As filed with the Securities and Exchange Commission on June 17, 1997.
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
under
The Securities Act of 1933
-----------------------
IES UTILITIES INC.
(Exact Name of Registrant as Specified in Its Charter)
IOWA 42-0331370
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
IES Tower
200 First Street S.E.
Cedar Rapids, Iowa 52401
(319) 398-4411
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
-----------------------
Stephen W. Southwick
Vice President, General Counsel & Secretary
IES Utilities Inc.
200 First Street S.E.
Cedar Rapids, Iowa 52401
(319) 398-8147
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
Richard L. Harden
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, NY 10004-1490
(212) 858-1228
-----------------------
Approximate date of commencement of proposed sale of securities to the
public: From time to time after this Registration Statement becomes effective.
-----------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 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. [ ]
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------- -------------------- ------------------------- ------------------------ ---------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to Aggregate Price Aggregate Offering Amount of
to be Registered Be Registered Per Unit <F1> Price <F1> Registration Fee <F1>
- ----------------------- -------------------- ------------------------- ------------------------ ---------------------
- ----------------------- -------------------- ------------------------- ------------------------ =====================
<S> <C> <C> <C> <C>
Debt Securities $50,000,000 100% $50,000,000 $15,152
- ----------------------- -------------------- ------------------------- ------------------------ =====================
<FN>
<F1> Estimated solely for the purpose of calculating the amount of the
registration fee.
</FN>
</TABLE>
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus herein
also relates to $85,000,000 principal amount of Debt Securities registered in
Registration Statement No. 33-62259, for which a $29,310 filing fee was paid
upon the filing of such Registration Statement.
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.
<PAGE>
================================================================================
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
================================================================================
<PAGE>
PROSPECTUS
Subject to Completion, Dated June 17, 1997
$135,000,000
IES UTILITIES INC.
DEBT SECURITIES
IES Utilities Inc. (the "Company") may from time to time issue up to
$135,000,000 aggregate principal amount of its various debt securities,
including Collateral Trust Bonds and Junior Subordinated Debentures
(collectively referred to as "Securities"), in one or more series, at prices and
on terms to be determined at the time of sale. The terms of the Securities in
respect of which this Prospectus is being delivered, including, where
applicable, the series designation, the principal amount of the series, the
maturity, the rate and time of payment of interest, the initial public offering
price, the provisions for redemption and other provisions, will be set forth in
one or more Prospectus Supplements (each a "Prospectus Supplement"), together
with the terms of offering of the Securities.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The Securities may be sold by the Company through underwriters, dealers
or agents, or directly to one or more purchasers pursuant to terms fixed at the
time of sale. The Prospectus Supplement will set forth the names of the
underwriters, dealers or agents, if any, any applicable commissions or
discounts, and the net proceeds to the Company from any such sale. See "Plan of
Distribution" for possible indemnification arrangements for underwriters,
dealers or agents.
The date of this Prospectus is ___________, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "SEC"). Such reports and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; and
at the SEC's regional offices located at 1400 Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60601 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can be obtained at prescribed
rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. In addition, such
reports and other information concerning the Company can be inspected at the
principal office of the Company, 200 First Street S.E., Cedar Rapids, Iowa
52401.
The Company has filed with the SEC a registration statement on Form S-3
(herein together with all amendments and exhibits referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information, reference is made to the
Registration Statement and to the exhibits and schedules filed therewith, which
may be inspected without charge at the office of the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such documents may also be obtained from
the SEC at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC pursuant to
the Exchange Act are incorporated in this Prospectus by reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; and
3. The Company's Current Report on Form 8-K dated April 28, 1997.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 or 15(d) of the Exchange Act prior to the
termination of the offering of the Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents; provided, however, that documents filed by the Company pursuant
to Sections 13, 14 or 15(d) of the Exchange Act prior to the end of the fiscal
year covered by the most recent Annual Report on Form 10-K of the Company shall
not be deemed to be incorporated herein by reference or to be a part hereof from
and after the date of the filing of such Annual Reports on Form 10-K. The
documents incorporated herein by reference are sometimes hereinafter called the
"Incorporated Documents." Any statement contained herein or in an Incorporated
Document shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in a Prospectus
Supplement or in any subsequently filed Incorporated Document modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial statements
contained in one or more Incorporated Documents; accordingly, such information
contained herein is qualified in its entirety by reference to Incorporated
Documents and should be read in conjunction therewith.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all of the Incorporated
Documents (not including exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Requests for such
copies should be directed to William Jurgensen, Director of Shareholder
Services, IES Industries Inc., 200 First Street S.E., Cedar Rapids, Iowa 52401,
telephone (319) 398-7755.
2
<PAGE>
No person has been authorized to give any information or make any
representation not contained in this Prospectus or, with respect to any
Security, the Prospectus Supplement relating thereto, and, if given or made,
such information or representation must not be relied upon as having been
authorized by the Company or any underwriter. This Prospectus and any Prospectus
Supplement do not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus and a Prospectus Supplement nor any sale made
thereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date of that Prospectus
Supplement.
TABLE OF CONTENTS
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
THE COMPANY 3
THE MERGER 4
USE OF PROCEEDS 4
SELECTED CONSOLIDATED FINANCIAL INFORMATION 5
PLAN OF DISTRIBUTION 6
DESCRIPTION OF THE COLLATERAL TRUST BONDS 6
DESCRIPTION OF THE 1940 INDENTURE 17
DESCRIPTION OF THE ISU 1923 INDENTURE 23
DESCRIPTION OF THE SUBORDINATED INDENTURE 27
GLOBAL SECURITIES 39
EXPERTS 39
LEGAL MATTERS 39
THE COMPANY
The Company was incorporated under the laws of the State of Iowa on May
25, 1925. The Company is a public utility operating company with all of its
operations in the State of Iowa and is a wholly-owned subsidiary of IES
Industries Inc. ("Industries"), a public utility holding company. The Company is
the surviving corporation following the merger on December 31, 1993 of Iowa
Southern Utilities Company ("Iowa Southern" or "ISU") with and into Iowa
Electric Light and Power Company ("IE"). The surviving corporation was
subsequently renamed IES Utilities Inc.
3
<PAGE>
The Company supplies electric energy and natural gas to a service area
with an estimated population of approximately one million. For the twelve months
ended March 31, 1997, the Company derived approximately 75% of its revenues from
the sale of electric energy, approximately 22% from the sale of natural gas and
approximately 3% from the sale of steam gas. At March 31, 1997, the Company
provided service to approximately 336,000 electric, 176,000 natural gas and 226
steam retail customers as well as 30 resale customers in more than 550 Iowa
communities. The Company's principal executive offices are located at 200 First
Street S.E., Cedar Rapids, Iowa 52401, telephone (319) 398-4411.
Additional information concerning the Company and its operations is
contained in the Incorporated Documents, to which reference is hereby made.
THE MERGER
On November 10, 1995, Industries, WPL Holdings, Inc. ("WPLH") and
Interstate Power Company ("IPC") entered into an Agreement and Plan of Merger,
as amended ("Merger Agreement"), providing for: (a) IPC becoming a wholly-owned
subsidiary of WPLH, and (b) the merger of Industries with and into WPLH, which
merger will result in the combination of Industries and WPLH as a single holding
company (collectively, the "Proposed Merger"). The new holding company will be
named Interstate Energy Corporation ("Interstate Energy") and Industries will
cease to exist. The Proposed Merger, which will be accounted for as a pooling of
interests and is intended to be tax-free for federal income tax purposes, has
been approved by the respective Boards of Directors and shareholders. It is
still subject to approval by several federal and state regulatory agencies. The
companies expect to receive such regulatory approvals by the third or fourth
quarter of 1997.
WPLH is a holding company headquartered in Madison, Wisconsin, and is
the parent company of Wisconsin Power and Light Company ("WP&L") and Heartland
Development Corporation ("HDC"). WP&L supplies electric and gas service to
approximately 385,000 and 150,000 customers, respectively, in south and central
Wisconsin. HDC and its principal subsidiaries are engaged in businesses in three
major areas: environmental engineering and consulting, affordable housing and
energy services. IPC, an operating public utility headquartered in Dubuque,
Iowa, supplies electric and gas service to approximately 165,000 and 49,000
customers, respectively, in northeast Iowa, northwest Illinois and southern
Minnesota.
Interstate Energy will be the parent company of Utilities, WP&L and IPC
and will be registered under the Public Utility Holding Company Act of 1935, as
amended. The Merger Agreement provides that these operating utility companies
will continue to operate as separate entities for a minimum of three years
beyond the effective date of the merger. In addition, the non-utility operations
of the Company and WPLH will be combined shortly after the effective date of the
merger under one entity to manage the diversified operations of Interstate
Energy. The corporate headquarters of Interstate Energy will be in Madison,
Wisconsin.
The Securities and Exchange Commission historically has interpreted the
1935 Act to preclude registered holding companies, with limited exceptions, from
owning both electric and gas utility systems. Although the Securities and
Exchange Commission has recommended that registered holding companies be allowed
to hold both gas and electric utility operations if the affected states agree,
it remains possible that the Securities and Exchange Commission may require as a
condition to its approval of the Proposed Merger that the Company, WPLH and IPC
divest their gas utility properties, and possibly certain non-utility ventures
of the Company and WPLH, within a reasonable time after the effective date of
the Proposed Merger.
Additional information concerning the Proposed Merger is contained in
the Incorporated Documents, to which reference is hereby made.
USE OF PROCEEDS
Except as otherwise provided in the applicable Prospectus Supplement or
a supplement thereto, the Company intends to use the net proceeds to be received
from the issuance and sale of the Securities offered hereby (i) to reduce
short-term debt and (ii) for general corporate purposes.
4
<PAGE>
<TABLE>
<CAPTION>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except percentages and ratios)
The financial data presented below should be read in conjunction with the
Company's consolidated financial statements and notes thereto which are
incorporated by reference in this Prospectus.
Twelve
Months Ended Year Ended December 31,
March 31, 1997 ----------------------------------------------------------
(unaudited) 1996 1995 1994 1993 1992
--------- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income Summary:
Operating revenues............. $782,609 $754,979 $709,826 $685,366 $713,750 $610,262
Operating income............... 152,110 153,725 142,265 135,591 143,329 100,361
Net income..................... 61,452 63,729 59,278 61,210 67,970 45,291
Dividend requirements on
preferred stock.............. 914 914 914 914 914 1,729
Net income available for
common stock<F1>............. 60,538 62,815 58,364 60,296 67,056 43,562
Cash dividends declared
on common stock........... 48,000 44,000 43,000 52,000 31,300 24,721
Ratio of earnings to fixed
charges<F2>.................... 3.09 3.23 3.04 3.18 3.41 2.49
March 31, 1997 (unaudited) <F3>
-------------------------------------------------
Percent of
Actual Capitalization
------ --------------
<S> <C> <C>
Capitalization Summary:
Long-term debt<F4>........... $525,529 48.4%
Preferred stock.............. 18,320 1.7%
Common equity................ 541,428 49.9%
-------- -----
Total.......................... $1,085,277 100.0%
========== ======
- --------------------------------
<FN>
<F1> All of the Company's common stock is owned by IES Industries Inc.
<F2> For purposes of computation of these ratios, (a) earnings have been
calculated by adding fixed charges and federal and state income taxes
to net income; (b) fixed charges consist of interest (including
amortization of debt expense, premium and discount) on long-term and
other debt, and the estimated interest component of rents.
<F3> Does not reflect the issuance of the Securities or the use of the
proceeds thereof.
<F4> Includes $63,140,000 of current maturities.
</FN>
</TABLE>
5
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters or dealers, (ii) directly to one or more purchasers, or (iii)
through agents. The applicable Prospectus Supplement will set forth the terms of
any offering of the Securities, including the names of any underwriters or
agents, the purchase price of such Securities, the proceeds to the Company from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, the initial public offering price, and any discounts or
concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale, the Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. Such
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all of such Securities if any of such Securities are purchased. The initial
public offering prices and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The Securities may also be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Securities will be named, and any commissions payable by
the Company to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will act on a reasonable efforts basis for the period of its
appointment.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize agents, underwriters, or dealers to solicit offers by certain
specified institutions to purchase the Securities at the public offering price
set forth in such Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in such Prospectus
Supplement or a supplement thereto. Such contracts will be subject only to those
conditions set forth in the applicable Prospectus Supplement, and such
Prospectus Supplement will set forth the commissions payable for solicitation of
such contracts.
Any underwriters, dealers, or agents participating in the distribution
of the Securities may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of the Securities may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Agents and underwriters may be entitled under agreements entered into with the
Company to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. Agents and underwriters may be customers
of, engage in transactions with, or perform services for the Company or its
affiliates in the ordinary course of business.
DESCRIPTION OF THE COLLATERAL TRUST BONDS
General
If the Securities are issued as Collateral Trust Bonds, those
Collateral Trust Bonds will be issued in one or more series as fully registered
bonds, without coupons, under an Indenture of Mortgage and Deed of Trust, dated
as of September 1, 1993 (the "Original Mortgage"), between the Company and The
First National Bank of Chicago, as Trustee (the "Trustee"), as amended and
supplemented. As used herein, the term "Bonds" refers to any series of
Collateral Trust Bonds in respect of which this Prospectus is being delivered.
The Original Mortgage as amended and supplemented by various supplemental
indentures including one or more supplemental indentures relating to any
issuance of Collateral Trust Bonds, is hereinafter referred to as the
"Mortgage." The summaries herein concerning the Collateral Trust Bonds do not
purport to be complete and are subject to the detailed provisions of the
Mortgage, a copy of which was previously filed with the Commission, is listed as
an exhibit to the Registration Statement of which this Prospectus is a part, and
is incorporated herein by reference. Capitalized terms used herein which are not
otherwise defined in this Prospectus have the meanings ascribed thereto in the
Mortgage. Wherever particular provisions of the Mortgage or terms defined
therein are referred to, such provisions or definitions are incorporated by
reference as a part of the statements made herein and such statements are
qualified in their entirety by such reference. References to article and section
numbers herein, unless otherwise indicated, are references to article and
section numbers of the Mortgage.
6
<PAGE>
The Mortgage provides that, in addition to Collateral Trust Bonds,
additional debt securities may be issued thereunder, without limitation as to
the aggregate principal amount. (See "Issuance of Additional Securities" below.)
The Bonds will be secured equally and ratably with all other securities issued
under the Mortgage.
Terms of Specific Series of the Bonds
Reference is made to the applicable Prospectus Supplement, or a
supplement thereto, for a description of the following terms of the Bonds: (i)
the title of such Bonds; (ii) the limit, if any, upon the aggregate principal
amount of such Bonds; (iii) the date or dates on which the principal of such
Bonds is payable; (iv) the rate or rates at which such Bonds will bear interest,
if any; the date or dates from which such interest will accrue; the dates on
which such interest will be payable ("Interest Payment Dates"); and the regular
record dates for the interest payable on such Interest Payment Dates; (v) the
option, if any, of the Company to redeem such Bonds and the periods within which
or the dates on which, the prices at which and the terms and conditions upon
which, such Bonds may be redeemed, in whole or in part, upon the exercise of
such option; (vi) the obligation, if any, of the Company to redeem or purchase
Bonds pursuant to any sinking fund or analogous provisions or at the option of
the Holder (as hereinafter defined) and the periods within which or the dates on
which, the prices at which and the terms and conditions upon which, such Bonds
will be redeemed, in whole or in part, pursuant to such obligation; (vii) the
denominations in which such Bonds will be issuable; (viii) whether such Bonds
are to be issued in whole or in part in the form of one or more global Bonds
and, if so, the identity of the depositary for such global Bonds; and (ix) any
other terms of such Bonds not inconsistent with the provisions of the Mortgage.
Payment of Bonds; Transfers; Exchanges
Except as may be provided in the applicable Prospectus Supplement, or a
supplement thereto, interest, if any, on each Bond payable on each Interest
Payment Date will be paid to the person in whose name such Bond is registered
(the registered holder of any Bond being hereinafter called a "Holder") as of
the close of business on the regular record date relating to such Interest
Payment Date; provided, however, that interest payable at maturity (whether at
stated maturity, upon redemption or acceleration of maturity or otherwise,
hereinafter "Maturity") will be paid to the person to whom principal is paid.
However, if there has been a default in the payment of interest on any Bond,
such defaulted interest may be payable to the Holder of such Bond as of the
close of business on a date selected by the Trustee which is not more than 15
days and not less than 10 days prior to the date proposed by the Company for
payment of such defaulted interest or in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such Bond
may be listed, if the Trustee deems such manner of payment practicable. (Section
307)
Principal of and premium, if any, and interest on the Bonds at Maturity
will be payable upon presentation of the Bonds at the office of the Trustee in
Chicago, Illinois or, at the option of the Holder, at the principal corporate
trust office of The First National Bank of Chicago in New York, New York. The
transfer of Bonds may be registered, and the Bonds may be exchanged for other
Bonds of the same series and tranche, of authorized denominations of like tenor
and aggregate principal amount, at the office of The First National Bank of
Chicago in New York, New York as Bond Registrar for the Bonds. The Company will
not be required to issue, and no Bond Registrar will be required to register the
transfer of or to exchange (a) Collateral Trust Bonds of any series (including
the Bonds offered hereby) during a period of 15 days prior to giving any notice
of redemption thereof or (b) any Bond selected for redemption in whole or in
part, except the unredeemed portion of any Bond being redeemed in part. (Section
305)
The Company may change the place for payment or registration of
transfer or exchange of the Bonds, may appoint one or more additional Paying
Agents or Bond Registrars (including, without limitation, the Company) and may
remove any Paying Agent or Bond Registrar, all at its discretion. The applicable
Prospectus Supplement or a supplement thereto, will identify any such changes
prior to the date of such Prospectus Supplement or supplement thereto. (Section
602)
7
<PAGE>
Redemption
Any terms for the optional or mandatory redemption of the Bonds will be
set forth in a Prospectus Supplement or a supplement thereto. Except as will
otherwise be provided with respect to Bonds redeemable at the option of the
Holder, redeemable Bonds will be redeemed only upon notice by mail not less than
30 nor more than 60 days prior to the date fixed for redemption and, if less
than all the Bonds of a series, or any tranche thereof, are to be redeemed, the
particular Bonds to be redeemed will be selected by such method as will be
provided for any particular series, or in the absence of any such provision, by
such method as the Bond Registrar deems fair and appropriate. (Sections 503 and
504)
Any notice of redemption of Bonds, at the option of the Company, may
state that such redemption will be conditional upon receipt by the Trustee, on
or prior to the date fixed for such redemption, of money sufficient to pay the
principal of and premium, if any, and interest, if any, on such Bonds and that
if such money has not been so received, such notice will be of no force and
effect and the Company will not be required to redeem such Bonds. (Section 504)
No Maintenance, Replacement or Sinking Funds
While the Mortgage contains provisions for the maintenance of the
Mortgage Property (Section 601), it does not contain any provisions for any
maintenance, replacement, sinking or analogous fund and, except as may be
provided in the applicable Prospectus Supplement, or a supplement thereto, there
will be no provisions for any such funds for the Bonds.
Security
General. Except as discussed below, securities (including the Bonds)
now or hereafter issued under the Mortgage will be secured primarily by:
(a) first mortgage bonds issued under the Company's Indenture
of Mortgage and Deed of Trust, dated as of August 1, 1940 (as amended
and supplemented, the "1940 Indenture"), to The First National Bank of
Chicago, as trustee (the "1940 Indenture Trustee"), and delivered to
the Trustee under the Mortgage. As discussed under "DESCRIPTION OF THE
1940 INDENTURE - Security," the 1940 Indenture constitutes, subject to
certain exceptions, a first mortgage lien on substantially all of the
properties of the Company except properties of Iowa Southern at the
time of the IE-ISU merger;
(b) first mortgage bonds issued under Iowa Southern's
Indenture or Deed of Trust, dated as of February 1, 1923 (as amended
and supplemented, the "ISU 1923 Indenture"), with The Northern Trust
Company (The First National Bank of Chicago, successor) (the "ISU
Corporate Trustee") and Harold H. Rockwell (Richard D. Manella,
successor) as trustees (the "ISU Indenture Trustees"), and delivered to
the Trustee under the Mortgage; as discussed under "DESCRIPTION OF THE
ISU 1923 INDENTURE - Security," the ISU 1923 Indenture constitutes,
subject to certain exceptions, a first mortgage lien on substantially
all of the properties owned by Iowa Southern at the time of the IE-ISU
merger (which are now, subsequent to such merger, properties of the
Company); and
(c) the Lien of the Mortgage on the Company's properties used
in the generation, purchase, transmission, distribution or sale of
electric energy by the Company, or in the manufacture of manufactured
gas, or in the purchase, transportation, distribution or sale of
manufactured gas or natural gas, or in the generation, manufacture,
distribution or sale of steam and hot water, which Lien is junior to
the liens of the 1940 Indenture and the ISU 1923 Indenture.
(Granting Clause First)
As discussed below under "Class "A" Bonds," following a merger or
8
<PAGE>
consolidation of another corporation into the Company, or the transfer by
another corporation of property to the Company, the Company could issue and
deliver to the Trustee bonds issued under an existing mortgage on the properties
of such other corporation in lieu of or in addition to bonds issued under the
1940 Indenture or the ISU 1923 Indenture. In such event, the securities
(including the Bonds) issued under the Mortgage would be secured, additionally,
by such bonds and by the Lien of the Mortgage on the properties of such other
corporation, which would be junior to the liens of the existing mortgage of such
corporation, the 1940 Indenture and the ISU 1923 Indenture. The 1940 Indenture
and the ISU 1923 Indenture and all such other mortgages are hereinafter,
collectively, called the "Class "A" Mortgages," and all bonds outstanding under
the Class "A" Mortgages are hereinafter collectively called the "Class "A"
Bonds." If and when no Class "A" Mortgages are in effect, the Mortgage will
constitute a first mortgage lien on all property of the Company subject thereto.
(Sections 101 and 706)
Class "A" Bonds. Any Class "A" Bonds issued after the date of the
Mortgage (other than in substitution or exchange for previously outstanding
Class "A" Bonds) will be issued and delivered to, and registered in the name of,
the Trustee or its nominee and will be owned and held by the Trustee, subject to
the provisions of the Mortgage, for the benefit of the Holders of all securities
issued under the Mortgage and Outstanding from time to time. Class "A" Bonds
issued as the basis of authentication and delivery of securities under the
Mortgage (a) will mature on the same dates, and in the same principal amounts,
as such securities and (b) will contain, in addition to any mandatory redemption
provisions applicable to all Class "A" Bonds Outstanding under the related Class
"A" Mortgage, mandatory redemption provisions correlative to provisions for
mandatory redemption, or for redemption at the option of the Holder, of such
securities. Class "A" Bonds issued as the basis for authentication and delivery
of a series or tranche of securities under the Mortgage (x) may, but need not,
bear interest, any such interest to be payable at the same times as interest on
the securities of such series or tranche and (y) may, but need not, contain
provisions for the redemption thereof at the option of the Company, any such
redemption to be made at a redemption price or prices not less than the
principal amount of such Class "A" Bonds.
(Sections 402 and 701)
Any payment by the Company of principal of or premium or interest on
the Class "A" Bonds held by the Trustee will be applied by the Trustee to the
payment of any principal, premium or interest, as the case may be, in respect of
any Mortgage securities which is then due and, to the extent of such
application, the obligation of the Company under the Mortgage to make such
payment in respect of such securities will be deemed satisfied and discharged.
If, at the time of any such payment of principal of Class "A" Bonds, such
payment shall exceed the amount of principal then due in respect of the
securities, the excess of such payment will be deemed to constitute Funded Cash
and will be held by the Trustee as part of the Mortgaged Property, to be
withdrawn, used or applied as provided in the Mortgage. If, at the time of any
such payment of premium or interest on Class "A" Bonds held by the Trustee, such
payment shall exceed the amount of premium or interest then due in respect of
such securities, the excess of such payments will be remitted to the Company at
its request. Any payment by the Company of principal of or premium or interest
on any Mortgage securities authenticated and delivered on the basis of the
deposit with the Trustee of Class "A" Bonds (other than by application of the
proceeds of a payment in respect of such Class "A" Bonds) will, to the extent
thereof, be deemed to satisfy and discharge the obligation of the Company, if
any, to make a payment of principal, premium or interest, as the case may be, in
respect of such Class "A" Bonds which is then due. (Section 702; see "Withdrawal
of Cash" below.)
The Trustee may not sell, assign or otherwise transfer any Class "A"
Bonds held by the Trustee except to a successor trustee under the Mortgage.
(Section 704) At the time any Mortgage securities of any series or tranche which
have been authenticated and delivered upon the basis of Class "A" Bonds cease to
be Outstanding (other than a result of the application of the proceeds of the
payment or redemption of such Class "A" Bonds), the Trustee shall surrender to,
or upon the order of, the Company an equal principal amount of such Class "A"
Bonds having the same Stated Maturity and mandatory redemption provisions as
such securities. (Section 703)
At the date of this Prospectus, the only Class "A" Mortgages are the
1940 Indenture and the ISU 1923 Indenture and the only Class "A" Bonds issuable
are first mortgage bonds issuable thereunder. The Mortgage provides that in the
event of the merger or consolidation of another company with or into the
Company, an existing mortgage constituting a lien on properties of such other
company prior to the Lien of the Mortgage may be designated by the Company as an
additional Class "A" Mortgage. Any bonds thereafter issued under such additional
mortgage would be Class "A" Bonds and (other than in substitution or exchange
for previously Outstanding Class "A" Bonds) could be issued only to provide the
basis for the authentication and delivery of securities under the Mortgage.
(Section 706)
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When no bonds are Outstanding under a Class "A" Mortgage except for
Class "A" Bonds held by the Trustee, then, at the request of the Company and
subject to satisfaction of certain conditions, the Trustee will surrender such
Class "A" Bonds for cancellation and the related Class "A" Mortgage will be
satisfied and discharged; whereupon, the lien of such Class "A" Mortgage on the
property owned by the Company will cease to exist and the Lien of the Mortgage
will become a first mortgage lien on such property, subject to Permitted Liens.
(Section 707)
So long as any securities are Outstanding under the Mortgage, the
Company will not (a) issue any additional Class "A" Bonds except (i) to replace
any mutilated, destroyed, lost or stolen securities of the same series or to
effect exchanges and transfers of such securities or (ii) to the Trustee as the
basis for the authentication and delivery of securities or (b) subject to the
lien of any Class "A" Mortgage any property which is excepted and excluded from,
or not included in or subject to, the lien of such Class "A" Mortgage. (Section
610) First mortgage bonds may be issued under the 1940 Indenture on the basis of
property additions, retirements of bonds previously issued under the 1940
Indenture and cash deposited with the 1940 Indenture Trustee. (See "DESCRIPTION
OF THE 1940 INDENTURE - Issuance of Additional Bonds.") First mortgage bonds may
be issued under the ISU 1923 Indenture on the basis of property additions,
retirements of bonds previously issued under the ISU 1923 Indenture and cash
deposited with the ISU Corporate Trustee. (See "DESCRIPTION OF THE ISU 1923
INDENTURE - Issuance of Additional Bonds.")
Lien of the Mortgage. At the date of this Prospectus, substantially all
of the Company's property subject to the Lien of the Mortgage is also subject to
the prior lien of the 1940 Indenture or the ISU 1923 Indenture. Any Bonds
offered hereby will have the benefit of the first mortgage lien of the 1940
Indenture and the ISU 1923 Indenture on such property, and the benefit of the
prior lien of any additional Class "A" Mortgage on any property subject thereto,
to the extent of the aggregate principal amount of Class "A" Bonds issued under
the respective Class "A" Mortgage and held by the Trustee.
The Lien of the Mortgage is subject to Permitted Liens which include
tax liens and other governmental charges which are not delinquent or which can
thereafter be paid without penalty or which are being contested, construction
and materialmen's liens, certain judgment liens, easements, reservations and
rights of others (including governmental entities) in, and defects of title in,
certain property of the Company, certain leasehold interests, liens on the
Company's pollution control and sewage and solid waste disposal facilities which
were previously financed with industrial development revenue bonds and certain
other liens and encumbrances. (Granting Clauses and Section 101)
There are excepted from the Lien of the Mortgage, among other things,
cash and securities not paid, deposited or held under the Mortgage; contracts,
leases and other agreements of all kinds, contract rights, bills, notes and
other instruments, accounts receivable, claims, judgments, certain intellectual
property rights and other general intangibles; automobiles, aircraft and
vessels; all goods, wares, merchandise, equipment, spare parts, tools,
materials, supplies and fuel held for sale or lease in the ordinary course of
business or for use or consumption in, or in the operation of, any properties of
or for the benefit of the Company; nuclear fuel; computers, machinery and
equipment used exclusively for corporate administrative or clerical purposes;
all gas, oil, minerals and timber, and rights thereto; electric energy, gas,
steam, water and other products generated, produced or purchased; property
installed on the premises of customers of the Company and designed to aid in
conservation or efficient use of energy; leasehold interests and leasehold
improvements of the Company; and all property which is located outside of the
State of Iowa and is neither specifically described in the Granting Clauses of
the Mortgage nor specifically subjected or required to be subjected to the Lien
of the Mortgage by any provision thereof. (Granting Clauses)
Without the consent of the Holders, the Company and the Trustee may
enter into supplemental indentures to subject to the Lien of the Mortgage
additional property (including property which would otherwise be excepted from
such Lien). (Section 1401) Such property, so long as the same would otherwise
constitute Property Additions, would thereupon constitute Property Additions and
be available as a basis for the issuance of securities under the Mortgage. (See
"Issuance of Additional Securities" below.) Property Additions generally include
any unit or element of property which is owned by the Company and is subject to
the Lien of the Mortgage except (i) any property, the cost of acquisition or
construction of which is property chargeable to an operating expense account of
the Company and (ii) goodwill, going concern value rights and intangible
property, unless the cost thereof is included in the cost of such unit or
element of property and no separate consideration was paid or apportioned
therefor, in which case Property Additions may include such goodwill, going
concern rights and intangible property. (Section 103)
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The Mortgage contains provisions subjecting after-acquired property
(other than Excepted Property) to the Lien thereof. These provisions are limited
in the case of consolidation or merger or sale of substantially all of the
Company's assets. In the event of consolidation or merger or the transfer of all
of the Mortgaged Property as or substantially as an entirety, the Mortgage will
not be required to be a lien upon any of the properties then owned or thereafter
acquired by the successor corporation except properties acquired from the
Company in or as a result of such transaction and properties which are an
integral part of, or essential to the use or operation of, any Mortgaged
Property, and renewals, replacements and substitutions of or for any part
thereof. (Article Thirteen; see "Consolidation, Merger, Conveyance, Transfer or
Lease" below.) In addition, after-acquired property may be subject to vendors'
liens, purchase money mortgages and other liens thereon at the time of
acquisition thereof, including the lien of any Class "A" Mortgage.
The Mortgage provides that the Trustee will have a lien, prior to the
lien on behalf of the holders of securities issued under the Mortgage, upon
Mortgaged Property, for the payment of its reasonable compensation and expenses
and for indemnity against certain liabilities. (Section 1107)
Issuance of Additional Securities
The maximum principal amount of securities which may be issued under
the Mortgage is unlimited. (Section 301) Under the Mortgage, securities of any
series may be issued from time to time on the basis of, and in an aggregate
principal amount not exceeding:
(1) the aggregate principal amount of Class "A" Bonds issued and
delivered to the Trustee for such purpose;
(2) 75% of the Cost or fair value (whichever is less) of Property
Additions (as described below) which do not constitute Funded Property
(generally, Funded Property includes Property Additions which have been made, or
deemed to have been made, the basis of the authentication and delivery of
securities, the release of Mortgaged Property from the Lien of the Mortgage or
cash withdrawals, or which have been substituted for retired property), after
certain deductions and additions, primarily including adjustments to offset
property retirements;
(3) the aggregate principal amount of Retired Securities (which
consist of securities no longer outstanding under the Mortgage which have not
been used for certain other purposes under the Mortgage and which are not to be
paid, redeemed, purchased or otherwise retired by the application thereto of
Funded Cash) or Retired Prior Lien Bonds; and
(4) the amount of cash deposited with the Trustee.
(Article Four)
The Company is not required to satisfy a net earnings requirement prior
to the issuance of securities under the Mortgage.
Unless otherwise provided in the applicable Prospectus Supplement, or
supplement thereto, the Company will issue the Bonds on the basis of Class "A"
Bonds issued under the 1940 Indenture. (See "DESCRIPTION OF THE 1940 INDENTURE -
Issuance of Additional Bonds" for a description of the requirements for the
issuance of bonds under the 1940 Indenture, which requirements are generally
more restrictive than those for the issuance of securities under the Mortgage.)
Release of Property
Unless an Event of Default (hereinafter defined) shall have occurred
and be continuing, the Company may obtain the release from the Lien of the
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Mortgage of any Funded Property, except for cash held by the Trustee, upon
delivery to the Trustee of cash equal in amount to the amount, if any, that the
Cost of the property to be released (or, if less, the fair value of such
property at the time it became Funded Property) exceeds the aggregate of:
(1) the principal amount, subject to certain
limitations, of obligations secured by purchase money mortgages upon
the property to be released delivered to the Trustee;
(2) the Cost or fair value (whichever is less) of
certified Property Additions not constituting Funded Property after
certain deductions and additions, primarily including adjustments to
offset property retirements (except that such adjustments need not be
made if such Property Additions were acquired or made within the 90-day
period preceding the request for such release);
(3) an amount equal to 133-1/3% of the aggregate
principal amount of securities the Company would be entitled to issue
on the basis of Retired Securities or Retired Prior Lien Bonds (with
such entitlement being waived by operation of such release);
(4) the amount of cash deposited with, or the principal
amount of obligations secured by purchase money mortgages upon the
property released and delivered to, the Trustee or other holder of a
lien prior to the Lien of the Mortgage;
(5) an amount equal to 133-1/3% of the aggregate
principal amount of securities Outstanding under the Mortgage and
delivered to the Trustee (with such Securities to be canceled by the
Trustee); and
(6) any taxes and expenses incidental to any sale,
exchange, dedication or other disposition of the property to be
released.
(Section 803)
Unless an Event of Default shall have occurred and be continuing,
property which is not Funded Property may generally be released from the Lien of
the Mortgage without depositing any cash or property with the Trustee as long as
(a) the aggregate amount of Cost or fair value (whichever is less) of all
Property Additions which do not constitute Funded Property (excluding the
property to be released) after certain deductions and additions, primarily
including adjustments to offset property retirements, is not less than zero or
(b) the Cost or fair value (whichever is less) of property to be released does
not exceed the aggregate amount of the Cost or fair value (whichever is less) of
Property Additions acquired or made within the 90-day period preceding the
release. (Section 804)
The Mortgage provides simplified procedures for the release of property
which has been released from the lien of Class "A" Mortgages, minor properties
and property taken by eminent domain, and provides for dispositions of certain
obsolete property and grants or surrender of certain rights without any release
or consent by the Trustee.
If any property released from the Lien of Mortgage continues to be
owned by the Company after such release, the Mortgage will not become a lien on
any improvement, extension or addition to such property or renewals,
replacements or substitutions of or for any part or parts of such property.
(Article Eight)
Withdrawal of Cash
Subject to certain limitations, unless an Event of Default shall have
occurred and be continuing, cash held by the Trustee may (1) be withdrawn by the
Company (a) to the extent of the Cost or fair value (whichever is less) of
Property Additions not constituting Funded Property, after certain deductions
and additions, primarily including adjustments to offset retirements or (b) in
an amount equal to 133-1/3% of the aggregate principal amount of securities that
the Company would be entitled to issue under the Mortgage on the basis of
Retired Securities or Retired Prior Lien Bonds (with the entitlement to such
issuance being waived by operation of such withdrawal) or (c) in an amount equal
to 133-1/3% of the aggregate principal amount of any securities Outstanding
under the Mortgage and issued under the Mortgage and delivered to the Trustee,
or (2) upon the request of the Company, be applied to (a) the purchase of
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securities issued under the Mortgage (at prices not exceeding 133-1/3% of the
principal amount thereof) or (b) the redemption or payment at Stated Maturity of
securities issued under the Mortgage (with any securities received by the
Trustee pursuant to these provisions being canceled by the Trustee) (Section
806); provided, however, that cash deposited with the Trustee as the basis for
the authentication and delivery of securities, as well as cash representing a
payment of principal of Class "A" Bonds, may only be withdrawn in an amount
equal to the aggregate principal amount of securities the Company would be
entitled to issue under the Mortgage on any basis (with the entitlement to such
issuance being waived by operation of such withdrawal), or may, upon the request
of the Company, be applied to the purchase redemption or payment of securities
issued under the Mortgage at prices not exceeding, in the aggregate, the
principal amount thereof. (Sections 405 and 702)
Consolidation, Merger, Conveyance, Transfer or Lease
The Company may not consolidate with or merge into any other
corporation or convey, transfer or lease the Mortgaged Property as or
substantially as an entirety to any Person unless (a) such transaction is on
such terms as will fully preserve in all material respects the Lien and security
of the Mortgage and the rights and powers of the Trustee and the Holders and (b)
the corporation formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or other transfer, or which leases,
the Mortgaged Property as or substantially as an entirety is a corporation
organized and existing under the laws of the United States of America, any State
or Territory thereof or the District of Columbia, and such corporation executes
and delivers to the Trustee a supplemental indenture, which contains an
assumption by such corporation of the Company's obligations under the Mortgage
and which contains a grant, conveyance, transfer and mortgage by such
corporation confirming the Lien of the Mortgage on the Mortgaged Property and
subjecting to such Lien all property thereafter acquired by such corporation
which shall constitute an integral part, or be essential to the use or operation
of, any Mortgage Property or a renewal, replacement or substitution of or for
any part thereof. (Section 1301)
Modification of the Mortgage
Without the consent of any Holders, the Company and the Trustee may
enter into one or more supplemental indentures for certain purposes, including
any of the following:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company in the Mortgage and in the securities; or
(b) to add one or more covenants of the Company or other
provisions for the benefit of all Holders or for the benefit of the
Holders of, or to remain in effect only so long as there shall be
outstanding, securities issued under the Mortgage of one or more
specified series, or one or more tranches thereof, or to surrender any
right or power conferred upon the Company by the Mortgage; or
(c) to correct or amplify the description of any
property at any time subject to the Lien of the Mortgage, or to subject
to the Lien of the Mortgage additional property; or
(d) to change or eliminate any provision of the Mortgage
or to add any new provision to the Mortgage, provided that, if such
change, elimination or addition adversely affects the interests of the
Holders of the securities of any series or tranche in any material
respect, such change, elimination or addition will become effective
with respect to such series or tranche only when no security of such
series or tranche remains Outstanding under the Mortgage; or
(e) to establish the form or terms of the securities of
any series or tranche as permitted by the Mortgage; or
(f) to cure any ambiguity, to correct or supplement any
provision therein which may be defective or inconsistent with any other
provision therein, or to comply with the rules or regulations of any
national securities exchange on which any of the securities issued
under the Mortgage may be listed, or to change, alter, modify, vary or
eliminate any of the provisions thereof or to add other provisions to
the Mortgage, so long as such other changes, alterations,
modifications, variations, eliminations or additions do not adversely
affect the interests of the Holders of securities of any series or
tranche in any material respect, unless they are expressly stated to
become effective only as to securities which are not then Outstanding.
