker(s) and manager(s), if any, to
administer any offering relating hereto and the form of registration statement
utilized for such registration.
2. Piggyback Registration by MidAmerican.
-------------------------------------
(a) Whenever the Company proposes to register any equity securities for
public sale under the Securities Act (other than pursuant to Section 1 or other
than a registration statement on Form S-8 or on Form S-4 (or any successor
forms) or any other registration statement filed in connection with a dividend
reinvestment plan) at any time and from time to time, it will, prior to such
filing, give written notice to MidAmerican of its intention to do so and, upon
the written request of MidAmerican given within 15 days after the Company
provides such notice, the Company shall use its best efforts to cause all
Registrable Securities which the Company has been requested by MidAmerican to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended method of
distribution; provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 2 without obligation
to MidAmerican.
(b) In connection with any offering under this Section 2 involving an
underwriting, the Company shall not be required to include any Registrable
Securities in such underwriting unless MidAmerican enters into customary
agreements (including the underwriting agreement on customary form) and takes
such other actions as are reasonably required in order to facilitate the sale of
the Registrable Securities. Notwithstanding Section 2(a), if the managing
underwriter or underwriters of such offering deliver a written opinion to the
Company that either because of (i) the kind of securities that the Company,
MidAmerican and any other persons or entities intend to include in such offering
or (ii) the size of the offering that the Company, MidAmerican and any other
persons or entities intend to make, the success of the offering would be
materially and adversely affected by inclusion of all or part of the Registrable
Securities, then the Company shall be required to include in the underwriting
only the number of Registrable Securities, if any, which the managing
underwriter believes may be sold without causing such material adverse effect,
but in no
3
<PAGE>
event shall the amount of Registrable Securities be reduced below 20% of the
total amount of the securities included in the offering.
3. Registration Procedures. Subject to Section 2(a), whenever MidAmerican has
-----------------------
requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use its reasonable efforts to effect the
registration of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement with respect to such Registrable Securities and
use its reasonable efforts to cause such registration statement to be declared
effective;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective until the date which is
24 months from the date the registration statement is declared effective
(subject to extension pursuant to Section 5(c) hereof) (the "Effectiveness
Period"), or such shorter period ending when (i) all Registrable Securities
covered by such registration statement have been sold in the manner set forth
and as contemplated in such registration statement, or (ii) in the opinion of
counsel to the Company, which opinion shall be satisfactory in form, scope and
substance to MidAmerican, registration of the Registrable Securities is (A) no
longer required under the Securities Act and (B) MidAmerican may sell all
remaining Registrable Securities in the open market without limitations as to
volume and without being required to file any forms or reports under Rule 144
with the SEC under the Securities Act or the General Rules and Regulations of
the SEC (the "Regulations"); and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by MidAmerican set forth in such registration statement;
(c) furnish to MidAmerican such number of copies of each registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as MidAmerican may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by MidAmerican;
(d) use its reasonable efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
MidAmerican reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable MidAmerican to consummate the
disposition in such jurisdictions of the Registrable Securities (provided that
the Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to
4
<PAGE>
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction); and
(e) cause all such Registrable Securities to be listed on each securities
exchange on which securities of the same class issued by the Company are then
listed.
4. Registration Expenses.
---------------------
All expenses incident to the Company's performance of or compliance with
this Agreement, including without limitation all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other Persons (as used herein,
"Person" shall be deemed to refer to individuals or entities, as appropriate)
retained by the Company (all such expenses being herein called "Registration
Expenses"), will be paid by the Company, except that MidAmerican shall pay a pro
rata share of the Registration Expenses based upon the ratio of the number of
MidAmerican Registrable Securities sold in the offering to the total number of
securities sold in the same offering, and except that each party will, in any
event, pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of its annual audit or quarterly review, the expense of
its liability insurance, the expenses and fees for listing its securities to be
registered on each securities exchange on which similar securities issued by the
Company are registered, and its underwriting discounts and commissions.
5. MidAmerican Agreements and Covenants. MidAmerican agrees that:
------------------------------------
(a) Neither MidAmerican nor any of MidAmerican's affiliates (as defined in
the Regulations) will take, directly or indirectly, during the term of this
Agreement, any action designed to stabilize (except as may be permitted by
applicable law) or manipulate the price of any security of the Company.
