<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 6, 1996
REGISTRATION NO. 333-15387
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
MIDAMERICAN ENERGY FINANCING I
MIDAMERICAN ENERGY FINANCING II MIDAMERICAN ENERGY COMPANY
(Exact name of registrants as specified in their Trust Agreements)
(Exact name of registrant as specified in its charter)
DELAWARE IOWA
(State or other jurisdiction of incorporation or organization)
(To be applied for) 42-1425214
(I.R.S. Employer Identification Nos.)
Paul J. Leighton
Vice President and Corporate Secretary
666 Grand Avenue MidAmerican Energy Company
P.O. Box 657 666 Grand Avenue
Des Moines, Iowa 50303-0657 P.O. Box 657
(515) 242-4300 Des Moines, Iowa 50303-0657
(Address, including zip code, and telephone number (515) 242-4300
including area code, of registrants' principal executive (Name, address, including zip code, and telephone number
offices) including area code, of agent for service)
</TABLE>
PLEASE SEND COPIES OF ALL CORRESPONDENCE TO:
R. Todd Vieregg, P.C.
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective, as determined by
market conditions and other factors.
If 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, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER UNIT(2) PRICE(2)
<S> <C> <C> <C>
MidAmerican Energy Financing I
MidAmerican Energy Financing II
Preferred Securities.............................
MidAmerican Energy Company
Guarantees with respect to
Preferred Securities(3)..........................
MidAmerican Energy Company
Deferrable Interest Subordinated Debentures......
MidAmerican Energy Company
Medium-Term Notes................................
Total.............................................. $500,000,000 100% $500,000,000
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
MidAmerican Energy Financing I
MidAmerican Energy Financing II
Preferred Securities.............................
MidAmerican Energy Company
Guarantees with respect to
Preferred Securities(3)..........................
MidAmerican Energy Company
Deferrable Interest Subordinated Debentures......
MidAmerican Energy Company
Medium-Term Notes................................
Total.............................................. $151,515
</TABLE>
(1) There are being registered hereunder a presently indeterminate number of
Preferred Securities of MidAmerican Energy Financing I and MidAmerican
Energy Financing II (together with related Guarantees and Deferrable
Interest Subordinated Debentures of MidAmerican Energy Company for which no
separate consideration will be received by any of the Registrants) and a
presently indeterminate number of Medium-Term Notes of MidAmerican Energy
Company, all with an aggregate initial public offering price not to exceed
$500,000,000.
(2) Pursuant to Rule 457(n) and (o), the registration fee is calculated on the
basis of the proposed aggregate maximum offering price of the Preferred
Securities and the Medium-Term Notes.
(3) Includes the rights of holders of the Preferred Securities and the
obligations of MidAmerican Energy Company ("Back-Up Obligations") under (i)
the Preferred Securities Guarantee Agreement, (ii) the Deferrable Interest
Subordinated Debentures, (iii) the Amended and Restated Trust Agreements for
MidAmerican Energy Financing I and MidAmerican Energy Financing II, (iv) the
Indenture and Supplemental Indentures under which the Deferrable Interest
Subordinated Debentures will be issued and (v) the Agreements as to Expenses
and Liabilities in which MidAmerican Energy Company undertakes to pay all of
the expenses of MidAmerican Energy Financing I and MidAmerican Energy
Financing II, except for obligations under the Preferred Securities, as
described in the Registration Statement.
----------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains the following prospectuses: (i) a
prospectus to be used in connection with the offer and sale of medium-term notes
of MidAmerican Energy Company, an Iowa corporation ("MidAmerican Energy"), and
(ii) a prospectus and form of prospectus supplement to be used in connection
with the offer and sale of preferred securities of MidAmerican Energy Financing
I, a Delaware business trust, and MidAmerican Energy Financing II, a Deleware
business trust (collectively, the "Trust Issuers").
MidAmerican Energy and the Trust Issuers plan to consummate, from time to
time, transactions involving the sale of securities registered pursuant to this
Registration Statement, provided that the proceeds therefrom will not exceed an
aggregate of $500,000,000. No decisions have been made as to which securities
will be issued or the timing or size of any offering of such securities. Such
determinations will be made from time to time in the light of market and other
conditions.
<PAGE>
SUBJECT TO COMPLETION, DATED , 1996
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 be 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
[LOGO]
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTES
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
-----------------
MidAmerican Energy Company ("MidAmerican Energy" or the "Company") may offer
from time to time, at prices and on terms to be determined at or prior to the
time of sale, its unsecured Medium-Term Notes (the "Notes"), having an aggregate
initial offering price not to exceed $500,000,000, subject to reduction in the
event of sales of certain other securities under the registration statement
referred to below of which this Prospectus is a part. Each Note will rank as
senior unsecured debt, be registered as to principal and interest, and be
denominated in United States dollars.