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Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after
the date of the Mortgage in such a way as to require changes to the Mortgage or
the incorporation therein of additional provisions or so as to permit changes
to, or the elimination of, provisions which, at the date of the Mortgage or at
any time thereafter, were required by the Trust Indenture Act to be contained in
the Mortgage, the Company and the Trustee may, without the consent of any
Holders, enter into one or more supplemental indentures to evidence or effect
such amendments. (Section 1401)
For most purposes not described above, the consent of the Holders of
not less than a majority in aggregate principal amount of the securities of all
affected series then Outstanding under the Mortgage is required for the purpose
of amending or modifying the Mortgage pursuant to one or more supplemental
indentures; provided, however, that no such amendment or modification may,
without the consent of each Holder of the Outstanding securities of each series
or tranche directly affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any security
issued under the Mortgage, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof, (b) permit the
creation of any lien ranking prior to the Lien of the Mortgage with respect to
all or substantially all of the Mortgaged Property or terminate the Lien of the
Mortgage, or (c) reduce the percentage in principal amount of the Outstanding
securities of such series or tranche, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with any provision of the
Mortgage or of any default thereunder and its consequences, or reduce the
requirements for quorum or voting. A supplemental indenture which changes or
eliminates any covenant or other provision of the Mortgage which has expressly
been included solely for the benefit of the Holders of, or which is to remain in
effect only so long as there shall be Outstanding securities of one or more
specified series, or one or more tranches thereof, or modifies the rights of the
Holders of securities such series or tranches with respect to such covenants or
other provision, will not be deemed to affect the rights under the Mortgage of
Holders of the securities of any other series or tranche. (Section 1402)
Waiver
The Holders of at least a majority in aggregate principal amount of all
affected Outstanding securities issued under the Mortgage may waive the
Company's obligations to comply with certain covenants of the Mortgage, provided
that such waiver occurs before the time such compliance is required. (Section
609)
Events of Default
Each of the following events constitutes an Event of Default under the
Mortgage:
(1) failure to pay interest on any security issued under
the Mortgage within 90 days after the same becomes due;
(2) failure to pay principal or premium, if any, on any
security issued under the Mortgage within three business days after its
due date;
(3) failure to perform or breach of any covenant or
warranty of the Company in the Mortgage (other than as referred to in
(1) or (2) above) for a period of 90 days after there has been given to
the Company by the Trustee, or to the Company and the Trustee by the
Holders of at least 30% in principal amount of Outstanding securities
issued under the Mortgage, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default," unless the Trustee, or the Trustee and the
Holders of a principal amount of securities not less than the principal
amount of securities the Holders of which gave such notice, as the case
may be, agree in writing to an extension of such period prior to its
expiration; provided, however, that the Trustee, or the Trustee and
such Holders, as the case may be, will be deemed to have agreed to an
extension of such period if corrective action has been initiated by the
Company within such period and is being diligently pursued;
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(4) certain events relating to reorganization,
bankruptcy and insolvency of the Company and appointment of a receiver
or trustee for its property; and
(5) the occurrence of a matured event of default under
any Class "A" Mortgage; provided that the waiver or cure of any such
event of default and the rescission and annulment of the consequences
thereof shall constitute a waiver of the corresponding Event of Default
under the Mortgage and a rescission and annulment of the consequences
thereof.
(Section 1001)
The Trust Indenture Act currently requires that the Company give the
Trustee, not less often than annually, a brief statement as to the Company's
compliance with the conditions and covenants under the Mortgage.
Remedies
If an Event of Default occurs and is continuing, then the Trustee or
the Holders of not less than a majority in principal amount of securities then
Outstanding under the Mortgage may declare the principal amount (or if the
securities are Discount Securities, such portion of the principal amount as may
be provided for such Discount Securities pursuant to the terms of the Mortgage)
of all of the securities Outstanding under the Mortgage together with premium,
if any, and interest accrued, if any, thereon to be immediately due and payable.
At any time after such declaration of the maturity of the securities then
Outstanding, but before the sale of any of the Mortgaged Property and before a
judgment or decree for payment of money shall have been obtained by the Trustee
as provided in the Mortgage, the Event or Events of Default giving rise to such
declaration of maturity will, without further act, be deemed to have been
waived, and such declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest, if any, on all securities then
Outstanding under the Mortgage;
(2) the principal of and premium, if any, on any
securities then Outstanding under the Mortgage which have become due
otherwise than by such declaration of acceleration and interest thereon
at the rate or rates prescribed therefor in such securities; and
(3) all amounts due to the Trustee as compensation and
reimbursement as provided in the Mortgage; and
(b) any other Event or Events of Default other than the
non-payment of the principal of securities which shall have become due solely by
such declaration of acceleration, shall have been cured or waived as provided in
the Mortgage.
(Sections 1002 and 1017)
The Mortgage provides that, under certain circumstances and to the
extent permitted by law, if an Event of Default occurs and is continuing, the
Trustee has the power to take possession of, and to hold, operate and manage,
the Mortgaged Property, or with or without entry, sell the Mortgaged Property.
If the Mortgaged Property is sold, whether by the Trustee or pursuant to
judicial proceedings, the principal of the securities Outstanding under the
Mortgage, if not previously due, will become immediately due, together with
premium, if any, and any accrued interest (including interest upon overdue
installments of interest at the same rates respectively as were born by the
respective securities on which installments of interest were overdue). (Sections
1003, 1004 and 1005)
If an Event of Default occurs and is continuing, the Holders of a
majority in principal amount of the securities then Outstanding under the
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Mortgage will have the right to direct the time, method and place of conducting
any proceedings for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that (a) such direction does not
conflict with any rule of law or with the Mortgage, and could not involve the
Trustee in personal liability in circumstances where indemnity would not, in the
Trustee's sole discretion, be adequate and (b) the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
discretion. (Section 1016)
The Mortgage provides that no Holder of any security will have any
right to institute any proceeding, judicial or otherwise, with respect to the
Mortgage for the appointment of a receiver or for any other remedy thereunder
unless (a) such Holder has previously given to the Trustee written notice of a
continuing Event of Default; (b) the Holders of not less than a majority in
aggregate principal amount of the securities then Outstanding under the Mortgage
have made written request to the Trustee to institute proceedings in respect of
such Event of Default and have offered the Trustee reasonable indemnity against
costs and liabilities incurred in complying with such request; and (c) the
Trustee has refused, or for sixty days after receipt of such Notice, the Trustee
has failed, to institute any such proceeding and no direction inconsistent with
such request has been given to the Trustee by the Holders of a majority in
aggregate principal amount of securities then Outstanding under the Mortgage.
Furthermore, no Holder will be entitled to institute any such action if and to
the extent that such action would disturb or prejudice the rights of the other
Holders. (Section 1011)
Notwithstanding that the right of a Holder to institute a proceeding
with respect to the Mortgage is subject to certain conditions precedent, each
Holder of a security has the right, which is absolute and unconditional, to
receive payment of the principal of and premium, if any, and interest (including
interest upon overdue interest), if any, on such security when due and to
institute suit for the enforcement of any such payment, and such rights may not
be impaired without the consent of such Holder. (Section 1012)
The Mortgage obligates the Trustee to give the Holders notice of any
default under the Mortgage to the extent required by the Trust Indenture Act,
unless such default shall have been cured or waived, except that no such notice
to Holders of a default of the character described in paragraph (3) under "Event
of Default" shall be given until at least 60 days after the occurrence thereof.
(Section 1102) The Trust Indenture Act currently permits the Trustee to withhold
notices of default (except for certain payment defaults) if the Trustee in good
faith determines the withholding of such notice to be in the interests of the
Holders.
As a condition precedent to certain actions by the Trustee in the
enforcement of the Lien of Mortgage and institution of action on the securities
Outstanding under the Mortgage, the Trustee may require adequate indemnity
against costs, expenses and liabilities to be incurred in connection therewith.
(Sections 1011 and 1101)
In addition to every other right and remedy provided in the Mortgage,
the Trustee may exercise any right or remedy available to the Trustee in its
capacity as owner and Holder of Class "A" Bonds which arises as a result of a
default or matured event of default under any Class "A" Mortgage, whether or not
an Event of Default under the Mortgage has occurred and is continuing. (Section
1020)
Defeasance
Upon request of the Company, any securities Outstanding under the
Mortgage, or any portion of the principal amount thereof, will be deemed to have
been paid for purposes of the Mortgage, and the entire indebtedness of the
Company in respect thereof will be deemed to have been satisfied and discharged,
if there has been irrevocably deposited with the Trustee or any Paying Agent
(other than the Company), in trust: (a) money in the amount which will be
sufficient, or (b) Eligible Obligations (as described below), which do not
contain provisions permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide monies which,
together with the money, if any, deposited with or held by the Trustee, will be
sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay
when due the principal of and premium, if any, and interest, if any, due and to
become due on such securities or portions thereof. (Section 901) For this
purpose, Eligible Obligations include direct obligations of, or obligations
unconditionally guaranteed by, the United States of America, entitled to the
benefit of the full faith and credit thereof, and certificates, depositary
receipts or other instruments which evidence a direct ownership interest in such
obligations or in any specific interest or principal payments due in respect
thereof.
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While the Company knows of no legal precedent on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related securities for
an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such securities would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their securities. In addition, such Holders thereafter would be required to
recognize for federal income tax purposes a share of the income, gain or loss of
the trust. The amount so required to be recognized could be different from the
amount that would be recognized in the absence of such deposit. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences to them of any such deposit.
Resignation of the Trustee
The Trustee may resign at any time by giving written notice thereof to
the Company or may be removed at any time by act of the Holders of a majority in
principal amount of securities then Outstanding delivered to the Trustee and the
Company. No resignation or removal of the Trustee and no appointment of a
successor trustee will become effective until the acceptance of appointment by a
successor trustee in accordance with the requirements of the Mortgage. So long
as no Event of Default or event which, after notice or lapse of time, or both,
would become an Event of Default has occurred and is continuing, if the Company
has delivered to the Trustee a resolution of its Board of Directors appointing a
successor trustee and such successor has accepted such appointment in accordance
with the terms of the Mortgage, the Trustee will be deemed to have resigned and
the successor will be deemed to have been appointed as trustee in accordance
with the Mortgage. (Section 1110)
More Restrictive Provisions of Class "A" Mortgages
The Mortgage is less restrictive upon the Company in certain respects
than is either the 1940 Indenture or the ISU 1923 Indenture, but the Class "A"
Bonds issued under either of those indentures and delivered to the Trustee will
be entitled to the benefits of more restrictive provisions of those indentures
(see "DESCRIPTION OF THE 1940 INDENTURE" and "DESCRIPTION OF THE ISU 1923
INDENTURE" below). However, pursuant to the Mortgage, the Trustee, as holder of
the Class "A" Bonds, will vote such Class "A" Bonds in favor of certain
amendments to the 1940 Indenture and ISU 1923 Indenture. (Section 705; see
"Voting of Class "A" Bonds" under each of "DESCRIPTION OF THE 1940 INDENTURE"
and "DESCRIPTION OF THE ISU 1923 INDENTURE" below).
Relationship with the Trustee
The Trustee or an affiliate provides general banking services to the
Company including (i) acting as a depositary for certain Company funds and (ii)
issuing a $15,000,000 line of credit to the Company. As of March 31, 1997, the
line of credit was being used to support commercial paper. Additionally, the
Trustee has a $45,000,000 credit agreement with the lessor of the Company's
nuclear fuel supporting the Company's nuclear fuel lease.
The Trustee is also the 1940 Indenture Trustee, the ISU 1923 Corporate
Trustee and the Subordinated Indenture Trustee (each as defined below). As such,
the Trustee would have a conflicting interest for purposes of the Trust
Indenture Act if an Event of Default were to occur under the 1940 Indenture, the
ISU 1923 Indenture or the Subordinated Indenture. In any such case, the Trustee
may be required to eliminate such conflicting interest by resigning as the
Trustee, the 1940 Indenture Trustee, the ISU 1923 Corporate Trustee or the
Subordinated Indenture Trustee. There are other instances under the Trust
Indenture Act which would require the resignation of the Trustee, such as an
affiliate of the Trustee acting as underwriter with respect to any of the
Securities.
DESCRIPTION OF THE 1940 INDENTURE
General
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The summaries of the 1940 Indenture set forth below do not purport to
be complete and are subject to the detailed provisions of the 1940 Indenture, a
copy of which was previously filed with the Commission, is listed as an exhibit
to the Registration Statement of which this Prospectus is a part, and is
incorporated herein by reference. Capitalized terms used in this section which
are not otherwise defined in this Prospectus shall have the meanings ascribed to
them in the 1940 Indenture. Wherever particular provisions or terms defined in
the 1940 Indenture are referred to herein, such provisions or definitions are
incorporated by reference as part of the statements made herein, and such
statements are qualified in their entirety by such reference. References to
article and section numbers in this section, unless otherwise indicated, are
references to article and section numbers of the 1940 Indenture.
Security
The 1940 Indenture constitutes a direct first mortgage lien on
substantially all of the property and franchises of the Company (other than
expressly excepted property and other than properties owned by Iowa Southern at
the time of the IE-ISU merger on December 31, 1993), subject only to permitted
encumbrances and liens. Substantially all property and franchises (other than
expressly excepted property) hereafter acquired by the Company will become
subject to the lien of the 1940 Indenture, subject only to permitted liens and
encumbrances and liens and encumbrances, if any, existing or placed on such
after-acquired property at the time of acquisition thereof. The lien of the 1940
Indenture on the property owned by Iowa Southern at the time of the IE-ISU
merger, and extensions and additions appurtenant to such property, are junior to
the lien of the ISU 1923 Indenture.
The 1940 Indenture excepts from the lien thereof all cash, securities,
contracts, and bills, notes and accounts receivable acquired in the ordinary
course of business which are not specifically pledged under the 1940 Indenture
and all tangible personal property purchased or held for sale in the ordinary
course of business or consumable in the operation of the plants or system of the
Company, automobiles, buses, trucks and similar vehicles. (Granting Clauses)
Any bonds issued under the 1940 Indenture as the basis for the issuance
of Bonds under the Mortgage will be secured equally and ratably with the bonds
of all other series then outstanding under the 1940 Indenture.
Effect of the IE-ISU Merger on the 1940 Indenture
The merger of IE and ISU did not impair the lien of the 1940 Indenture
or any of the rights or powers of the 1940 Indenture Trustee or the bondholders
under the 1940 Indenture. (Section 133) Subsequent to that merger, the Company
became the successor to IE under the 1940 Indenture.
Issuance of Additional Bonds
The 1940 Indenture does not fix an overall limitation on the aggregate
principal amount of the bonds of all series that may be issued or outstanding
thereunder. (Section 3) Generally, additional bonds of any series may be issued,
subject to the provisions of the 1940 Indenture, in a principal amount equal to:
(a) 60% of Net Bondable Additions not previously utilized
under the 1940 Indenture resulting from the acquisition by purchase,
construction or otherwise of Property Additions (Article IV);
(b) the principal amount of bonds, previously
authenticated under the 1940 Indenture, which have been retired or for
the retirement of which the 1940 Indenture Trustee holds the necessary
funds, other than bonds redeemed through the operation of cash sinking
funds and other than retired bonds used to satisfy the maintenance and
renewal provisions of the 1940 Indenture (Article VI); or
(c) the amount of cash deposited with the 1940 Indenture
Trustee as the basis for the issuance of such bonds, which cash may be
applied to the retirement of bonds or may be withdrawn in lieu of the
authentication of an equal principal amount of bonds to whose
authentication and delivery the Company would be entitled under the
provisions referred to in clauses (a) and (b). (Article V)
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No such bonds in any event may be issued under (a) or (c), or under (b)
if the bonds to be issued bear a higher rate of interest than that borne by the
bonds retired or being retired (except in case such bonds mature within 2
years), unless (i) the Net Earnings of the Company for a 12 months' period
within the immediately preceding 15 months' period shall have been at least
equal to two times the aggregate amount of annual interest charges on all bonds
then outstanding under the 1940 Indenture, including the bonds then applied for,
and (ii) at least 85% of such required minimum amount of Net Earnings consists
of Net Operating Revenues from the Public Utility Property of the Company.
(Articles IV, V, and VI)
Bonds issuable under the 1940 Indenture are available as the basis for
the issuance of securities under the Mortgage. As of March 31, 1997, on the
basis of the most restrictive provisions described above, the Company would have
been entitled to issue an aggregate of at least $241 million of additional bonds
under the 1940 Indenture.
Acquisition of Property Subject to Prior Liens
The 1940 Indenture prohibits the Company from acquiring any property
subject to a prior lien, or placing any prior lien on property at the time of
acquisition thereof, if either the principal amount of indebtedness secured by
prior liens on such property exceeds 60% of the cost or the fair value of such
property, whichever shall be less, or the Net Earnings of the Company for a
period of 12 months within the 15 months immediately preceding the month in
which the property is to be acquired shall not have been at least equal to two
times the aggregate amount of the annual interest charges on the Secured Bonded
Debt of the Company; provided, however, that if the Net Earnings of the Company
for the above-stated period shall have been at least equal to three times the
aggregate amount of the annual interest charges on the Secured Bonded Debt of
the Company, then the 60% limitation shall not apply. In the case of each of the
foregoing Net Earnings requirements, such Net Earnings must consist of Net
Operating Revenues from Public Utility Property to an extent at least equal to
85% of two or three times, as the case may be, the said aggregate amount of
annual interest charges. (Section 83)
Maintenance and Renewal
The 1940 Indenture provides that the Company will, for each year, pay
or cause to be paid to the Trustee, an amount in cash, as and for a renewal
fund, equal to 2-1/2% (or such different percentage as may be fixed upon
certification by an independent engineer that such change in percentage rate is
desirable and justified) of the average gross book value during such year of all
of the depreciable tangible Public Utility Property of the Company (with certain
specified exceptions). The percentage is currently set at 2-1/2%. The Company's
obligation to pay such amount to the Trustee in cash may at the option of the
Company be satisfied in whole or in part by the certification of unused Gross
Bondable Additions or the certification of unused bond retirements, or both.
(Section 74)
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The 1940 Indenture also provides (i) that the Company shall maintain
the mortgaged properties in good repair and working order; (ii) that the
Company, upon written request served upon it and the Trustee by the holders of
at least 25% in principal amount of the bonds outstanding, shall cause such
properties to be inspected by an independent engineer (not more often than at
five-year intervals) to determine whether they have been so maintained and
whether any property, not retired on the books, should be so classified for the
purpose (among others) of computing Net Bondable Additions; and (iii) that the
Company shall make good any deficiency in maintenance disclosed by such
engineer's report as rendered or as modified by arbitration. (Section 73)
Limitations on Dividends on Common Stock
The 1940 Indenture prohibits the Company from declaring or paying any
dividends (except stock dividends or dividends paid out of the proceeds of sale
of stock), or making other distributions on, or acquisitions of, stock unless
immediately after such dividend, distribution or acquisition the net income of
the Company available for dividends (as defined), for the period from December
31, 1945, to and including the date of such dividend, distribution or
acquisition, plus the sum of $250,000 shall at least equal all payments made in
respect of all such dividends, distributions or acquisitions during said period;
provided that such restriction shall not apply to the acquisition of stock out
of the proceeds from the sale of, or in exchange for, any other shares of stock
or securities representing an equity interest subordinate to all debts, secured
or unsecured. (Section 85) Giving effect to the use of the proceeds of the
Securities offered hereby, retained earnings are not restricted under this
provision.
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Modification of the 1940 Indenture
In general, modifications or alterations of the 1940 Indenture and
indentures supplemental thereto and of the rights and obligations of the Company
and of the holders of the bonds may, with the approval of the Company, be made
at a meeting of bondholders upon the affirmative vote of the holders of 75% or
more of the aggregate principal amount of the bonds entitled to vote with
respect to the matter involved, but no such modifications or alterations are
permitted with respect to certain basic matters, such as terms of payment of
principal or interest on the bonds or the creation of liens ranking prior to, or
on a parity with, the lien of the 1940 Indenture. (Section 167) (See "Voting of
Class "A" Bonds" below.)
Defaults and Notice Thereof
Defaults under the 1940 Indenture are defined in substance as being (a)
failure to pay principal or any installment of interest on any bond on the due
date; (b) failure to observe any covenant or condition prescribed by the
provisions of any sinking fund created for the benefit of bonds of any series;
(c) failure to perform any other covenant or agreement of the 1940 Indenture,
which failure shall continue for a period of 60 days after a written demand that
such failure be cured has been mailed to the Company by the Trustee or to the
Company by the holders of 15% in principal amount of the bonds; (d) certain
events relating to reorganization, bankruptcy and insolvency of the Company or
the appointment of a receiver or trustee of the Company's property; (e) final
judgment in excess of $100,000 against the Company which is not discharged or
stayed within 30 days; or (f) the assumption by any governmental agency or any
court at the instance of any governmental agency of custody of the whole or any
substantial part of the Trust Estate or of control over the Company's affairs or
operations to the exclusion of management by the Company. (Section 105)
Upon the occurrence of a Default, the 1940 Indenture Trustee may, and
upon request of the holders of a majority in principal amount of the bonds shall
(and the holders of at least 25% in principal amount of the bonds may, by notice
in writing to the Company), declare the principal of and interest on all the
bonds to be immediately due and payable. (Section 107)
The 1940 Indenture Trustee is required to give notice of any Default to
holders of bonds whose names are on file with it within 90 days after the
occurrence of a Default known to it, unless such Default has been cured prior to
the giving of such notice and except that such notice may be withheld, other
than as to a Default in payment of principal or interest or of any installment
of any sinking fund, if the 1940 Indenture Trustee determines in good faith that
such withholding is in the interest of the holders of bonds. (Section 106)
The holders of not less than a majority in principal amount of bonds
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the 1940 Indenture Trustee, or exercise
any trust or power conferred upon the 1940 Indenture Trustee. (Section 110)
The Company must file an annual Certificate with the 1940 Indenture
Trustee as to compliance with the conditions and covenants of the 1940 Indenture
and as to the absence of default with respect to any of the covenants contained
in the 1940 Indenture. (Section 103)
Voting of Class "A" Bonds
The Trustee will, as holder of any Class "A" Bonds issued under the
1940 Indenture, attend such meetings of bondholders under the 1940 Indenture, or
deliver its proxy in connection therewith, as relate to matters with respect to
which it is entitled to vote or consent. The Mortgage provides that, so long as
no Event of Default as defined in the Mortgage has occurred or is continuing,
the Trustee will, as holder of such Class "A" Bonds, vote or consent:
(a) in favor of amendments or modifications to the 1940 Indenture
of substantially the same tenor and effect as the following, together with all
amendments and modifications required to effectuate the following:
(i) to provide that, whenever the 1940 Indenture requires
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authorization by, or a resolution of, the Board of
Directors for the issuance of a series of bonds or
the determination of the terms thereof, the
requirement shall be satisfied if the action taken
would be sufficient for the issuance of a series of
bonds, or the determination of the terms thereof,
under the Mortgage;
(ii) to eliminate the renewal fund and to provide that, to
the extent Property Additions have been taken as a
credit, or cash held by the Trustee has been
deposited, to satisfy the renewal fund requirements
(or to satisfy any sinking fund requirement which is
no longer in effect), such Property Additions and
cash may be used for any purpose under the 1940
Indenture (including as a basis for the issuance of
bonds) as if they had never been so credited or
deposited;
(iii) to permit bonds to be issued in a principal amount
equal to 75%, instead of 60%, of Net Bondable
Additions;
(iv) to eliminate the Net Earnings requirements for all
purposes, including in connection with the issuance
of bonds;
(v) to broaden the definition of "Property Additions" to
include all tangible property owned by the Company
and subject to the lien of the 1940 Indenture;
(vi) to eliminate the restrictions on the payment of
dividends on, or the making of other distributions
on, or acquisitions of, stock;
(vii) to eliminate most restrictions on purchase money
obligations which may be received as consideration
for the release of property from the lien of the 1940
Indenture;
(viii) to permit the release, without compliance with other
provisions of the 1940 Indenture, of any property
provided that (1) the release will not impair the
electric business of the Company in contravention of
the provisions of the 1940 Indenture and (2) the fair
value of property released pursuant to this
provision, together with the fair value of all other
property so released in the then current calendar
year, shall not exceed the greater of $5,000,000 and
3% of the aggregate principal amount of bonds then
outstanding under the 1940 Indenture;
(ix) to modify release provisions to delete the
requirement that the property to be released shall
"no longer be useful, necessary, profitable or
advantageous in the judicious management and
maintenance of the Trust Estate or in the conduct of
the business of the Company" and substituting
therefor the requirement that the release of the
property would not adversely affect the Company's
electric business;
(x) to permit the withdrawal by the Company, without
compliance with other provisions of the 1940
Indenture, of cash in an amount, together with other
amounts paid over to the Company pursuant to this
provision in the then current calendar year, up to
the greater of $5,000,000 and 3% of the aggregate
principal amount of the bonds then outstanding under
the 1940 Indenture; provided that such cash must be
expended for Property Additions;
(xi) to increase the amount of cash withdrawable by the
Company on the basis of retired bonds from 100% of
the principal amount of such bonds to 133-1/3% of
such principal amount;
(xii) to eliminate most restrictions on the acquisition of
property subject to a prior lien;
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(xiii) to limit the insurance coverage that must be
maintained by the Company to fire insurance only and
to raise the minimum dollar amount of any one fire
loss which must be payable to the 1940 Indenture
Trustee from $10,000 to an amount equal to the
greater of $5,000,000 and 3% of the aggregate
principal amount of bonds then outstanding under the
1940 Indenture;
(xiv) to modify the definition of "Defaults" under the 1940
Indenture to be substantially the same as "Events of
Default" under the Mortgage;
(xv) to modify the provisions of the 1940 Indenture for
the acceleration of the maturity of bonds to provide
that (1) action by the holders of a majority (rather
than the current 25%) in principal amount of the then
outstanding bonds is required to accelerate the
maturity of all outstanding bonds upon Default and
(2) any such acceleration and its consequences are
automatically rescinded (rather than at the option of
the holders as is currently provided) upon the curing
of all Defaults;
(xvi) to reduce the quorum requirements for bondholder
meetings from 75% to a majority; and
(xvii) to modify the remedies provisions to increase to a
majority from 25% the percentage of the principal
amount of outstanding bonds, the holders of which
must have requested that the 1940 Indenture Trustee
take action before individual holders may institute
suits against the Company.
(b) with respect to any other amendments or modifications to the
1940 Indenture as follows:
the Trustee will vote all Class "A" Bonds issued under the 1940
Indenture then held by it, or consent with respect thereto,
proportionately with what is reasonably believed to be the vote or
consent of the holders of all other bonds Outstanding under the 1940
Indenture, the holders of which are eligible to vote or consent;
provided, however, that (i) at any time the Class "A" Bonds under the
1940 Indenture held by the Trustee constitute a majority of the
principal amount of the Outstanding bonds under the 1940 Indenture or
(ii) at any time such Class "A" Bonds held by the Trustee constitute
less than such a majority but there is a proposed amendment or
modification of the 1940 Indenture which, if it were an amendment or
modification of the Mortgage (See "DESCRIPTION OF THE COLLATERAL TRUST
BONDS - Modification of the Mortgage"), would require the consent of
Holders, then, in either case, the Trustee may only vote such Class "A"
Bonds in accordance with the vote of the Holders of at least a majority
of the principal amount of the bonds casting a vote and shall seek that
vote in accordance with the provisions of the Mortgage applicable to
required votes of Holders in respect of amendments or modifications to
the Mortgage.
DESCRIPTION OF THE ISU 1923 INDENTURE
General
The summaries of the ISU 1923 Indenture set forth below do not purport
to be complete and are subject to the detailed provisions of the ISU 1923
Indenture, a copy of which was previously filed with the Commission, is listed
as an exhibit to the Registration Statement of which this Prospectus is a part,
and is incorporated herein by reference. Capitalized terms used in this section
which are not otherwise defined in this Prospectus shall have the meanings
ascribed to them in the ISU 1923 Indenture. Wherever particular provisions or
terms defined in the ISU 1923 Indenture are referred to in this section, such
provisions or definitions are incorporated by reference as part of the
statements made in this section, and such statements are qualified in their
entirety by such reference. References to article and section numbers herein,
unless otherwise indicated, are references to article and section numbers of the
ISU 1923 Indenture.
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Security
The ISU 1923 Indenture constitutes a direct first mortgage lien upon
substantially all of the property and rights of Iowa Southern existing at the
time of the IE-ISU merger on December 31, 1993 and upon extensions and additions
appurtenant to such property, with certain exceptions for certain types of
property (including accounts receivable) as provided in the ISU 1923 Indenture,
and subject only to permitted liens. (Granting Clauses)
Any bonds issued under the ISU 1923 Indenture as the basis for the
issuance of Bonds under the Mortgage will be secured equally and ratably with
the bonds of all other series then outstanding under the ISU 1923 Indenture.
Effect of the IE-ISU Merger on the ISU 1923 Indenture
The merger of IE and ISU did not impair the lien of the ISU 1923
Indenture or any of the rights or powers of the ISU Indenture Trustees or the
bondholders under the ISU 1923 Indenture. (Article XVI) Subsequent to that
merger, the Company became the successor to ISU under the ISU 1923 Indenture.
Issuance of Additional Bonds
The ISU 1923 Indenture does not fix an overall limitation on the
aggregate principal amount of the bonds of all series that may be issued or
outstanding thereunder. (Section 2.01)
Provided that the Earnings Applicable to Bond Interest for a period of
twelve consecutive calendar months within the fifteen months immediately
preceding issuance are at least twice the annual interest requirements of the
bonds applied for and all bonds and Prior Lien Bonds outstanding, additional
bonds of any series may be issued:
(a) in an aggregate principal amount not exceeding 60% of
the Cost or Fair Value, whichever is less, of Property Additions after
adjustments to offset retirements and amounts removed from the utility
plant or fixed capital accounts of the former Iowa Southern (Article
V);
(b) in an aggregate principal amount not exceeding the
aggregate principal amount of bonds which shall have been retired
(other than bonds retired through the use of certain funds) (Article
VI);
(c) upon deposit of cash with the ISU Corporate Trustee,
in an amount equal to the principal amount of the bonds to be so issued
(and such cash may be withdrawn by the Company in a sum equal to the
aggregate principal amount of the bonds which could be issued under
clause (a) or (b) above). (Article VII)
Bonds issuable under the ISU 1923 Indenture are available as the basis
for the issuance of securities under the Mortgage. As of March 31, 1997, on the
basis of the most restrictive provisions described above, the Company would have
been entitled to issue at least $167 million of additional bonds under the ISU
1923 Indenture.
Maintenance Fund
The ISU 1923 Indenture provides that so long as bonds shall be
outstanding, the Company will pay to the ISU Corporate Trustee annually, as a
maintenance fund, a sum of money equal to 15% of the gross operating revenue of
the Company derived during the calendar year preceding such payment from the
operation of the physical properties subject to the lien of the ISU 1923
Indenture after deducting (1) all gross operating revenue derived during such
period from the operation of property subject to a prior lien and (2) an amount
equal to the total cost to the Company of electric energy and natural gas
purchased by it (and allocable to operations of property subject to the lien of
the ISU 1923 Indenture) during such period with certain deductions. The Company
is entitled to credits against such annual payment for certain amounts expended
for maintenance and repairs and Unapplied Balance of Property Additions, retired
bonds, and other matters. Any moneys deposited by the Company with the ISU
Corporate Trustee in the maintenance fund will, upon the request of the Company,
be applied by the ISU Corporate Trustee to the purchase or redemption of bonds
or may be withdrawn by the Company in certain circumstances. (Article XII)
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Substitutions and Releases
Generally, property subject to the lien of the ISU 1923 Indenture may
be released only upon the deposit or pledge with the ISU Corporate Trustee of
cash, purchase money obligations, securities, or the certification of property
additions or, in certain instances, upon the substitution of other property of
equivalent value. The Company may also, under certain conditions, without
release, terminate, change, or assent to the modification of leases, easements,
franchises, and governmental permits. (Article XI)
Satisfaction and Discharge of Indenture
If the Company shall pay the principal of, premium (if any), and
interest on all outstanding bonds issued under the ISU 1923 Indenture (bonds for
the payment or redemption of which necessary funds have been deposited with the
ISU Corporate Trustee being deemed paid), then the ISU Indenture Trustees may,
and upon the request of the Company shall, cancel and discharge the lien of the
ISU 1923 Indenture and reconvey to the Company the mortgaged and pledged
property. (Article XIX)
Modification of the ISU 1923 Indenture
To the extent permitted by the terms of the ISU 1923 Indenture,
modification or alteration of the ISU 1923 Indenture or any indenture
supplemental thereto, and of the rights and obligations of the Company and of
ISU bondholders, may be made with the consent of the Company by an affirmative
vote of the holders of not less than 80% in principal amount of the outstanding
bonds issued under the ISU 1923 Indenture and entitled to vote at a meeting of
bondholders and by an affirmative vote of the holders of not less than 80% of
the principal amount of such bonds of the series affected by the change;
provided, however, that no such modification or alteration intended to effect or
permit the extension of the maturity of the principal of any bond, the reduction
in the rate of interest thereon, or any other modification in the terms of
payment of such principal or interest, or the taking of certain other actions,
such as creating liens ranking prior to, or on parity with, the lien of the ISU
1923 Indenture, shall be effective as to any bond the holder of which has not
assented to such modification or alteration. (Article XX) (See "Voting of Class
"A" Bonds" below.)