(b) MidAmerican shall promptly furnish to the Company any and all
information as may be required by, or as may be necessary or advisable to comply
with the provisions of, the Securities Act, the Regulations, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the SEC thereunder in connection with the preparation and filing
of any registration statement pursuant hereto, or any amendment or supplement
thereto, or any preliminary prospectus or prospectus included therein. All
information to be so furnished will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
5
<PAGE>
(c) Upon receipt of any notice from the Company of the happening of any of
the following events, MidAmerican will forthwith discontinue disposition of the
Registrable Securities covered by such registration statement or prospectus
until MidAmerican's receipt of the copies of the supplemented or amended
prospectus with respect to said event, or until MidAmerican is advised in
writing (the "Advice") by the Company that the use of the applicable prospectus
may be resumed, and has received copies of any amendments or supplements
thereto:
(i) The issuance by the SEC of any stop order suspending the
effectiveness of such registration statement or of any order preventing or
suspending the use of any preliminary prospectus or the initiation of any
proceedings for that purpose;
(ii) The receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of such
registration statement or any of the Registrable Securities for offer or sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose;
(iii) The happening of any event or any information becoming known that
makes any statement made in such registration statement or related prospectus or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes in
such registration statement, prospectus or documents; or
(iv) The Company's reasonable determination that a post-effective
amendment to such registration statement would be appropriate.
In the event the Company shall give any notice referred to in the prior
sentence, the Effectiveness Period shall be extended by the number of days
during such period from and including the date of the giving of such notice to
and including the date when MidAmerican shall have received (A) the copies of
the supplemented or amended prospectus contemplated above or (B) the Advice.
(d) Prior to any disposition of Registrable Securities by MidAmerican
during the Effectiveness Period, MidAmerican shall give written notice of such
intended disposition to the Company, including the anticipated date thereof, and
MidAmerican shall not effect such disposition until MidAmerican shall have
received from the Company either (i) copies of a supplemented or amended
prospectus as contemplated above, or (ii) the Advice and copies of any
amendments or supplements to the then in use prospectus.
6. Indemnification.
---------------
6
<PAGE>
(a) The Company agrees to indemnify, to the extent permitted by law,
MidAmerican and its officers and directors and each Person, if any, who controls
MidAmerican (within the meaning of the Securities Act or the Exchange Act)
against all losses, claims, damages, liabilities and expenses, including
attorneys' fees and the costs of investigation or defense, caused by any untrue
or alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such information was furnished in writing to the
Company by MidAmerican expressly for use therein or by MidAmerican's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished MidAmerican with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of MidAmerican.
(b) In connection with any registration statement in which MidAmerican is
participating, MidAmerican will furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the Securities Act
or the Exchange Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material fact
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in any information or affidavit so furnished
in writing by MidAmerican.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party will not
be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
7
<PAGE>
(d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. The Company also
agrees to make such provisions, as are reasonably requested by any indemnified
party, for contribution to such party in the event the Company's indemnification
is unavailable for any reason.
(e) If the indemnification provided for in this Section 6 is unavailable to
an indemnified party in respect of any losses, claims, damages, liabilities or
judgments referred to herein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and judgments in such proportion as is appropriate to reflect the
relative fault of each such party in connection with such statements or
omissions or alleged statements or omissions, as well as well any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact related to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
InterCoast and MidAmerican agree that it would not be just and equitable if
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding sentence.
The amount paid or payable by a party as a result of losses, claims, damages,
liabilities or judgments shall be deemed to include, subject to the limitation
set forth in Section 6(c) , any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(e),
MidAmerican shall not be required to contribute an amount in excess of the
amount by which the total price at which the common stock of the Company owned
by MidAmerican was sold to the public (net of underwriting discounts and
commissions) exceeds the amount of any damages which MidAmerican 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 is not guilty of such fraudulent
misrepresentation.
7. Transfer of Registration Rights.
-------------------------------
(a) Subject to the other provisions of this Section 7, the rights granted
to MidAmerican under this Agreement may be transferred by MidAmerican to any
affiliate of MidAmerican or to any Person acquiring all or part of the
Registrable Securities held by MidAmerican; provided, however, that the Company
is given written notice by the transferee at the time of any such transfer
stating the name and address of the transferee and identifying the Registrable
Securities with respect to which such rights are being assigned.