Specific terms of the Notes in respect of which this Prospectus is being
delivered will be set forth in an accompanying prospectus supplement, (as
supplemented by any applicable pricing supplement relating thereto, a
"Prospectus Supplement"), together with the terms of the offering of the Notes,
the initial offering price and the net proceeds to the Company from the sale
thereof. The applicable Prospectus Supplement will set forth, among other
matters, the following with respect to the particular Notes: the aggregate
principal amount, authorized denominations, maturity, rate or method of
calculation of interest and dates for payment thereof, and any redemption,
prepayment or sinking fund provisions.
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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 OR ANY
PROSPECTUS SUPPLEMENT HERETO. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The Company may sell Notes directly to purchasers or through agents
designated from time to time by the Company or to or through underwriters or a
group of underwriters which may be managed by one or more underwriters. If any
agents of the Company or any underwriters are involved in the sale of Notes in
respect of which this Prospectus is being delivered, the names of such agents or
underwriters and any applicable commission or discount will be set forth in the
applicable Prospectus Supplement. The net proceeds to the Company from the sale
of Notes will be the public offering price of such Notes less such discount, in
the case of an offering through an underwriter, or the purchase price of such
Notes less such commission, in the case of an offering through an agent, and
less, in each case, other expenses of the Company associated with the issuance
and distribution of such Notes.
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The date of this Prospectus is , 1996.
<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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Company has filed
with the Commission a registration statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Notes offered hereby and certain other securities. This
Prospectus does not contain all information set forth in the Registration
Statement and reference is hereby made to the Registration Statement and the
exhibits thereto for further information with respect to the Company and the
Notes offered hereby. Such reports, proxy statements, Registration Statement and
exhibits and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at its Northeast Regional Office located
at 7 World Trade Center, Suite 1300, New York, New York 10048 and Midwest
Regional Office located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Company is subject to the electronic
filing requirements of the Commission. Accordingly, pursuant to the rules and
regulations of the Commission, certain documents, including annual and quarterly
reports and proxy statements, filed by the Company with the Commission have been
filed electronically. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants (including the Company) that file electronically with the
Commission at (http://www.sec.gov). Certain of the Company's securities are
listed on the New York Stock Exchange and such reports, proxy statements and
other information may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report of the Company on Form 10-K, as amended, for the year
ended December 31, 1995, the Quarterly Reports of the Company on Form 10-Q for
the period ended March 31, 1996, as amended, and for the periods ended June 30,
1996 and September 30, 1996, and Current Reports of the Company on Form 8-K
reporting events occurring on February 20, 1996, April 25, 1996, May 28, 1996
and October 17, 1996 are incorporated by reference into this Prospectus. All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Notes contemplated hereby shall be deemed to
be incorporated by reference into this Prospectus and to be made a part hereof
from the respective dates of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of the Registration
Statement and this Prospectus to the extent that a statement contained herein,
in the applicable Prospectus Supplement or in any subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of the
Registration Statement or this Prospectus.
Copies of the above documents (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents)
may be obtained upon written or oral request without charge from the Company,
666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657 (telephone number
(515) 242-4300), Attention: Investor Relations.
2
<PAGE>
THE COMPANY
GENERAL
MidAmerican Energy was formed on July 1, 1995 through the merger (the
"Merger") of Iowa-Illinois Gas and Electric Company ("Iowa-Illinois"), Midwest
Resources Inc. ("Midwest Resources") and Midwest Power Systems Inc. ("Midwest
Power") with and into MidAmerican Energy. MidAmerican Energy is a combination
electric and natural gas public utility engaged in the generation, transmission,
distribution and sale of electric energy in Illinois, Iowa and South Dakota, and
the purchase, distribution, transportation and sale of natural gas in those
states and in the state of Nebraska. Nonregulated operations are conducted by
its affiliate, MidAmerican Capital Company ("MidAmerican Capital") subsidiary; a
separate affiliate, Midwest Capital Group, Inc. ("Midwest Capital"), functions
as a regional business development company in the utility service territory.
The Company is incorporated in Iowa. Its executive offices are located at
666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657 (telephone number
(515) 242-4300).
RECENT DEVELOPMENTS
On December 1, 1996, MidAmerican Energy formed a holding company, and
transferred MidAmerican Capital and Midwest Capital to the holding company. The
holding company has three wholly-owned subsidiaries consisting of MidAmerican
Energy (utility operations), MidAmerican Capital and Midwest Capital. The
transaction was structured as a share exchange, with each share of MidAmerican
Energy common stock being exchanged for one share of the holding company common
stock.