The Company may fail or omit to comply with certain covenants or
conditions of the ISU 1923 Indenture with the written consent of the holders of
at least 66 2/3% of the principal amount of all outstanding bonds issued under
the ISU 1923 Indenture. (Section 15.19)
Defaults and Notice Thereof
Defaults under the ISU 1923 Indenture are defined in substance as being
(a) failure to pay principal of, or premium (if any) on, any bond issued under
the ISU 1923 Indenture; (b) failure to pay any installment of interest on any
such bond, and such failure continues for 30 days; (c) failure to observe any
covenant or condition prescribed by the provisions of any sinking fund created
for the benefit of such bonds of any series; (d) failure by the Company to
perform any other covenant or agreement in such bonds or in the ISU 1923
Indenture, and such failure continues for 60 days after written notice is given;
and (e) certain events relating to reorganization, bankruptcy and insolvency of
the Company, and the appointment of a receiver. (Section 15.01)
The ISU 1923 Indenture Trustees are required to give notice of any
default to bondholders within 90 days after the occurrence thereof, unless such
default is cured before the giving of such notice (except in the case of certain
defaults, notice of which is not to be given by such Trustees until at least 60
days after the occurrence thereof). The ISU Indenture Trustees may withhold
notice of default (except in the payment of principal of, or interest or premium
(if any) on, any of the bonds or in the payment of any sinking fund or purchase
fund installment) if the ISU Corporate Trustee determines that such withholding
is in the interest of the bondholders. (Section 17.11)
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Holders of a majority of the principal amount of outstanding bonds may
direct the method, time, and place of conducting any proceedings for any remedy
available to the ISU Indenture Trustees for any sale of the property subject to
the lien of the ISU 1923 Indenture, or for the foreclosure of the ISU 1923
Indenture, or for the appointment of a receiver, or for the taking of any other
action authorized by the ISU 1923 Indenture in respect of a default or
refraining therefrom. (Section 15.05)
No holder of any bond or coupon shall have any right to any remedy
under the ISU 1923 Indenture, unless such holder has given prior written notice
to the ISU 1923 Indenture Trustees of the default, 25% in aggregate principal
amount of the bonds outstanding have made prior written request to the ISU
Corporate Trustee and have afforded reasonable opportunity to the 1923 ISU
Indenture Trustees to pursue the remedy in the trustees' own names, and the ISU
1923 Indenture Trustees have been offered adequate indemnity for costs, expenses
and liabilities which may be incurred thereby. (Section 15.15)
The Company must file an annual Certificate with the ISU Corporate
Trustee as to compliance with the conditions and covenants of the ISU 1923
Indenture and as to the absence of default with respect to any of the covenants
contained in the ISU 1923 Indenture. (Section 14.03)
Voting of Class "A" Bonds
The Trustee will, as holder of any Class "A" Bonds issued under the ISU
1923 Indenture, attend such meetings of bondholders under the ISU 1923
Indenture, or deliver its proxy in connection therewith, as relate to matters
with respect to which it is entitled to vote or consent. The Mortgage provides
that, so long as no Event of Default as defined in the Mortgage has occurred or
is continuing, the Trustee will, as holder of such Class "A" Bonds, vote or
consent:
(a) in favor of amendments or modifications to the ISU 1923
Indenture of substantially the same tenor and effect as the following, together
with all amendments and modifications required to effectuate the following:
(i) to provide that, whenever the ISU 1923 Indenture
requires authorization by, or a resolution of, the
Board of Directors or an Executive Committee thereof
for the issuance of a series of bonds or the
determination of the terms thereof, the requirement
shall be satisfied if the action taken would be
sufficient for the issuance of a series of bonds, or
the determination of the terms thereof, under the
Mortgage;
(ii) to eliminate the maintenance fund and to provide
that, to the extent Property Additions or bonds
previously outstanding have been taken as a credit,
or cash held by the ISU Corporate Trustee has been
deposited, in each case to satisfy the Maintenance
Fund Requirements, such Property Additions,
previously outstanding bonds and cash may be used for
any purpose under the ISU 1923 Indenture (including
as a basis for the issuance of bonds) as if they had
never been so credited or deposited;
(iii) to permit bonds to be issued in a principal amount
equal to 75%, instead of 60%, of Property Additions;
(iv) to eliminate the Net Earnings requirements for all
purposes, including in connection with the issuance
of bonds;
(v) to broaden the definition of "Property Additions" to
include property not used by the Company in its
electric, gas or steam business;
(vi) to permit the release, without compliance with other
provisions of the ISU 1923 Indenture, of any
property, provided that (1) the fair value of
property released pursuant to this provision,
together with the fair value of all other property so
released in the then current calendar year, shall not
exceed an amount equal to the greater of $5,000,000
and 3% of the aggregate principal amount of bonds
then outstanding under the ISU 1923 Indenture;
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(vii) to permit the withdrawal by the Company, without
compliance with other provisions of the ISU 1923
Indenture, of cash in an amount, together with other
amounts paid over to the Company pursuant to this
provision in the then current calendar year, up to
the greater of $5,000,000 and 3% of the aggregate
principal amount of the bonds then outstanding under
the ISU 1923 Indenture; provided that such cash must
be expended for Property Additions;
(viii) to increase the amount of cash withdrawable by the
Company on the basis of retired property from 100% of
the cost or fair value of such property to 133-1/3%
of such cost or fair value;
(ix) to raise the minimum dollar amount of any one fire
loss which must be payable to the ISU Indenture
Trustees from $10,000 to an amount equal to the
greater of $5,000,000 and 3% of the aggregate
principal amount of bonds then outstanding under the
ISU 1923 Indenture;
(x) to modify the definition of "defaults" under the ISU
1923 Indenture to be substantially the same as
"Events of Default" under the Mortgage;
(xi) to modify the provisions of the ISU 1923 Indenture
for the acceleration of the maturity of bonds to
provide that (1) action by the holders of a majority
(rather than the current 25%) in principal amount of
the then outstanding bonds is required to accelerate
the maturity of all outstanding bonds upon default
and (2) any such acceleration and its consequences
are automatically rescinded (rather than at the
option of the holders as is currently provided) upon
the curing of all defaults;
(xii) to reduce the quorum requirements for bondholder
meetings from 80% to a majority; and
(xiii) to modify the remedies provisions to increase to a
majority from 25% the percentage of the principal
amount of bonds, the holders of which must have
requested the ISU Corporate Trustee to take action
before individual holders may institute suits against
the Company.
(b) with respect to any other amendments or modifications to the
ISU 1923 Indenture, as follows:
the Trustee will vote all Class "A" Bonds issued under the ISU 1923
Indenture then held by it, or consent with respect thereto,
proportionately with what is reasonably believed to be the vote or
consent of the holders of all other bonds outstanding under the ISU
1923 Indenture, the holders of which are eligible to vote or consent;
provided, however, that (i) at any time such Class "A" Bonds under the
ISU 1923 Indenture held by the Trustee constitute a majority of the
principal amount of the Outstanding bonds under the ISU 1923 Indenture
or (ii) at any time such Class "A" Bonds held by the Trustee constitute
less than such a majority but there is a proposed amendment or
modification of the ISU 1923 Indenture which, if it were an amendment
or modification of the Mortgage (See "DESCRIPTION OF THE COLLATERAL
TRUST BONDS - Modification of the Mortgage"), would require the consent
of Holders, then, in either case, the Trustee may only vote such Class
"A" Bonds in accordance with the vote of the Holders of at least a
majority of the principal amount of the securities casting a vote and
shall seek that vote in accordance with the provisions of the Mortgage
applicable to required votes of Holders in respect of amendments or
modifications to the Mortgage.
DESCRIPTION OF THE SUBORDINATED INDENTURE
General
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The Securities may be issued in one or more series under the Indenture
(For Unsecured Subordinated Debt Securities) (the "Subordinated Indenture")
between the Company and The First National Bank of Chicago, as trustee (the
"Subordinated Indenture Trustee"). The summaries of the Subordinated Indenture
set forth below do not purport to be complete and are subject to the detailed
provisions of the Subordinated Indenture, a copy of which was previously filed
with the Commission, is listed as an exhibit to the Registration Statement of
which this Prospectus is a part, and is incorporated herein by reference.
Capitalized terms used in this section which are not otherwise defined in this
Prospectus shall have the meanings ascribed to them in the Subordinated
Indenture. Wherever particular provisions or terms defined in the Subordinated
Indenture are referred to in this section, such provisions or definitions are
incorporated by reference as part of the statements made in this section, and
such statements are qualified in their entirety by such reference. References to
article and section numbers herein, unless otherwise indicated, are references
to article and section numbers of the Subordinated Indenture.
The Securities issued under the Subordinated Indenture (the
"Subordinated Debentures") will be unsecured, subordinated obligations of the
Company and shall not be afforded any protection under the Mortgage, pursuant to
which various series of Collateral Trust Bonds may be issued. Reference is made
to the Prospectus Supplement, or a supplement thereto, for a description of the
following terms of the series of Subordinated Debentures in respect of which
this Prospectus is being delivered: (1) the title of such series of Subordinated
Debentures; (2) any limit on the aggregate principal amount of such Subordinated
Debentures or the series of which they are a part; (3) the Person or Persons to
whom interest on the Subordinated Debentures of such series shall be payable if
other than the Persons in whose names such Subordinated Debentures are
registered; (4) the date or dates on which the principal of any of such
Subordinated Debentures will be payable; (5) the rate or rates (which may be
fixed or variable) and/or the method of determination of such rate or rates at
which any of such Subordinated Debentures will bear interest, if any, the date
or dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date; (6) the place or places where (i)
the principal of, premium, if any, and interest on any of such Subordinated
Debentures will be payable, (ii) registration of transfer of such Subordinated
Debentures may be effected, (iii) exchanges of such Subordinated Debentures may
be effected and (iv) notices and demands to or upon the Company in respect of
such Subordinated Debentures may be served; the Security Registrar for such
Subordinated Debentures and, if such is the case, that the principal of such
Subordinated Debentures shall be payable without presentment or surrender
thereof; (7) the period or periods within which, or the date or dates on which,
the price or prices at which and the terms and conditions upon which any of such
Subordinated Debentures may be redeemed, in whole or in part, at the option of
the Company; (8) the obligation or obligations, if any, of the Company to redeem
or purchase any of such Subordinated Debentures pursuant to any sinking fund or
other mandatory redemption provisions or at the option of the Holder thereof,
and the period or periods within which, or the date or dates on which, the price
or prices at which and the terms and conditions upon which any of such
Subordinated Debentures shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and applicable exceptions to the requirements of a
notice of redemption in the case of mandatory redemption or redemption at the
option of the Holder; (9) the denominations in which any of such Subordinated
Debentures will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (10) if other than the currency of the United States,
the currency or currencies, including composite currencies, in which payment of
the principal of and any premium and interest on any of such Subordinated
Debentures will be payable; (11) if the principal of or any premium or interest
on any of such Subordinated Debentures is to be payable, at the election of the
Company or the Holder thereof, in a coin or currency other than in which such
Subordinated Debentures are stated to be payable, the period or periods within
which and the terms and conditions upon which, such election is to be made; (12)
if the principal of or premium, if any, or interest on such Subordinated
Debentures are to be payable, or are to be payable at the election of the
Company or a Holder thereof, in securities or other property, the type and
amount of such securities or other property, or the formulary or other method or
other means by which such amount shall be determined, and the period or periods
within which, and the terms and conditions upon which, any such election may be
made; (13) if the amount payable in respect of principal of or any premium or
interest on any of such Subordinated Debentures may be determined with reference
to an index or other fact or event ascertainable outside the Subordinated
Indenture, the manner in which such amounts will be determined; (14) if other
than the principal amount thereof, the portion of the principal amount of any of
such Subordinated Debentures which shall be payable upon declaration of
acceleration of the Maturity thereof; (15) any addition to the Events of Default
applicable to any of such Subordinated Debentures and any addition to the
covenants of the Company for the benefit of the Holders of such Subordinated
Debentures; (16) the terms, if any, pursuant to which such Subordinated
Debentures may be converted into or exchanged for shares of capital stock or
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other securities of the Company or any other Person; (17) the obligations or
instruments, if any, which shall be considered to be Eligible Obligations in
respect of such Subordinated Debentures denominated in a currency other than
Dollars or in a composite currency, and any additional or alternative provisions
for the reinstatement of the Company's indebtedness in respect of such
Subordinated Debentures after the satisfaction and discharge thereof; (18) if
such Subordinated Debentures are to be issued in global form, (i) any
limitations on the rights of the Holder or Holders of such Subordinated
Debentures to transfer or exchange the same or to obtain the registration of
transfer thereof, (ii) any limitations on the rights of the Holder or Holders
thereof to obtain certificates therefor in definitive form in lieu of temporary
form and (iii) any and all other matters incidental to such Subordinated
Debentures; (19) if such Subordinated Debentures are to be issuable as bearer
securities; (20) any limitations on the rights of the Holders of such
Subordinated Debentures to transfer or exchange such Subordinated Debentures or
to obtain the registration of transfer thereof, and if a service charge will be
made for the registration of transfer or exchange of such Subordinated
Debentures, the amount or terms thereof; (21) any exceptions to the provisions
governing payments due on legal holidays or any variations in the definition of
Business Day with respect to such Subordinated Debentures; and (22) any other
terms of such Subordinated Debentures of such series, or any Tranche thereof,
not inconsistent with the provisions of the Subordinated Indenture. (Section
301)
Subordinated Debentures may be sold at a substantial discount below
their principal amount. Certain special United States federal income tax
considerations applicable to Subordinated Debentures sold at an original issue
discount may be described in the applicable Prospectus Supplement. In addition,
certain special United States federal income tax or other considerations
applicable to any Subordinated Debentures which are denominated in a currency or
currency unit other than Dollars may be described in the applicable Prospectus
Supplement.
Except as may otherwise be described in the Prospectus Supplement, the
covenants contained in the Subordinated Indenture would not afford Holders of
Subordinated Debentures protection in the event of a highly-leveraged
transaction or change of control involving the Company.
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Subordination
The Subordinated Indenture provides that payment of the principal of,
premium, if any, and interest on Subordinated Debentures is subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below) of the Company, all as provided in the
Subordinated Indenture. No payment of principal of (including redemption of and
sinking fund payments), premium, if any, or interest on, Subordinated Debentures
may be made if payment of principal, premium, interest or any other payment on
any Senior Indebtedness is not made when due, any applicable grace period with
respect to such default has ended and such default has not been cured or waived
or ceased to exist, or if the maturity on any Senior Indebtedness has been
accelerated because of default. Upon any distribution of assets of the Company
to creditors upon any dissolution, winding up, liquidation or reorganization,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of, premium, if any, and interest due or to
become due on, all Senior Indebtedness must be paid in full before any payment
on the Subordinated Debentures. Subject to the payment in full of all Senior
Indebtedness, the rights of the holders of Subordinated Debentures will be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions applicable to Senior Indebtedness until all amounts
owing on Subordinated Debentures are paid in full. (Sections 1501 - 1504)
The term "Senior Indebtedness" means all obligations (other than
non-recourse obligations and the indebtedness issued under the Subordinated
Indenture) of, or guaranteed or assumed by, the Company for borrowed money,
including both senior and subordinated indebtedness for borrowed money (other
than the Subordinated Debentures), or for the payment of money relating to any
lease which is capitalized on the consolidated balance sheet of the Company and
its subsidiaries in accordance with generally accepted accounting principles, or
evidenced by bonds, debentures, notes or other similar instruments, and in each
case, amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Subordinated
Indenture or subsequently incurred by the Company. (Section 101) Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of such Senior Indebtedness. (Section 1509)
The Subordinated Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued. As of March 31, 1997, Senior
Indebtedness of the Company aggregated approximately $708 million.
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Form, Exchange, and Transfer
Unless otherwise specified in the applicable Prospectus Supplement,
Subordinated Debentures of each series will be issuable only in fully registered
form without coupons and in denominations of $1,000 and any integral multiple
thereof. (Sections 201 and 302)
At the option of the Holder, subject to the terms of the Subordinated
Indenture and the limitations applicable to global securities, Subordinated
Debentures of any series will be exchangeable for other Subordinated Debentures
of the same series, of any authorized denomination and of like tenor and
aggregate principal amount. (Section 305)
Subject to the terms of the Subordinated Indenture and the limitations
applicable to global securities, Subordinated Debentures may be presented for
exchange as provided above for registration of transfer (duly endorsed or
accompanied by a duly executed instrument of transfer) at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose. Unless otherwise indicated, no service charge will be
made for any registration of transfer or exchange of Subordinated Debentures,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. Every Subordinated
Debenture presented or surrendered for registration of transfer or exchange
shall (if so required by the Company, the Subordinated Indenture Trustee or the
Security Registrar) be duly endorsed or accompanied by an executed written
instrument of transfer in form satisfactory to the Company, the Subordinated
Indenture Trustee or the Security Registrar. (Section 305) Any transfer agent
(in addition to the Security Registrar) initially designated by the Company for
any Subordinated Debenture will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that the Company will be required
to maintain a transfer agent in each Place of Payment for the Subordinated
Debentures of each series. The Company may perform all functions of any office
or agency. (Section 602)
The Company shall not be required to execute or register the transfer
of or the exchange of any Subordinated Debenture, or any Tranche thereof, during
a period of 15 days preceding the notice to be given identifying the
Subordinated Debenture called for redemption, or any Subordinated Debentures so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Subordinated Debenture being redeemed in part. (Section 305)
Payment and Paying Agent
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of interest on a Subordinated Debenture on any Interest Payment Date
will be made to the person in whose name such Subordinated Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any interest on the Subordinated Debentures of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time. Unless otherwise
indicated in the applicable Prospectus Supplement, the corporate trust office of
the Subordinated Indenture Trustee in New York, New York will be designated as
the Company's sole Paying Agent for payment with respect to Subordinated
Debentures of each series. Any other Paying Agents initially designated by the
Company for the Subordinated Debentures of a particular series will be named in
the applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Company will be required to maintain a Paying Agent in each Place of Payment
for the Subordinated Debentures of a particular series. (Section 602)
Any moneys deposited by the Company with the Trustee or any Paying
Agent for the payment of the principal of or any premium or interest on any
Subordinated Debenture which remains unclaimed at the end of two years after
such principal, premium or interest has become due and payable will be paid to
the Company, and the Holder of such Subordinated Debenture, as an unsecured
general creditor and not as a Holder, thereafter may look only to the Company
for payment thereof. (Section 603)
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Redemption
Any terms for the optional or mandatory redemption of Subordinated
Debentures will be set forth in the applicable Prospectus Supplement or a
supplement thereto. Except as shall otherwise be provided in the applicable
Prospectus Supplement with respect to Subordinated Debentures that are
redeemable at the option of the Holder, Subordinated Debentures will be
redeemable only upon notice by mail not less than 30 days nor more than 60 days
prior to the date fixed for redemption, and, if less than all the Subordinated
Debentures of a series, or any Tranche thereof, are to be redeemed, the
particular Subordinated Debentures to be redeemed will be selected by the
Securities Registrar by such method as shall be provided for any particular
series, or in the absence of any such provision, by such method of random
selection as the Security Registrar deems fair and appropriate. (Sections 403
and 404)
Any notice of redemption at the option of the Company may state that
such redemption will be conditional upon receipt by the Paying Agent or Agents,
on or prior to the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on such Subordinated
Debentures and that if such money has not been so received, such notice will be
of no force and effect and the Company will not be required to redeem such
Subordinated Debentures. (Section 404)
Consolidation, Merger, Conveyance, or other Transfer
Under the terms of the Subordinated Indenture, the Company may not
consolidate with or merge into any other corporation or convey, transfer or
lease its properties and assets substantially as an entirety to any Person,
unless (i) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Person organized and existing under the laws of any domestic
jurisdiction and shall expressly assume the Company's obligations on the
Subordinated Debentures and under the Subordinated Indenture, (ii) immediately
after giving effect to the transaction, no Event of Default shall have occurred
and be continuing, and (iii) the Company will have delivered to the Subordinated
Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided
in the Subordinated Indenture. (Section 1101)
Events of Default
Each of the following will constitute an Event of Default under the
Subordinated Indenture with respect to Subordinated Debentures of any series:
(a) failure to pay any interest on any Subordinated Debentures of such series
within 60 days after the same becomes due and payable; provided, that an
extension of an interest payment period by the Company permitted by the terms of
the series shall not constitute a failure to pay interest for this purpose; (b)
failure to pay principal of or premium, if any, on any Subordinated Debenture of
such series within three business days after the same becomes due and payable;
(c) failure to perform or breach of any other covenant or warranty of the
Company in the Subordinated Indenture (other than a covenant or warranty of the
Company in the Subordinated Indenture solely for the benefit of one or more
series of Subordinated Debentures other than such series) for 60 days after
written notice to the Company by the Subordinated Indenture Trustee, or to the
Company and the Subordinated Indenture Trustee by the Holders of at least 33% in
principal amount of the Subordinated Debentures of such series Outstanding under
the Subordinated Indenture as provided in the Subordinated Indenture; (d)
certain events of bankruptcy, insolvency or reorganization; and (e) any other
Event of Default specified in the applicable Prospectus Supplement with respect
to Subordinated Debentures of a particular series. (Section 801)
An Event of Default with respect to the Subordinated Debentures may not
necessarily constitute an Event of Default with respect to the Subordinated
Debentures of any other series issued under the Subordinated Indenture.
If an Event of Default with respect to any series of Subordinated
Debentures occurs and is continuing, then either the Subordinated Indenture
Trustee or the Holders of not less than 33% in principal amount of the
Outstanding Subordinated Debentures of such series may declare the principal
amount (or if the Subordinated Debentures of such series are Discount
Securities, such portion of the principal amount hereof as may be specified in
the applicable Prospectus Supplement) of all of the Subordinated Debentures of
such series to be due and payable immediately; provided, however, that if an
Event of Default occurs and is continuing with respect to more than one series
of Subordinated Debentures, the Subordinated Indenture Trustee or the Holders of
not less than 33% in aggregate principal amount of the Outstanding Securities of
all such series, considered as one class, may make such declaration of
acceleration and not the Holders of the Subordinated Debentures of any one of
such series.
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Subject to the provisions of the Subordinated Indenture relating to the
duties of the Subordinated Indenture Trustee in case an Event of Default shall
occur and be continuing, the Subordinated Indenture Trustee will be under no
obligation to exercise any of its rights or powers under the Subordinated
Indenture at the request or direction of any Holder, unless such Holder shall
have offered to the Subordinated Indenture Trustee reasonable security or
indemnity. (Section 903) Subject to such provisions of the indemnification of
the Subordinated Indenture Trustee, the Holders of a majority in principal
amount of the Outstanding Subordinated Debentures of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Subordinated Indenture Trustee, or exercising any trust
or power conferred on the Subordinated Indenture Trustee, with respect to the
Subordinated Debentures of that series. (Section 812)
No Holder of a Subordinated Debenture of any series will have any right
to institute any proceeding with respect to the Subordinated Indenture, or for
the appointment of a receiver or a trustee, of for any other remedy thereunder,
unless (i) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Subordinated Debentures of such
series, (ii) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Subordinated Debentures of such series have made
written request to the Subordinated Indenture Trustee, and such Holder or
Holders have offered reasonable indemnity to the Subordinated Indenture Trustee,
to institute such proceeding as trustee and (iii) the Subordinated Indenture
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding
Subordinated Debentures of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer. (Section 807)
However, such limitations do not apply to a suit instituted by a Holder of a
Subordinated Debenture for the enforcement of payment of the principal of or any
premium or interest on such Subordinated Debenture on or after the applicable
due date specified in such Subordinated Debenture. (Section 808)
The Company will be required to furnish to the Subordinated Indenture
Trustee annually, not later than October 1 in each year, a statement by an
appropriate officer as to such officer's knowledge of the Company's compliance
with all conditions and covenants under the Subordinated Indenture, such
compliance to be determined without regard to any period of grace or requirement
of notice under the Subordinated Indenture. (Section 606)
Right to Cure
At any time after the declaration of acceleration with respect to the
Subordinated Debentures of any series has been made and before a judgment or
decree for payment of the money due has been obtained, the Event or Events of
Default giving rise to such declaration of acceleration will, without further
act, be deemed to have been waived, and such declaration and its consequences
will, without further act, be deemed to have been rescinded and annulled, if
(a) the Company has paid or deposited with the Subordinated
Indenture Trustee a sum sufficient to pay
(1) all overdue interest on all Subordinated Debentures
of such series;
(2) the principal of and premium, if any, on any
Subordinated Debentures of such series which have become due otherwise
than by such declaration of acceleration and interest thereon at the
rate or rates prescribed therefor in such Subordinated Debentures;
(3) interest upon overdue interest at the rate or rates
prescribed therefor in such Subordinated Debentures, to the extent that
payment of such interest is lawful; and
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(4) all amounts due to the Subordinated Indenture Trustee
under the Subordinated Indenture; and
(b) any other Event or Events of Default with respect to the
Subordinated Debentures of such series, other than the non-payment of the
principal of the Subordinated Debentures of such series which has become due
solely by such declaration of acceleration, have been cured or waived as
provided in the Subordinated Indenture. (Section 802)
Modification and Waiver
Without the consent of any Holder of Subordinated Debentures, the
Company and the Subordinated Indenture Trustee may enter into one or more
supplemental indentures to the Subordinated Indenture for any of the following
purposes: (a) to evidence the assumption by any permitted successor to the
Company of the covenants of the Company in the Subordinated Indenture and the
Subordinated Debentures; or (b) to add one or more covenants of the Company or
other provisions for the benefit of the Holders of all or any series of
Outstanding Subordinated Debentures or to surrender any right or power conferred
upon the Company by the Subordinated Indenture; or (c) to add any additional
Events of Default with respect to all or any series of Outstanding Subordinated
Debentures; or (d) to change or eliminate any provision of the Subordinated
Indenture or to add any new provision to the Subordinated Indenture, provided
that if such change, elimination or addition will adversely affect the interests
of the Holders of Subordinated Debentures of any series in any material respect,
such change, elimination or addition will become effective with respect to such
series only when the consent of the Holders of such series so affected has been
obtained or when there is no Subordinated Debenture of such series remaining
Outstanding under the Subordinated Indenture; or (e) to provide collateral
security for the Subordinated Debentures; or (f) to establish the form or terms
of Subordinated Debentures of any series as permitted by the Subordinated
Indenture; or (g) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and replacement
thereof and for giving of notice to, and the solicitation of the vote or consent
of, the Holders thereof, and for any and all other matters incidental thereto;
or (h) to evidence and provide for the acceptance of appointment of a separate
or successor Subordinated Indenture Trustee under the Subordinated Indenture
with respect to the Subordinated Debentures of one or more series and to add or
to change any of the provisions of the Subordinated Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the Subordinated Indenture by more than one trustee; or (i) to provide for the
procedures required to permit the utilization of a noncertificated system of
registration for any series of Subordinated Debentures; or (j) to change any
place where (1) the principal of and premium, if any, and interest, if any, on
any Subordinated Debentures shall be payable, (2) any Subordinated Debentures
may be surrendered for registration of transfer or exchange and (3) notices and
demands to or upon the Company in respect of Subordinated Debentures and the
Subordinated Indenture may be served; or (k) to cure any ambiguity, to correct
or supplement any defective or inconsistent provision or to make or change any
other provisions with respect to matters and questions arising under the
Subordinated Indenture, provided such changes or additions shall not adversely
affect the interests of the Holders of Subordinated Debentures of any series in
any material respect. (Section 1201)
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Subordinated Debentures of any series may waive compliance by
the Company with certain restrictive provisions of the Subordinated Indenture.
(Section 607) The Holders of not less than a majority in principal amount of the
Outstanding Subordinated Debentures of any series may waive any past default
under the Subordinated Indenture, except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Subordinated
Indenture that cannot be modified or be amended without the consent of the
Holder of each Outstanding Subordinated Debenture of such series affected.
(Section 813)
Without limiting the generality of the foregoing, if the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is amended after
the date of the Subordinated Indenture in such a way as to require changes to
the Subordinated Indenture or the incorporation therein of additional provisions
or so as to permit changes to, or the elimination of, provisions which, at the
date of the Subordinated Indenture or at any time thereafter, were required by
the Trust Indenture Act to be contained in the Subordinated Indenture, the
Subordinated Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and the Company and the
Subordinated Indenture Trustee may, without the consent of any Holders, enter
into one or more supplemental indentures to evidence or effect such amendment.
(Section 1201)
34
<PAGE>
Except as provided above, the consent of the Holders of not less than a
majority in aggregate principal amount of the Subordinated Debentures of all
series then Outstanding, considered as one class, is required for the purpose of
adding any provisions to, or changing in any manner, or eliminating any of the
provisions of, the Subordinated Indenture pursuant to one or more supplemental
indentures; provided, however, that if less than all of the series of
Subordinated Debentures Outstanding are directly affected by a proposed
supplemental indenture, then the consent only of the Holders of a majority in
aggregate principal amount of Outstanding Subordinated Debentures of all series
so directly affected, considered as one class, will be required; and provided,
further, that if the Subordinated Debentures of any series have been issued in
more than one Tranche and if the proposed supplemental indenture directly
affects the rights of the Holders of one or more, but less than all, such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Subordinated Debentures of all Tranches so
directly affected, considered as one class, will be required; and provided
further, that no such supplemental indenture may (a) change the Stated Maturity
of the principal of, or any installment of principal of or interest on, any
Subordinated Debenture, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or reduce the amount of the principal of any Discount
Security that would be due and payable upon a declaration of acceleration of
Maturity or change the coin or currency (or other property) in which any
Subordinated Debenture or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity of any Subordinated Debenture (or, in the case of
redemption, on or after the redemption date) without, in any such case, the
consent of the Holder of such Subordinated Debenture, (b) reduce the percentage
in principal amount of the Outstanding Subordinated Debentures of any series, or
any Tranche thereof, the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with any provision of the Subordinated Indenture or
any default thereunder and its consequences, or reduce the requirements for
quorum or voting, without, in any such case, the consent of the Holder of each
Outstanding Subordinated Debenture of such series or Tranche, or (c) modify
certain of the provisions of the Subordinated Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults with
respect to the Subordinated Debentures of any series, or any Tranche thereof,
without the consent of the Holder of each Outstanding Subordinated Debenture
affected thereby. A supplemental indenture which changes or eliminates any
covenant or other provision of the Subordinated Indenture which has expressly
been included solely for the benefit of one or more particular series of
Subordinated Debentures or one or more Tranches thereof, or modifies the rights
of the Holders of Subordinated Debentures of such series or Tranches with
respect to such covenant or other provision, will be deemed not to affect the
rights under the Indenture of the Holders of the Subordinated Debentures of any
other series or Tranche. (Section 1202)
The Subordinated Indenture provides that in determining whether the
Holders of the requisite principal amount of the Outstanding Subordinated
Debentures have given any request, demand, authorization, direction, notice,
consent, or waiver under the Subordinated Indenture as of any date, or whether
or not a quorum is present at a meeting of Holders, (i) Subordinated Debentures
owned by the Company or any other obligor upon the Subordinated Debentures or
any Affiliate of the Company or of such other obligor (unless the Company, such
Affiliate or such obligor owns all Securities Outstanding under this
Subordinated Indenture, or all Outstanding Subordinated Debentures of each such
series and each such Tranche, as the case may be, determined without regard to
this clause (i)) shall be disregarded and deemed not to be Outstanding; (ii) the
principal amount of a Discount Security that shall be deemed to be Outstanding
for such purposes shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon a declaration of
acceleration of the Maturity thereof as provided in the Subordinated Indenture;
and (iii) the principal amount of a Subordinated Debenture denominated in one or
more foreign currencies or a composite currency that will be deemed to be
Outstanding will be the Dollar equivalent, determined as of such date in the
manner prescribed for such Subordinated Debenture, of the principal amount of
such Subordinated Debenture (or, in the case of a Subordinated Debenture
described in clause (ii) above, of the amount described in such clause).
(Section 101)
If the Company shall solicit from Holders any request, demand,
authorization, direction, notice, consent, election, waiver or other Act, the
35
<PAGE>
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, election, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, election,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on the record date shall be deemed to
be Holders for the purposes of determining whether Holders of the requisite
proportion of the Outstanding Subordinated Debentures have authorized or agreed
or consented to such request, demand, authorization, direction, notice, consent,
direction, waiver or other Act, and for that purpose the Outstanding
Subordinated Debentures shall be computed as of the record date. Any request,
demand, authorization, direction, notice, consent, election, waiver or other Act
of a Holder shall bind every future Holder of the same Subordinated Debenture
and the Holder of every Subordinated Debenture issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Subordinated Debenture. (Section 104)
Defeasance
Unless otherwise indicated in the applicable Prospectus Supplement, any
Subordinated Debenture, or any portion of the principal amount thereof, will be
deemed to have been paid for purposes of the Subordinated Indenture, and, at the
Company's election, the entire indebtedness of the Company in respect thereof
will be deemed to have been satisfied and discharged, if there has been
irrevocably deposited with the Subordinated Indenture Trustee or any Paying
Agent (other than the Company), in trust: (a) money in an amount which will be
sufficient, or (b) Eligible Obligations (as described below), which do not
contain provisions permitting the redemption or other prepaying thereof at the
option of the issuer thereof, the principal of and the interest on which when
due, without any regard to reinvestment thereof, will provide monies which,
together with money, if any, deposited with or held by the Subordinated
Indenture Trustee or such Paying Agent, will be sufficient, or (c) a combination
of (a) and (b) which will be sufficient, to pay when due the principal of and
premium, if any, and interest, if any, due and to become due on such
Subordinated Debentures or portions thereof. (Section 701) For this purpose,
unless otherwise indicated in the applicable Prospectus Supplement, Eligible
Obligations include direct obligations of, or obligations unconditionally
guaranteed by, the United States, entitled to the benefit of the full faith and
credit thereof, and certificates, depositary receipts or other instruments which
evidence a direct ownership interest in such obligations or in any specific
interest or principal payments due in respect thereof. (Section 101)
36
<PAGE>
While the Company knows of no legal precedent on point, it is possible
that, for federal income tax purposes, any deposit contemplated in the preceding
paragraph could be treated as a taxable exchange of the related securities for
an issue of obligations of the trust or a direct interest in the cash and
securities held in the trust. In that case, Holders of such securities would
recognize gain or loss as if the trust obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their securities. In addition, such Holders thereafter would be required to
recognize for federal income tax purposes a share of the income, gain or loss of
the trust. The amount so required to be recognized could be different from the
amount that would be recognized in the absence of such deposit. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences to them of any such deposit.
Resignation of Subordinated Indenture Trustee
The Subordinated Indenture Trustee may resign at any time by giving
written notice thereof to the Company or may be removed at any time by Act of
the Holders of a majority in principal amount of Subordinated Debentures then
Outstanding delivered to the Subordinated Indenture Trustee and the Company. No
resignation or removal of the Subordinated Indenture Trustee and no appointment
of a successor trustee will become effective until the acceptance of appointment
by a successor trustee in accordance with the requirements of the Subordinated
Indenture. So long as no Event of Default or event which, after notice or lapse
of time, or both, would become an Event of Default has occurred and is
continuing and except with respect to a Subordinated Indenture Trustee appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Subordinated Debentures, if the Company has delivered to the Trustee a
resolution of its Board of Directors appointing a successor trustee and such
successor has accepted such appointment in accordance with the terms of the
Subordinated Indenture, the Subordinated Indenture Trustee will be deemed to
have resigned and the successor will be deemed to have been appointed as trustee
in accordance with the Subordinated Indenture. (Section 910)
37
<PAGE>
Notices
Notices to Holders of Subordinated Debentures will be given by mail to
the addresses of such Holders as they may appear in the Security Register.
(Section 106)
Title
The Company, the Subordinated Indenture Trustee, and any agent of the
Company or the Subordinated Indenture Trustee may treat the Person in whose name
a Subordinated Debenture is registered as the absolute owner thereof (whether or
not such Subordinated Debenture may be overdue) for the purpose of making
payment and for all other purposes. (Section 308)
Governing Law
The Subordinated Indenture and the Subordinated Debentures will be
governed by, construed in accordance with, the laws of the State of New York,
except to the extent the law of any other jurisdiction shall be mandatorily
applicable. (Section 112)
Limitation on Suits
The Subordinated Indenture limits a Holder's right to institute any
proceeding with respect to the Subordinated Indenture, the appointment of a
receiver or trustee, or for any other remedy under the Subordinated Indenture.
(Section 807)
Maintenance of Properties
The Subordinated Indenture provides that the Company shall cause (or,
with respect to property owned in common with others, make reasonable effort to
cause) all its properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and shall cause
(or, with respect to property owned in common with others, make reasonable
effort to cause) to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as, in the judgment of the Company,
may be necessary so that the business carried on in connection therewith may be
properly conducted; provided, however, that nothing shall prevent the Company
from discontinuing, or causing the discontinuance of, the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business. (Section 605)
Modification of Senior Indebtedness
In general, the holders of Senior Indebtedness may, without in any
manner affecting the subordination of the payment of principal of and premium,
if any, and interest, if any, on the Subordinated Debentures in their absolute
discretion agree with the Company to change the manner, place or terms of
payment, change or extend the time of payment of, or renew or alter, any Senior
Indebtedness, or amend or supplement any instrument pursuant to which any Senior
Indebtedness is issued, or exercise or refrain from exercising any other of
their rights under the Senior Indebtedness including, without limitation, the
waiver of default thereunder, all without notice to or assent from the Holders
or the Trustee. (Section 1509)
Relationship with the Subordinated Indenture Trustee
See "DESCRIPTION OF THE COLLATERAL TRUST BONDS -- Relationship with the
Trustee" for a description of certain relationships between the Subordinated
Indenture Trustee and the Company.
38
<PAGE>
GLOBAL SECURITIES
Some or all of the Securities of any series may be represented, in
whole or in part, by one or more global securities (each, a "Global Security")
which will have an aggregate principal amount equal to that of the Securities
represented thereby. Each Global Security will be registered in the name of a
depositary (the "Depositary") or a nominee thereof identified in the applicable
Prospectus Supplement, will be deposited with such Depositary or nominee or a
custodian therefor and will bear a legend regarding the restrictions on
exchanges and registration of transfer thereof referred to below and any such
other matters as may be provided for pursuant to the Mortgage or Subordinated
Indenture, as the case may be.
As long as the Depositary, or its nominee, is the registered holder of
a Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Securities
represented thereby for all purposes under the Mortgage or the Subordinated
Indenture, as the case may be. Except in limited circumstances, owners of
beneficial interests in a Global Security will not be entitled to have such
Global Security or any Securities represented thereby registered in their names,
will not receive or be entitled to receive physical delivery of certificated
Securities in exchange therefor and will not be considered to be the owners or
holders of such Global Security or any Securities represented thereby for any
purpose under the Securities or, as the case may be, the Mortgage or the
Subordinated Indenture. All payments of principal of and any premium and
interest on a Global Security will be made to the Depositary or its nominee, as
the case may be, as the Holder thereof. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. These laws may impair the ability to transfer beneficial
interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited
to institutions that have accounts with the Depositary or its nominee
(`participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security to
the accounts of its participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by the Depositary (with
respect to participants' interests) or any such participant (with respect to
interests of persons held by such participants on their behalf). Payments,
transfers, exchanges, and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the Mortgage Trustee or the
Subordinated Indenture Trustee, or any agents of each of the foregoing, will
have any responsibility or liability for any aspect of the Depositary's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising, or
reviewing any records relating to such beneficial interests.
EXPERTS
The financial statements and schedule included in the latest Annual
Report on Form 10-K of the Company have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto and are incorporated by reference herein in reliance upon the authority
of said firm as experts in auditing and accounting in giving said report.