8
<PAGE>
(b) Any transferee of the Registrable Securities to whom rights under this
Agreement are transferred shall, as a condition to such transfer, deliver to the
Company a written instrument by which such transferee agrees to be bound by the
terms, conditions, duties, obligations and restrictions of this Agreement, to
the same extent as if such transferee were MidAmerican, together with an opinion
of counsel reasonably satisfactory to the Company that it is not necessary to
register such transfer of such Registrable Securities under the Securities Act
or any state blue sky laws. The rights of a transferee under paragraph 7(a)
above shall be the same rights granted to MidAmerican under this Agreement,
except as otherwise provided in this Section 7. The term Holder hereinafter
used in this Section 7 shall include all persons then having registration rights
under this Agreement, including MidAmerican if it shall hold any Registrable
Securities.
(c) MidAmerican shall be permitted to transfer less than all of the
Registrable Securities it owns at any time only if it transfers not less than
500,000 of such Registrable Securities and MidAmerican and the proposed Holder
comply with all provisions of this Section 7. Notwithstanding anything to the
contrary in this Section 7, without the prior written consent of the Company, no
transfer of rights under this Agreement will be permitted if as a result of any
proposed transfer there would be more than 5 Holders.
(d) Upon the transfer of Registrable Securities by MidAmerican pursuant to
Section 7(c), the following additional terms and conditions with respect to the
rights and obligations of the Holders and the Company shall apply:
(1) With respect to Demand Registrations, only the Holder(s) of a
majority of the Registrable Securities may request a Demand
Registration pursuant to Section 1(a). Within 10 days of receiving such
a request, the Company will notify the other Holders of the request for
a Demand Registration and will include in such Demand Registration all
Registrable Securities with respect to which the Company has received a
written request for inclusion within 10 days after the date on which
the Company gave such notice. Each request will also specify the number
of Registrable Securities to be so registered. Notwithstanding, if the
offering is underwritten and if the managing underwriter or
underwriters of such offering deliver a written opinion to the Holders
that the success of the offering would be materially and adversely
affected by inclusion of all or part of the Registrable Securities
requested by the Holders, then the number of Registrable Securities
required to be included in such underwriting for each such Holder shall
be pro rata based upon the number of Registrable Securities requested
by such Holder in light of the total number of Registrable Securities
requested by the Holders to be inlcuded in such underwriting.
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<PAGE>
(2) Notwithstanding any transfers of rights hereunder, the Company
shall not be obligated to effect more than two Demand Registrations in
the aggregate and the total number of Registrable Securities to be
included in any Demand Registration shall not be less than 1,000,000;
(3) The "holdback" provisions of Section 1(c) shall apply to all
Holders; and
(4) With respect to "piggyback" rights set forth in Section 2, in the
event the managing underwriter has provided the notice described in
Section 2(b), and a result of which, less than all of the Registrable
Securities requested by the Holders can be included, then the number of
Registrable Securities to be included in the underwriting for each such
Holder shall be pro rata based upon the number of Registrable
Securities requested by such Holder in light of the total number of
Registrable Securities requested by all the Holders to be included in
such underwriting.
(e) A transferee to whom rights are transferred pursuant to this Section 7
may not again transfer such rights to any other Person, other than as permitted
in this Section 7.
8. Miscellaneous.
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(a) Notices. All notices, requests, and demands required or permitted to
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be given pursuant to this Agreement shall be in writing and must be given to or
made upon the respective parties hereto either by hand delivery or by registered
or certified mail, return receipt requested, addressed as follows:
If to MidAmerican:
MidAmerican Capital Company
666 Grand Avenue
26th Floor, Ruan Center
Des Moines, Iowa 50309
Attention: President
If to the Company:
InterCoast Energy Company
666 Grand Avenue
26th Floor, Ruan Center
Des Moines, Iowa 50309
Attention: Chairman and Chief Executive Officer
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<PAGE>
Any party may change its address by notice to the other parties given in
like fashion. Any notice so duly sent by mail by one party to another shall be
deemed given five days after deposit in a proper governmental mailing facility.
(b) Descriptive Headings. The descriptive headings herein have been
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inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provisions hereof.
(c) Governing Law. This Agreement is made under and shall be governed by
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and interpreted in accordance with the laws of the State of Iowa.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
INTERCOAST ENERGY COMPANY
By:
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Name:
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Title:
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MIDAMERICAN CAPITAL COMPANY
By:
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Name:
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Title:
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U\OTHER\REGRTS.1
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