On November 14, 1996, MidAmerican Capital agreed to sell its subsidiaries
which conduct oil and gas and gas marketing operations to KCS Energy, Inc. for
approximately $209.5 million in cash (subject to certain adjustments for real
property title and environmental matters and changes in intercompany accounts)
and warrants to acquire 435,100 shares of KCS Energy, Inc. common stock for $45
per share. In addition, MidAmerican Capital has agreed to convert approximately
$91 million of loans it made to such subsidiaries into equity investments in
such subsidiaries.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited consolidated and utility only
ratios and supplemental ratios of earnings to fixed charges of MidAmerican
Energy for each of the years 1991 through 1995 and for the twelve months ended
September 30, 1996.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------- TWELVE MONTHS ENDED
1991 1992 1993 1994 1995 SEPTEMBER 30, 1996
--------- --------- --------- --------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED:
Ratio of earnings to fixed charges(1).............. 2.46x 1.87x 2.84x 2.78x 2.82x 3.08x
Supplemental ratio of earnings to fixed
charges(2)....................................... 2.39x 1.82x 2.75x 2.70x 2.75x 3.01x
UTILITY ONLY(3):
Ratio of earnings to fixed charges(1).............. 2.92x 2.34x 3.40x 3.30x 3.39x 3.72x
Supplemental ratio of earnings to fixed
charges(2)....................................... 2.80x 2.24x 3.25x 3.16x 3.28x 3.61x
</TABLE>
- ------------------------
(1) For purposes of computing the ratios of earnings to fixed charges,
"earnings" consist of net income from continuing operations before interest
charges and preferred dividend requirements, plus income taxes, plus the
estimated interest component of rentals. "Earnings" also include allowances
for borrowed and other funds used during construction. Fixed charges consist
of interest charges and the estimated interest component of rentals.
3
<PAGE>
(2) The supplemental ratios have been calculated including obligations of the
Company under its long-term power purchase contract with the Nebraska Public
Power District relating to Cooper Nuclear Station.
(3) Reflects the formation of the holding company and the transfer of
MidAmerican Capital and Midwest Capital to the holding company by
MidAmerican Energy.
USE OF PROCEEDS
Except as set forth in the Prospectus Supplement for a specific offering of
Notes, MidAmerican Energy will use the net proceeds from the sale of the Notes
for the repayment of a portion of its outstanding indebtedness. The Company has
not yet selected the indebtedness to be repaid with such net proceeds.
DESCRIPTION OF NOTES
GENERAL
The Notes offered hereby will be issued under the Indenture dated as of
, 1996, as supplemented from time to time (the "Indenture"), between
the Company and The First National Bank of Chicago, as trustee (the "Trustee").
The Indenture is subject to and governed by the Trust Indenture Act of 1939, as
amended. The summary contained herein of certain provisions of the Notes is
subject to and is qualified in its entirety by reference to the provisions of
the Indenture and the forms of Notes (including the definitions of certain terms
therein), each of which has been filed as an exhibit to the Registration
Statement, to which exhibits reference is hereby made. Certain capitalized terms
used below but not defined herein have the meanings ascribed to them in the
Indenture. Unless otherwise noted, section references below are to the
Indenture.
The Notes are the only securities that may be issued under the Indenture.
The Indenture does not limit the aggregate amount of Notes that may be issued
under the Indenture, but the aggregate initial offering price of the Notes that
may be issued under this Prospectus is limited to $500,000,000, subject to
reduction in the event of sales of certain other securities under the
Registration Statement of which this Prospectus is a part. The Notes will be
denominated in United States dollars, and payments of principal of, premium, if
any, and any interest on the Notes will be made in United States dollars.
Currency amounts in this Prospectus and any Prospectus Supplement are stated in
United States dollars. Unless otherwise specified in the applicable Prospectus
Supplement, the Notes will have the terms described below.
The general provisions of the Indenture do not contain any provisions that
would limit the ability of the Company to incur indebtedness or that would
afford holders of Notes ("Holders") protection in the event of a highly
leveraged or similar transaction involving the Company. However, the general
provisions of the Indenture contain certain restrictions on mortgages and liens.
See "Restrictions on Secured Debt" below. Reference is made to the applicable
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company that are described below, including any addition of covenants or other
provisions providing event risk or similar protection.
All of the Notes need not be issued at the same time, and may vary as to
interest rate, maturity and other provisions. (Section 2.05) The Notes are
offered on a continuing basis and will mature on a day from nine months to 30
years from their date of issue, as selected by the initial purchaser and agreed
to by the Company, and may be subject to redemption at the option of the Company
or repayment at the option of the Holder prior to Stated Maturity (as defined
below). See "Redemption and Repayment" below.