LEGAL MATTERS
The legality of the Securities will be passed upon for the Company by
Stephen W. Southwick, Vice President, General Counsel & Secretary of the
Company, 200 First Street S.E., Cedar Rapids, Iowa 52401, and by Winthrop,
Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York 10004, and
for any underwriters, dealers, agents or purchasers by Dorsey & Whitney LLP, 220
South Sixth Street, Minneapolis, Minnesota 50402. However, all matters
pertaining to the Lien of the Mortgage, organization of the Company, titles to
property and franchises will be passed upon by Stephen W. Southwick, Vice
President, General Counsel & Secretary.
39
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and
distribution of the Securities, other than underwriting discounts and
commissions are as follows:
Registration Fee--Securities and Exchange Commission (actual). $ 15,152
Printing and Engraving Cost................................... $ 10,000
Trustee's Charges including Authentication.................... $ 7,000
Attorney's Fees and Expenses.................................. $ 75,000
Accountant's Fees and Expenses................................ $ 35,000
Blue Sky Expenses............................................. $ 1,000
Rating Agency Fees............................................ $ 15,000
Recording and Listing Fees.................................... $ 30,000
Miscellaneous................................................. $ 5,000
--------
Total....................................... $193,152
========
Item 15. Indemnification.
Section 490.851 of the Iowa Business Corporations Act ("IBCA") grants
each corporation organized thereunder, such as the Registrant, the power to
indemnify its directors and officers against liabilities for certain of their
acts. Section 6.1 of the Registrant's Bylaws, as amended, provides for
indemnification of directors and officers of the Registrant to the full extent
permitted by Section 490.851 of the IBCA. Section 6.1 further requires the
Registrant to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted and incurred against such person in
any such capacity or arising out of such person's status as such, whether or not
the Registrant would have the power to indemnify such person against such
liability under the provisions of Section 6.1. Section 2 of Article Ninth of the
Registrant's Amended Articles of Incorporation, however, requires that the
Registrant may, but is not required to, maintain such insurance.
Section 490.832 of the IBCA grants corporations organized thereunder,
such as the Registrant, the authority to adopt a provision in their respective
articles of incorporation eliminating or limiting, with certain exceptions, the
personal liability of a director to the corporation or to its shareholders for
monetary damages for certain breaches of fiduciary duty as a director. Section 1
of Article Ninth of the Amended Articles of Incorporation of the Registrant
eliminates the personal liability of each director except for liability (i) for
any breach of the director's duty of loyalty to the Registrant or its
shareholders, (ii) for acts or omissions not in good faith or which involve any
intentional misconduct or knowing violation of the law, (iii) any transaction
from which the director derived an improper personal benefit, or (iv) under
Section 490.833 of the IBCA relating to liability for unlawful distribution.
The foregoing statements are subject to the detailed provisions of
Sections 490.832, 490.833 and 490.851 of the IBCA, Article Ninth of the Amended
Articles of Incorporation of the Registrant and Section 6.1 of the Bylaws, as
amended of the Registrant, as applicable and should be read in conjunction
therewith for a more full understanding of their affect on the Registrant.
The Registrant's directors' and officers' insurance policies are
designed to reimburse the Registrant for any payments made by it pursuant to the
foregoing indemnification provisions.
II - 1
<PAGE>
The proposed form of underwriting agreement for each of the Securities
contains provisions under which the underwriters agree to indemnify the
directors and officers of the Registrant against certain liabilities under the
Securities Act of 1933, as amended (the "Act").
Item 16. Exhibits.
See Exhibit Index on Page II - 6.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent Post-Effective Amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, or Form S-8, and the information required
to be included in a Post-Effective Amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Securities and Exchange
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining liability under the Act,
each such Post-Effective Amendment 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.
(3) To remove from registration by means of a Post-Effective
Amendment any of the securities which remain unsold at the termination of the
offering.
(4) That for purposes of determining any liability under the Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement 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 - 2
<PAGE>
Insofar as indemnification for liabilities arising under the Act, as
amended, 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 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 Act and will be governed by the final adjudication of
such issue.
II - 3
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below authorizes Lee Liu, Larry D.
Root, Thomas M. Walker and John E. Ebright, or any one of them, to execute in
the name of each such person who is then an officer or director of the
Registrant, and to file any amendments to, this Registration Statement,
including post-effective amendments, necessary or advisable to enable the
Registrant to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, which amendments may make such changes in such Registration
Statement as the above-named attorneys, or any of them, may deem appropriate.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cedar Rapids, State of Iowa, on the 9th day of
June, 1997.
IES UTILITIES INC.
By: /s/ Larry D. Root
______________________________
Larry D. Root
President & Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
such Registration Statement has been signed below on the 9th day of June, 1997,
by the following persons in the capacities indicated:
Signature Title
--------- -----
/s/ Lee Liu Chairman of the Board &
- --------------------------------------- Chief Executive Officer and Director
Lee Liu (Principal Executive Officer)
/s/ Thomas M. Walker Executive Vice President &
- --------------------------------------- Chief Financial Officer
Thomas M. Walker (Principal Financial Officer)
/s/ John E. Ebright Controller & Chief Accounting Officer
- --------------------------------------- (Principal Accounting Officer)
John E. Ebright
/s/ C.R.S. Anderson Director
- ---------------------------------------
C.R.S. Anderson
/s/ J. Wayne Bevis Director
- ---------------------------------------
J. Wayne Bevis
II - 4
<PAGE>
Signature Title
--------- -----
/s/ Jack R. Newman Director
- ---------------------------------------
Jack R. Newman
/s/ Robert D. Ray Director
- ---------------------------------------
Robert D. Ray
/s/ David Q. Reed Director
- ---------------------------------------
David Q. Reed
/s/ Henry Royer Director
- ---------------------------------------
Henry Royer
/s/ Robert W. Schlutz Director
- ---------------------------------------
Robert W. Schlutz
/s/ Anthony R. Weiler Director
- ---------------------------------------
Anthony R. Weiler
II - 5
<PAGE>
EXHIBIT INDEX
Exhibit Number List of Exhibits
- -------------- ----------------
1(a) Proposed form of Underwriting Agreement relating to Collateral
Trust Bonds ("Bonds").
1(b) Proposed form of Underwriting Agreement relating to
Subordinated Debentures to be issued under the Subordinated
Indenture.
*4(a) Indenture of Mortgage and Deed of Trust, dated as of September
1, 1993, between the Company (formerly Iowa Electric Light and
Power Company ("IE")) and The First National Bank of Chicago,
as Trustee ("Mortgage") (Filed as Exhibit 4(c) to IE's Form
10-Q for the quarter ended September 30, 1993).
*4(b) Supplemental Indentures to the Mortgage:
Number Dated as of File Reference Exhibit
------ ----------- -------------- -------
First October 1, 1993 Form 10-Q, 11/12/93 4(d)
Second November 1, 1993 Form 10-Q, 11/12/93 4(e)
Third March 1, 1995 Form 10-Q, 5/12/95 4(b)
Fourth September 1, 1996 Form 8-K, 9/19/96 4(c)(i)
Fifth April 1, 1997 Form 10-Q, 5/14/97 4(a)
4(c) Proposed form of __________ Supplemental Indenture
establishing the series of Bonds (including form of Bonds).
*4(d) Indenture of Mortgage and Deed of Trust, dated as of August 1,
1940, between the Company (formerly IE) and The First National
Bank of Chicago, Trustee (1940 Indenture) (Filed as Exhibit
2(a) to IE's Registration Statement, File No. 2-25347).
*4(e) Supplemental Indentures to the 1940 Indenture:
Number Dated as of IE File Reference Exhibit
------ ----------- ----------------- -------
First March 1, 1941 2-25347 2(a)
Second July 15, 1942 2-25347 2(a)
Third August 2, 1943 2-25347 2(a)
Fourth August 10, 1944 2-25347 2(a)
Fifth November 10, 1944 2-25347 2(a)
Sixth August 8, 1945 2-25347 2(a)
Seventh July 1, 1946 2-25347 2(a)
Eighth July 1, 1947 2-25347 2(a)
Ninth December 15, 1948 2-25347 2(a)
Tenth November 1, 1949 2-25347 2(a)
Eleventh November 10, 1950 2-25347 2(a)
Twelfth October 1, 1951 2-25347 2(a)
Thirteenth March 1, 1952 2-25347 2(a)
Fourteenth November 5, 1952 2-25347 2(a)
Fifteenth February 1, 1953 2-25347 2(a)
Sixteenth May 1, 1953 2-25347 2(a)
Seventeenth November 3, 1953 2-25347 2(a)
Eighteenth November 8, 1954 2-25347 2(a)
II - 6
<PAGE>
Number Dated as of IE File Reference Exhibit
------ ----------- ----------------- -------
Nineteenth January 1, 1955 2-25347 2(a)
Twentieth November 1, 1955 2-25347 2(a)
Twenty-first November 9, 1956 2-25347 2(a)
Twenty-second November 6, 1957 2-25347 2(a)
Twenty-third November 4, 1959 2-25347 2(a)
Twenty-fourth November 3, 1959 2-25347 2(a)
Twenty-fifth November 1, 1960 2-25347 2(a)
Twenty-sixth January 1, 1961 2-25347 2(a)
Twenty-seventh November 7, 1961 2-25347 2(a)
Twenty-eighth November 6, 1962 2-25347 2(a)
Twenty-ninth November 5, 1963 2-25347 2(a)
Thirtieth November 4, 1964 2-25347 2(a)
Thirty-first November 2, 1965 2-25347 2(a)
Thirty-second September 1, 1966 Form 10-K, 1966 4.10
Thirty-third November 30, 1966 Form 10-K, 1966 4.10
Thirty-fourth November 7, 1967 Form 10-K, 1967 4.10
Thirty-fifth November 5, 1968 Form 10-K, 1968 4.10
Thirty-sixth November 1, 1969 Form 10-K, 1969 4.10
Thirty-seventh December 1, 1970 Form 8-K, 12/70 1
Thirty-eighth November 2, 1971 2-43131 2(g)
Thirty-ninth May 1, 1972 Form 8-K, 5/72 1
Fortieth November 7, 1972 2-56078 2(i)
Forty-first November 7, 1973 2-56078 2(j)
Forty-second September 10, 1974 2-56078 2(k)
Forty-third November 5, 1975 2-56078 2(l)
Forty-fourth July 1, 1976 Form 8-K, 7/76 1
Forty-fifth November 1, 1976 Form 8-K, 12/76 1
Forty-sixth December 1, 1977 2-60040 2(o)
Forty-seventh November 1, 1978 Form 10-Q, 6/30/79 1
Forty-eighth December 1, 1979 Form S-16, 2-65996 2(q)
Forty-ninth November 1, 1981 Form 10-Q, 3/31/82 2
Fiftieth December 1, 1980 Form 10-K, 1981 4(s)
Fifty-first December 1, 1982 Form 10-K, 1982 4(t)
Fifty-second December 1, 1983 Form 10-K, 1983 4(u)
Fifty-third December 1, 1984 Form 10-K, 1984 4(v)
Fifty-fourth March 1, 1985 Form 10-K, 1984 4(w)
Fifty-fifth March 1, 1988 Form 10-Q, 5/12/88 4(b)
Fifty-sixth October 1, 1988 Form 10-Q, 11/10/88 4(c)
Fifty-seventh May 1, 1991 Form 10-Q, 8/13/91 4(d)
Fifty-eighth March 1, 1992 Form 10-K, 1991 4(c)
Fifty-ninth October 1, 1993 Form 10-Q, 11/12/93 4(a)
Sixtieth November 1, 1993 Form 10-Q, 11/12/93 4(b)
Sixty-first March 1, 1995 Form 10-Q, 5/12/95 4(a)
Sixty-second September 1, 1996 Form 8-K, 9/19/96 4(c)(i)
Sixty-third April 1, 1997 Form 10-Q, 5/14/97 4(b)
4(f) Proposed form of __________ Supplemental Indenture providing
for the issuance of Class "A" Bonds under the 1940 Indenture
(including form of Class "A" Bonds).
ll - 7
<PAGE>
*4(g) Indenture or Deed of Trust dated as of February 1, 1923,
between the Company (successor to Iowa Southern Utilities
Company (IS) as a result of merger of IS and IE) and The
Northern Trust Company (The First National Bank of Chicago,
successor) and Harold H. Rockwell (Richard D. Manella,
successor), as Trustees (ISU 1923 Indenture) (Filed as Exhibit
B-1 to File No. 2-1719).
*4(h) Supplemental Indentures to the ISU 1923 Indenture:
Dated as of IS File Reference Exhibit
----------- ----------------- -------
May 1, 1940 2-4921 B-1-k
May 2, 1940 2-4921 B-1-l
October 1, 1945 2-8053 7(m)
October 2, 1945 2-8053 7(n)
January 1, 1948 2-8053 7(o)
September 1, 1950 33-3995 4(e)
February 1, 1953 2-10543 4(b)
October 2, 1953 2-10543 4(q)
August 1, 1957 2-13496 2(b)
September 1, 1962 2-20667 2(b)
June 1, 1967 2-26478 2(b)
February 1, 1973 2-46530 2(b)
February 1, 1975 2-53860 2(aa)
July 1, 1975 2-54285 2(bb)
September 2, 1975 2-57510 2(bb)
March 10, 1976 2-57510 2(cc)
February 1, 1977 2-60276 2(ee)
January 1, 1978 0-849 2
March 1, 1979 0-849 2
March 1, 1980 0-849 2
May 31, 1986 33-3995 4(g)
July 1, 1991 0-849 4(h)
September 1, 1992 0-849 4(m)
December 1, 1994 Form 10-K,1994 4(f)
*4(i) Indenture (For Unsecured Subordinated Debt Securities), dated
as of December 1, 1995, between the Company and The First
National Bank of Chicago, Trustee (Subordinated Indenture)
(Filed as Exhibit 4(i) to the Company's Registration
Statement, File No. 33-62259).
5 Opinion of Stephen W. Southwick, Vice President, General
Counsel & Secretary as to the legality of the Securities
(including consent of counsel).
*12 Ratio of Earnings to Fixed Charges (Filed as Exhibit 12 to the
Company's Form 10-Q for the quarter ended March 31, 1997).
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Stephen W. Southwick, Vice President, General
Counsel & Secretary (contained in Exhibit 5).
II - 8
<PAGE>
24 Powers of Attorney (included on p. II - 4 of the Registration
Statement).
25(a) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The First National Bank of
Chicago, as Trustee under the Mortgage.
25(b) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The First National Bank of
Chicago, as Trustee under the Subordinated Indenture.
26 Form of Letter to Prospective Purchasers regarding the
Securities.
- -------------------
* The exhibits listed above and marked with an asterisk were filed as exhibits
to registration statements or reports previously filed with the Commission under
the exhibit number and file reference number shown after each such exhibit, and
they are hereby incorporated herein by reference.
II - 9
<PAGE>
EXHIBIT 1(a)
UNDERWRITING AGREEMENT
For the Purchase of Collateral Trust Bonds
of IES Utilities Inc.
IES UTILITIES INC.
c/o Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
SECTION 1. Purchase and Sale. On the basis of the
representations and warranties, and subject to the terms and conditions, set
forth in this agreement ("Underwriting Agreement"), each Underwriter (defined
below) shall purchase from IES Utilities Inc. ("Company"), severally and not
jointly, and the Company shall sell to each of the Underwriters (defined below),
the principal amount of the Company's Collateral Trust Bonds set forth opposite
the name of such Underwriter in Schedule II hereto at the price specified in
Schedule I hereto, plus accrued interest, if any, at the rate specified in
Schedule I hereto. The aggregate principal amount of such Collateral Trust Bonds
being sold hereunder is hereinafter referred to as the "Bonds."
SECTION 2. Underwriters and Representative. The term
"Underwriters," as used herein, shall be deemed to mean the several persons,
firms, or corporations named in Schedule II hereto (including any substituted
Underwriters under the provisions of Section 6), and the term "Representative,"
as used herein, shall be deemed to mean the representative or representatives of
such Underwriters by whom or on whose behalf this Underwriting Agreement is
signed. If there shall be one person, firm, or corporation named in said
Schedule II, the term "Underwriters" and the term "Representative," as used
herein, shall mean that person, firm, or corporation. All obligations of the
Underwriters are several and not joint. The use of the term "Underwriter" herein
shall not be deemed to establish or admit that a purchaser of the Bonds is an
"Underwriter" of the Bonds as such term is defined in and used under the
Securities Act of 1933, as amended ("Securities Act").
SECTION 3. Description of the Bonds. The Bonds shall be in the
aggregate principal amount and shall mature on the date specified in Schedule I
hereto, and shall be issued under and secured by the Indenture of Mortgage and
Deed of Trust, dated as of September 1, 1993, of the Company to The First
National Bank of Chicago as Trustee ("Trustee"), as supplemented by ____
supplemental indentures and as it will be further supplemented by a supplemental
indenture ("Supplemental Indenture") relating to the Bonds. Said Indenture of
Mortgage and Deed of Trust, as so supplemented, is hereinafter referred to as
the "Mortgage". The Bonds shall bear interest at the rate per annum specified in
Schedule I hereto. The Bonds and the Mortgage are more fully described in the
Prospectus hereinafter referred to.
SECTION 4. Representations and Warranties of the Company.
The Company represents and warrants that:
(a) It has filed with the Securities and Exchange Commission
("Commission") two registration statements (File Nos. 33-62259 and
333-_____) (collectively, the "Registration Statement") for the
registration of up to an aggregate of $135,000,000 principal amount of the
Company's debt securities under the Securities Act. Registration statements
(File Nos. 33-62259 and 333-_____) have become effective. No stop order
suspending the effectiveness of the Registration Statement has been issued,
and no proceedings for that purpose have been initiated or threatened by
the Commission. The prospectus (including the supplement thereto) forming a
part of the Registration Statement, at that time pursuant to Item 12 of
Form S-3, is hereinafter referred to as the "Basic Prospectus." In the
event that the Basic Prospectus shall have been amended, revised, or
supplemented (but excluding any amendments, revisions, or supplements to
the Basic Prospectus relating solely to the offering of debt securities
other than the Bonds) prior to the time of effectiveness of this
Underwriting Agreement, and with respect to any documents filed by the
Company pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act
of 1934, as amended ("Exchange Act"), after the time the Registration
Statement initially became effective and up to the time of effectiveness of
this Underwriting Agreement (but excluding documents incorporated therein
by reference relating solely to the offering of debt securities other than
the Bonds), which documents are deemed to be incorporated by reference in
the Basic Prospectus, the term "Basic Prospectus" as used herein shall also
mean such prospectus as so amended, revised, or supplemented. The
Registration Statement as it initially became effective and as it may have
been amended by any amendment thereto incorporated in the Basic Prospectus
(including for these purposes as an amendment any document incorporated by
reference in the Basic Prospectus) and the Basic Prospectus as it shall be
supplemented to reflect the terms of offering and sale of the Bonds by a
prospectus supplement ("Prospectus Supplement") to be filed with the
Commission pursuant to Rule 424 under the Securities Act ("Rule 424"), are
hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively;
(b) After the time of effectiveness of this Underwriting Agreement,
the Company will not file (i) any amendment to the Registration Statement
(except any amendment relating solely to the offering of debt securities
other than the Bonds) or supplement to the Prospectus or (ii) prior to the
time that the Prospectus is filed with the Commission pursuant to Rule 424,
any document which is to be incorporated by reference in, or any supplement
(including the Prospectus Supplement) to, the Basic Prospectus, in either
case without prior notice to the Representative and Dorsey & Whitney LLP
("Counsel for the Underwriters"), or any such amendment, supplement, or
document to which said Counsel shall reasonably object on legal grounds in
writing. For purposes of this Underwriting Agreement, any document filed
with the Commission after the effectiveness of this Underwriting Agreement
and incorporated by reference in the Prospectus (except documents
incorporated by reference relating solely to the offering of debt
securities other than the Bonds) pursuant to Item 12 of Form S-3 shall be
deemed a supplement to the Prospectus;
(c) The Registration Statement, at the time of its effectiveness,
fully complied, the Mortgage, at the time of its execution, will fully
comply, and the Prospectus, when filed with the Commission pursuant to Rule
424 and at the Closing Date (hereinafter defined), as it may then be
supplemented or amended, will fully comply, in all material respects with
the applicable provisions of the Securities Act, the Trust Indenture Act of
1939, as amended ("Trust Indenture Act"), and the rules and regulations of
the Commission thereunder or pursuant to said rules and regulations will be
deemed to comply therewith; the documents incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3, on the date first filed with
the Commission pursuant to the Exchange Act, fully complied and on the date
the Prospectus is filed with the Commission pursuant to Rule 424 and at the
Closing Date (hereinafter defined) will comply in all material respects
with the applicable provisions of the Exchange Act and the rules and
regulations of the Commission thereunder or pursuant to said rules and
regulations were or will be deemed to comply therewith; on the date of
effectiveness of the Registration Statement and any post-effective
amendment thereto (but excluding in each case any post-effective amendment
relating solely to the offering of debt securities other than the Bonds)
or, if later than such dates, on the date that the Company's most recent
annual report on Form 10-K was filed with the Commission under the Exchange
Act, the Registration Statement, as amended by any such post-effective
amendment, did not or will not, as the case may be, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; the Prospectus, at the date it is filed with the Commission
pursuant to Rule 424 and at the Closing Date (hereinafter defined), as it
may be amended or supplemented, will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading; and on said dates and at such times, the
documents then incorporated by reference in the Prospectus pursuant to Item
12 of Form S-3, when read together with the Prospectus, or the Prospectus
as it may then be amended or supplemented, will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties in this
subsection (c) shall not apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company by
or through the Representative on behalf of any Underwriter for use in
connection with the preparation of the Registration Statement or the
Prospectus, as they may be amended or supplemented, or to any statements in
or omissions from the statement of eligibility, as it may be amended, under
the Trust Indenture Act of the Trustee under the Mortgage;
(d) The Federal Energy Regulatory Commission has authorized the
issuance and sale of the Bonds; such authorization is in full force and
effect; the issuance and sale of the Bonds pursuant to this Underwriting
Agreement will not violate the terms of such authorization; and no other
authorization, approval or consent of any other governmental body or
regulatory authority is legally required for the issuance and sale of the
Bonds pursuant to this Underwriting Agreement, except such as have been
obtained under the Securities Act and the Trust Indenture Act and such as
may be required under the state securities or "blue sky" laws in connection
with the purchase and distribution of the Bonds by the Underwriters;
(e) The Company is a corporation duly incorporated, and validly
existing, and in good standing under the laws of the State of Iowa and has
full power and authority (corporate and other) under such laws to own its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; and the Company does not own or lease
substantial properties or conduct its business in any state other than the
State of Iowa;
(f) The Bonds have been duly authorized, and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by and
secured by the Mortgage; the Supplemental Indenture will be substantially
in the form filed as an exhibit to the Registration Statement; the
Supplemental Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument, enforceable in accordance with its terms,
except as limited by the Public Utility Registration Act pursuant to Ch.
476 of the Iowa Code et seq., and except in each case as the same may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) and by an
implied covenant of good faith and fair dealing; and the Bonds and the
Mortgage will conform in all material respects to the descriptions thereof
in the Prospectus;
(g) The Class "A" Bonds, upon the basis of which the Bonds are to be
issued, have been duly authorized, and, when issued and delivered to the
Trustee pursuant to the Mortgage, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided and
secured by the 1940 Indenture (as defined in the Mortgage); the __________
Supplemental Indenture to the 1940 Indenture will be substantially in the
form filed as an exhibit to the Registration Statement; the __________
Supplemental Indenture has been duly authorized and, when executed and
delivered by the Company and the trustee under the 1940 Indenture, will
constitute a valid and binding instrument, enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency, reorganization or
other similar laws affecting enforcement of mortgages or other creditors'
rights and general equity principles; and the Class "A" Bonds and the 1940
Indenture will conform in all material respects to the descriptions thereof
in the Prospectus;
(h) The ISU 1923 Indenture (as defined in the Mortgage) conforms in
all material respects to the description thereof in the Prospectus; and
(i) The consummation by the Company of the transactions herein
contemplated and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under,
the Company's Articles of Incorporation or Bylaws, as amended, or of any
indenture or other agreement or instrument to which the Company is now a
party, including the Agreement and Plan of Merger by and among WPL
Holdings, Inc., IES Industries Inc., and Interstate Power Company, dated as
of November 10, 1995, as amended.
SECTION 5. Offering. Forthwith upon the execution of this
Underwriting Agreement, the Representative, acting on behalf of the
Underwriters, shall advise the Company whether a public offering of the Bonds is
to be made, and, if so, shall furnish to the Company (which information shall be
confirmed in writing as soon as practicable thereafter) (a) the information with
respect to such offering of the Bonds and related matters that is required to
complete the Prospectus Supplement or any post-effective amendment to the
Registration Statement which may be required and a copy of any "agreement among
underwriters"; (b) if a post-effective amendment to the Registration Statement
is required, a consent, if necessary, to the filing of the post-effective
amendment or an acceptable power-of-attorney authorizing an available individual
to sign the consent on its behalf; and (c) such further information, if any, as
may be required to be furnished by the Company under the Federal Power Act. Such
information and the power-of-attorney may be provided by telecopier (in the case
of the power-of-attorney, followed promptly by an executed copy). Nothing in
this Underwriting Agreement shall be construed to require that the Underwriters
make any such public offering on a "fixed price" basis. The Representative
agrees to notify the Company in writing of any change in the plan of
distribution of the Bonds that would require a supplement to the Prospectus or
an amendment to the Registration Statement.
SECTION 6. Time and Place of Closing. Delivery of the Bonds
and payment therefor by check or checks, payable to the Company or its order, in
New York, New York, or by wire transfer, in immediately available funds, shall
be made at the offices of Winthrop, Stimson, Putnam & Roberts, One Battery Park
Plaza, New York, New York, at 10:00 A.M., New York time, on __________, or at
such other place, time, and/or date as the Representative and the Company may
agree upon in writing or as may be established in accordance with the following
paragraph. The hour and date of such delivery and payment are herein called the
"Closing Date."
The Bonds shall be delivered to the Representative for the
respective accounts of the Underwriters in registered form in such authorized
denominations and registered in such names as the Representative may reasonably
request in writing at least two business days prior to the Closing Date, or, to
the extent not so requested, in the names of the respective Underwriters in such
denominations as the Company shall determine.
For the purpose of expediting the checking of the Bonds by the
Representative, the Company agrees to make the Bonds available to the
Representative for checking not later than 2:30 P.M., New York time, on the last
business day preceding the Closing Date, at the New York office of The First
National Bank of Chicago, or at such other place, time, and/or date as may be
agreed upon between the Company and the Representative.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the principal amount of Bonds that it has agreed to purchase and pay for
hereunder, the Company shall immediately give notice to the Representative of
the default of such Underwriter, and the other Underwriters shall have the right
within twenty-four (24) hours after the receipt of such notice by the
Representative to determine to purchase, or to procure one or more others, who
are members of the National Association of Securities Dealers, Inc. ("NASD")
(or, if not members of the NASD, who are foreign banks, dealers, or institutions
not registered under the Exchange Act and who agree in making sales to comply
with the NASD's Rules of Fair Practice), and satisfactory to the Company, to
purchase, upon the terms herein set forth, the principal amount of Bonds that
the defaulting Underwriter had agreed to purchase. If any non-defaulting
Underwriter or Underwriters shall determine to exercise such right, the
Representative shall give written notice to the Company of such determination
within twenty-four (24) hours after it shall have received notice of any such
default, and thereupon the Closing Date shall be postponed for such period, not
exceeding three business days, as the Company shall determine. If in the event
of such a default the Representative shall fail to give such notice, or shall
within such twenty-four (24) hour period give written notice to the Company that
no other Underwriter or Underwriters, or others, will exercise such right, then
this Underwriting Agreement may be terminated by the Company, upon like notice
given to the Representative, within a further period of twenty-four (24) hours.
If in such case the Company shall not elect to terminate this Underwriting
Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase and pay
for the respective principal amounts of Bonds that they had severally
agreed to purchase hereunder, as hereinabove provided, and, in addition,
the principal amount of Bonds that the defaulting Underwriter shall have so
failed to purchase up to a principal amount thereof equal to one-ninth
(1/9th) of the respective principal amounts of Bonds that such
non-defaulting Underwriters have otherwise agreed to purchase hereunder,
and/or
(b) to procure one or more others, who are members of the NASD (or, if
not members of the NASD, who are foreign banks, dealers, or institutions
not registered under the Exchange Act and who agree in making sales to
comply with the NASD's Rules of Fair Practice), to purchase, upon the terms
herein set forth, the principal amount of Bonds that such defaulting
Underwriter had agreed to purchase, or that portion thereof that the
remaining Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under clause (a) and/or (b)
above, the Company shall give written notice thereof to the Representative
within such further period of twenty-four (24) hours, and, thereupon, the
Closing Date shall be postponed for such period, not exceeding three business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Underwriting
Agreement.
Any action taken by the Company under this Section 6 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Underwriting Agreement. Termination by the Company
under this Section 6 shall be without any liability on the part of the Company
or any non-defaulting Underwriter, except as otherwise provided in subsection
(g) of Section 7.
In the computation of any period of twenty-four (24) hours
referred to in this Section 6, there shall be excluded a period of twenty-four
(24) hours in respect of each Saturday, Sunday, or legal holiday which would
otherwise be included in such period of time.
SECTION 7. Covenants of the Company. The Company agrees with
each of the Underwriters:
(a) To deliver to the Representative a signed copy of the Registration
Statement as originally filed and of all amendments thereto relating to the
Bonds or a conformed copy thereof certified by an officer of the Company to
be in the form filed.
(b) To deliver to the Underwriters, through the Representative, prior
to 10:00 A.M. New York time on the business day after the date on which
this Underwriting Agreement becomes effective as many copies of the
Prospectus as the Representative may reasonably request.
(c) To cause the Prospectus to be filed with the Commission pursuant
to and in compliance with Rule 424, and to advise the Representative
promptly of the issuance of any stop order under the Securities Act with
respect to the Registration Statement or the institution of any proceedings
therefor of which the Company shall have received notice. The Company will
use its best efforts to prevent the issuance of any such stop order and to
secure the prompt removal thereof if issued.
(d) During such period of time (not exceeding nine months) after the
Prospectus has been filed with the Commission pursuant to Rule 424 as the
Underwriters are required by law to deliver a prospectus, if any event
relating to or affecting the Company or of which the Company shall be
advised in writing by the Representative shall occur which in the Company's
opinion should be set forth in a supplement or amendment to the Prospectus
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser of the Bonds, not
misleading, to notify the Representative of such event and to amend or
supplement the Prospectus by either (i) preparing and filing with the
Commission and furnishing to the Representative at the Company's expense a
reasonable number of copies of a supplement or supplements or an amendment
or amendments to the Prospectus or (ii) making an appropriate filing
pursuant to Section 13, 14, or 15(d) of the Exchange Act, which will
supplement or amend the Prospectus so that, as supplemented or amended, it
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, in the light of the circumstances when the
Prospectus is delivered to a purchaser of the Bonds, not misleading;
provided that should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the expense of
preparing any such amendment or supplement. In case any Underwriter is
required to deliver a prospectus after the expiration of nine months from
the date the Prospectus is filed with the Commission pursuant to Rule 424,
the Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus or supplements or amendments to the
Prospectus complying with Section 10(a) of the Securities Act.
(e) During such period of time after the date the Prospectus is filed
with the Commission pursuant to Rule 424 as a prospectus relating to the
Bonds is required to be delivered under the Securities Act, to file
promptly all documents required to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act.
(f) To make generally available to the Company's security holders as
soon as practicable an earning statement (which need not be audited) in
reasonable detail covering a period of at least twelve months beginning
after the "effective date of the registration statement" within the meaning
of Rule 158 under the Securities Act, which earning statement shall be in
such form, and be made generally available to security holders in such a
manner, as to comply with the requirements of Section 11(a) of the
Securities Act and Rule 158 promulgated under the Securities Act.
(g) Except as herein otherwise provided, to pay all expenses and taxes
(except transfer taxes) in connection with (i) the preparation and filing
of the Registration Statement and any amendments thereto, (ii) the
issuance, printing, and delivery of the Bonds, (iii) the preparation,
execution, filing, and recording of the Supplemental Indenture, (iv) any
fees charged by securities rating services for rating the Bonds and (v) the
typing, printing, and delivery to the Underwriters, through the
Representative, of reasonable quantities of copies of the Registration
Statement and the Prospectus, and any amendment or supplement thereto,
except as otherwise provided in paragraph (d) of this Section. The Company
shall not, however, be required to pay any amount for any expenses of the
Representative or any of the Underwriters, except that, if this
Underwriting Agreement shall be terminated in accordance with the
provisions of Section 8, 9, or 11, the Company will reimburse the
Representative for (i) the reasonable fees and disbursements of counsel for
the Underwriters, whose fees and disbursements the Underwriters agree to
pay in any other event, and (ii) their reasonable out-of-pocket expenses,
in an amount not exceeding a total of ten thousand dollars ($10,000),
incurred in contemplation of the performance of this Underwriting
Agreement. The Company shall not in any event be liable to any of the
Underwriters for damages on account of loss of anticipated profits.
(h) Not to sell any additional Collateral Trust Bonds (other than
Collateral Trust Bonds of one or more series having a maturity or
maturities different from the date of maturity of the Bonds) without the
consent of the Representative until the earlier to occur of (i) the Closing
Date or (ii) in the case of an initial public offering at a fixed price by
the Underwriters, the date of the termination of the fixed price offering
restrictions applicable to the Underwriters. The Representative agrees to
notify the Company of such termination if it occurs prior to the Closing
Date.
SECTION 8. Conditions of Underwriters' Obligations. The
obligation of the Underwriters to purchase and pay for the Bonds shall be
subject to the accuracy of the representations and warranties made herein on the
part of the Company and to the following conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date, and no
proceedings for that purpose shall be pending before, or threatened by, the
Commission on the Closing Date; and at the Closing Date the Representative
shall have received a certificate, dated the Closing Date and signed by an
officer of the Company, to the effect that no such stop order has been or
is in effect and that no proceedings for such purpose are pending before,
or to the knowledge of the Company threatened by, the Commission.
(c) The authorization by the Federal Energy Regulatory Commission of
the issuance and sale of the Bonds shall be in full force and effect;
(d) At the Closing Date, the Representative shall have received from
____________, counsel for IES Industries Inc., Winthrop, Stimson, Putnam &
Roberts, counsel to the Company, and Dorsey & Whitney LLP, counsel for the
Underwriters, opinions in substantially the form and substance set forth in
Exhibits A, B, and C hereto, respectively, (i) with such changes therein as
may be agreed upon by the Company and the Representative, with the approval
of counsel for the Underwriters, and (ii) if the Prospectus relating to the
Bonds shall be supplemented after the Prospectus shall have been filed with
the Commission pursuant to Rule 424, with changes therein to reflect such
supplementation.
(e) On the Closing Date, the Representative shall have received from
Arthur Andersen LLP a letter dated the Closing Date, in substantially the
form and substance set forth in Exhibit D hereto.
(f) At the Closing Date, the Representative shall have received a
certificate of the Company dated the Closing Date and signed by a Vice
President of the Company, to the effect that (i) the Federal Energy
Regulatory Commission has authorized the issuance and sale of the Bonds and
such authorization is in full force and effect, to the best knowledge of
the signer; (ii) since the most recent date as of which information is
given in the Prospectus, as it may have been amended or supplemented, there
has not been any material adverse change in the business, property, or
financial condition of the Company and there has not been any material
transaction entered into by the Company, other than transactions in the
ordinary course of business, in each case other than as referred to in, or
contemplated by, the Prospectus, as it may have been amended or
supplemented; and (iii) to the best knowledge of the signer, the
representations and warranties of the Company in this Underwriting
Agreement are true and correct in all material respects at and as of the
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.
(g) All legal proceedings to be taken in connection with the issuance
and sale of the Bonds shall have been satisfactory in form and substance to
Counsel for the Underwriters.
If any of the conditions specified in this Section 8 shall not
have been fulfilled, this Underwriting Agreement may be terminated by the
Representative with the consent of the Underwriters, who may include the
Representative, which have agreed to purchase in the aggregate fifty percent
(50%) or more of the principal amount of the Bonds, upon notice thereof to the
Company. Any such termination shall be without liability of any party to any
other party, except as otherwise provided in subsection (g) of Section 7.
SECTION 9. Conditions of Company's Obligations. The
obligations of the Company hereunder shall be subject to the following
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date, and no
proceedings for that purpose shall be pending before, or threatened by, the
Commission on the Closing Date.
(c) The authorization by the Federal Energy Regulatory Commission of
the issuance and sale of the Bonds shall be in full force and effect.
In case any of the conditions specified in this Section 9
shall not have been fulfilled, this Underwriting Agreement may be terminated by
the Company upon notice thereof to the Representative. Any such termination
shall be without liability of any party to any other party, except as otherwise
provided in subsection (g) of Section 7.
SECTION 10. Indemnification.
(a) The Company shall indemnify, defend, and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act from and against any and all losses,
claims, damages, or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or any other statute or
common law. The Company shall reimburse each such Underwriter and
controlling person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by them,
such reimbursement to be made as such expenses are incurred by them, in
connection with investigating any such losses, claims, damages, or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in a preliminary prospectus (if used prior to the
initial effective date of the Registration Statement), or in the Basic
Prospectus (if used prior to the date that the Prospectus is filed with the
Commission pursuant to Rule 424) or in the Registration Statement or the
Prospectus, as amended or supplemented (if any amendments or supplements
thereto shall have been made), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the indemnity agreement
contained in this paragraph shall not apply to any such losses, claims,
damages, liabilities, expenses, or actions arising out of, or based upon,
any such untrue statement or alleged untrue statement, or any such omission
or alleged omission, if such statement or omission was made in reliance
upon and in conformity with written information furnished to the Company by
or through the Representative on behalf of any Underwriter expressly for
use in connection with the preparation of the Registration Statement or the
Prospectus or any amendment or supplement to either thereof, or arising out
of, or based upon, statements in or omissions from that part of the
Registration Statement which shall constitute the statement of eligibility
under the Trust Indenture Act of the Trustee under the Indenture; and
provided further, that the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter or of any person
controlling any Underwriter on account of any such losses, claims, damages,
liabilities, expenses, or actions arising from the sale of the Bonds to any
person if there shall not have been given or sent to such person on behalf
of such Underwriter (i) with or prior to the written confirmation of the
sale to such person a copy of the Prospectus, as then amended or
supplemented (exclusive for this purpose of any amendment or supplement
relating solely to any offering of debt securities other than the Bonds and
of any document which becomes incorporated by reference pursuant to Item 12
of Form S-3 more than 3 business days prior to the date hereof), and (ii)
as soon as available after such written confirmation a copy of any
amendment or supplement to the Prospectus (exclusive for this purpose of
any document incorporated by reference pursuant to Item 12 of Form S-3)
which the Company shall thereafter furnish, pursuant to subsection (d) of
Section 7 hereof, relating to an event occurring prior to the payment for
and delivery to such person of the Bonds involved in such sale. The
indemnity agreement of the Company contained in this Section and the
representations and warranties of the Company contained in Section 4 shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any such
controlling person, and shall survive the delivery of the Bonds.
(b) Each Underwriter shall indemnify, defend, and hold harmless the
Company, its directors and officers, and each person who controls any of
the foregoing within the meaning of Section 15 of the Securities Act, from
and against any and all losses, claims, damages, or liabilities, joint or
several, to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall reimburse each
of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them, such
reimbursement to be made as such expenses are incurred by them, in
connection with investigating any such losses, claims, damages, or
liabilities or in connection with defending any action, insofar as such
losses, claims, damages, liabilities, expenses, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, as
amended or supplemented (if any amendments or supplements thereto shall
have been furnished), or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made
in reliance upon and in conformity with written information furnished to
the Company by or through the Representative on behalf of such Underwriter
expressly for use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement to either
thereof. The indemnity agreement of the respective Underwriters contained
in this paragraph shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Company, its
directors or officers, or any such controlling person, and shall survive
the delivery of the Bonds.
(c) The Company and the several Underwriters each shall, upon the
receipt of notice of the commencement of any action against it or any
person controlling it as aforesaid, in respect of which indemnity may be
sought on account of any indemnity agreement contained herein, promptly
give written notice of the commencement thereof to the party or parties
against whom indemnity shall be sought hereunder, but the omission so to
notify the indemnifying party or parties of any such action shall not
relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, the indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of the action, in which event
the defense shall be conducted by counsel chosen by such indemnifying party
or parties and satisfactory to the indemnified party or parties who shall
be a defendant or defendants in the action, and the indemnified defendant
or defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of the action, the indemnifying party will reimburse the
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by the indemnified party or parties. If the indemnifying
party does not employ counsel to take charge of the defense or if counsel
for the indemnifying party reasonably concludes that there may be defenses
available to the indemnified party which are different from or in addition
to those available to the indemnifying party (in which case the
indemnifying party will not have the right to assume the defense on behalf
of the indemnified party), legal expenses (limited to those of one counsel
for all indemnified parties) and other expenses reasonably incurred by the
indemnified party will be paid by the indemnifying party. No party will be
liable with respect to any settlement made without its prior written
consent.
(d) If the indemnification provided for in this Section 10 is
unavailable to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statements of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statements or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were 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 account of equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Bonds underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter 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
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(e) The respective obligations of the Company and the Underwriters
under this Section 10 shall be in addition to any liability which each of
them may otherwise have.
SECTION 11. Termination. This Underwriting Agreement may be
terminated at any time prior to the Closing Date by the Representative with the
consent of the Underwriters, who may include the Representative, which have
agreed to purchase in the aggregate fifty percent (50%) or more of the aggregate
principal amount of the Bonds, if, prior to such time, (i) trading in securities
on the New York Stock Exchange shall have been generally suspended, (ii) minimum
or maximum ranges for prices shall have been generally established on the New
York Stock Exchange by the New York Stock Exchange, the Commission, or other
governmental authority, (iii) a general banking moratorium shall have been
declared by federal or New York State authorities, (iv) an outbreak or
escalation of hostilities or other national or international calamity or crisis
occurs, the effect of which on the financial markets of the United States is
such as, in the reasonable judgment of the Representative, to make it
impracticable to market the Bonds or enforce contracts for the sale of the Bonds
or (v) in the reasonable judgment of the Representative, the subject matter of
any amendment or supplement (prepared by the Company) to the Basic Prospectus,
the Registration Statement or the Prospectus (except for information relating to
the public offering of the Bonds or to the activity of any Underwriter or
Underwriters) filed or issued after the effectiveness of this Underwriting
Agreement by the Company shall have materially impaired the marketability of the
Bonds. Any termination hereof pursuant to this Section 11 shall be without
liability of any party to any other party, except as otherwise provided in
subsection (g) of Section 7.
SECTION 12. Applicable Law. This Underwriting Agreement and
the Bonds to be sold hereunder shall be New York contracts, and their validity
and interpretation shall be governed by the laws of the State of New York.
SECTION 13. Successors. This Underwriting Agreement shall
inure to the benefit of the Company, the Underwriters and, with respect to the
provisions of Section 10, each director, officer, and controlling person
referred to in Section 10, and their respective successors. Nothing herein is
intended or shall be construed to give to any other person, firm, or corporation
any legal or equitable right, remedy, or claim under or in respect of any
provision in this Underwriting Agreement. The term "successor" as used in this
Underwriting Agreement shall not include any purchaser, as such purchaser, of
any of the Bonds from any of the Underwriters.
SECTION 14. Notices. All communications hereunder shall be
in writing and, if to the Underwriters, shall be mailed or delivered to the
Representative at the address set forth below, or, if to the Company, shall be
mailed or delivered to it c/o IES Utilities Inc., 200 First Street, S.E., Cedar
Rapids, Iowa 52401 Attention: Treasurer.
SECTION 15. Counterparts. This Underwriting Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of such counterparts, when so executed and
delivered, shall be deemed to be an original, and all of such counterparts
shall, taken together, constitute one and the same agreement.
-----------
<PAGE>
The stated interest rate to be borne by the Bonds and the
price to be paid to the Company therefor (stated as a percentage of the
principal amount of the Bonds), in each case are set forth in Schedule I hereto.
If said interest rate and price and this Underwriting Agreement are in
accordance with your understanding of our agreement, please indicate your
acceptance thereof in the space provided below for that purpose; whereupon, this
letter and your acceptance shall constitute a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
As Representative(s) of the Underwriters
By:
--------------------------------------
Name:
Title:
Address of Representative(s):
The foregoing Underwriting Agreement is hereby
accepted as of the date set forth below:
IES UTILITIES INC.
By:
--------------------------
Name:
Title:
Date:
<PAGE>
SCHEDULE I
Underwriting Agreement dated
Registration Statements (Nos. 33-62259 and 333-_____)
Securities:
Designation: Collateral Trust Bonds ___% Series Due ____
Principal Amount: $
Date of Maturity:
Interest Rate: ___%
Commencement of Interest Accrual:
Purchase Price: ___%
Public Offering Price: ___%
Closing Date:
<PAGE>
SCHEDULE II
Principal Amount
Name of Underwriter of Bonds
- ------------------- ----------------
$----------
Total $==========
<PAGE>
EXHIBIT A
[Letterhead of IES Industries Inc.]
[Date]
Re: $__________ Collateral Trust Bonds ___% Series Due ____
Ladies and Gentlemen:
I am counsel for IES Industries Inc., the parent company of
IES Utilities Inc. (the "Company") and have participated in the issuance and
sale by the Company to you of $__________ aggregate principal amount of
Collateral Trust Bonds ___% Series Due ____ (the "Bonds"), issued under the
Company's Indenture of Mortgage and Deed of Trust, dated as of September 1,
1993, to The First National Bank of Chicago, as Trustee (the "Trustee"), as
heretofore supplemented and as supplemented by the _____ Supplemental Indenture
dated as of __________ (the "Supplemental Indenture") (said Mortgage of
Indenture and Deed of Trust as so supplemented is herein referred to as the
"Mortgage") pursuant to an Underwriting Agreement dated as of __________ between
you and the Company (the "Underwriting Agreement").
In this connection, I, or attorneys under my general
supervision, have examined, among other things, the following:
(a) the Registration Statement and the Prospectus (such
terms having the same meanings herein as in the Underwriting
Agreement);
(b) the Articles of Incorporation of the Company and all
amendments thereto, as certified by the Secretary of State of the
State of Iowa;
(c) a Certificate of the Secretary of State or other
appropriate state official certifying as to the good standing and
qualification of the Company to transact business in the State of
Iowa;
(d) the By-laws of the Company, certified by the Secretary
of the Company;
(e) the Mortgage;
(f) the Company's Indenture of Mortgage and Deed of Trust
dated as of August 1, 1940, to The First National Bank of
Chicago, as trustee, as amended and supplemented and as it is
further supplemented by the _____ Supplemental Indenture, dated
as of __________ (the "1940 Supplemental Indenture"), pursuant to
which certain First Mortgage Bonds of the Company (the "Class "A"
Bonds") have been issued (said Mortgage and Deed of Trust as so
amended and supplemented is herein referred to as the "1940
Indenture");
(g) the Company's Indenture of Mortgage and Deed of Trust
dated as of February 1, 1923, to The First National Bank of
Chicago, as trustee, as amended and supplemented ("ISU 1923
Indenture");
(h) Resolutions of the Executive Committee of the Board of
Directors of the Company dated _________, and the Chairman's
Certificate dated ___________, pertaining to the authorization
and sale of the Bonds, the terms and conditions thereof and
related matters;
(i) Abstracts of Title and Certificates for title searches
covering all pertinent county records in the various counties in
which property of the Company is situated, together with title
opinions of counsel deemed by me to be competent and reputable
and upon whom I believe I am justified in relying as to such
matters;
(j) copies of franchises of the Company and the proceedings
under which they were granted;
(k) the Application filed by the Company with the Federal
Energy Regulatory Commission seeking, among other things,
authority for and approval of the issuance and sale of Bonds and
a copy of the Letter of Authority issued by the Chief Accountant
of such Commission, dated __________, authorizing and approving
the issuance and sale of the Bonds;
(l) counterparts of the Underwriting Agreement executed by
you and the Company; and
(m) other information, documents, and material which I deem
sufficient along with the foregoing to support this opinion.
In addition, in connection with this opinion, I have reviewed
various orders and certificates of, and members of the legal staff of IES
Industries Inc. had telephone conversations with, public officials. I have not
examined the Bonds, except a specimen thereof.
<PAGE>
Subject to the foregoing and to the further exceptions and
qualifications set forth below and having regard to all legal and factual
considerations which I deem relevant and based upon all such other information
and documents furnished to or obtained by me as I believe necessary to enable me
to render this opinion, including certificates of public officials, I am of the
opinion that:
1. The Company has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the State of
Iowa, with full power and authority (corporate and other) to own its property
and to conduct its business as presently being conducted all within the State of
Iowa.
2. The Bonds, the Mortgage, the Class "A" Bonds, the 1940
Indenture and the ISU 1923 Indenture conform in all material respects to the
descriptions thereof in the Prospectus.
3. The Underwriting Agreement has been duly authorized,
executed and delivered on behalf of the Company.
4. The Class "A" Bonds have been duly authorized and, when
duly executed, authenticated, issued and delivered to the Trustee, will
constitute valid and legally binding obligations of the Company entitled to the
benefits and security provided by the 1940 Indenture, enforceable against the
Company in accordance with their terms except as the same may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting enforcement of creditors' rights
generally, by general principles of equity (regardless of whether or not
enforceability is considered in a proceeding in equity or at law).
5. The Bonds have been duly authorized and, when duly
executed, authenticated, issued and delivered to and paid for by you in
accordance with the terms of the Underwriting Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits and
security provided by the Mortgage, enforceable against the Company in accordance
with their terms except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether or not enforceability is considered
in a proceeding in equity or at law).
6. The Mortgage, the 1940 Indenture, and the ISU 1923
Indenture have been duly and validly authorized by all necessary corporate
action of the Company, have been duly executed, acknowledged and delivered by
the Company and are valid and legally binding instruments enforceable against
the Company in accordance with their terms, except as limited by laws with
respect to or affecting the remedies to enforce the security provided by the
Mortgage, which laws do not, in my opinion, make inadequate the remedies
necessary for the realization of the benefits of such security, and except as
the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, by general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and by an implied covenant of good faith and fair dealing.
7. The execution and delivery of the Underwriting Agreement,
the consummation of the transactions therein contemplated and the fulfillment of
the terms thereof do not and will not conflict with, or result in a breach by,
the Company of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation or By-laws of the Company, the Mortgage, the 1940
Indenture or the ISU 1923 Indenture, or to the best of my knowledge after
reasonable investigation, any other indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which it or any of
its properties are bound, including the Agreement and Plan of Merger, by and
among, WPL Holdings, Inc., IES Industries Inc., Interstate Power Company (a
Delaware corporation), WPLH Acquisition Co., and Interstate Power Company (a
Wisconsin corporation), dated as of November 10, 1995, as amended.
8. The Company has good and valid title to all of the
principal properties subject to the lien of the Mortgage, subject only to (a)
Permitted Liens (as defined in the Mortgage), (b) the prior lien of the 1940
Indenture on certain properties of the Company, (c) the prior lien of the ISU
1923 Indenture on certain other properties of the Company and (d) minor
restrictions, exceptions and reservations in conveyance and defects which are of
a nature ordinarily found in property of a similar character and magnitude; and
the Company possesses the power of eminent domain with respect to its present
public utility operations.
9. The references in the Mortgage to the descriptions in the
1940 Indenture and the ISU 1923 Indenture of the properties subject to the lien
of the 1940 Indenture and the ISU 1923 Indenture are adequate to constitute the
Mortgage a lien on such properties, subject only to (a) Permitted Liens (as
defined in the Mortgage), (b) the prior lien of the 1940 Indenture on certain
properties of the Company, (c) the prior lien of the ISU 1923 Indenture on
certain other properties of the Company and (d) minor restrictions, exceptions
and reservations in conveyance and defects which are of a nature ordinarily
found in property of a similar character and magnitude; the Mortgage constitutes
a valid direct mortgage lien upon all physical properties in the State of Iowa
acquired by the Company after the date of the Mortgage, subject only to (v)
Permitted Liens (as defined in the Mortgage), (w) the prior lien of the 1940
Indenture on certain properties of the Company, (x) the prior lien of the ISU
1923 Indenture on certain other properties of the Company, (y) minor
restrictions, exceptions and reservations in conveyance and defects which are of
a nature ordinarily found in property of a similar character and magnitude and
(z) liens, charges or encumbrances existing or placed thereon at the time of
acquisition.
10. The 1940 Indenture constitutes a valid direct first
mortgage lien upon all properties subject to the lien thereof, subject only to
(a) Permitted Encumbrances as defined therein, and (b) minor restrictions,
exceptions and reservations in conveyance and defects which are of a nature
ordinarily found in property of a similar character and magnitude; the 1940
Indenture constitutes and will constitute a valid direct first mortgage lien
upon all physical properties and franchises in the State of Iowa acquired by the
Company after the date of the 1940 Indenture until the Merger of Iowa Southern
Utilities Company into the Company on December 31, 1993, and on all property
thereafter acquired by the Company other than property which is appurtenant to
the property owned by Iowa Southern Utilities Company immediately prior to such
merger, subject only to (x) Permitted Encumbrances (as defined therein), (y)
minor restrictions, exceptions and reservations in conveyance and defects which
are of a nature ordinarily found in property of similar character and magnitude,
and (z) any liens, charges or encumbrances existing or placed thereon at the
time of acquisition.
11. The ISU 1923 Indenture constitutes a valid direct first
mortgage lien upon all properties subject to the lien thereof, subject only to
(a) Permitted Liens as defined therein, and (b) minor restrictions, exceptions
and reservations in conveyance and defects which are of a nature ordinarily
found in property of a similar character and magnitude; the ISU 1923 Indenture
constitutes and will constitute a valid direct first mortgage lien upon all
physical properties and franchises in the State of Iowa acquired by Iowa
Southern Utilities Company after the date of the ISU 1923 Indenture until the
Merger of Iowa Southern Utilities Company into the Company on December 31, 1993,
and, on all property thereafter acquired by the Company which is appurtenant to
the property owned by Iowa Southern Utilities Company immediately prior to such
merger, subject only to (x) Permitted Liens (as defined therein), (y) minor
restrictions, exceptions and reservations in conveyance and defects which are of
a nature ordinarily found in property of similar character and magnitude, and
(z) any liens, charges or encumbrances existing or placed thereon at the time of
acquisition.
12. The Mortgage, the 1940 Indenture, and the ISU 1923
Indenture have been duly filed and recorded in all jurisdictions in which it is
necessary for the Mortgage, the 1940 Indenture, and the ISU 1923 Indenture to be
filed and recorded in order to constitute a lien of record on the property
subject thereto; appropriate financing statements have been filed in the
appropriate offices in the State of Iowa; and each such recording or filing is
fully effective to give constructive notice of the contents of each such
recorded or filed document to all purchasers, mortgagees and secured parties
(except for after-acquired property) covered thereby.
13. The Chief Accountant of the Federal Energy Regulatory
Commission ("FERC") has authorized the issuance and sale of the Bonds, which
authorization is, to the best of my knowledge, still in full force and effect;
the issuance and sale of the Bonds to you pursuant to the Underwriting Agreement
are in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other governmental body is legally
required for the issuance and sale of the Bonds pursuant to the Underwriting
Agreement, except such as have been obtained under the Securities Act of 1933,
as amended ("Securities Act"), and such as may be required under state
securities or blue sky laws in connection with the purchase and distribution of
the Bonds by you.
14. Except as referred to in the Registration Statement and
Prospectus, to the best of my knowledge, there are no material or contemplated
legal proceedings to which the Company is or may be a party or of which property
of the Company is or may be subject which depart from the ordinary routine
litigation incident to the kinds of business conducted by the Company.
15. The documents incorporated by reference in the Prospectus
(other than the financial statements and financial and statistical data, as to
which I express no opinion), when they were filed with the Securities and
Exchange Commission (the "Commission"), complied as to form in all material
respects with the requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder of the Commission; and I have no reason to
believe that any of such documents, when they were so filed, contained an 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 when such documents were so filed, not misleading.
16. To the best of my knowledge, there are no contracts or
other instruments or documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
17. The Company has the legal right to function and operate as
an electric and gas utility in the State of Iowa, holds valid and subsisting
franchises authorizing it to carry on the utility business in which it is
engaged in all incorporated communities having a population of 1,000 or more
[(except in ______________, Iowa, where operations have not been impaired by the
expiration of such franchises)], and has adequate licenses and permits where
required by law to maintain electric and gas transmission and distribution lines
through unincorporated areas and over public lands not located in incorporated
communities and over private rights-of-way in the territory which it serves.
I am a member of the bar of the State of Iowa and do not hold
myself out as an expert on the laws of any other State. With respect to the
opinions set forth in Paragraphs 4, 5, and 6 above, I call your attention to the
fact that the provisions of the Atomic Energy Act of 1954, as amended, and
regulations promulgated thereunder impose certain licensing and other
requirements upon persons (such as the Trustee, as defined in the Mortgage, or
other purchasers pursuant to the remedial provisions of the Mortgage, the 1940
Indenture, or the ISU 1923 Indenture) who seek to acquire, possess or use
nuclear production facilities.
The opinion set forth above is solely for the benefit of the
addressees of this letter and may not be relied upon in any manner by any other
person without my prior written consent, except that Winthrop, Stimson, Putnam &
Roberts may rely on this opinion as to all matters of Iowa law in rendering
their opinions required to be delivered under the Underwriting Agreement.
Very truly yours,
<PAGE>
EXHIBIT B
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
Re: IES Utilities Inc.
$__________ Collateral Trust Bonds ___% Series Due ____
Ladies and Gentlemen:
We have acted as Counsel for IES Utilities Inc. ("Company") in
connection with the issuance and sale by the Company to you pursuant to the
Underwriting Agreement dated __________ ("Underwriting Agreement") between the
Company and you, of $_________ in principal amount of Collateral Trust Bonds
___% Series Due ____ (the "Bonds"), issued under the Company's Indenture of
Mortgage and Deed of Trust, dated as of September 1, 1993, to The First National
Bank of Chicago, as Trustee (the "Trustee"), as heretofore supplemented and as
further supplemented by the _____ Supplemental Indenture, dated as of
__________. Said Indenture of Mortgage and Deed of Trust as so supplemented is
herein referred to as the "Mortgage".
We are members of the New York Bar and, for purposes of this
opinion, do not hold ourselves out as experts on the laws of any jurisdiction
other than the State of New York and the United States of America. We have, with
your consent, relied upon the opinion of even date herewith addressed to you by
__________, Counsel for IES Industries Inc., as to the matters covered in such
opinion relating to Iowa law. We have reviewed said opinion and believe that it
is satisfactory and that you and we are justified in relying thereon.
We also examined such other documents and questions of law and
satisfied ourselves as to such other matters as we have deemed necessary in
order to enable us to express this opinion. We have not examined and are
expressing no opinion or belief as to matters relating to the incorporation of
the Company, titles to property of the Company, franchises of the Company, or
the descriptions of properties in, the nature and the extent of the lien of, the
absence of liens and encumbrances prior to the lien of, or the recordation of,
the Mortgage, IELP 1940 Mortgage and ISU 1923 Mortgage (the terms "IELP 1940
Mortgage" and "ISU 1923 Mortgage" as used herein shall have the same meaning as
those terms in the Mortgage). We also have not examined the Bonds, except a
specimen thereof. As to various questions of fact material to this opinion, we
have relied upon representations and certificates of officers and
representatives of the Company and statements in the Registration Statement (the
terms "Registration Statement" and "Prospectus," as used herein, have the same
meanings as those words in the Underwriting Agreement). We have also examined
originals, or copies of originals certified to our satisfaction, of such
agreements, documents, certificates and other instruments as we have considered
relevant and necessary as a basis for such opinion. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to the originals of the
documents submitted to us as certified or photostatic copies.
Subject to the foregoing and to the further exceptions and
qualifications set forth below, we are of the opinion that:
1. The Mortgage has been duly and validly authorized by all
necessary corporate action of the Company, has been duly executed, acknowledged
and delivered by the Company and is a valid and legally binding instrument
enforceable against the Company in accordance with its terms, except as limited
by laws with respect to or affecting the remedies to enforce the security
provided by the Mortgage, and by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, by general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and by an implied covenant of good faith and fair dealing; and the
Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
2. The Bonds have been duly authorized and, when duly
executed, authenticated, issued and delivered to and paid for by you in
accordance with the terms of the Underwriting Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits and
security provided by the Indenture enforceable against the Company in accordance
with their terms except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing.
3. The summaries of the terms of the Mortgage, the Bonds, the
Class "A" Bonds (as defined in the Mortgage), the IELP 1940 Mortgage and the ISU
1923 Mortgage contained in the Registration Statement and the Prospectus fairly
describe in all material respects the provisions thereof required to be
described by the registration statement form.
4. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
5. The execution and delivery of the Underwriting Agreement,
the consummation of the transactions therein contemplated and the fulfillment of
the terms thereof do not and will not conflict with, or result in a breach by
the Company of, any of the terms or provisions of, or constitute a default
under, the Articles of Incorporation or By-laws of the Company, the Mortgage,
the IELP 1940 Mortgage, the ISU 1923 Mortgage, or, to the best of our knowledge,
any other indenture, mortgage, deed of trust or other agreement or instrument to
which the Company is a party or by which it or any of its properties are bound.
6. The Chief Accountant of the Federal Energy Regulatory
Commission has authorized the issuance and sale of the Bonds, which
authorization is, to the best of our knowledge, still in full force and effect;
the issuance and sale of the Bonds to you pursuant to the Underwriting Agreement
are in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other federal commission or regulatory
authority is legally required for the issuance and sale of the Bonds pursuant to
the Underwriting Agreement, except such as have been obtained under the
Securities Act of 1933, as amended ("Securities Act") or the Trust Indenture
Act.
7. To the best of our knowledge, the Registration Statement
is, at the date hereof, effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for a stop order with respect thereto have been instituted or are
pending or threatened under the Securities Act; the Registration Statement, at
the time of its effectiveness, and the Prospectus, at the time first filed with
the Securities and Exchange Commission ("Commission") pursuant to Rule 424 under
the Securities Act, complied as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act, and the
applicable rules and regulations of the Commission thereunder (except that we
express no opinion as to the financial statements or other financial or
statistical data included or incorporated by reference therein or as to the Form
T-1 filed as an exhibit to the Registration Statement).
8. The Company and IES Industries Inc. are currently exempt
from regulation under the Public Utility Holding Company Act of 1935, as
amended, except under Section 9(a)(2) thereof.
9. To the best of our knowledge, there are no contracts or
other instruments or documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
In passing upon the forms of the Registration Statement and
the Prospectus, we necessarily assume the correctness and completeness of the
statements made by the Company and the information included or incorporated by
reference in the Registration Statement and the Prospectus and take no
responsibility therefor, except insofar as such statements relate to us and as
set forth in paragraph 3 above. In connection with the preparation of the
Registration Statement and the Prospectus, we have had discussions with certain
of the Company's officers and representatives, with other counsel for the
Company, with your counsel and with Arthur Andersen LLP, the independent
certified public accountants who examined certain of the financial statements
included or incorporated by reference in the Registration Statement. Our
examination of the Registration Statement and the Prospectus and our discussions
did not disclose to us any information that gives us reason to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, at the time first filed with the Commission pursuant to
Rule 424 under the Securities Act and at the date hereof, contained or contains
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do not express any
opinion or belief as to the financial statements or other financial or
statistical data included or incorporated by reference in the Registration
Statement or the Prospectus or as to the statements contained in the Form T-1
filed as an exhibit to the Registration Statement.
With respect to the opinions set forth in Paragraphs 1 and 2
above, we call your attention to the fact that the provisions of the Atomic
Energy Act of 1954, as amended, and regulations promulgated thereunder impose
certain licensing and other requirements upon persons (such as the Trustee, as
defined in the Mortgage, or other purchasers pursuant to the remedial provisions
of the Mortgage, the IELP 1940 Mortgage, and the ISU 1923 Mortgage) who seek to
acquire, possess or use nuclear production facilities.
As used in this opinion, the phrase "to the best of our
knowledge" is intended to mean the actual knowledge or information known by the
lawyers in our firm who have been principally involved in the transactions
contemplated by the Underwriting Agreement.
The opinion set forth above is solely for your benefit in
connection with the Underwriting Agreement and the transactions contemplated
thereunder and may not be quoted or furnished to, or relied upon in any manner
by, any other person or utilized for any other purpose without our prior written
consent.
Very truly yours,
WINTHROP, STIMSON, PUTNAM & ROBERTS
<PAGE>
EXHIBIT C
[Letterhead of Dorsey & Whitney LLP]
[Date]
Re: IES Utilities Inc.
$__________ Collateral Trust Bonds ___% Series Due ____
Ladies and Gentlemen:
We have acted as your counsel in connection with the issuance
and sale by IES Utilities, Inc. (the "Company") to you pursuant to the
Underwriting Agreement dated __________ ("Underwriting Agreement") between the
Company and you, of $__________ in principal amount of Collateral Trust Bonds
___% Series (the "Bonds"), issued under the Company's Indenture, dated as of
September 1, 1993, to The First National Bank of Chicago, as Trustee (the
"Trustee"), as supplemented by the _____ Supplemental Indenture, dated as of
__________. Said Indenture of Mortgage and Deed of Trust as so supplemented is
herein referred to as the "Mortgage"). This opinion is being delivered pursuant
to Section 8(d) of the Underwriting Agreement.
We have examined such documents and reviewed such questions of
law as we have considered necessary and appropriate for the purposes of this
opinion.
In rendering our opinions below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies or specimens. We have also assumed the legal capacity
for all purposes relevant hereto of all natural persons and, with respect to all
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or other) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or other), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
on certificates of officers of the Company and of public officials.
Certain of our opinions expressed below as to factual matters
are qualified as being limited "to the best of our knowledge" or by other words
to the same or similar effect. Such words, as used herein, mean the information
known to ___________, ___________ and __________, the attorneys who have
represented you in connection with the transactions contemplated by the
Underwriting Agreement. In rendering such opinions, we have not conducted any
independent investigation or consulted with other attorneys in our firm with
respect to the matters covered thereby.
On the basis of such examination, we advise you that, in our
opinion:
1. The Company is a validly organized and existing corporation
in good standing under the laws of the State of Iowa.
2. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
3. The Mortgage has been duly and validly authorized by all
requisite corporate action, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms.
4. The Mortgage has been duly qualified under the Trust
Indenture Act of 1939, as amended ("Trust Indenture Act").
5. The Bonds have been duly authorized by all requisite
corporate action and, when duly executed, authenticated, issued and delivered to
and paid for by you in accordance with the terms of the Underwriting Agreement,
will constitute valid and legally binding obligations of the Company entitled to
the benefits and security provided by the Mortgage.
6. The Chief Accountant of the Federal Energy Regulatory
Commission has authorized the issuance and sale of the Bonds, which
authorization is, to the best of our knowledge, still in full force and effect;
the issuance and sale of the Bonds to you pursuant to the Underwriting Agreement
is in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other federal commission or regulatory
authority is legally required for the issuance and sale of the Bonds pursuant to
the Underwriting Agreement, except such as have been obtained under the
Securities Act of 1933, as amended ("Securities Act"), or the Trust Indenture
Act.
7. The Company's registration statements on Form S-3 (File
Nos. 33-62259 and 333-_____) relating to the Bonds (collectively, the
"Registration Statement") have become effective under the Securities Act, and,
to the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for a stop order with
respect thereto have been instituted or are pending or threatened under the
Securities Act.
8. The Company is a subsidiary of IES Industries Inc., an Iowa
corporation, and both are exempt from regulation under the Public Utility
Holding Company Act of 1935, as amended, except under Section 9(a)(2) thereof.
The opinions set forth above are subject to the following qualifications and
exceptions:
(a) Our opinions are subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar law of general application affecting creditors' rights.
(b) Our opinions are subject to the effect of general
principles of equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing, estoppel, election of remedies and
other similar doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at law).
(c) We express no opinion concerning any person's rights in or
title to any real or personal property. We express no opinion with regard to the
filing or recording of any agreement or instrument. We express no opinion with
respect to the validity, perfection or priority of any lien or security
interest.
(d) The rights of debtors, guarantors and other secured
parties to receive notices under Sections 9-504 and 9-505 of the Uniform
Commercial Code ("UCC") may not be waived prior to default, the failure to
comply with such notice requirements may bar or limit the recovery of any
deficiency remaining after the retention or sale of repossessed collateral, and
a secured party may be required to obtain, after appropriate notice and hearing,
a judgment or decree of a court of competent jurisdiction permitting the secured
party to enforce its rights to take possession and dispose of any of its
collateral.
(e) The rights of debtors, guarantors and other secured
parties to redeem collateral under Section 9-506 of the UCC may not be waived
prior to default.
(f) The duties to exercise reasonable care in the custody and
preservation of collateral in a secured party's possession and to deal with and
dispose of collateral in a commercially reasonable manner as required by the UCC
or other applicable law may not be disclaimed by agreement, waived or released
prior to default.
(g) Notwithstanding certain language of the Mortgage, the
Trustee may be limited to recovery of only reasonable expenses or attorneys'
fees and legal expenses with respect to the enforcement of the Mortgage and the
liens or security interests created under the Mortgage.
(h) We express no opinion as to the enforcement of
indemnification provisions in the Mortgage.
(i) Certain rights, remedies and waivers contained in the
Mortgage may be limited or rendered ineffective by applicable laws governing
such provisions, but such laws do not, in our opinion, render the Mortgage
invalid as a whole, or invalidate the obligations created thereunder or the
liens or security interests created thereby, and the Mortgage does contain the
customary remedial provisions which are normally used to allow the practical
realization of the rights and benefits afforded thereby.
(j) The provisions of the Atomic Energy Act of 1954, as
amended, and regulations promulgated thereunder, impose certain licensing and
other requirements upon persons (such as the Trustee or other purchasers
pursuant to the remedial provisions of the Mortgage) who seek to acquire,
possess or use nuclear production facilities.
Our opinions expressed above are limited to the laws of the
States of Iowa and New York and the federal laws of the United States of
America.
The foregoing opinions are being furnished to you solely for
your benefit and may not be relied upon by, nor may copies be delivered to, any
other person without pour prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
<PAGE>
[Letterhead of Dorsey & Whitney LLP]
[Date]
Re: IES Utilities Inc.
$__________ Collateral Trust Bonds ___% Series Due ____
Ladies and Gentlemen:
This letter relates to the registration under the Securities
Act of 1933, as amended (the "Act"), and offering of $__________ in aggregate
principal amount of Collateral Trust Bonds, ___% Series Due ____ (the "Bonds")
of IES Utilities Inc., an Iowa corporation (the "Company"). The registration
statements of the Company on Form S-3 (File Nos. 33-62259 and 333-_____)
(collectively, the "Registration Statement") was filed in accordance with
procedures of the Securities and Exchange Commission (the "Commission")
permitting a delayed or continuous offering of securities pursuant thereto and,
if appropriate, a post-effective amendment or prospectus supplement that
provides information relating to the terms of the securities and the manner of
their distribution. The Bonds have been offered by the Prospectus dated
__________ (the "Prospectus"), as supplemented by the Prospectus Supplement
dated __________ (the "Prospectus Supplement"), which updates or supplements
certain information contained in the Prospectus. The Prospectus, as so
supplemented, does not necessarily contain a current description of the
Company's business and affairs since, pursuant to form S-3, it incorporates by
reference certain documents filed with the Commission which contain information
as of various dates.
In accordance with our understanding with you as to the scope
of our services under the circumstances applicable to the offering of the Bonds,
we reviewed the Registration Statement, the Prospectus and the Prospectus
Supplement, participated in the discussions with your representatives and those
of the Company, its counsel and its independent public accountants and advised
you as to the requirements of the Act and the applicable rules and regulations
thereunder. Between the date of the Prospectus Supplement and the date of
delivery of this letter, we participated in further discussions with your
representatives and those of the Company, its counsel and its independent public
accountants regarding the contents of certain portions of the Prospectus and the
Prospectus Supplement and certain related matters, and reviewed certificates of
certain officers of the Company, opinions addressed to you from counsel to the
Company and letters addressed to you from independent public accountants of the
Company.
On the basis of the information that was reviewed by us in the
course of the performance of the services referred to above, in our opinion (i)
the Registration Statement, as of its effective date, and the Prospectus, as
supplemented by the Prospectus Supplement as of the date of the Prospectus
Supplement, complied as to form in all material respects with the requirements
of the Act and the Trust Indenture Act of 1939, as amended, and the respective,
applicable rules and regulations thereunder (ii) the summaries of the terms of
the Mortgage, the Bonds, the Class "A" Bonds, the 1940 Indenture and the ISU
1923 Indenture (as such terms are defined in the Prospectus) contained in the
Registration Statement, the Prospectus and the Prospectus Supplement fairly
describe in all material respects the provisions thereof required to be
described in the registration statement form. Further, nothing that came to our
attention in the course of such review has caused us to believe that the
Registration Statement, on such effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as supplemented by the Prospectus Supplement, as of the date of the
Prospectus Supplement and as of the date and time of delivery of this letter,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such, however, that we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement. Also, we do
not express any opinion or belief as to the financial statements or other
financial data contained in the Registration Statement, the Prospectus or the
Prospectus Supplement, or as to the statement of the eligibility and
qualification of the Trustee under the Indenture under which the Bonds are being
issued.