Each Note will be represented by either a global security (a "Book-Entry
Note") registered in the name of a nominee of the Depositary or a certificate
issued in definitive form (a "Certificated Note"), as specified in the
applicable Prospectus Supplement. Beneficial interests in Book-Entry Notes will
be shown
4
<PAGE>
on, and transfers thereof will be effected only through, records maintained by
DTC and its participants. Owners of beneficial interests in Book-Entry Notes
will be entitled to physical delivery of Certificated Notes only under the
limited circumstances described herein. See "Book-Entry System" below. Unless
otherwise specified in the applicable Prospectus Supplement, Notes will be
issued in denominations of $1,000 and integral multiples thereof. (Section 2.04)
Payments of interest and principal (and premium, if any) to Beneficial
Owners (as defined below under "Book-Entry System") of Book-Entry Notes are
expected to be made in accordance with the procedures of the Depositary and its
participants in effect from time to time as described below under "Book-Entry
System."
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of and any premium and accrued interest on all Notes shall be payable
as follows:
(a) On or before 10:00 a.m., New York City time, of the day on which any
payment of principal, accrued interest or premium is due on any Book-Entry Note
pursuant to the terms thereof, the Company will deliver to the Trustee
immediately available funds sufficient to make such payment. On or before 10:30
a.m., New York City time or such other time as shall be agreed upon between the
Trustee and the Depositary, of the day on which such payment is due, the Trustee
will deposit with the Depositary such funds by wire transfer into the account
specified by the Depositary. As a condition to the payment at the Maturity of
any part of the principal and any applicable premium of any Book-Entry Note, the
Depositary will surrender, or cause to be surrendered, such Book-Entry Note to
the Trustee, whereupon a new Book-Entry Note will be issued to the Depositary.
(b) With respect to any Note that is not a Book-Entry Note, principal, any
premium and accrued interest due at the Maturity of such Note will be payable in
immediately available funds when due upon presentation and surrender of such
Note at the Corporate Trust Office of the Trustee, currently c/o First Chicago
Trust Company of New York, 14 Wall Street-8th Floor-Window 2, New York, New York
10005; PROVIDED that such Note is presented to the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Accrued interest on (and, in the case of Amortizing Notes, as
defined below under "Amortizing Notes", installments of principal of) any Note
that is not a Book-Entry Note (other than accrued interest or such installments
payable at Maturity) will be paid by a clearinghouse funds check mailed on the
Interest Payment Date; PROVIDED, HOWEVER, that if any Holder of Notes, the
aggregate principal amount of which equals or exceeds $10,000,000, provides a
written request to the Trustee on or before the applicable Record Date for such
Interest Payment Date, accrued interest (and such installments of principal)
shall be paid by wire transfer of immediately available funds to a bank within
the continental United States or by direct deposit into the account of such
Holder if such account is maintained with the Trustee. (Section 2.11)
Notwithstanding anything in this Prospectus to the contrary, unless
otherwise specified in the applicable Prospectus Supplement, if a Note is an
Original Issue Discount Note (as defined below under "Original Issue Discount
Notes"), the amount payable on such Note in the event the principal amount
thereof is declared to be due and payable immediately as described below under
"Description of Notes-- Events of Default" or in the event of redemption or
repayment thereof prior to its Stated Maturity, in lieu of the principal amount
due at the Stated Maturity thereof, will be the Amortized Face Amount of such
Note as of the date of declaration, redemption or repayment, as the case may be.