This letter is furnished by us as counsel to you solely for
your benefit and may not be relied upon by, nor may copies be delivered to, any
other person without our prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
<PAGE>
EXHIBIT D
Pursuant to subsection (e) of Section 8 of the Underwriting
Agreement, Arthur Andersen LLP shall furnish a letter to the Representative to
the effect that:
(1) They are independent certified public accountants with respect to
the Company within the meaning of the Securities Act and the applicable
published rules and regulations thereunder;
(2) In their opinion, the financial statements and schedules audited by
them and included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published rules and
regulations thereunder;
(3) On the basis of performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information, on the
latest available unaudited financial statements included or incorporated by
reference in the Registration Statement, a reading of the latest available
interim unaudited financial statements of the Company, the minutes of the
meetings of the Board of Directors, the Executive Committee thereof and the
stockholders of the Company, respectively, since the close of the most recent
audited fiscal year to a specified date not more than five business days prior
to the Closing Date, and inquiries of officials of the Company who have
responsibility for the respective company's financial and accounting matters (it
being understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and that they would not
necessarily reveal matters of significance with respect to the comments made in
such letter, and, accordingly, that Arthur Andersen LLP makes no representation
as to the sufficiency of such procedures for the several Underwriters'
purposes), nothing has come to their attention which caused them to believe that
(a) any unaudited financial statements included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and regulations
thereunder;
(b) the audited and any unaudited selected financial
information and supplemental financial information and ratios of earnings to
fixed charges included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable disclosure
requirements of Regulation S-K promulgated under the Securities Act;
(c) any material modifications should be made to said
unaudited financial statements for them to be in conformity with generally
accepted accounting principles;
(d) for the period from ___________ to the date of the latest
available unaudited financial statements of the Company, there was any decrease
in operating revenues, operating income or net income as compared with the
corresponding period in the preceding year, except in all instances for
decreases which the Prospectus discloses have occurred or may occur or except as
set forth in such letter; and
(e) at a specified date not more than ______ days prior to the
Closing Date there was any change in the capital stock or long-term debt of the
Company, in each case as compared with amounts shown in the most recent balance
sheet incorporated by reference in the Prospectus, except in all instances for
changes or decreases which the Prospectus discloses have occurred or may occur,
for declarations of dividends, for the repayment or redemption of long-term
debt, for the amortization of premium or discount on long-term debt, for the
redemption or purchase of preferred stock for sinking fund purposes, for any
increases in long-term debt in respect of previously issued pollution control
revenue bonds, or for changes or decreases as set forth in such letter,
identifying the same and specifying the amount thereof.
(4) In addition to the audit referred to in their reports included or
incorporated by reference in the Prospectus and the inspection of minute books,
inquiries and other limited procedures referred to in paragraph 3 above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information including certain pro forma
information specified by the Representative which are derived from the general
accounting records of the Company which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representative or in
documents incorporated by reference in the Prospectus specified by the
Representative and agreed to by the Company, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Company and have found them to be in agreement.
<PAGE>
EXHIBIT 1(b)
UNDERWRITING AGREEMENT
For the Purchase of Subordinated Debentures
of IES Utilities Inc.
IES UTILITIES INC.
c/o Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
SECTION 1. Purchase and Sale. On the basis of the
representations and warranties, and subject to the terms and conditions, set
forth in this agreement ("Underwriting Agreement"), each Underwriter (defined
below) shall purchase from IES Utilities Inc. ("Company"), severally and not
jointly, and the Company shall sell to each of the Underwriters (defined below),
the principal amount of the Company's unsecured junior subordinated debentures
("Subordinated Debentures") set forth opposite the name of such Underwriter in
Schedule II hereto at the price specified in Schedule I hereto, plus accrued
interest, if any, at the rate specified in Schedule I hereto. The aggregate
principal amount of such Subordinated Debentures being sold hereunder is
hereinafter referred to as the "Debentures."
SECTION 2. Underwriters and Representative. The term
"Underwriters," as used herein, shall be deemed to mean the several persons,
firms, or corporations named in Schedule II hereto (including any substituted
Underwriters under the provisions of Section 6), and the term "Representative,"
as used herein, shall be deemed to mean the representative or representatives of
such Underwriters by whom or on whose behalf this Underwriting Agreement is
signed. If there shall be one person, firm, or corporation named in said
Schedule II, the term "Underwriters" and the term "Representative," as used
herein, shall mean that person, firm, or corporation. All obligations of the
Underwriters are several and not joint. The use of the term "Underwriter" herein
shall not be deemed to establish or admit that a purchaser of the Debentures is
an "Underwriter" of the Debentures as such term is defined in and used under the
Securities Act of 1933, as amended ("Securities Act").
SECTION 3. Description of the Debentures. The Debentures shall
be in the aggregate principal amount and shall mature on the date specified in
Schedule I hereto, and shall be issued under and secured by the Indenture (For
Unsecured Subordinated Debt Securities) dated as of December 1, 1995
("Indenture"), of the Company to The First National Bank of Chicago as Trustee
("Trustee"). The Debentures shall bear interest at the rate per annum specified
in Schedule I hereto. The Debentures and the Indenture are more fully described
in the Prospectus hereinafter referred to.
SECTION 4. Representations and Warranties of the Company.
The Company represents and warrants that:
(a) It has filed with the Securities and Exchange Commission
("Commission") two registration statements (File Nos. 33-62259 and
333-_____) (collectively, the "Registration Statement") for the
registration of up to an aggregate of $135,000,000 principal amount of the
Company's debt securities under the Securities Act. Registration statements
(File Nos. 33-62259 and 333-_____) have become effective. No stop order
suspending the effectiveness of the Registration Statement has been issued,
and no proceedings for that purpose have been initiated or threatened by
the Commission. The prospectus (including the supplement thereto) forming a
part of the Registration Statement, at that time pursuant to Item 12 of
Form S-3, is hereinafter referred to as the "Basic Prospectus." In the
event that the Basic Prospectus shall have been amended, revised, or
supplemented (but excluding any amendments, revisions, or supplements to
the Basic Prospectus relating solely to the offering of debt securities
other than the Debentures) prior to the time of effectiveness of this
Underwriting Agreement, and with respect to any documents filed by the
Company pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act
of 1934, as amended ("Exchange Act"), after the time the Registration
Statement initially became effective and up to the time of effectiveness of
this Underwriting Agreement (but excluding documents incorporated therein
by reference relating solely to the offering of debt securities other than
the Debentures), which documents are deemed to be incorporated by reference
in the Basic Prospectus, the term "Basic Prospectus" as used herein shall
also mean such prospectus as so amended, revised, or supplemented. The
Registration Statement as it initially became effective and as it may have
been amended by any amendment thereto incorporated in the Basic Prospectus
(including for these purposes as an amendment any document incorporated by
reference in the Basic Prospectus) and the Basic Prospectus as it shall be
supplemented to reflect the terms of offering and sale of the Debentures by
a prospectus supplement ("Prospectus Supplement") to be filed with the
Commission pursuant to Rule 424 under the Securities Act ("Rule 424"), are
hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively;
(b) After the time of effectiveness of this Underwriting Agreement,
the Company will not file (i) any amendment to the Registration Statement
(except any amendment relating solely to the offering of debt securities
other than the Debentures) or supplement to the Prospectus or (ii) prior to
the time that the Prospectus is filed with the Commission pursuant to Rule
424, any document which is to be incorporated by reference in, or any
supplement (including the Prospectus Supplement) to, the Basic Prospectus,
in either case without prior notice to each of the Representative and
Dorsey & Whitney LLP ("Counsel for the Underwriters"), or any such
amendment, supplement, or document to which said Counsel shall reasonably
object on legal grounds in writing. For purposes of this Underwriting
Agreement, any document filed with the Commission after the effectiveness
of this Underwriting Agreement and incorporated by reference in the
Prospectus (except documents incorporated by reference relating solely to
the offering of debt securities other than the Debentures) pursuant to Item
12 of Form S-3 shall be deemed a supplement to the Prospectus;
(c) The Registration Statement, at the time of its effectiveness,
fully complied, the Indenture, at the time of its execution, will fully
comply, and the Prospectus, when filed with the Commission pursuant to Rule
424 and at the Closing Date (hereinafter defined), as it may then be
supplemented or amended, will fully comply, in all material respects with
the applicable provisions of the Securities Act, the Trust Indenture Act of
1939, as amended ("Trust Indenture Act"), and the rules and regulations of
the Commission thereunder or pursuant to said rules and regulations will be
deemed to comply therewith; the documents incorporated by reference in the
Prospectus pursuant to Item 12 of Form S-3, on the date first filed with
the Commission pursuant to the Exchange Act, fully complied and on the date
the Prospectus is filed with the Commission pursuant to Rule 424 and at the
Closing Date (hereinafter defined) will comply in all material respects
with the applicable provisions of the Exchange Act and the rules and
regulations of the Commission thereunder or pursuant to said rules and
regulations were or will be deemed to comply therewith; on the date of
effectiveness of the Registration Statement and any post-effective
amendment thereto (but excluding in each case any post-effective amendment
relating solely to the offering of debt securities other than the
Debentures) or, if later than such dates, on the date that the Company's
most recent annual report on Form 10-K was filed with the Commission under
the Exchange Act, the Registration Statement, as amended by any such
post-effective amendment, did not or will not, as the case may be, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; the Prospectus, at the date it is filed with the Commission
pursuant to Rule 424 and at the Closing Date (hereinafter defined), as it
may be amended or supplemented, will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading; and on said dates and at such times, the
documents then incorporated by reference in the Prospectus pursuant to Item
12 of Form S-3, when read together with the Prospectus, or the Prospectus
as it may then be amended or supplemented, will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties in this --------
------- subsection (c) shall not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to the
Company by or through the Representative on behalf of any Underwriter for
use in connection with the preparation of the Registration Statement or the
Prospectus, as they may be amended or supplemented, or to any statements in
or omissions from the statement of eligibility, as it may be amended, under
the Trust Indenture Act of the Trustee under the Indenture;
(d) The Federal Energy Regulatory Commission has authorized the
issuance and sale of the Debentures; such authorization is in full force
and effect; the issuance and sale of the Debentures pursuant to this
Underwriting Agreement will not violate the terms of such authorization;
and no other authorization, approval or consent of any other governmental
body or regulatory authority is legally required for the issuance and sale
of the Debentures pursuant to this Underwriting Agreement, except such as
have been obtained under the Securities Act and the Trust Indenture Act and
such as may be required under the state securities or "blue sky" laws in
connection with the purchase and distribution of the Debentures by the
Underwriters;
(e) The Company is a corporation duly incorporated, and validly
existing, and in good standing under the laws of the State of Iowa and has
full power and authority (corporate and other) under such laws to own its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; and the Company does not own or lease
substantial properties or conduct its business in any state other than the
State of Iowa;
(f) The Debentures have been duly authorized, and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by and
secured by the Indenture; the Indenture has been duly authorized, executed
and delivered by the Company and the Trustee, and constitutes a valid and
legally binding instrument, enforceable in accordance with its terms,
except in each case as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, by general equitable
principles (regardless of whether enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith
and fair dealing; and the Debentures and the Indenture will conform in all
material respects to the descriptions thereof in the Prospectus; and
(g) The consummation by the Company of the transactions herein
contemplated and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under,
the Company's Articles of Incorporation or Bylaws, as amended, or of any
indenture or other agreement or instrument to which the Company is now a
party.
SECTION 5. Offering. Forthwith upon the execution of this
Underwriting Agreement, the Representative, acting on behalf of the
Underwriters, shall advise the Company whether a public offering of the
Debentures is to be made, and, if so, shall furnish to the Company (which
information shall be confirmed in writing as soon as practicable thereafter) (a)
the information with respect to such offering of the Debentures and related
matters that is required to complete the Prospectus Supplement or any
post-effective amendment to the Registration Statement which may be required and
a copy of any "agreement among underwriters"; (b) if a post-effective amendment
to the Registration Statement is required, a consent, if necessary, to the
filing of the post-effective amendment or an acceptable power-of-attorney
authorizing an available individual to sign the consent on its behalf; and (c)
such further information, if any, as may be required to be furnished by the
Company under the Federal Power Act. Such information and the power-of-attorney
may be provided by telecopier (in the case of the power-of-attorney, followed
promptly by an executed copy). Nothing in this Underwriting Agreement shall be
construed to require that the Underwriters make any such public offering on a
"fixed price" basis. The Representative agrees to notify the Company in writing
of any change in the plan of distribution of the Debentures that would require a
supplement to the Prospectus or an amendment to the Registration Statement.
SECTION 6. Time and Place of Closing. Delivery of the
Debentures and payment therefor by check or checks, payable to the Company or
its order, in New York, New York, or by wire transfer, in immediately available
funds, shall be made at the offices of Winthrop, Stimson, Putnam & Roberts, One
Battery Park Plaza, New York, New York, at 10:00 A.M., New York time, on _____,
or at such other place, time, and/or date as the Representative and the Company
may agree upon in writing or as may be established in accordance with the
following paragraph. The hour and date of such delivery and payment are herein
called the "Closing Date."
The Debentures shall be delivered to the Representative for
the respective accounts of the Underwriters in registered form in such
authorized denominations and registered in such names as the Representative may
reasonably request in writing at least two business days prior to the Closing
Date, or, to the extent not so requested, in the names of the respective
Underwriters in such denominations as the Company shall determine.
For the purpose of expediting the checking of the Debentures
by the Representative, the Company agrees to make the Debentures available to
the Representative for checking not later than 2:30 P.M., New York time, on the
last business day preceding the Closing Date, at the New York office of The
First National Bank of Chicago, or at such other place, time, and/or date as may
be agreed upon between the Company and the Representative.
If any Underwriter shall fail or refuse (otherwise than for
some reason sufficient to justify, in accordance with the terms hereof, the
cancellation or termination of its obligations hereunder) to purchase and pay
for the principal amount of Debentures that it has agreed to purchase and pay
for hereunder, the Company shall immediately give notice to the Representative
of the default of such Underwriter, and the other Underwriters shall have the
right within twenty-four (24) hours after the receipt of such notice by the
Representative to determine to purchase, or to procure one or more others, who
are members of the National Association of Securities Dealers, Inc. ("NASD")
(or, if not members of the NASD, who are foreign banks, dealers, or institutions
not registered under the Exchange Act and who agree in making sales to comply
with the NASD's Rules of Fair Practice), and satisfactory to the Company, to
purchase, upon the terms herein set forth, the principal amount of Debentures
that the defaulting Underwriter had agreed to purchase. If any non-defaulting
Underwriter or Underwriters shall determine to exercise such right, the
Representative shall give written notice to the Company of such determination
within twenty-four (24) hours after it shall have received notice of any such
default, and thereupon the Closing Date shall be postponed for such period, not
exceeding three business days, as the Company shall determine. If in the event
of such a default the Representative shall fail to give such notice, or shall
within such twenty-four (24) hour period give written notice to the Company that
no other Underwriter or Underwriters, or others, will exercise such right, then
this Underwriting Agreement may be terminated by the Company, upon like notice
given to the Representative, within a further period of twenty-four (24) hours.
If in such case the Company shall not elect to terminate this Underwriting
Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase and pay
for the respective principal amounts of Debentures that they had severally
agreed to purchase hereunder, as hereinabove provided, and, in addition,
the principal amount of Debentures that the defaulting Underwriter shall
have so failed to purchase up to a principal amount thereof equal to
one-ninth (1/9th) of the respective principal amounts of Debentures that
such non-defaulting Underwriters have otherwise agreed to purchase
hereunder, and/or
(b) to procure one or more others, who are members of the NASD (or, if
not members of the NASD, who are foreign banks, dealers, or institutions
not registered under the Exchange Act and who agree in making sales to
comply with the NASD's Rules of Fair Practice), to purchase, upon the terms
herein set forth, the principal amount of Debentures that such defaulting
Underwriter had agreed to purchase, or that portion thereof that the
remaining Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under clause (a) and/or (b)
above, the Company shall give written notice thereof to the Representative
within such further period of twenty-four (24) hours, and, thereupon, the
Closing Date shall be postponed for such period, not exceeding three business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Underwriting
Agreement.
Any action taken by the Company under this Section 6 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Underwriting Agreement. Termination by the Company
under this Section 6 shall be without any liability on the part of the Company
or any non-defaulting Underwriter, except as otherwise provided in subsection
(g) of Section 7.
In the computation of any period of twenty-four (24) hours
referred to in this Section 6, there shall be excluded a period of twenty-four
(24) hours in respect of each Saturday, Sunday, or legal holiday which would
otherwise be included in such period of time.
SECTION 7. Covenants of the Company. The Company agrees with
each of the Underwriters:
(a) To deliver to the Representative a signed copy of the Registration
Statement as originally filed and of all amendments thereto relating to the
Debentures or a conformed copy thereof certified by an officer of the
Company to be in the form filed.
(b) To deliver to the Underwriters, through the Representative, prior
to 10:00 A.M. New York time on the business day after the date on which
this Underwriting Agreement becomes effective as many copies of the
Prospectus as the Representative may reasonably request.
(c) To cause the Prospectus to be filed with the Commission pursuant
to and in compliance with Rule 424, and to advise the Representative
promptly of the issuance of any stop order under the Securities Act with
respect to the Registration Statement or the institution of any proceedings
therefor of which the Company shall have received notice. The Company will
use its best efforts to prevent the issuance of any such stop order and to
secure the prompt removal thereof if issued.
(d) During such period of time (not exceeding nine months) after the
Prospectus has been filed with the Commission pursuant to Rule 424 as the
Underwriters are required by law to deliver a prospectus, if any event
relating to or affecting the Company or of which the Company shall be
advised in writing by the Representative shall occur which in the Company's
opinion should be set forth in a supplement or amendment to the Prospectus
in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser of the Debentures, not
misleading, to notify the Representative of such event and to amend or
supplement the Prospectus by either (i) preparing and filing with the
Commission and furnishing to the Representative at the Company's expense a
reasonable number of copies of a supplement or supplements or an amendment
or amendments to the Prospectus or (ii) making an appropriate filing
pursuant to Section 13, 14, or 15(d) of the Exchange Act, which will
supplement or amend the Prospectus so that, as supplemented or amended, it
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, in the light of the circumstances when the
Prospectus is delivered to a purchaser of the Debentures, not misleading;
provided that should such event relate solely to the activities of any of
the Underwriters, then the Underwriters shall assume the expense of
preparing any such amendment or supplement. In case any Underwriter is
required to deliver a prospectus after the expiration of nine months from
the date the Prospectus is filed with the Commission pursuant to Rule 424,
the Company, upon the request of the Representative, will furnish to the
Representative, at the expense of such Underwriter, a reasonable quantity
of a supplemented or amended prospectus or supplements or amendments to the
Prospectus complying with Section 10(a) of the Securities Act.
(e) During such period of time after the date the Prospectus is filed
with the Commission pursuant to Rule 424 as a prospectus relating to the
Debentures is required to be delivered under the Securities Act, to file
promptly all documents required to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act.
(f) To make generally available to the Company's security holders as
soon as practicable an earning statement (which need not be audited) in
reasonable detail covering a period of at least twelve months beginning
after the "effective date of the registration statement" within the meaning
of Rule 158 under the Securities Act, which earning statement shall be in
such form, and be made generally available to security holders in such a
manner, as to comply with the requirements of Section 11(a) of the
Securities Act and Rule 158 promulgated under the Securities Act.
(g) Except as herein otherwise provided, to pay all expenses and taxes
(except transfer taxes) in connection with (i) the preparation and filing
of the Registration Statement and any amendments thereto, (ii) the
issuance, printing, and delivery of the Debentures, (iii) any fees charged
by securities rating services for rating the Debentures and (iv) the
typing, printing, and delivery to the Underwriters, through the
Representative, of reasonable quantities of copies of the Registration
Statement and the Prospectus, and any amendment or supplement thereto,
except as otherwise provided in paragraph (d) of this Section. The Company
shall not, however, be required to pay any amount for any expenses of the
Representative or any of the Underwriters, except that, if this
Underwriting Agreement shall be terminated in accordance with the
provisions of Section 8, 9, or 11, the Company will reimburse the
Representative for (i) the reasonable fees and disbursements of counsel for
the Underwriters, whose fees and disbursements the Underwriters agree to
pay in any other event, and (ii) their reasonable out-of-pocket expenses,
in an amount not exceeding a total of ten thousand dollars ($10,000),
incurred in contemplation of the performance of this Underwriting
Agreement. The Company shall not in any event be liable to any of the
Underwriters for damages on account of loss of anticipated profits.
(i) Not to sell any additional Subordinated Debentures until the
earlier to occur of (i) the Closing Date or (ii) in the case of an initial
public offering at a fixed price by the Underwriters, the date of the
termination of the fixed price offering restrictions applicable to the
Underwriters. The Representative agrees to notify the Company of such
termination if it occurs prior to the Closing Date.
SECTION 8. Conditions of Underwriters' Obligations. The
obligation of the Underwriters to purchase and pay for the Debentures shall be
subject to the accuracy of the representations and warranties made herein on the
part of the Company and to the following conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date, and no
proceedings for that purpose shall be pending before, or threatened by, the
Commission on the Closing Date; and at the Closing Date the Representative
shall have received a certificate, dated the Closing Date and signed by an
officer of the Company, to the effect that no such stop order has been or
is in effect and that no proceedings for such purpose are pending before,
or to the knowledge of the Company threatened by, the Commission.
(c) The authorization by the Federal Energy Regulatory Commission of
the issuance and sale of the Debentures shall be in full force and effect;
(d) At the Closing Date, the Representative shall have received from
___________, counsel for IES Industries Inc., Winthrop, Stimson, Putnam &
Roberts, counsel to the Company, and Dorsey & Whitney LLP, counsel for the
Underwriters, opinions in substantially the form and substance set forth in
Exhibits A, B, and C hereto, respectively, (i) with such changes therein as
may be agreed upon by the Company and the Representative, with the approval
of Counsel for the Underwriters, and (ii) if the Prospectus relating to the
Debentures shall be supplemented after the Prospectus shall have been filed
with the Commission pursuant to Rule 424, with changes therein to reflect
such supplementation.
(e) On the Closing Date, the Representative shall have received from
Arthur Andersen LLP a letter dated the Closing Date, in substantially the
form and substance set forth in Exhibit D hereto.
(f) At the Closing Date, the Representative shall have received a
certificate of the Company dated the Closing Date and signed by a Vice
President of the Company, to the effect that (i) the Federal Energy
Regulatory Commission has authorized the issuance and sale of the
Debentures and such authorization is in full force and effect, to the best
knowledge of the signer; (ii) since the most recent date as of which
information is given in the Prospectus, as it may have been amended or
supplemented, there has not been any material adverse change in the
business, property, or financial condition of the Company and there has not
been any material transaction entered into by the Company, other than
transactions in the ordinary course of business, in each case other than as
referred to in, or contemplated by, the Prospectus, as it may have been
amended or supplemented; and (iii) to the best knowledge of the signer, the
representations and warranties of the Company in this Underwriting
Agreement are true and correct in all material respects at and as of the
Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to the Closing Date.
(g) All legal proceedings to be taken in connection with the issuance
and sale of the Debentures shall have been satisfactory in form and
substance to Counsel for the Underwriters.
If any of the conditions specified in this Section 8 shall not
have been fulfilled, this Underwriting Agreement may be terminated by the
Representative with the consent of the Underwriters, who may include the
Representative, which have agreed to purchase in the aggregate fifty percent
(50%) or more of the principal amount of the Debentures, upon notice thereof to
the Company. Any such termination shall be without liability of any party to any
other party, except as otherwise provided in subsection (g) of Section 7.
SECTION 9. Conditions of Company's Obligations. The
obligations of the Company hereunder shall be subject to the following
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to and in compliance with Rule 424.
(b) No stop order suspending the effectiveness of the Registration
Statement shall be in effect at or prior to the Closing Date, and no
proceedings for that purpose shall be pending before, or threatened by, the
Commission on the Closing Date.
(c) The authorization by the Federal Energy Regulatory Commission of
the issuance and sale of the Debentures shall be in full force and effect.
In case any of the conditions specified in this Section 9 shall not have
been fulfilled, this Underwriting Agreement may be terminated by the
Company upon notice thereof to the Representative. Any such termination
shall be without liability of any party to any other party, except as
otherwise provided in subsection (g) of Section 7.
SECTION 10. Indemnification.
(a) The Company shall indemnify, defend, and hold harmless each
Underwriter and each person who controls any Underwriter within the meaning
of Section 15 of the Securities Act from and against any and all losses,
claims, damages, or liabilities, joint or several, to which they or any of
them may become subject under the Securities Act or any other statute or
common law. The Company shall reimburse each such Underwriter and
controlling person for any legal or other expenses (including, to the
extent hereinafter provided, reasonable counsel fees) incurred by them,
such reimbursement to be made as such expenses are incurred by them, in
connection with investigating any such losses, claims, damages, or
liabilities or in connection with defending any actions, insofar as such
losses, claims, damages, liabilities, expenses, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in a preliminary prospectus (if used prior to the
initial effective date of the Registration Statement), or in the Basic
Prospectus (if used prior to the date that the Prospectus is filed with the
Commission pursuant to Rule 424) or in the Registration Statement or the
Prospectus, as amended or supplemented (if any amendments or supplements
thereto shall have been made), or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made not misleading; provided, however, that the indemnity agreement
contained in this paragraph shall not apply to any such losses, claims,
damages, liabilities, expenses, or actions arising out of, or based upon,
any such untrue statement or alleged untrue statement, or any such omission
or alleged omission, if such statement or omission was made in reliance
upon and in conformity with written information furnished to the Company by
or through the Representative on behalf of any Underwriter expressly for
use in connection with the preparation of the Registration Statement or the
Prospectus or any amendment or supplement to either thereof, or arising out
of, or based upon, statements in or omissions from that part of the
Registration Statement which shall constitute the statement of eligibility
under the Trust Indenture Act of the Trustee under the Indenture; and
provided further, that the indemnity agreement contained in this paragraph
shall not inure to the benefit of any Underwriter or of any person
controlling any Underwriter on account of any such losses, claims, damages,
liabilities, expenses, or actions arising from the sale of the Debentures
to any person if there shall not have been given or sent to such person on
behalf of such Underwriter (i) with or prior to the written confirmation of
the sale to such person a copy of the Prospectus, as then amended or
supplemented (exclusive for this purpose of any amendment or supplement
relating solely to any offering of debt securities other than the
Debentures and of any document which becomes incorporated by reference
pursuant to Item 12 of Form S-3 more than 3 business days prior to the date
hereof), and (ii) as soon as available after such written confirmation a
copy of any amendment or supplement to the Prospectus (exclusive for this
purpose of any document incorporated by reference pursuant to Item 12 of
Form S-3) which the Company shall thereafter furnish, pursuant to
subsection (d) of Section 7 hereof, relating to an event occurring prior to
the payment for and delivery to such person of the Debentures involved in
such sale. The indemnity agreement of the Company contained in this Section
and the representations and warranties of the Company contained in Section
4 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any such
controlling person, and shall survive the delivery of the Debentures.
(b) Each Underwriter shall indemnify, defend, and hold harmless the
Company, its directors and officers, and each person who controls any of
the foregoing within the meaning of Section 15 of the Securities Act, from
and against any and all losses, claims, damages, or liabilities, joint or
several, to which they or any of them may become subject under the
Securities Act or any other statute or common law and shall reimburse each
of them for any legal or other expenses (including, to the extent
hereinafter provided, reasonable counsel fees) incurred by them, such
reimbursement to be made as such expenses are incurred by them, in
connection with investigating any such losses, claims, damages, or
liabilities or in connection with defending any action, insofar as such
losses, claims, damages, liabilities, expenses, or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, as
amended or supplemented (if any amendments or supplements thereto shall
have been furnished), or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made
in reliance upon and in conformity with written information furnished to
the Company by or through the Representative on behalf of such Underwriter
expressly for use in connection with the preparation of the Registration
Statement or the Prospectus or any amendment or supplement to either
thereof. The indemnity agreement of the respective Underwriters contained
in this paragraph shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Company, its
directors or officers, or any such controlling person, and shall survive
the delivery of the Debentures.
(c) The Company and the several Underwriters each shall, upon the
receipt of notice of the commencement of any action against it or any
person controlling it as aforesaid, in respect of which indemnity may be
sought on account of any indemnity agreement contained herein, promptly
give written notice of the commencement thereof to the party or parties
against whom indemnity shall be sought hereunder, but the omission so to
notify the indemnifying party or parties of any such action shall not
relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party otherwise than on account of such
indemnity agreement. In case such notice of any such action shall be so
given, the indemnifying party shall be entitled to participate at its own
expense in the defense or, if it so elects, to assume (in conjunction with
any other indemnifying parties) the defense of the action, in which event
the defense shall be conducted by counsel chosen by such indemnifying party
or parties and satisfactory to the indemnified party or parties who shall
be a defendant or defendants in the action, and the indemnified defendant
or defendants shall bear the fees and expenses of any additional counsel
retained by them; but if the indemnifying party shall elect not to assume
the defense of the action, the indemnifying party will reimburse the
indemnified party or parties for the reasonable fees and expenses of any
counsel retained by the indemnified party or parties. If the indemnifying
party does not employ counsel to take charge of the defense or if counsel
for the indemnified party reasonably concludes that there may be defenses
available to the indemnified party which are different from or in addition
to those available to the indemnifying party (in which case the
indemnifying party will not have the right to assume the defense on behalf
of the indemnified party), legal expenses (limited to those of one counsel
for all indemnified parties) and other expenses reasonably incurred by the
indemnified party will be paid by the indemnifying party. No party will be
liable with respect to any settlement made without its prior written
consent.
(d) If the indemnification provided for in this Section 10 is
unavailable to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof)
as well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statements of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statements or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were 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 account of equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Debentures underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter 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
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(e) The respective obligations of the Company and the Underwriters
under this Section 10 shall be in addition to any liability which each of
them may otherwise have.
SECTION 11. Termination. This Underwriting Agreement may be
terminated at any time prior to the Closing Date by the Representative with the
consent of the Underwriters, who may include the Representative, which have
agreed to purchase in the aggregate fifty percent (50%) or more of the aggregate
principal amount of the Debentures, if, prior to such time, (i) trading in
securities on the New York Stock Exchange shall have been generally suspended,
(ii) minimum or maximum ranges for prices shall have been generally established
on the New York Stock Exchange by the New York Stock Exchange, the Commission,
or other governmental authority, (iii) a general banking moratorium shall have
been declared by federal or New York State authorities, (iv) an outbreak or
escalation of hostilities or other national or international calamity or crisis
occurs, the effect of which on the financial markets of the United States is
such as, in the reasonable judgment of the Representative, to make it
impracticable to market the Debentures or enforce contracts for the sale of the
Debentures or (v) in the reasonable judgment of the Representative, the subject
matter of any amendment or supplement (prepared by the Company) to the Basic
Prospectus, the Registration Statement or the Prospectus (except for information
relating to the public offering of the Debentures or to the activity of any
Underwriter or Underwriters) filed or issued after the effectiveness of this
Underwriting Agreement by the Company shall have materially impaired the
marketability of the Debentures. Any termination hereof pursuant to this Section
11 shall be without liability of any party to any other party, except as
otherwise provided in subsection (h) of Section 7.
SECTION 12. Applicable Law. This Underwriting Agreement and
the Debentures to be sold hereunder shall be New York contracts, and their
validity and interpretation shall be governed by the laws of the State of New
York.
SECTION 13. Successors. This Underwriting Agreement shall
inure to the benefit of the Company, the Underwriters and, with respect to the
provisions of Section 10, each director, officer, and controlling person
referred to in Section 10, and their respective successors. Nothing herein is
intended or shall be construed to give to any other person, firm, or corporation
any legal or equitable right, remedy, or claim under or in respect of any
provision in this Underwriting Agreement. The term "successor" as used in this
Underwriting Agreement shall not include any purchaser, as such purchaser, of
any of the Debentures from any of the Underwriters.
SECTION 14. Notices. All communications hereunder shall be
in writing and, if to the Underwriters, shall be mailed or delivered to the
Representative at the address set forth below, or, if to the Company, shall be
mailed or delivered to it c/o IES Utilities Inc., 200 First Street, S.E., Cedar
Rapids, Iowa 52401 Attention: Treasurer.
SECTION 15. Counterparts. This Underwriting Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of such counterparts, when so executed and
delivered, shall be deemed to be an original, and all of such counterparts
shall, taken together, constitute one and the same agreement.
-----------
The stated interest rate to be borne by the Debentures and the
price to be paid to the Company therefor (stated as a percentage of the
principal amount of the Debentures), in each case are set forth in Schedule I
hereto. If said interest rate and price and this Underwriting Agreement are in
accordance with your understanding of our agreement, please indicate your
acceptance thereof in the space provided below for that purpose; whereupon, this
letter and your acceptance shall constitute a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
As Representative(s) of the Underwriters
By:
------------------------------------
Name:
Title:
Address of Representative(s):
-----------------------------
-----------------------------
The foregoing Underwriting Agreement is hereby
accepted as of the date set forth below:
IES UTILITIES INC.
By:
-----------------------
Name:
Title:
Date:
<PAGE>
SCHEDULE I
Underwriting Agreement dated ____________
Registration Statements (Nos. 33-62259 and 333-____________)
Securities:
Designation:
Principal Amount:
Date of Maturity:
Interest Rate: ___%
Commencement of Interest Accrual:
Purchase Price: ______%
Public Offering Price: ______%
Closing Date:
<PAGE>
SCHEDULE II
Principal Amount
Name of Underwriter of Debentures
- ------------------- ----------------
Total
==========
<PAGE>
EXHIBIT A
[Letterhead of IES Industries Inc.]
[Date]
Re: __% Subordinated Debentures, Series ___
$
Due
Ladies and Gentlemen:
I am counsel for IES Industries Inc., the parent company of
IES Utilities Inc. (the "Company") and have participated in the issuance and
sale by the Company to you of $ aggregate principal amount of __% Subordinated
Debentures, Series ___ due _____________ (the "Debentures"), issued under the
Company's Indenture (For Unsecured Subordinated Debt Securities), dated as of
December 1, 1995, to The First National Bank of Chicago, as Trustee (the
"Trustee") (the "Indenture") pursuant to an Underwriting Agreement dated as of
________ between you and the Company (the "Underwriting Agreement").
In this connection, I have examined, among other things, the
following:
(a) the Registration Statement and the Prospectus (such terms having
the same meanings herein as in the Underwriting Agreement);
(b) the Articles of Incorporation of the Company and all amendments
thereto, as certified by the Secretary of State of the State of Iowa;
(c) a Certificate of the Secretary of State or other appropriate state
official certifying as to the good standing and qualification of the
Company to transact business in the State of Iowa;
(d) the By-laws of the Company, certified by the Secretary of the
Company;
(e) the Indenture;
(f) resolution of the Board of Directors of the Company [pertaining to
the authorization and sale of the Debentures and related matters];
(g) the Application filed by the Company with the Federal Energy
Regulatory Commission seeking, among other things, authority for and
approval of the issuance and sale of Debentures and a copy of the Letter of
Authority issued by the Chief Accountant of such Commission, dated
__________, authorizing and approving the issuance and sale of the
Debentures;
(h) certified copies of the Officer's Certificate of the Company dated
__________, setting forth the terms and conditions of the Debentures
approved by the __________ of the Company.
(i) counterparts of the Underwriting Agreement executed by you and the
Company; and
(j) other information, documents, and material which I deem sufficient
along with the foregoing to support this opinion.
In addition, in connection with this opinion, I have reviewed
various orders and certificates of, and members of the legal staff of IES
Industries Inc. had telephone conversations with, public officials. I have not
examined the Debentures, except a specimen thereof.
<PAGE>
Subject to the foregoing and to the further exceptions and
qualifications set forth below and having regard to all legal and factual
considerations which I deem relevant and based upon all such other information
and documents furnished to or obtained by me as I believe necessary to enable me
to render this opinion, including certificates of public officials, I am of the
opinion that:
1. The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the State of Iowa, with full
power and authority (corporate and other) to own its property and to conduct its
business as presently being conducted all within the State of Iowa.
2. The Debentures and the Indenture conform in all material respects to the
descriptions thereof in the Prospectus.
3. The Underwriting Agreement has been duly authorized, executed and
delivered on behalf of the Company.
4. The Debentures have been duly authorized and, when duly executed,
authenticated, issued and delivered to and paid for by you in accordance with
the terms of the Underwriting Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits and security
provided by the Indenture, enforceable against the Company in accordance with
their terms except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether or not enforceability is considered
in a proceeding in equity or at law) and by an implied covenant of good faith
and fair dealing.
5. The Indenture has been duly and validly authorized by all necessary
corporate action of the Company, has been duly executed, acknowledged and
delivered by the Company and is a valid and legally binding instrument
enforceable against the Company in accordance with its terms except as the same
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, by general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law) and by
an implied covenant of good faith and fair dealing.
6. The execution and delivery of the Underwriting Agreement, the
consummation of the transactions therein contemplated and the fulfillment of the
terms thereof do not and will not conflict with, or result in a breach by, the
Company of any of the terms or provisions of, or constitute a default under, the
Articles of Incorporation or By-laws of the Company or the Indenture, or to the
best of my knowledge after reasonable investigation, any other indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it or any of its properties are bound, including the
Agreement and Plan of Merger, by and among, WPL Holdings, Inc., IES Industries
Inc., Interstate Power Company (a Delaware corporation), WPLH Acquisition Co.,
and Interstate Power Company (a Wisconsin corporation), dated as of November 10,
1995, as amended.
7. The Chief Accountant of the Federal Energy Regulatory Commission
("FERC") has authorized the issuance and sale of the Debentures, which
authorization is, to the best of my knowledge, still in full force and effect;
the issuance and sale of the Debentures to you pursuant to the Underwriting
Agreement is in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other governmental body is legally
required for the issuance and sale of the Debentures pursuant to the
Underwriting Agreement, except such as have been obtained under the Securities
Act of 1933, as amended ("Securities Act"), and such as may be required under
state securities or blue sky laws in connection with the purchase and
distribution of the Debentures by you.
8. The Company has the legal right to function and operate as an electric
and gas utility in the state of Iowa, holds valid and subsisting franchises
authorizing it to carry on the utility business in which it is engaged in all
incorporated communities having a population of 1,000 or more (except in ____,
which operations have not been impaired by the lack ofsuch franchises), and has
adaquate licenses and permits where required by law to maintain electric and gas
transmission and distribution lines through unincorporated areas and over public
lands not located in incorporated communities and over private rights-of-way in
the territory which it serves.
9. Except as referred to in the Registration Statement and Prospectus, to
the best of my knowledge, there are no material or contemplated legal
proceedings to which the Company is or may be a party or of which property of
the Company is or may be subject which depart from the ordinary routine
litigation incident to the kinds of business conducted by the Company.
10. The documents incorporated by reference in the Prospectus (other than
the financial statements and financial and statistical data, as to which I
express no opinion), when they were filed with the Securities and Exchange
Commission (the "Commission"), complied as to form in all material respects with
the requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder of the Commission; and I have no reason to believe that
any of such documents, when they were so filed, contained an 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 when such documents were so filed, not misleading.
11. To the best of my knowledge, there are no contracts or other
instruments or documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
I am a member of the bar of the State of Iowa and do not hold
myself out as an expert on the laws of any other State. The opinion set forth
above is solely for the benefit of the addressees of this letter and may not be
relied upon in any manner by any other person without my prior written consent,
except that Winthrop, Stimson, Putnam & Roberts may rely on this opinion as to
all matters of Iowa law in rendering their opinions required to be delivered
under the Underwriting Agreement.
Very truly yours,
<PAGE>
EXHIBIT B
[Letterhead of Winthrop, Stimson, Putnam & Roberts]
[Date]
Re: IES Utilities Inc.
$ % Subordinated Debentures,
Series Due
Ladies and Gentlemen:
We have acted as Counsel for IES Utilities Inc. ("Company") in
connection with the issuance and sale by the Company to you pursuant to the
Underwriting Agreement dated _________, ("Underwriting Agreement") between the
Company and you, of $ in principal amount of % Subordinated Debentures, Series
__ (the "Debentures"), issued under the Company's Indenture dated as of December
1, 1995, to The First National Bank of Chicago, as Trustee (the "Trustee") (the
"Indenture").
We are members of the New York Bar and, for purposes of this
opinion, do not hold ourselves out as experts on the laws of any jurisdiction
other than the State of New York and the United States of America. We have, with
your consent, relied upon the opinion of even date herewith addressed to you by
__________, Counsel for IES Industries Inc., as to the matters covered in such
opinion relating to Iowa law. We have reviewed said opinion and believe that it
is satisfactory and that you and we are justified in relying thereon.
We also examined such other documents and questions of law and
satisfied ourselves as to such other matters as we have deemed necessary in
order to enable us to express this opinion. We have not examined and are
expressing no opinion or belief as to matters relating to the incorporation of
the Company. We also have not examined the Debentures, except a specimen
thereof. As to various questions of fact material to this opinion, we have
relied upon representations and certificates of officers and representatives of
the Company and statements in the Registration Statement (the terms
"Registration Statement" and "Prospectus," as used herein, have the same
meanings as those words in the Underwriting Agreement). We have also examined
originals, or copies of originals certified to our satisfaction, of such
agreements, documents, certificates and other instruments, as we have considered
relevant and necessary as a basis for such opinion. In such examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to the originals of the
documents submitted to us as certified or photostatic copies.
<PAGE>
Subject to the foregoing and to the further exceptions and
qualifications set forth below, we are of the opinion that:
1. The Indenture has been duly and validly authorized by all
necessary corporate action of the Company, has been duly executed, acknowledged
and delivered by the Company and is a valid and legally binding instrument
enforceable against the Company in accordance with its terms except as limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting enforcement of creditors' rights
generally, by general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law) and by an implied covenant of
good faith and fair dealing; and the Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
2. The Debentures have been duly authorized and, when duly
executed, authenticated, issued and delivered to and paid for by you in
accordance with the terms of the Underwriting Agreement, will constitute valid
and legally binding obligations of the Company entitled to the benefits and
security provided by the Indenture enforceable against the Company in accordance
with their terms except as the same may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, by general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing.
3. The summaries of the terms of the Indenture and the
Debentures contained in the Registration Statement and the Prospectus fairly
describe in all material respects the provisions thereof required to be
described by the registration statement form.
4. The Underwriting Agreement has been duly authorized,
executed and delivered on behalf of the Company.
5. The execution and delivery of the Underwriting Agreement,
the consummation of the transactions therein contemplated and the fulfillment of
the terms thereof do not and will not conflict with, or result in a breach by,
the Company of any of the terms or provisions of, or constitute a default under,
the Articles of Incorporation or By-laws of the Company or to the best of our
knowledge, any other indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or any of its
properties are bound. As used in this paragraph 5, the phrase "to the best of
our knowledge after reasonable investigation" is intended to mean the actual
knowledge or information known by the lawyers in our firm who have been
principally involved in the transactions contemplated by the Underwriting
Agreement.
6. The Chief Accountant of the Federal Energy Regulatory
Commission has authorized the issuance and sale of the Debentures, which
authorization is, to the best of our knowledge, still in full force and effect;
the issuance and sale of the Debentures to you pursuant to the Underwriting
Agreement is in conformity with the terms of such authorization; and no other
authorization, approval or consent of any other federal commission or regulatory
authority is legally required for the issuance and sale of the Debentures
pursuant to the Underwriting Agreement, except such as have been obtained under
the Securities Act of 1933, as amended ("Securities Act") or the Trust Indenture
Act.
7. To the best of our knowledge, the Registration Statement
is, at the date hereof, effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for a stop order with respect thereto have been instituted or are
pending or threatened under the Securities Act; the Registration Statement, at
the time of its effectiveness, and the Prospectus, at the time first filed with
the Securities and Exchange Commission ("Commission") pursuant to Rule 424 under
the Securities Act, complied as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act, and the
applicable rules and regulations of the Commission thereunder (except that we
express no opinion as to the financial statements or other financial or
statistical data included or incorporated by reference therein or as to the Form
T-1 filed as an exhibit to the Registration Statement).
8. The Company and IES Industries Inc. are exempt from
regulation under the Public Utility Holding Company Act of 1935, as amended,
except under Section 9(a)(2) thereof.
9. To the best of our knowledge, there are no contracts or
other instruments or documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus or required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or described as
required.
In passing upon the forms of the Registration Statement and
the Prospectus, we necessarily assume the correctness and completeness of the
statements made by the Company and the information included or incorporated by
reference in the Registration Statement and the Prospectus and take no
responsibility therefor, except insofar as such statements relate to us and as
set forth in paragraph 3 above. In connection with the preparation of the
Registration Statement and the Prospectus, we have had discussions with certain
of the Company's officers and representatives, with other counsel for the
Company, with your counsel and with Arthur Andersen LLP, the independent
certified public accountants who examined certain of the financial statements
included or incorporated by reference in the Registration Statement. Our
examination of the Registration Statement and the Prospectus and our discussions
did not disclose to us any information that gives us reason to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, at the time first filed with the Commission pursuant to
Rule 424 under the Securities Act and at the date hereof, contained or contains
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. We do not express any
opinion or belief as to the financial statements or other financial or
statistical data included or incorporated by reference in the Registration
Statement or the Prospectus. We do not express any opinion as to the statements
contained in the Form T-1 filed as an exhibit to the Registration Statement.
The opinion set forth above is solely for the benefit of the
addressees hereof in connection with the Underwriting Agreement and the
transactions contemplated thereunder and may not be quoted or furnished to, or
relied upon in any manner by, any other person or utilized for any other purpose
without our prior written consent.
Very truly yours,
WINTHROP, STIMSON, PUTNAM & ROBERTS
<PAGE>
EXHIBIT C
[Letterhead of Dorsey & Whitney LLP]
[Date]
Re: IES Utilities Inc.
$ % Subordinated Debentures,
Series
Ladies and Gentlemen:
We have acted as your counsel in connection with the issuance
and sale by IES Utilities, Inc. (the "Company") to you pursuant to the
Underwriting Agreement dated , ("Underwriting Agreement") between the Company
and you, of $___________ in principal amount of % Subordinated Debentures,
Series ___ (the "Debentures"), issued under the Company's Indenture, dated as of
December 1, 1995, to The First National Bank of Chicago, as Trustee (the
"Trustee") (the "Indenture"). This opinion is being delivered pursuant to
subsection (d) of Section 8 of the Underwriting Agreement.
We have examined such documents and reviewed such questions of
law as we have considered necessary and appropriate for the purposes of this
opinion.
In rendering our opinions below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies or specimens. We have also assumed the legal capacity
for all purposes relevant hereto of all natural persons and, with respect to all
parties to agreements or instruments relevant hereto other than the Company,
that such parties had the requisite power and authority (corporate or other) to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action
(corporate or other), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. As to questions of fact material to our opinions, we have relied
on certificates of officers of the Company and of public officials.
Certain of our opinions expressed below as to factual matters
are qualified as being limited "to the best of our knowledge" or by other words
to the same or similar effect. Such words, as used herein, mean the information
known to ___________, ___________ and __________, the attorneys who have
represented you in connection with the transactions contemplated by the
Underwriting Agreement. In rendering such opinions, we have not conducted any
independent investigation or consulted with other attorneys in our firm with
respect to the matters covered thereby.
On the basis of such examination, we adivse you that, in our
opinion:
<PAGE>
1. the Company is a validly organized and existing corporation in good
standing under the laws of the State of Iowa;
2. the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
3. the Indenture has been duly and validly authorized by all requisite
corporate action of the Company, and has been duly executed and delivered by the
Company and (assuming the Indenture has been duly authorized, executed and
delivered by the Trustee) consititues a valid and legally binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, by general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and by an implied covenant of good faith and fair dealing;
4. the Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended ("Trust Indenture Act");
5. the Debentures have been duly authorized and executed by the Company
and, when authenticated by the Trustee in accordance with the terms of the
Indenture, and delivered to and paid for by you in accordance with the terms of
the Underwriting Agreement, will constitute valid and binding obligations of the
Company entitled to the benefits and security provided by the Indenture, except
as the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, by general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law) and by an implied covenant of good faith and fair dealing;
6. the Chief Accountant of the FERC has authorized the issuance and sale of
the Debentures, which authorization is, to the best of our knowledge, still in
full force and effect; the issuance and sale of the Debentures to you pursuant
to the Underwriting Agreement is in conformity with the terms of such
authorization; and no other authorization, approval or consent of any other
federal commission or regulatory authority is legally required for the issuance
and sale of the Debentures pursuant to the Underwriting Agreement, except such
as have been obtained under the Securities Act of 1933, as amended ("Securities
Act"), or the Trust Indenture Act;
7. the Company's registration statements on Form S-3 (File Nos. 33-62259
and 333-_____) relating to the Debentures (collectively, the "Registration
Statement") have become effective under the Securities Act, and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order with respect
thereto have been instituted or are pending or threatened under the Securities
Act; and
8. the Company is a subsidiary of IES Industries Inc., an Iowa corporation,
and both are exempt from regulation under the Public Utility Holding Company Act
of 1935, as amended, except under Section 9(a)(2) thereof.
Our opinions expressed above are limited to the laws of the
States of Iowa and New York and the federal laws of the United States of
America.
The opinion set forth above is solely for the benefit of the
addressees of this letter and may not be relied upon in any manner by, nor may
copies be delivered to, any other person without our prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
<PAGE>
[Letterhead of Dorsey & Whitney LLP]
[Date]
Re: IES Utilities Inc.
$ % Subordinated Debentures,
Series
Ladies and Gentlemen:
This letter relates to the registration under the Securities
Act of 1933, as amended (the "Act"), and offering of $__________ in aggregate
principal amount of ___% Subordinated Debentures, Series ____ (the "Debentures")
of IES Utilities Inc., an Iowa corporation (the "Company"). The registration
statements of the Company on Form S-3 (File Nos. 33-62259 and 333-_____)
(collectively, the "Registration Statement") was filed in accordance with
procedures of the Securities and Exchange Commission (the "Commission")
permitting a delayed or continuous offering of securities pursuant thereto and,
if appropriate, a post-effective amendment or prospectus supplement that
provides information relating to the terms of the securities and the manner of
their distribution. The Debentures have been offered by the Prospectus dated
__________ (the "Prospectus"), as supplemented by the Prospectus Supplement
dated __________ (the "Prospectus Supplement"), which updates or supplements
certain information contained in the Prospectus. The Prospectus, as so
supplemented, does not necessarily contain a current description of the
Company's business and affairs since, pursuant to form S-3, it incorporates by
reference certain documents filed with the Commission which contain information
as of various dates.
In accordance with our understanding with you as to the scope
of our services under the circumstances applicable to the offering of the
Debentures, we reviewed the Registration Statement, the Prospectus and the
Prospectus Supplement, participated in the discussions with your representatives
and those of the Company, its counsel and its independent public accountants and
advised you as to the requirements of the Act and the applicable rules and
regulations thereunder. Between the date of the Prospectus Supplement and the
date of delivery of this letter, we participated in further discussions with
your representatives and those of the Company, its counsel and its independent
public accountants regarding the contents of certain portions of the Prospectus
and the Prospectus Supplement and certain related matters, and reviewed
certificates of certain officers of the Company, opinions addressed to you from
counsel to the Company and letters addressed to you from independent public
accountants of the Company.
On the basis of the information that was reviewed by us in the
course of the performance of the services referred to above, in our opinion (i)
the Registration Statement, as of its effective date, and the Prospectus, as
supplemented by the Prospectus Supplement as of the date of the Prospectus
Supplement, complied as to form in all material respects with the requirements
of the Act and the Trust Indenture Act of 1939, as amended, and the respective,
applicable rules and regulations thereunder (except that we express no opinion
as to financial statements and financial or statistical data contained therein
or as to the Form T-1 filed as an Exhibit to the Registration Statement) (ii)
the summaries of the terms of the Indenture (as such term is defined in the
Prospectus) and the Debentures contained in the Registration Statement, the
Prospectus and the Prospectus Supplement fairly describe in all material
respects the provisions thereof required to be described in the Registration
Statement. Further, nothing that came to our attention in the course of such
review has caused us to believe that the Registration Statement, on such
effective date, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as supplemented by
the Prospectus Supplement, as of the date of the Prospectus Supplement and as of
the date and time of delivery of this letter, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such, however, that we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement. Also, we do
not express any opinion or belief as to the financial statements or other
financial data contained in the Registration Statement, the Prospectus or the
Prospectus Supplement, or as to the statement of the eligibility and
qualification of the Trustee under the Indenture under which the Debentures are
being issued.
This letter is furnished by us as counsel to you solely for
your benefit and may not be relied upon by, nor may copies be delivered to, any
other person without our prior written consent.
Very truly yours,
DORSEY & WHITNEY LLP
<PAGE>
EXHIBIT D
Pursuant to subsection (e) of Section 8 of the Underwriting Agreement,
Arthur Andersen LLP shall furnish a letter to the Representative to the effect
that:
(1) They are independent certified public accountants with respect to
the Company within the meaning of the Securities Act and the applicable
published rules and regulations thereunder;
(2) In their opinion, the financial statements and schedules audited by
them and included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published rules and
regulations thereunder;
(3) On the basis of performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information, on the
latest available unaudited financial statements included or incorporated by
reference in the Registration Statement, a reading of the latest available
interim unaudited financial statements of the Company, the minutes of the
meetings of the Board of Directors, the Executive Committee thereof and the
stockholders of the Company, respectively, since the close of the most recent
audited fiscal year to a specified date not more than five business days prior
to the Closing Date, and inquiries of officials of the Company who have
responsibility for the respective company's financial and accounting matters (it
being understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and that they would not
necessarily reveal matters of significance with respect to the comments made in
such letter, and, accordingly, that Arthur Andersen LLP makes no representation
as to the sufficiency of such procedures for the several Underwriters'
purposes), nothing has come to their attention which caused them to believe that
(a) the unaudited financial statements included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and the Exchange Act and the related published rules and regulations
thereunder;
(b) the audited and unaudited selected financial information
and supplemental financial information and ratios of earnings to fixed charges
included or incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable disclosure requirements of
Regulation S-K promulgated under the Securities Act;
(c) any material modifications should be made to said
unaudited financial statements for them to be in conformity with generally
accepted accounting principles;
(d) for the period from ___________ to the date of the latest
available unaudited financial statements of the Company, there was any decrease
in operating revenues, operating income or net income as compared with the
corresponding period in the preceding year, except in all instances for
decreases which the Prospectus discloses have occurred or may occur or except as
set forth in such letter; and
(e) at a specified date not more than _____ days prior to the
Closing Date there was any change in the capital stock or long-term debt of the
Company, in each case as compared with amounts shown in the most recent balance
sheet incorporated by reference in the Prospectus, except in all instances for
changes or decreases which the Prospectus discloses have occurred or may occur,
for declarations of dividends, for the repayment or redemption of long-term
debt, for the amortization of premium or discount on long-term debt, for the
redemption or purchase of preferred stock for sinking fund purposes, for any
increases in long-term debt in respect of previously issued pollution control
revenue bonds, or for changes or decreases as set forth in such letter,
identifying the same and specifying the amount thereof.
(4) In addition to the audit referred to in their reports included or
incorporated by reference in the Prospectus and the inspection of minute books,
inquiries and other limited procedures referred to in paragraph 3 above, they
have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information including certain pro forma
information specified by the Representative which are derived from the general
accounting records of the Company which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representative or in
documents incorporated by reference in the Prospectus specified by the
Representative and agreed to by the Company, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Company and have found them to be in agreement.
<PAGE>
EXHIBIT 4(c)
Prepared by: IES Utilities Inc., __________,
200 First St. SE, Cedar Rapids, IA 52401, (319) 398-4505
================================================================================
IES UTILITIES INC.
(formerly known as Iowa Electric Light and Power Company)
TO
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
--------------
______ Supplemental Indenture
Dated as of ________
--------------
TO
INDENTURE OF MORTGAGE and DEED OF TRUST
Dated as of September 1, 1993
- -------------------------------------------------------------------------------
<PAGE>
______ SUPPLEMENTAL INDENTURE, dated as of _______ (the
"______ Supplemental Indenture"), made by and between IES UTILITIES INC.
(formerly known as Iowa Electric Light and Power Company), a corporation
organized and existing under the laws of the State of Iowa (the "Company"), and
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association organized and
existing under the laws of the United States of America (the "Trustee"), as
Trustee under the Indenture of Mortgage and Deed of Trust dated as of September
1, 1993, hereinafter mentioned.
WHEREAS, the Company has heretofore executed and delivered its
Indenture of Mortgage and Deed of Trust dated as of September 1, 1993, to the
Trustee, for the security of the securities of the Company to be issued
thereunder (the "Collateral Trust Bonds" or "Bonds"), and the said Indenture has
been supplemented by [five] supplemental indentures, dated as of October 1,
1993, November 1, 1993, March 1, 1995, September 1, 1996, April 1, 1997, and
[__________], which Indenture as so supplemented and to be hereby supplemented
is hereinafter referred to as the "Indenture"; and
WHEREAS, the Company desires to create a series of Collateral
Trust Bonds to be issued under the Indenture, to be known as Collateral Trust
Bonds, ___% Series Due ____ (the "Collateral Trust Bonds of the ____% Series");
and
WHEREAS, the Company, in the exercise of the powers and
authority conferred upon and reserved to it under the provisions of the
Indenture, has duly resolved and determined to make, execute and deliver to the
Trustee a ______ Supplemental Indenture in the form hereof for the purposes
herein provided; and
WHEREAS, pursuant to Section 1401 of the Indenture, the
Company may from time to time execute one or more supplemental indentures in
order to better assure, convey and confirm unto the Trustee any property subject
to the Lien of the Indenture; and
WHEREAS, the Company desires to so assure, convey and confirm
property described in Exhibit A to this Supplemental Indenture; and
WHEREAS, all conditions and requirements necessary to make
this ______ Supplemental Indenture a valid, binding and legal instrument have
been done, performed and fulfilled, and the execution and delivery hereof have
been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
THAT IES UTILITIES INC., in consideration of the purchase and
ownership from time to time of the Bonds created in the ______ Supplemental
Indenture and the service by the Trustee, and its successors, under the
Indenture and of One Dollar to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trust under the Indenture, for the benefit of those who shall
hold the Bonds as follows:
ARTICLE I
DESCRIPTION OF COLLATERAL TRUST BONDS OF THE ___% SERIES
SECTION 1. The Company hereby creates a new series of Bonds to
be known as "Collateral Trust Bonds of the ___% Series." The Collateral Trust
Bonds of the ___% Series shall be executed, authenticated and delivered in
accordance with the provisions of, and shall in all respects be subject to, all
of the terms, conditions and covenants of the Indenture, as supplemented and
modified.
The commencement of the first interest period shall be
__________. The Collateral Trust Bonds of the ___% Series shall mature
__________, and shall bear interest at the rate of ___% per annum, payable
semi-annually on the 1st day of _____ and the 1st day of _____ in each year,
commencing on _________. The person in whose name any of the Collateral Trust
Bonds of the ___% Series is registered at the close of business on any record
date (as hereinafter defined) with respect to any interest payment date shall be
entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Collateral Trust Bonds of the ___%
Series upon any transfer or exchange subsequent to the record date and prior to
such interest payment date; provided, however, that if and to the extent the
Company shall default in the payment of the interest due on such interest
payment date, such defaulted interest shall be paid as provided in Section 307
of the Indenture.
The term "record date" as used in this Section with respect to
any interest payment date shall mean the _____ 15 or _____ 15, as the case may
be, next preceding the semi-annual interest payment date, or, if such _____ 15
or _____ 15 shall be a legal holiday or a day on which banking institutions in
the Borough of Manhattan, the City of New York, State of New York or in the City
of Chicago, State of Illinois, are authorized by law to close, then the next
preceding day which shall not be a legal holiday or a day on which such
institutions are so authorized to close.
SECTION 2. The Collateral Trust Bonds of the ___% Series shall
be issued only as registered Bonds without coupons of the denomination of
$1,000, or any integral multiple of $1,000, appropriately numbered. Subject to
the terms and conditions set forth in the Indenture, the Collateral Trust Bonds
of the ___% Series may be exchanged for one or more new Collateral Trust Bonds
of the ___% Series or other authorized denominations, for the same aggregate
principal amount, upon surrender thereof, to the agency of the Company in the
City of Chicago, Illinois, or, at the option of the holder, at the agency of the
Company in the City of New York.
Collateral Trust Bonds of the ___% Series may be exchanged or
transferred without expense to the registered owner thereof except that any
taxes or other governmental charges that may be imposed in connection with such
transfer or exchange shall be paid by the registered owner requesting such
transfer or exchange as a condition precedent to the exercise of such privilege.
SECTION 3. Except as otherwise provided in this Section, the
registered owner of all Collateral Trust Bonds of the ___% Series shall be CEDE
& Co., as nominee of The Depository Trust Company ("DTC"). Payment of interest
for any Collateral Trust Bonds of the ___% Series registered as of each record
date in the name of CEDE & Co. shall be made by wire transfer to the account of
CEDE & Co. on the interest payment date for such Collateral Trust Bonds of the
___% Series at the address indicated on the record date for CEDE & Co. in the
registration books of the Company kept by Trustee, as registrar.
The Collateral Trust Bonds of the ___% Series shall initially
be issued in the form of one or more fully registered global bonds ("Global
Bonds") which will have an aggregate principal amount equal to the Collateral
Trust Bonds of the ___% Series represented thereby. Upon initial issuance, the
ownership of the Collateral Trust Bonds of the ___% Series shall be registered
in the registration books of the Company kept by the Trustee in the name of CEDE
& Co., as nominee of DTC. The Trustee and the Company may treat DTC (or its
nominee) as the sole and exclusive owner of the Collateral Trust Bonds of the
___% Series registered in its name for the purposes of payment of the principal
of, premium, if any, or interest on such Collateral Trust Bonds of the ___%
Series, giving any notice permitted or required to be given to Holders herein,
registering the transfer of such Collateral Trust Bonds of the ___% Series,
obtaining any consent or other action to be taken by Holders and for all other
purposes whatsoever; and neither the Trustee nor the Company shall be affected
by any notice to the contrary. Neither the Trustee nor the Company shall have
any responsibility or obligation to any DTC participant, any Person claiming a
beneficiary ownership interest in Collateral Trust Bonds of the ___% Series
registered in the name of CEDE & Co. under or through DTC or any DTC
participant, or any other Person which is not shown on the registration books of
the Company kept by the Trustee as being a Holder with respect to the accuracy
of any records maintained by DTC, CEDE & Co. or any DTC participant; the payment
by DTC or any DTC participant to any beneficial owner of any amount in respect
of the principal of, premium, if any, or interest on the Collateral Trust Bonds
of the ___% Series registered in the name of CEDE & Co.; the delivery to any DTC
participant or any beneficial owner of any notice which is permitted or required
to be given to Holders herein; the selection by DTC or any DTC participant of
any Person to receive payment in the event of a partial payment of any
Collateral Trust Bonds of the ___% Series registered in the name of CEDE & Co.;
or any consent given or other action taken by DTC as Holder. The Paying Agent
shall pay all principal of, premium, if any, and interest on any Collateral
Trust Bonds of the ___% Series registered in the name of CEDE & Co., only to or
upon the order of CEDE & Co., as nominee of DTC, and all such payments shall be
valid and effective to fully satisfy and discharge the Company's obligations
with respect to the principal of, premium, if any, and interest on such
Collateral Trust Bonds of the ___% Series to the extent of the sum or sums so
paid. Upon delivery by DTC to the Trustee of written notice to the effect that
DTC had determined to substitute a new nominee in place of CEDE & Co., and
subject to the provisions herein with respect to record dates, the words "CEDE &
Co." herein shall refer to such new nominee of DTC.
A Global Bond shall be exchangeable for definitive
certificates registered in the names of persons other than DTC or its nominee
only if (i) DTC notifies the Company that it is unwilling or unable to continue
as a depositary for such Global Bond and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, at a time when DTC is required to be so
registered to act as such depositary, (ii) the Company in its sole discretion
determines that such Global Bond shall be so exchangeable or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Collateral Trust Bonds of the ___% Series. In any such event, the Trustee shall
issue, register the transfer of and exchange definitive certificates as
requested by DTC in appropriate amounts and the Company and the Trustee shall be
obligated to deliver definitive certificates. In the event definitive
certificates are issued to Holders other than DTC, the provisions herein shall
apply to, among other things, the registration, transfer of and exchange of such
certificates and the method of payment of principal of, premium, if any, and
interest on such certificates. Whenever DTC requests the Company and the Trustee
to do so, the Trustee and the Company will cooperate with DTC in taking
appropriate action after reasonable notice (i) to make available one or more
separate certificates evidencing the Collateral Trust Bonds of the ___% Series
registered in the name of CEDE & Co., to any DTC participant having Collateral
Trust Bonds of the ___% Series credited to its DTC account or (ii) to arrange
for another bonds depository to maintain custody of certificates evidencing such
Collateral Trust Bonds of the ___% Series.
So long as any Collateral Trust Bonds of the ___% Series are
registered in the name of CEDE & Co., as nominee of DTC, all payments with
respect to the principal of, premium, if any, and interest on such Collateral
Trust Bonds of the ___% Series and all notices, with respect to such Collateral
Trust Bonds of the ___% Series shall be made and given to DTC as provided in the
Letter of Representations dated __________.
In connection with any notice or other communication to be
provided to Holders by the Company or the Trustee with respect to any consent or
other action to be taken by Holders, so long as any Collateral Trust Bonds of
the ___% Series are registered in the name of CEDE & Co., as nominee of DTC, the
Company or the Trustee, as the case may be, shall establish a record date for
such consent or other action and give DTC notice of such record date not less
than 15 calendar days in advance of such record date to the extent possible.
The notice requirements set forth in the Letter of
Representations with respect to redemptions, conversions and mandatory tenders
shall be effective whenever the Collateral Trust Bonds of the ___% Series are
registered in the name of DTC or its nominee, notwithstanding any other
provision herein, to the extent such other provisions are incompatible with the
notice requirements set forth in the Letter of Representations.
SECTION 4. The Collateral Trust Bonds of the ___% Series and
the Trustee's Certificate of Authentication shall be substantially in the
following forms respectively:
[FORM OF FACE OF BOND]
[FORM OF LEGEND FOR GLOBAL BOND]
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
IES UTILITIES INC.
COLLATERAL TRUST BOND, ___% SERIES DUE ____.
No. ________ $_________
CUSIP ___________
IES UTILITIES INC., a corporation organized and existing under
the laws of the State of Iowa (the "Company," which term shall include any
successor corporation as defined in the Indenture hereinafter referred to), for
value received, hereby promises to pay to ______________, or its registered
assigns, the sum of _____________ ($_______) dollars on the ___ day of _____,
____, in any coin or currency of the United States of America which at the time
of payment is legal tender for public and private debts, and to pay interest
thereon in like coin or currency from ______ __, ____, payable semi-annually, on
the ___ day of ______ and ______ in each year, commencing _______ __, ____, at
the rate of ___% per annum, until the Company's obligation with respect to the
payment of such principal shall be discharged as provided in the Indenture
hereinafter mentioned. The interest so payable on any ___ day of ______ or
______ will, subject to certain exceptions provided in the _____ Supplemental
Indenture dated as of ______ __, ____, be paid to the person in whose name this
Collateral Trust Bond is registered at the close of business on the immediately
preceding ______ ____ or ______ ____, as the case may be. Except as otherwise
provided in the Indenture, any such interest not paid or duly provided for shall
forthwith cease to be payable to such person, and shall either be paid to the
person in whose name this Collateral Trust Bond is registered at the close of
business on a Special Record Date for the payment of such interest to be fixed
by the Trustee, notice of which shall be given to holders of Collateral Trust
Bonds of this Series not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Collateral Trust Bonds of
this Series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided for in said Indenture. Both principal of,
and interest on, this Collateral Trust Bond are payable at the agency of the
Company in the City of Chicago, Illinois, or, at the option of the holder, at
the agency of the Company in the City of New York.
This Collateral Trust Bond shall not be entitled to any
benefit under the Indenture or any indenture supplemental thereto, or become
valid or obligatory for any purpose, until the form of certificate endorsed
hereon shall have been signed by or on behalf of The First National Bank of
Chicago, the Trustee under the Indenture, or a successor trustee thereto under
the Indenture, or by an authenticating agent duly appointed by the Trustee in
accordance with the terms of the Indenture.
The provisions of this Collateral Trust Bond are continued on
the reverse hereof and such continued provisions shall for all purposes have the
same effect as though fully set forth at this place.
IN WITNESS WHEREOF, IES Utilities Inc. has caused this
Collateral Trust Bond to be signed (manually or by facsimile signature) in its
name by an Authorized Executive Officer, as defined in the Indenture, and its
corporate seal (or a facsimile thereof) to be hereto affixed and attested
(manually or by facsimile signature) by an Authorized Executive Officer, as
defined in the Indenture.
Dated ________________ IES UTILITIES INC.
By
----------------------------
Authorized Executive Officer
ATTEST:
- -----------------------------
Authorized Executive Officer
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Collateral Trust Bonds of the series
designated therein referred to in the within-mentioned Indenture and _____
Supplemental Indenture dated as of ______ __, ____.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By
----------------------
Authorized Officer
<PAGE>
[FORM OF REVERSE OF BOND]
IES UTILITIES INC.
COLLATERAL TRUST BOND, ____% SERIES DUE ____
This Collateral Trust Bond is one of a duly authorized issue
of Collateral Trust Bonds of the Company in an aggregate principal amount of up
to $________ of the series hereinafter specified, all issued and to be issued
under and equally secured by an Indenture of Mortgage and Deed of Trust dated as
of September 1, 1993, executed by the Company to The First National Bank of
Chicago, as Trustee (the "Trustee"), as supplemented by _____ supplemental
indentures, (including a _____ Supplemental Indenture dated as of ______ __,
____), each executed by the Company to said Trustee (said Indenture, as so
supplemented, being herein sometimes referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the properties mortgaged and pledged, the nature and extent of
the security, the rights of registered owners of the Collateral Trust Bonds and
of the Trustee in respect thereof, and the terms and conditions upon which the
Collateral Trust Bonds are, and are to be, secured. The Collateral Trust Bonds
may be issued in series, for various principal sums, may mature at different
times, may bear interest at different rates and may otherwise vary as provided
in the Indenture. This Collateral Trust Bond is one of a series designated as
the "Collateral Trust Bonds, ____% Series Due ____" (the "Collateral Trust Bonds
of the ____% Series") of the Company, in an aggregate principal amount of up to
$________, issued under and secured by the Indenture and described in the _____
Supplemental Indenture thereto dated as of ______ __, ____ (the "_____
Supplemental Indenture") between the Company and the Trustee.
The Collateral Trust Bonds of the ____% Series will not be
redeemable prior to their maturity by the Company; provided, however, that such
Bonds may be redeemed by the Company in whole at any time or in part from time
to time, up on at least 30 days notice, at the redemption price equal to 100% of
the principal amount thereof, plus accrued interest to the date of redemption,
through application of cash received by the Trustee as a result of properties of
the Company being taken by eminent domain or being sold to an entity possessing
the power of eminent domain.
In case an Event of Default, as defined in the Indenture,
shall occur, the principal of all the Collateral Trust Bonds of the ____% Series
at any such time outstanding under the Indenture may be declared or may become
due and payable, upon the conditions and in the manner and with the effect
provided in the Indenture. The Indenture provides that such declaration may be
rescinded under certain circumstances.
No reference herein to the Indenture and no provision of this
Collateral Trust Bond or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Collateral Trust Bond at the times, place
and rate, in the coin or currency, and in the manner, herein prescribed.
To the extent permitted on the front hereof, this Collateral
Trust Bond may be exchanged or transferred without expense to the registered
owner hereof except that any taxes or other governmental charges that may be
imposed in connection with such transfer or exchange shall be paid by the
registered owner requesting such transfer or exchange as a condition precedent
to the exercise of such privilege.
<PAGE>
Prior to due presentment of this Collateral Trust Bond for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Collateral Trust Bond is
registered as the absolute owner hereof for all purposes, whether or not this
Collateral Trust Bond be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
As provided in the Indenture, no recourse shall be had for the
payment of the principal of or premium, if any, or interest on any Collateral
Trust Bonds or any part thereof, or for any claim based thereon or otherwise in
respect thereof, or of the indebtedness represented thereby, or upon any
obligation, covenant or agreement under the Indenture, against, and no personal
liability whatsoever shall attach to, or be incurred by, any incorporator,
stockholder, officer or director, as such, past, present or future of the
Company or of any predecessor or successor corporation (either directly or
through the Company or a predecessor or successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly agreed
and understood that the Indenture and all the Collateral Trust Bonds are solely
corporate obligations and that any such personal liability is hereby expressly
waived and released as a condition of, and as part of the consideration for, the
execution of the Indenture and the issuance of the Collateral Trust Bonds.
[END OF BOND FORM]
ARTICLE II
ISSUE OF COLLATERAL TRUST BONDS
SECTION 1. Pursuant to the terms of Section 401 of the
Indenture, the Company hereby exercises the right to obtain the authentication
of $__________ principal amount of Collateral Trust Bonds.
SECTION 2. Such Collateral Trust Bonds of the ___% Series may
be authenticated and delivered prior to the filing for recordation of this
______ Supplemental Indenture.
<PAGE>
ARTICLE III
REDEMPTION
The Collateral Trust Bonds of the ___% Series will not be
redeemable prior to their maturity; provided, however, that such Bonds may be
redeemed in whole at any time or in part from time to time, upon at least 30
days notice, at the redemption price equal to 100% of the principal amount
thereof, plus accrued interest to the date of redemption, through application of
cash received by the Trustee as a result of properties of the Company being
taken by eminent domain or being sold to an entity possessing the power of
eminent domain.
ARTICLE IV
DESCRIPTION OF PROPERTY
To secure the payment of the principal of, premium, if any,
and interest, if any, on all Collateral Trust Bonds issued under the Indenture
and Outstanding (as defined in the Indenture), when payable in accordance with
the provisions thereof, and to secure the performance by the Company of, and its
compliance with, the covenants and conditions of the Indenture, the Company
hereby grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges,
sets over and confirms to the Trustee a security interest in, all right, title
and interest of the Company in and to the property described in Exhibit A to
this ______ Supplemental Indenture.
TO HAVE AND TO HOLD all said property hereby granted,
bargained, sold, conveyed, assigned, transferred, mortgaged, pledged, set over
and confirmed, or in which a security interest has been granted by the Company
in this ______ Supplemental Indenture, unto the Trustee and its successors and
assigns forever, but in trust nevertheless upon the trusts, for the purposes,
and subject to all the exceptions and reservations, terms, conditions,
provisions and restrictions of the Indenture, and for the equal and
proportionate benefit and security of all present and future holders of the
Collateral Trust Bonds, without any preference, priority or distinction of any
one Collateral Trust Bond over any other Collateral Trust Bond by reason of
priority in the issue or negotiation thereof or otherwise, except as may
otherwise be expressly provided in the Indenture, but subject, however, to all
the conditions, agreements, covenants, exceptions, limitations, restrictions and
reservations expressed or provided in the deeds or other instruments of record
affecting the property, or any part or portion thereof, insofar as the same are
at the time of execution hereof in force and effect and permitted by law.
ARTICLE V
THE TRUSTEE
The Trustee hereby accepts the trusts hereby declared and
provided, and agrees to perform the same upon the terms and conditions in the
Indenture set forth and upon the following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this ______
Supplemental Indenture or the due execution hereof by the Company or
for or in respect of the recitals contained herein, all of which
recitals are made by the Company solely. In general, each and every
term and condition contained in Article Eleven of the Indenture shall
apply to this Supplemental Indenture with the same force and effect as
if the same were herein set forth in full, with such omissions,
variations and modifications thereof as may be appropriate to make the
same conform to this ______ Supplemental Indenture.