The "Amortized Face Amount" of an Original Issue Discount Note will be the
amount equal to (i) the principal amount of such Note multiplied by the Issue
Price (as defined below) specified in the applicable Prospectus Supplement plus
(ii) the portion of the difference between the dollar amount determined pursuant
to the preceding clause (i) and the principal amount of such Note that has
accreted at the yield to maturity specified in the applicable Prospectus
Supplement (computed in accordance with generally accepted United States bond
yield computation principles) to such date of declaration, redemption or
repayment, but in no event will
5
<PAGE>
the Amortized Face Amount of an Original Issue Discount Note exceed the
principal amount stated in such Note. (Section 1.03)
Each Note will bear interest at a fixed rate (a "Fixed Rate Note"), which
may be zero in the case of a Zero Coupon Note, or at a variable rate (a
"Floating Rate Note") determined by reference to the Commercial Paper Rate,
LIBOR, Prime Rate or Treasury Rate or such other interest rate formula (the
"Interest Rate Basis") as may be specified in the applicable Prospectus
Supplement as adjusted by a Spread and/or Spread Multiplier, if any (as defined
herein), applicable to such Notes. The Prospectus Supplement relating to each
Note will describe, among other things, the following items: (i) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
such Note will be issued (the "Issue Price"); (ii) the date on which such Note
will be issued (the "Original Issue Date"); (iii) the date on which such Note
will mature (the "Stated Maturity") and whether the Stated Maturity may be
extended by the Company, and if so, the Extension Periods and the Final Maturity
Date (each as defined below under "Extension of Maturity"); (iv) whether such
Note is a Fixed Rate Note or a Floating Rate Note; (v) if such Note is a Fixed
Rate Note, the rate per annum at which such Note will bear interest, if any, the
Interest Payment Date or Dates, if different from those set forth below under
"Fixed Rate Notes" and whether such rate may be changed by the Company prior to
Stated Maturity; (vi) if such Note is a Floating Rate Note, the Initial Interest
Rate, the Interest Rate Basis, the Interest Reset Dates, the Interest Payment
Dates, the Index Maturity, the Spread, if any, the Spread Multiplier, if any
(all as defined herein), the maximum interest rate, if any, the minimum interest
rate, if any, and any other terms relating to the particular method of
calculating the interest rate for such Note, and whether any such Spread and/or
Spread Multiplier may be changed by the Company prior to Stated Maturity; (vii)
whether such Note is an Original Issue Discount Note, and if so, the yield to
maturity; (viii) whether such Note is an Amortizing Note, and if so, the basis
or formula for the amortization of principal and/or interest and the payment
dates for such periodic principal payments; (ix) the record date or dates for
determining the person entitled to receive payments of interest, principal and
premium, if any (a "Record Date"), if other than as set forth below; (x) whether
such Note may be redeemed at the option of the Company, or repaid at the option
of the Holder, prior to Stated Maturity and, if so, the provisions relating to
such redemption or repayment; (xi) any sinking fund or other mandatory
redemption provisions with respect to such Note; (xii) whether such Note will be
issued initially as a Book-Entry Note or a Certificated Note; and (xiii) any
other terms of such Note not inconsistent with the provisions of the Indenture.
Certificated Notes may be presented for payment and for registration of
transfer or exchange at the Corporate Trust Office of the Trustee, currently c/o
First Chicago Trust Company of New York, 14 Wall Street-8th Floor-Window 2, New
York, New York 10005. (Section 6.02)
All percentages resulting from any calculation with respect to any Notes
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculation on any Notes will
be rounded to the nearest cent with one-half cent being rounded upward. (Section
2.04)
As used herein, "Business Day" means, unless otherwise specified in the
applicable Prospectus Supplement , any Monday, Tuesday, Wednesday, Thursday or
Friday that in The City of New York is not a day on which banking institutions
are authorized or obligated by law, regulation or executive order to close and,
with respect to Notes as to which LIBOR (as defined below under "Floating Rate
Notes--LIBOR Notes") is the applicable Interest Rate Basis is also a London
Business Day. As used herein, "London Business Day" means any day on which
dealings in deposits in United States dollars are transacted in the London
interbank market. (Section 1.03)
6
<PAGE>
RESTRICTIONS ON SECURED DEBT
The Notes will constitute unsecured and unsubordinated indebtedness of the
Company, and will rank on a parity with the Company's other unsecured and
unsubordinated indebtedness, but will rank junior to the first mortgage bonds of
the Company ("First Mortgage Bonds") which were issued under the Indenture of
Mortgage and Deed of Trust, dated as of March 1, 1947, from Iowa-Illinois to
Harris Trust and Savings Bank and Lynn Lloyd (C. Potter, successor individual
trustee), as trustees, and indentures supplemental thereto ("Iowa-Illinois Bond
Indenture"), or under the General Mortgage Indenture and Deed of Trust, dated as
of January 1, 1993, between Midwest Power and Morgan Guaranty Trust Company of
New York, trustee (Harris Trust and Savings Bank, successor trustee), and
indentures supplemental thereto ("Midwest Power Bond Indenture").
The Iowa-Illinois Bond Indenture constitutes a first mortgage lien (subject
to permissible encumbrances) on all of the electric generating, transmission and
distribution property, and all of the gas distribution property, which was owned
by Iowa-Illinois at the time of the Merger, and properties thereafter acquired
by the Company which are an integral part of, or essential to the use or
operation of, properties which were subject to the lien of the Iowa-Illinois
Bond Indenture at the time of the Merger. The Midwest Power Bond Indenture
constitutes a first mortgage lien (subject to permissible encumbrances) on all
of the electric generating, transmission and distribution property of the
Company within the State of Iowa which was owned by Midwest Power at the time of
the Merger, and properties thereafter acquired by the Company which are an
integral part of, or essential to the use or operation of, properties which were
subject to the lien of the Midwest Power Bond Indenture at the time of the
Merger. No gas distribution property or property located outside the State of
Iowa which was owned by Midwest Power at the time of the Merger is currently
subject to the lien of the Midwest Power Bond Indenture. However, the Company
has the right to subject such exempted properties to the lien of the Midwest
Power Bond Indenture at any time or times. As a result of the Merger, the
Company has the right to issue First Mortgage Bonds under either the
Iowa-Illinois Bond Indenture or the Midwest Power Bond Indenture, but after the
Company has issued First Mortgage Bonds under one such Bond Indenture, it may
not issue First Mortgage Bonds under the other such Bond Indenture.
The Company has covenanted in the Indenture that while any of the Notes are
outstanding, it will not (i) issue any additional First Mortgage Bonds, or (ii)
subject to the lien of the Iowa-Illinois Bond Indenture or the lien of the
Midwest Power Bond Indenture any property which is exempt from such liens,
unless in each case the Company concurrently issues to the Trustee under the
Indenture, a First Mortgage Bond or Bonds in the same aggregate principal amount
and having the same interest rate or rates, maturity date or dates, redemption
provisions and other terms as the Notes then outstanding and thereby give to the
holders of all outstanding Notes the benefit of the security of such First
Mortgage Bond or Bonds. (Section 4.01) At such time as the Trustee under the
Indenture is the only holder of First Mortgage Bonds outstanding under the
Iowa-Illinois Bond Indenture or the Midwest Power Bond Indenture, the Trustee
will surrender such First Mortgage Bonds to the Company for cancellation and
such Bond Indenture will be discharged and defeased. (Section 4.07).
In addition, the Company has covenanted in the Indenture that neither the
Company nor a Subsidiary will create or assume, except in favor of the Company
or a Wholly-Owned Subsidiary (as defined below under "Certain Definitions"), any
mortgage, pledge, or other lien or encumbrance upon any Principal Facility (as
defined below under "Certain Definitions") or any stock of any Regulated
Subsidiary (as defined below under "Certain Definitions") or indebtedness of any
Subsidiary to the Company or any other Subsidiary whether now owned or hereafter
acquired without equally and ratably securing the outstanding Notes. This
limitation will not apply to the lien of the Iowa-Illinois Bond Indenture, the
lien of the Midwest Power Bond Indenture or certain permitted encumbrances
described in the Indenture, including (a) purchase money mortgages entered into
within specified time limits; (b) liens extending, renewing or refunding any
liens permitted by clause (a) of this covenant; (c) liens existing on acquired
property; (d) certain tax, materialmen's, mechanics' and judgment liens, certain
liens arising by operation
7
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of law and certain other similar liens; (e) certain mortgages, pledges, liens or
encumbrances in favor of any state or local government or governmental agency in
connection with certain tax-exempt financings; (f) liens to secure the cost of
construction or improvement of any property entered into within specified time
limits; and (g) mortgages, pledges, liens and encumbrances not otherwise
permitted if the sum of the indebtedness thereby secured does not exceed the
greater of $100,000,000 or 10% of Common Shareholders' Equity (as defined below
under "Certain Definitions"). (Section 6.06)
INTEREST AND INTEREST RATES
Unless otherwise specified in the applicable Prospectus Supplement, each
Note (other than a Zero Coupon Note), will bear interest from and including its
Original Issue Date or from and including the most recent Interest Payment Date
to which interest on such Note has been paid or duly provided for at a fixed
rate per annum or at a rate per annum determined pursuant to an Interest Rate
Basis, stated therein and in the applicable Prospectus Supplement, that may be
adjusted by a Spread and/or Spread Multiplier, until Maturity and the principal
thereof is paid or made available for payment. Unless otherwise specified in the
applicable Prospectus Supplement, interest will be payable on each Interest
Payment Date and at Maturity. "Maturity" means the date on which the principal
of a Note or an installment of principal becomes due and payable in accordance
with its terms and the terms of the Indenture, whether at Stated Maturity, upon
acceleration, redemption, repayment or otherwise. Interest (other than defaulted
interest which may be paid to the Holder on a special record date) will be
payable to the Holder at the close of business on the Record Date next preceding
an Interest Payment Date; provided, however, that the first payment of interest
on any Note originally issued between a Record Date and the next Interest
Payment Date will be made on the Interest Payment Date following the next
succeeding Record Date to the Holder on such next succeeding Record Date and
interest payable on the Maturity date, including, if applicable, upon
redemption, shall be payable to the person to whom principal is payable.