ARTICLE VI
MISCELLANEOUS PROVISIONS
This ______ Supplemental Indenture may be simultaneously
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original; but such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this ______
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
IES UTILITIES INC.
By
------------------------------
ATTEST:
- ------------------
THE FIRST NATIONAL BANK OF
CHICAGO, Trustee
By
------------------------------
ATTEST:
- -------------------
<PAGE>
STATE OF IOWA )
) ss:
COUNTY OF LINN )
On the __th day of _____, ____, before me personally came
_________, to me known, who, being by me duly sworn, did depose and say that he
is the __________ of IES UTILITIES INC., the corporation described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority, acknowledging the instrument to be
the free act and deed of said corporation.
--------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
On the ___th day of _____, _____, before me personally came
__________ to me known, who, being by me duly sworn, did depose and say that he
is a __________ of THE FIRST NATIONAL BANK OF CHICAGO, the national banking
association described in and which executed the foregoing instrument; that he
knows the seal of said national banking association; that the seal affixed to
said instrument is the seal of said national banking association; that it was so
affixed by authority of the Board of Directors of said national banking
association, and that he signed his name thereto by like authority,
acknowledging the instrument to be the free act and deed of said national
banking association.
-----------------------
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A
DESCRIPTION OF PROPERTY
EXHIBIT 4(f)
Prepared by: IES Utilities Inc., __________,
200 First St. SE, Cedar Rapids, IA 52401, (319) 398-4505
================================================================================
IES UTILITIES INC.
(formerly known as Iowa Electric Light and Power Company)
To
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
--------------------------
__________ Supplemental
Indenture
Dated as of __________
--------------------------
SUPPLEMENTAL TO
INDENTURE OF MORTGAGE AND DEED OF TRUST
DATED AS OF AUGUST 1, 1940
<PAGE>
THIS __________ SUPPLEMENTAL INDENTURE, dated as of _________,
between IES UTILITIES INC. (formerly known as Iowa Electric Light and Power
Company), a corporation organized and existing under the laws of the State of
Iowa (hereinafter called the "Company"), party of the first part, and THE FIRST
NATIONAL BANK OF CHICAGO, as Trustee, a national banking association organized
and existing under the laws of the United States of America, party of the second
part,
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has heretofore executed and delivered its
Indenture of Mortgage and Deed of Trust, dated as of August 1, 1940 (hereinafter
called the "Original Indenture"), to the Trustee to secure the first mortgage
bonds (herein sometimes referred to as "first mortgage bonds") of the Company,
issuable in series; and
WHEREAS, the Company thereafter executed and delivered certain
Supplemental Indentures, First through [Sixty-third], inclusive, for the various
purposes of creating additional series of first mortgage bonds, conveying and
confirming unto the Trustee certain additional property, correcting the
description of a certain parcel of land as set forth in the Original Indenture
and amending the Original Indenture in certain respects (the Original Indenture
and the above referred to Supplemental Indentures together with this __________
Supplemental Indenture being herein sometimes collectively referred to as the
"Indenture"); and
WHEREAS, there have been issued and are now outstanding under
the Indenture the following described first mortgage bonds:
First Mortgage Bonds Principal Amount
-------------------- ----------------
WHEREAS, the Original Indenture in Section 158 provides that
the Company, when authorized by resolution of the Board, and the Trustee, may at
any time, subject to the restrictions in the Original Indenture contained, enter
into such an indenture supplemental to the Original Indenture as may or shall be
by them deemed necessary or desirable for the purpose of creating any new series
of first mortgage bonds or of adding to the covenants and agreements of the
Company in the Original Indenture contained, other covenants and agreements
thereafter to be observed by the Company and for any other purpose not
inconsistent with the terms of the Original Indenture and which shall not impair
the security of the same; and
WHEREAS, the Company desires to execute and deliver this
__________ Supplemental Indenture, in accordance with the provisions of the
Original Indenture, for the purpose of providing for the creation of a new
series of first mortgage bonds to be designated "First Mortgage Bonds,
Collateral Series __, Due ____" (hereinafter called the "Bonds of Series __" or
the "Bonds"), and for the purpose of adding to the covenants and agreements of
the Company in the Original Indenture contained, other covenants and agreements
hereafter to be observed by the Company;
WHEREAS, the Bonds are to be issued to The First National Bank
of Chicago as trustee (the "New Mortgage Trustee") under the Company's Indenture
of Mortgage and Deed of Trust dated as of September 1, 1993 (the "New
Mortgage"), and are to be owned and held by the New Mortgage Trustee as "Class
'A' Bonds" (as defined in the New Mortgage) in accordance with the terms of the
New Mortgage; and
WHEREAS, all acts and proceedings required by law and by the
Articles of Incorporation of the Company, including all action requisite on the
part of its stockholders, directors and officers, necessary to make the Bonds,
when executed by the Company, authenticated and delivered by the Trustee and
duly issued, the valid, binding and legal obligations of the Company, and to
constitute the Indenture a valid and binding mortgage and deed of trust for the
security of the Bonds in accordance with the terms of the Indenture and the
terms of the Bonds, have been done and taken; and the execution and delivery of
this __________ Supplemental Indenture have been in all respects duly
authorized.
NOW, THEREFORE, THIS __________ SUPPLEMENTAL INDENTURE
WITNESSETH, that, in order to further secure the payment of the principal of,
premium, if any, and interest, if any, on all first mortgage bonds at any time
issued and outstanding under the Indenture, according to their tenor, purport
and effect, and to secure the performance and observance of all the covenants
and conditions in said first mortgage bonds and in the Indenture contained
(except any covenant of the Company with respect to the refund or reimbursement
of taxes, assessments or other governmental charges on account of the ownership
of any first mortgage bonds, or the income derived therefrom, for which the
holders of such first mortgage bonds shall look only to the Company and not to
the property mortgaged and pledged) and for and in consideration of the premises
and of the mutual covenants herein contained and of the purchase and acceptance
of the Bonds by the holders thereof, and of the sum of $1.00 duly paid to the
Company by the Trustee at or before the ensealing and delivery hereof, and for
other valuable considerations, the receipt whereof is hereby acknowledged, the
Company has executed and delivered this __________ Supplemental Indenture, and,
by these presents does grant, bargain, sell, release, convey, assign, transfer,
mortgage, pledge, set over, warrant and confirm unto the Trustee the properties
of the Company described and referred to in the Original Indenture and all
indentures supplemental thereto, as thereby conveyed or intended so to be, and
not heretofore specifically released, together with all and singular the plants,
buildings, improvements, additions, tenements, hereditaments, easements, rights,
privileges, licenses and franchises and all other appurtenances whatsoever
belonging or in any wise appertaining to any of the property hereby mortgaged or
pledged, or intended so to be, or any part thereof, now owned or which may
hereafter be owned or acquired by the Company, and the reversion and reversions,
remainder and remainders, and the tolls, rents, revenues, issues, earnings,
income, product and profits thereof, and of every part and parcel thereof, and
all the estate, right, title, interest, property, claim and demand of every
nature whatsoever of the Company, at law or in equity, or otherwise howsoever,
in, of and to such property and every part and parcel thereof, including the
following property acquired by the Company since the execution and delivery of
the [Sixty-third] Supplemental Indenture dated as of [April 1, 1997]:
TO HAVE AND TO HOLD all and singular the lands, properties,
estates, rights, franchises, privileges and appurtenances mortgaged, conveyed,
pledged or assigned as aforesaid, or intended so to be, together with all the
appurtenances thereunto appertaining, unto the Trustee and its successors and
assigns forever, upon the trusts, for the uses and purposes and under the terms
and conditions and with the rights, privileges and duties as in the Indenture
set forth;
Subject, however, to the reservations, exceptions, limitations
and restrictions contained in the several deeds, leases, servitudes, contracts
or other instruments through which the Company acquired and/or claims title to
and/or enjoys the use of the aforesaid properties; and subject also to Permitted
Encumbrances (as defined in Section 24 of the Original Indenture) and, as to any
property acquired by the Company since the execution and delivery of the
Original Indenture, to any liens thereon existing, and to any liens for unpaid
portions of the purchase money placed thereon, at the time of such acquisition,
but only to the extent that such liens are permitted by Sections 72 and 83 of
the Original Indenture, as amended, and Section 7 of this __________
Supplemental Indenture;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate
use, benefit, security and protection of those who from time to time shall hold
the first mortgage bonds and coupons authenticated and delivered under the
Indenture and duly issued by the Company, without any discrimination, preference
or priority of any one first mortgage bond or coupon over any other by reason of
priority in the time of issue, sale or negotiation thereof or otherwise, except
as provided in Section 69 of the Original Indenture, so that, subject to said
provisions, each and all of said first mortgage bonds and coupons shall have the
same right, lien and privilege under the Indenture and shall be equally and
ratably secured thereby (except as any sinking, amortization, improvement,
renewal or other fund, or any other covenants or agreements established in
accordance with the provisions of the Original Indenture, may afford additional
security for the first mortgage bonds of any particular series), and shall have
the same proportionate interest and share in the Trust Estate (as defined in the
Original Indenture), with the same effect as if all of the first mortgage bonds
and coupons had been issued, sold and negotiated simultaneously on the date of
the delivery of the Original Indenture; and in trust for enforcing payment of
the principal of the first mortgage bonds and of the interest and premium, if
any, thereon, according to the tenor, purport and effect of the first mortgage
bonds and coupons and of the Indenture, and for enforcing the terms, provisions,
covenants and stipulations therein and in the first mortgage bonds set forth,
and upon the trusts, uses and purposes and subject to the covenants, agreements
and conditions set forth and declared in the Indenture;
AND THIS __________ SUPPLEMENTAL INDENTURE FURTHER WITNESSETH,
that the Company hereby covenants and agrees to and with the Trustee and its
successors and assigns forever as follows:
SECTION 1. There shall be, and is hereby created, a new series
of first mortgage bonds, known as and entitled "First Mortgage Bonds, Collateral
Series __, Due ____," and the form thereof shall be substantially as hereinafter
set forth.
The Bonds of Series __ shall be issued and delivered to the
New Mortgage Trustee under the New Mortgage as the basis for the authentication
and delivery under the New Mortgage of a series of securities ("Collateral Trust
Securities"). As provided in the New Mortgage, the Bonds of Series __ will be
registered in the name of the New Mortgage Trustee, subject to the provisions of
the New Mortgage, for the benefit of the holders of all securities from time to
time outstanding under the New Mortgage, and the Company shall have no interest
therein. The Bonds of Series __ will not be transferable except to a successor
trustee under the New Mortgage.
Any payment or deemed payment by the Company under the New
Mortgage of the principal of or interest, if any, on the Collateral Trust
Securities (other than by the application of the proceeds of a payment in
respect of the Bonds of Series __) shall, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to make a payment
of principal of or interest, if any, on such Bonds of Series __, as the case may
be, which is then due.
The principal amount of the Bonds of Series __ shall be
limited to $__________, except in case of the issuance of Bonds as provided in
Section 14 of the Original Indenture on account of mutilated, lost, stolen, or
destroyed Bonds. The Bonds of Series __ shall be registered bonds only without
coupons of the denomination of $1,000 and any multiple of $1,000, and of such
respective amounts of each of said denominations as may be executed by the
Company and delivered to the Trustee for authentication and delivery.
Notwithstanding the provisions of Section 7 of the Original Indenture to the
contrary, no reservation of unissued coupon bonds shall be required with respect
to the Bonds of Series __. All Bonds of Series __ shall mature __________, and
shall not bear interest, except that if the Company should default in payment of
principal on a Bond of Series __, such Bond shall bear interest on such
defaulted principal at the rate of 6% per annum (to the extent that payment of
such interest is enforceable under applicable law) until the Company's
obligation with respect to the payment of such principal shall be discharged.
The principal, premium, if any, and the interest, if any, on the Bonds of Series
__ shall be payable at the office of the Trustee in the City of Chicago, State
of Illinois, or at the option of the holder, at the principal corporate trust
office of First Chicago Trust Company of New York in the Borough of Manhattan in
the City of New York, in any coin or currency of the United States of America
which at the time of payment shall be legal tender for public and private debts.
The Bonds of Series __ shall be subject to redemption under certain
circumstances specified in Section 54 of the Original Indenture as amended.
The Bonds of Series __ will be redeemable, at the option of the
Company, in whole at any time or in part from time to time, upon 30 days notice,
at a redemption price equal to 100% of the principal amount thereof together
with accrued interest, if any, thereon to the date fixed for redemption. The
Bonds shall be redeemed no later than the redemption of the Collateral Trust
Securities, in a principal amount equal to the principal amount of Collateral
Trust Securities then being redeemed, and at a redemption price equal to the
redemption price (excluding interest other than interest on defaulted principal,
if any) applicable to such redemption of Collateral Trust Securities.
Notwithstanding Section 11 of the Original Indenture, the
Company may execute, and the Trustee shall authenticate and deliver, definitive
Bonds of Series __ in typewritten form.
Subject to the provisions of Section 8 of the Original
Indenture, all definitive Bonds of Series __ shall be interchangeable for other
Bonds of Series __ of a different authorized denomination or denominations, as
requested by the holder surrendering the same, upon surrender to the agency of
the Company in the City of Chicago, Illinois, or, at the option of the holder,
at the agency of the Company in the City of New York. Anything contained in
Section 13 of the Original Indenture notwithstanding, upon such interchange of
Bonds of Series __, no charge may be made by the Company except the payment of a
sum sufficient to reimburse the Company for any stamp tax or other governmental
charge incident thereto.
The Trustee is hereby appointed Registrar of the Bonds of
Series __ for the purpose of registering and transferring Bonds of Series __ as
in Section 12 of the Original Indenture provided. Bonds of Series __ may also be
so registered and transferred at the principal corporate trust office of First
Chicago Trust Company of New York in the Borough of Manhattan in the City of New
York, which company is hereby authorized to act as co-Registrar of Bonds of
Series __ in the City of New York. In case any Bonds of Series __ shall be
redeemed in part only, any delivery pursuant to Section 97 of the Original
Indenture of a new Bond or Bonds of Series __ of an aggregate principal amount
equal to the unredeemed portion of such Bond of Series __ shall, at the option
of the registered owner, be made by the co-Registrar. For all purposes of
Articles Eleven and Eighteen of the Original Indenture, First Chicago Trust
Company of New York in the City of New York, as the New York Paying Agent for
Bonds of Series __, shall be deemed to be the agent of the Trustee for the
purpose of receiving all or any part, as may be directed by the Trustee, of any
deposit for the purpose of redeeming, or of paying at maturity, any Bonds of
Series __, and any money so deposited with First Chicago Trust Company of New
York in the City of New York, upon the direction of the Trustee, in trust for
the purpose of paying the redemption price of, or of paying at maturity, any
Bonds of Series __, shall be deemed to constitute a deposit in trust with, and
to be held in trust by, the Trustee in accordance with the provisions of Article
Eleven or Eighteen of the Original Indenture.
So long as any Bonds of Series __ shall be outstanding, in
addition to the offices or agencies required to be maintained by the provisions
of the Original Indenture, the Company shall keep or cause to be kept at an
office or agency to be maintained by the Company in the Borough of Manhattan,
the City of New York, books for the registration and transfer of Bonds pursuant
to the foregoing provisions of this Section and to the provisions of the
Original Indenture.
SECTION 2. For the purpose of redemption under certain
circumstances specified in Section 54 of the Original Indenture, as amended, by
the application of cash received by the Trustee as the result of the taking by
eminent domain or of the purchase by a public authority of properties of the
Company, the Bonds shall be redeemable at a special redemption price of 100% of
the principal amount thereof together with accrued interest, if any, to the date
fixed for redemption.
SECTION 3. The Bonds and the certificate of authentication to
be borne by such Bonds shall be substantially in the following forms,
respectively:
[FORM OF FACE OF BOND]
This Bond is not transferable except to a successor trustee under the
Indenture of Mortgage and Deed of Trust, dated as of September 1, 1993, between
IES Utilities Inc. and The First National Bank of Chicago, Trustee.
No. $
IES UTILITIES INC.
FIRST MORTGAGE BOND, COLLATERAL SERIES __
Due ____
IES UTILITIES INC. (hereinafter called the "Company"), a
corporation of the State of Iowa, for value received, hereby promises to pay to
THE FIRST NATIONAL BANK OF CHICAGO, as trustee under the Indenture of Mortgage
and Deed of Trust, dated as of September 1, 1993, between the Company and such
trustee, or registered assigns, on the ____ day of ______, ____, the sum of
___________ ($________) dollars in any coin or currency of the United States of
America which at the time of payment shall be legal tender for public and
private debts. This Bond shall not bear interest except that, if the Company
should default in the payment of principal hereof, this Bond shall bear interest
on such defaulted principal at the rate of 6% per annum (to the extent that
payment of such interest is enforceable under applicable law) until the
Company's obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture hereinafter mentioned. Principal of and
interest, if any, on this Bond shall be payable at the agency of the Company in
the City of Chicago, Illinois, or, at the option of the holder, at the agency of
the Company in the City of New York.
Reference is made to the further provisions of this Bond set
forth on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Bond shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed by
The First National Bank of Chicago, or its successor, as Trustee under the
Indenture hereinafter mentioned.
IN WITNESS WHEREOF, the Company has caused this Bond to be
signed in its name, manually or in facsimile, by its President or one of its
Vice Presidents and its corporate seal to be impressed or imprinted hereon and
attested, manually or in facsimile, by its Secretary or one of its Assistant
Secretaries.
Dated:
IES UTILITIES INC.
By
-----------------------------
Authorized Executive Officer
ATTEST:
- -----------------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the first mortgage bonds described in the
within-mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By
---------------------------------
Authorized Officer
[FORM OF REVERSE OF BOND]
IES UTILITIES INC.
FIRST MORTGAGE BOND, COLLATERAL SERIES __
Due ____
This Bond is one of an authorized issue of Bonds of the
Company known as its "first mortgage bonds", issued and to be issued in series
under, and all equally and ratably secured (except as any sinking, amortization,
improvement, renewal or other fund, or any other covenants or agreements,
established in accordance with the provisions of the Indenture hereinafter
mentioned, may afford additional security for the first mortgage bonds of any
particular series) by an Indenture of Mortgage and Deed of Trust dated as of
August 1, 1940, executed by the Company to The First National Bank of Chicago,
as Trustee, as supplemented by ________ Supplemental Indentures (including a
Seventh Supplemental Indenture dated as of July 1, 1946, a Thirty-second
Supplemental Indenture dated as of September 1, 1966, a Forty-fifth Supplemental
Indenture dated as of November 1, 1976, a Fifty-fifth Supplemental Indenture
dated as of March 1, 1988, a Fifty-sixth Supplemental Indenture dated as of
October 1, 1988, a Fifty-ninth Supplemental Indenture dated as of October 1,
1993, a Sixtieth Supplemental Indenture dated as of November 1, 1993, a
Sixty-second Supplemental Indenture dated as of September 1, 1996, a Sixty-third
Supplemental Indenture dated as of April 1, 1997, and a __________ Supplemental
Indenture dated as of ________) each duly executed by the Company to said
Trustee (said Indenture, as so supplemented, being herein sometimes referred to
as the "Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the properties mortgaged and
pledged, the nature and extent of the security, the rights of the holders of
said first mortgage bonds, and of the Trustee and of the Company in respect of
such security, and the terms and conditions upon which said first mortgage bonds
are and are to be issued and secured. As provided in, and to the extent
permitted by, the Indenture, the rights and obligations of the Company and of
the holders of said first mortgage bonds may be changed and modified with the
consent of the Company by the affirmative vote of the holders of at least 75% in
principal amount of the first mortgage bonds then outstanding affected by such
change or modification (excluding first mortgage bonds disqualified from voting
by reason of the Company's interest therein as provided in the Indenture);
provided, however, that without the consent of the registered owner hereof no
such change or modification shall permit the reduction of the principal or the
extension of the maturity of the principal of this Bond or the reduction of the
rate of interest, if any, hereon or any other modification of the terms of
payment of such principal or interest. As provided in the Indenture, said first
mortgage bonds are issuable in series which may vary as in the Indenture
provided or permitted. This Bond is one of a series of first mortgage bonds
entitled "First Mortgage Bonds, Collateral Series __, Due ____".
Any payment or deemed payment by the Company of the principal
of or interest, if any, on the Collateral Trust Securities (as defined in the
________ Supplemental Indenture) (other than by the application of the proceeds
of a payment in respect of this Bond) shall, to the extent thereof, be deemed to
satisfy and discharge the obligation of the Company, if any, to make a payment
of principal of or interest, if any, on this Bond which is then due.
This Bond is redeemable, at the option of the Company, in
whole at any time or in part from time to time, upon 30 days notice, at a
redemption price equal to 100% of the principal amount thereof together with
accrued interest, if any, thereon to the date fixed for redemption. This Bond is
also subject to redemption under certain circumstances specified in Section 54
of the Indenture by the application of cash received by the Trustee as the
result of the taking by eminent domain or of the purchase by a public authority
of properties of the Company, as more fully provided in, and subject to the
provisions of, the Indenture, upon at least 30 days prior notice given as
aforesaid, at a special redemption price of 100% of the principal amount
thereof. In addition, the Bonds shall be redeemed by the Company no later than
the redemption of the Collateral Trust Securities in a principal amount equal to
the principal amount of Collateral Trust Securities then being redeemed, and at
a redemption price equal to the redemption price (excluding interest other than
interest on defaulted principal, if any) applicable to such redemption of
Collateral Trust Securities.
If an event of default, as defined in the Indenture, shall
occur, the principal of this Bond may become or be declared due and payable, in
the manner and with the effect provided in the Indenture.
To the extent permitted on the front hereof, this Bond is
transferable by the registered owner hereof in person or by attorney authorized
in writing at the agency of the Company in the City of Chicago, Illinois, or, at
the option of the holder, at the agency of the Company in the City of New York,
upon surrender and cancellation of this Bond and upon any such transfer a new
first mortgage bond of the same series, for the same aggregate principal amount,
will be issued to the transferee in exchange herefor. The Company and the
Trustee may deem and treat the person in whose name this Bond is registered as
the absolute owner hereof, for the purpose of receiving payment and for all
other purposes.
This Bond, alone or with other first mortgage bonds of the
same series, may be exchanged upon surrender thereof to the Trustee at the
agency of the Company in the City of Chicago, Illinois, or, at the option of the
holder, at the agency of the Company in the City of New York, for one or more
other first mortgage bonds of the same series and of the same aggregate
principal amount but of a different authorized denomination or denominations,
upon payment of a sum sufficient to reimburse the Company for any stamp tax or
other governmental charge incident thereto, and subject to the terms and
conditions set forth in the Indenture.
No recourse shall be had for the payment of the principal of
or interest, if any, on this Bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture or of any indenture supplemental thereto,
against any incorporator, stockholder, director, or officer, as such, past,
present or future, of the Company or of any predecessor or successor
corporation, either directly or through the Company or any predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or by any legal or
equitable proceeding or otherwise howsoever; all such liability being, by the
acceptance hereof and as a part of the consideration for the issuance hereof,
expressly waived and released by every registered owner hereof, as more fully
provided in the Indenture; provided, however, that nothing herein or in the
Indenture contained shall be taken to prevent recourse to and the enforcement of
the liability, if any, of any shareholder or any stockholder or subscriber to
capital stock upon or in respect of shares of capital stock not fully paid up.
[END OF BOND FORM]
SECTION 4. Anything contained in Sections 97 and 98 of the
Indenture to the contrary notwithstanding, if less than all of the outstanding
Bonds are to be called for redemption, the Bonds to be redeemed in whole or in
part shall be designated by the Trustee (within 10 days after receipt from the
Company of notice of its intention to redeem Bonds) by lot according to such
method as the Trustee shall deem proper in its discretion. For the purpose of
any drawing, the Trustee shall assign a number for each $1,000 principal amount
of each outstanding Bond.
The provisions of Section 97 of the Indenture relating to
notations of partial redemption shall not apply to the Bonds.
SECTION 5. The recitals contained in this Supplemental
Indenture are made by the Company and not by the Trustee; and all of the
provisions contained in the Original Indenture, as heretofore supplemented, in
respect of the rights, privileges, immunities, powers, and duties of the Trustee
shall, except as hereinabove modified, be applicable in respect hereof as fully
and with like effect as if set forth herein in full.
SECTION 6. All the covenants, stipulations, promises and
agreements in this Supplemental Indenture contained, by or on behalf of the
Company, shall bind and inure to the benefit of its successors and assigns,
whether so expressed or not.
SECTION 7. Nothing in this Supplemental Indenture expressed or
implied is intended or shall be construed to give to any person other than the
Company, the Trustee, and the holders of the first mortgage bonds any legal or
equitable right, remedy or claim under or in respect of the Indenture or any
covenant, condition or provision therein or in the first mortgage bonds
contained, and all such covenants, conditions, and provisions are and shall be
held to be for the sole and exclusive benefit of the Company, the Trustee and
the holders of the first mortgage bonds issued under the Indenture.
SECTION 8. All references in the Original Indenture to the
various Sections and Articles thereof shall be deemed to refer to said Sections
and Articles as heretofore amended, and the Original Indenture shall hereafter
be construed and applied as heretofore amended and supplemented.
SECTION 9. This Supplemental Indenture may be executed in any
number of counterparts, and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts, or as many of them as the
Company and the Trustee shall preserve undestroyed, shall together constitute
but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, IES UTILITIES INC. has caused this
__________ Supplemental Indenture to be signed in its corporate name by its
President or a Vice President and its corporate seal to be hereunto affixed and
attested by its Secretary or an Assistant Secretary, and THE FIRST NATIONAL BANK
OF CHICAGO, in token of its acceptance of the trusts created hereunder, has
caused this __________ Supplemental Indenture to be signed in its corporate name
by one of its Vice Presidents or Assistant Vice Presidents and its corporate
seal to be hereunto affixed and attested by one of its Trust Officers, all as of
the day and year first above written.
IES UTILITIES INC.
By
-------------------------
(CORPORATE SEAL)
ATTEST:
- -------------------------
THE FIRST NATIONAL BANK OF
CHICAGO, Trustee
By
-------------------------
(CORPORATE SEAL)
ATTEST:
- --------------------------
<PAGE>
STATE OF IOWA )
) ss:
COUNTY OF LINN )
On this ___th day of _____, _____ before me, the undersigned,
a Notary Public in and for the said County in the state aforesaid, personally
appeared _________ and __________, to me personally known, and to me known to be
_________, and __________ respectively, of IES UTILITIES INC., one of the
corporations described in and which executed the within and foregoing
instrument, and who, being by me severally duly sworn, each did say that he the
said __________ is __________, and that he the said __________ is __________ of
the said IES UTILITIES INC., a corporation; that the seal affixed to the within
and foregoing instrument is the corporate seal of the said corporation, and that
the said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors; and the said _________ and __________ each
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation by it voluntarily executed.
WITNESS my hand and notarial seal this __th day of _____, ___.
------------------
Notary Public
My Commission expires:
(NOTARIAL SEAL)
<PAGE>
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
On this ___th day of _____, _____, before me, the undersigned,
a Notary Public in and for said County in the State aforesaid, personally
appeared __________ and __________ to me personally known, and to me known to be
a __________ and an _________, respectively, of THE FIRST NATIONAL BANK OF
CHICAGO, one of the corporations described in and which executed the within and
foregoing instrument, and who, being by me severally duly sworn, each did say
that he the said _________ is a _________ that the said _________ is an
__________ of the said THE FIRST NATIONAL BANK OF CHICAGO, a corporation; that
the seal affixed to the within and foregoing instrument is the corporate seal of
the said corporation, and that the said instrument was signed and sealed on
behalf of said corporation by authority of its By-Laws; and the said __________
and __________ each acknowledged the execution of said instrument to be the
voluntary act and deed of said corporation by it voluntarily executed.
WITNESS my hand and notarial seal this ___th day of ____, ___.
------------------
Notary Public
My Commission expires:
(NOTARIAL SEAL)
<PAGE>
EXHIBIT 5
June 4, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: IES Utilities Inc. Registration on Form S-3 of Debt Securities
Ladies and Gentlemen:
I am Vice President, General Counsel and Secretary for IES Utilities Inc. (the
"Company") and have acted as counsel for the Company in connection with the
Company's Registration Statement on Form S-3 filed on or about the date hereof,
with the Securities and Exchange Commission (the "Registration Statement"),
relating to $50,000,000 aggregate principal amount of its debt securities to be
issued in one or more offerings.
In this regard, I have examined, or caused attorneys under my general
supervision to examine, such corporate records of the Company and such other
instruments, records, certificates and documents as I have deemed necessary in
order to enable me to render this opinion. On the basis of the foregoing, I am
of the opinion that:
1. The Company has been duly incorporated and is legally existing
as a corporation under the laws of the State of Iowa and has
the power and authority to issue debt securities, including
collateral trust bonds.
2. The debt securities will be valid, legally binding obligations
of the Company.
<PAGE>
Securities and Exchange Commission
Page -2-
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Legal Matters" in the
Prospectus included in the Registration Statement.
Very truly yours,
/s/ Stephen W. Southwick
Stephen W. Southwick
Vice President, General Counsel
& Secretary
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 31, 1997,
in IES Utilities Inc.'s Form 10-K for the year ended December 31, 1996, and to
all references to our firm included in this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
June 3, 1997
EXHIBIT 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
-------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-------------------
IES UTILITIES, INC.
(Exact name of obligor as specified in its charter)
Iowa 42-0331370
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
IES Tower
200 First Street S.E.
P.O. Box 351
Cedar Rapids, 52406
(Address of principal executive offices) (Zip Code)
Collateral Trust Bonds
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 21st day of May, 1997.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
Richard D. Manella
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No.
333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 21, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between IES Utilities, Inc.
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Richard D. Manella
Richard D. Manella
Vice President
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in C400 <-
Thousands RCFD BIL MIL THOU
----------------- ---- ------------ --
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,586,399 1.a.
b. Interest-bearing balances(2) 0071 5,224,838 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 3,335,304 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 4,157,626 3.a.
b. Securities purchased under agreements to resell 0277 96,125 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 23,448,929 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,373 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 23,029,556 4.d.
5. Assets held in trading accounts 3545 7,888,514 5.
6. Premises and fixed assets (including capitalized leases) 2145 701,700 6.
7. Other real estate owned (from Schedule RC-M) 2150 11,061 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 62,681 8.
9. Customers' liability to this bank on acceptances outstanding 2155 480,933 9.
10. Intangible assets (from Schedule RC-M) 2143 303,014 10.
11. Other assets (from Schedule RC-F) 2160 1,745,155 11.
12. Total assets (sum of items 1 through 11) 2170 51,622,906 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 22,032,796 13.a.
(1) Noninterest-bearing(1) RCON 6631 9,190,670 13.a.1
(2) Interest-bearing RCON 6636 12,842,126 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 10,861,857 13.b.
(1) Noninterest bearing RCFN 6631 285,745 13.b.1
(2) Interest-bearing RCFN 6636 10,576,382 13.b.2
14. Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased RCFD 0278 2,639,255 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 66,564 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 121,352 15.a.
b. Trading Liabilities...................................................... RCFD 3548 5,793,742 15b.
16. Other borrowed money:
a. With original maturity of one year or less RCFD 2332 2,665,232 16.a.
b. With original maturity of more than one year RCFD 2333 58,105 16b.
17. Mortgage indebtedness and obligations under capitalized
leases RCFD 2910 285,671 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 480,933 18.
19. Subordinated notes and debentures RCFD 3200 1,400,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,199,147 20.
21. Total liabilities (sum of items 13 through 20) RCFD 2948 47,604,654 21.
22. Limited-Life preferred stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,934,523 25.
26. a. Undivided profits and capital reserves RCFD 3632 865,652 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 18,441 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,222) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,018,252 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) RCFD 3300 51,622,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number
auditors as of any date during 1995 . . . . . . . . . . . . . . . . RCFD 6724. .... N/a M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
<PAGE>
EXHIBIT 25(b)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
-------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-------------------
IES UTILITIES, INC.
(Exact name of obligor as specified in its charter)
Iowa 42-0331370
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
IES Tower
200 First Street S.E.
P.O. Box 351
Cedar Rapids, 52406
(Address of principal executive offices) (Zip Code)
Subordinated Debentures
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part
of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 21st day of May, 1997.
The First National Bank of Chicago,
Trustee
By /s/ Richard D. Manella
Richard D. Manella
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No.
333-14201).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 21, 1997
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between IES Utilities, Inc.
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Richard D. Manella
Richard D. Manella
Vice President
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts in C400 <-
Thousands RCFD BIL MIL THOU
----------------- ---- ------------ --
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) 0081 4,586,399 1.a.
b. Interest-bearing balances(2) 0071 5,224,838 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 3,335,304 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 4,157,626 3.a.
b. Securities purchased under agreements to resell 0277 96,125 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) RCFD 2122 23,448,929 4.a.
b. LESS: Allowance for loan and lease losses RCFD 3123 419,373 4.b.
c. LESS: Allocated transfer risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) 2125 23,029,556 4.d.
5. Assets held in trading accounts 3545 7,888,514 5.
6. Premises and fixed assets (including capitalized leases) 2145 701,700 6.
7. Other real estate owned (from Schedule RC-M) 2150 11,061 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 2130 62,681 8.
9. Customers' liability to this bank on acceptances outstanding 2155 480,933 9.
10. Intangible assets (from Schedule RC-M) 2143 303,014 10.
11. Other assets (from Schedule RC-F) 2160 1,745,155 11.
12. Total assets (sum of items 1 through 11) 2170 51,622,906 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/96
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) RCON 2200 22,032,796 13.a.
(1) Noninterest-bearing(1) RCON 6631 9,190,670 13.a.1
(2) Interest-bearing RCON 6636 12,842,126 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) RCFN 2200 10,861,857 13.b.
(1) Noninterest bearing RCFN 6631 285,745 13.b.1
(2) Interest-bearing RCFN 6636 10,576,382 13.b.2
14. Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal funds purchased RCFD 0278 2,639,255 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 66,564 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 121,352 15.a.
b. Trading Liabilities...................................................... RCFD 3548 5,793,742 15b.
16. Other borrowed money:
a. With original maturity of one year or less RCFD 2332 2,665,232 16.a.
b. With original maturity of more than one year RCFD 2333 58,105 16b.
17. Mortgage indebtedness and obligations under capitalized
leases RCFD 2910 285,671 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 480,933 18.
19. Subordinated notes and debentures RCFD 3200 1,400,000 19.
20. Other liabilities (from Schedule RC-G) RCFD 2930 1,199,147 20.
21. Total liabilities (sum of items 13 through 20) RCFD 2948 47,604,654 21.
22. Limited-Life preferred stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,934,523 25.
26. a. Undivided profits and capital reserves RCFD 3632 865,652 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities RCFD 8434 18,441 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (1,222) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 4,018,252 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) RCFD 3300 51,622,906 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number
auditors as of any date during 1995 . . . . . . . . . . . . . . . . RCFD 6724. .... N/a M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
<PAGE>
EXHIBIT 26
[Letterhead of IES]
[Date]
To:
Re: IES Utilities Inc.
Proposed Collateral Trust Bond Issue
Ladies/Gentlemen:
IES Utilities Inc. plans to commence an offering of $__________ in aggregate
principal amount of its _______________ (the "_____") during the week of
__________. Two registration statements on Form S-3 (File Nos. 33-62259 and
333-_____) (collectively, the "Registration Statement") relating to the ________
were filed with the SEC. It is expected bids will be solicited on either
_________ or _________. The purpose of this letter is to extend to you an
invitation to bid on this issue and to define the bidding process.
Proposals are being solicited from _____ investment banking firms:
_____________________________. The Company will initiate the bidding process by
contacting each of you by phone at approximately ______ New York City time the
day prior to the bid. Your completed bid sheet should be returned to me by
facsimile at ______ New York City time the following day. (Appropriate FAX
numbers will be provided on the bid sheet.)
IES Utilities Inc. will select an underwriter based on the economics of the
proposals as well as any other criteria it deems appropriate. This selection
will be made within 15 minutes of receipt of the bids with pricing and execution
of the underwriting agreement expected to be completed the same day.
Closing will occur ______ business days after pricing.
All bids are expected to be made in good faith with final pricing consistent
with the selected offer. You should assume IES Utilities will be paid in same
day funds at closing and that Dorsey & Whitney's fees will be paid by
underwriters.
The Company does not plan to include a rating out in the underwriting agreement.
Should your proposal be contingent on a rating out, please indicate so in your
bid.
Under Section 34.2 of the Rules of the Federal Energy Regulatory Commission, we
are required to notify you that no bid for securities shall be invited or
accepted from any person who:
i) prior to the submission of bids has performed any service for any fee
or compensation in connection with the proposed issuance of
securities;
ii) violates Section 305(a) of the Federal Power Act with respect to this
bid.
I am enclosing some materials which should be helpful in your due diligence.
Included are the IES Utilities latest Form 10-K , appropriate Form 10-Q's,
appropriate Form 8-K's, the Proxy Statement filed with the SEC on _______, the
Registration Statement, and the form of underwriting agreement. Also enclosed is
a Prospective Purchasers Questionnaire. Please complete this form and return it
to me. A due diligence conference call is currently scheduled for ______ New
York City time on ____________. ____________ of Dorsey & Whitney will be in
contact with you to verify this.
<PAGE>
Attached is a summary of the proposed offering as well as a distribution list
and the proposed bid form. If you have any questions, please feel free to call
either _____________ or ____________.
Very truly yours,