Interest rates, interest rate formulae and other variable terms of the Notes
are subject to change by the Company from time to time, but no such change will
affect any Note already issued or as to which an offer to purchase has been
accepted by the Company. Unless otherwise specified in the applicable Prospectus
Supplement, the Interest Payment Dates and the Record Dates for Fixed Rate Notes
will be as described below under "Fixed Rate Notes." The Interest Payment Dates
for Floating Rate Notes will be as specified in the applicable Prospectus
Supplement, and unless otherwise specified in the applicable Prospectus
Supplement, each Record Date for a Floating Rate Note will be the fifteenth day
(whether or not a Business Day) preceding each Interest Payment Date.
Each Note (other than a Zero Coupon Note) will bear interest at either (a) a
fixed rate or (b) a floating rate determined by reference to an Interest Rate
Basis which may be adjusted by a Spread and/or Spread Multiplier; provided that
the interest rate in effect for the ten days immediately prior to Stated
Maturity will be the interest rate in effect on the tenth day preceding such
Stated Maturity. Any Floating Rate Note may also have either or both of the
following: (i) a maximum interest rate, or ceiling, on the rate of interest
which may accrue during any interest period, and (ii) a minimum interest rate,
or floor, on the rate of interest which may accrue during any interest period.
The applicable Prospectus Supplement relating to each Note will designate either
a fixed rate of interest per annum on the applicable Fixed Rate Note or one or
more of the following Interest Rate Bases as applicable to the relevant Floating
Rate Note: (a) the Commercial Paper Rate, in which case such Note will be a
"Commercial Paper Rate Note," (b) LIBOR, in which case such Note will be a
"LIBOR Note," (c) the Prime Rate, in which case such Note will be a "Prime Rate
Note," (d) the Treasury Rate, in which case such Note will be a "Treasury Rate
Note," or (e) such other Interest Rate Basis or formula as may be specified in
such Prospectus Supplement.
Notwithstanding the determination of the interest rate as provided below,
the interest rate on the Notes for any interest period shall not be greater than
the maximum interest rate, if any, or less than the minimum interest rate, if
any, specified in the applicable Prospectus Supplement. The interest rate on the
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Notes will in no event be higher than the maximum rate permitted by New York or
other applicable law, as the same may be modified by United States federal law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit may not apply to Notes
in which $2,500,000 or more has been invested.
FIXED RATE NOTES
Unless otherwise specified in the applicable Prospectus Supplement, each
Fixed Rate Note (other than a Zero Coupon Note) will accrue interest from and
including its Original Issue Date at the annual rate stated on the face thereof,
as specified in the applicable Prospectus Supplement. Unless otherwise specified
in the applicable Prospectus Supplement, payments of interest on any Fixed Rate
Note with respect to any Interest Payment Date or Maturity will include interest
accrued from and including the Original Issue Date, or from and including the
most recent Interest Payment Date to which interest has been paid or duly
provided for, to but excluding such Interest Payment Date or Maturity. Fixed
Rate Notes may bear one or more annual rates of interest during the periods or
under the circumstances specified therein and in the applicable Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus Supplement,
interest on Fixed Rate Notes will be computed and paid on the basis of a 360-day
year of twelve 30-day months.
Unless otherwise specified in the applicable Prospectus Supplement, the
Interest Payment Dates for Fixed Rate Notes, including Fixed Rate Amortizing
Notes, will be semi-annually on each January 15 and July 15 and the Record Dates
will be each January 1 and July 1 (whether or not a Business Day) and the Stated
Maturity. In the case of Fixed Rate Amortizing Notes, Interest Payment Dates may
be quarterly on each January 15, April 15, July 15 and October 15 if specified
in the applicable Prospectus Supplement, and the Record Dates will be each
January 1, April 1, July 1 and October 1 (whether or not a Business Day) next
preceding each such Interest Payment Date. If the Interest Payment Date or
Maturity for any Fixed Rate Note is not a Business Day, all payments to be made
on such day with respect to such Note will be made on the next day that is a
Business Day with the same force and effect as if made on the due date, and no
additional interest will be payable on the date of payment for the period from
and after the due date as a result of such delayed payment.
FLOATING RATE NOTES
The interest rate on each Floating Rate Note will be equal to the interest
rate calculated by reference to the specified Interest Rate Basis (i) plus or
minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any. The "Spread" is the number of basis points (one basis point equals
one-hundredth of a percentage point) specified in the applicable Prospectus
Supplement as being applicable to such Note, and the "Spread Multiplier" is the
percentage of the Interest Rate Basis (adjusted for any Spread) specified in the
applicable Prospectus Supplement as being applicable to such Note. The
applicable Prospectus Supplement will specify the Interest Rate Basis and the
Spread and/or Spread Multiplier, if any, and the maximum or minimum interest
rate, if any, applicable to each Floating Rate Note. In addition, such
Prospectus Supplement will contain particulars as to the Calculation Agent
(unless otherwise specified in the applicable Prospectus Supplement, The First
National Bank of Chicago (in such capacity, the "Calculation Agent")), Index
Maturity, Original Issue Date, the interest rate in effect for the period from
the Original Issue Date to the first Interest Reset Date specified in the
applicable Prospectus Supplement (the "Initial Interest Rate"), Interest
Determination Dates, Interest Payment Dates, Record Dates, and Interest Reset
Dates with respect to such Note.
Except as provided below or in the applicable Prospectus Supplement, the
Interest Payment Dates for Floating Rate Notes, including Floating Rate
Amortizing Notes, will be (i) in the case of Floating Rate Notes that reset
daily, weekly or monthly, the third Wednesday of each month or the third
Wednesday of March, June, September and December of each year, as specified on
the face thereof and in the applicable Prospectus Supplement; (ii) in the case
of Floating Rate Notes that reset quarterly, the third Wednesday of
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March, June, September and December of each year as specified on the face
thereof and in the applicable Prospectus Supplement; (iii) in the case of
Floating Rate Notes that reset semiannually, the third Wednesday of each of two
months of each year, as specified on the face thereof and in the applicable
Prospectus Supplement; and (iv) in the case of Floating Rate Notes that reset
annually, the third Wednesday of one month of each year, as specified on the
face thereof and in the applicable Prospectus Supplement and, in each case, at
Maturity. If any Interest Payment Date, other than Maturity, for any Floating
Rate Note is not a Business Day for such Floating Rate Note, such Interest
Payment Date will be postponed to the next day that is a Business Day for such
Floating Rate Note, except that, in the case of a LIBOR Note, if such Business
Day for such Floating Rate Note is in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding London Business Day. If
the Maturity for any Floating Rate Note falls on a day that is not a Business
Day, all payments to be made on such day with respect to such Note will be made
on the next day that is a Business Day with the same force and effect as if made
on the due date, and no additional interest will be payable on the date of
payment for the period from and after the due date as a result of such delayed
payment.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (such period being the "Interest
Reset Period" for such Note, and the first day of each Interest Reset Period
being an "Interest Reset Date"), as specified in the applicable Prospectus
Supplement. Unless otherwise specified in the applicable Prospectus Supplement,
the Interest Reset Date will be, in the case of Floating Rate Notes which reset
daily, each Business Day for such Floating Rate Note; in the case of Floating
Rate Notes (other than Treasury Rate Notes) which reset weekly, the Wednesday of
each week; in the case of Treasury Rate Notes which reset weekly, the Tuesday of
each week, except as provided below; in the case of Floating Rate Notes which
reset monthly, the third Wednesday of each month; in the case of Floating Rate
Notes which reset quarterly, the third Wednesday of each March, June, September
and December; in the case of Floating Rate Notes which reset semiannually, the
third Wednesday of each of two months of each year, as specified in the
applicable Prospectus Supplement; and in the case of Floating Rate Notes which
reset annually, the third Wednesday of one month of each year, as specified in
the applicable Prospectus Supplement; provided, however, that the interest rate
in effect from the Original Issue Date to but excluding the first Interest Reset
Date with respect to a Floating Rate Note will be the Initial Interest Rate (as
specified in the applicable Prospectus Supplement). If any Interest Reset Date
for any Floating Rate Note is not a Business Day for such Floating Rate Note,
such Interest Reset Date will be postponed to the next day that is a Business
Day for such Floating Rate Note, except that in the case of a LIBOR Note, if
such Business Day is in the next succeeding calendar month, such Interest Reset
Date will be the immediately preceding London Business Day. Each adjusted rate
will be applicable on and after the Interest Reset Date to which it relates to
but excluding the next succeeding Interest Reset Date or until Maturity.
The interest rate for each Interest Reset Period will be the rate determined
by the Calculation Agent on the Calculation Date (as defined below) pertaining
to the Interest Determination Date pertaining to the Interest Reset Date for
such Interest Reset Period. Unless otherwise specified in the applicable
Prospectus Supplement, the "Interest Determination Date" pertaining to an
Interest Reset Date for (a) a Commercial Paper Rate Note (the "Commercial Paper
Interest Determination Date") or (b) a Prime Rate Note (the "Prime Interest
Determination Date") will be the second Business Day immediately preceding such
Interest Reset Date. Unless otherwise specified in the applicable Prospectus
Supplement, the Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note (the "LIBOR Interest Determination Date") will be the second
London Business Day immediately preceding such Interest Reset Date. Unless
otherwise specified in the applicable Prospectus Supplement, the Interest
Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note
(the "Treasury Interest Determination Date") will be the day of the week in
which such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If an auction is so held on the preceding Friday, such Friday will be
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the Treasury Interest Determination Date pertaining to the Interest Reset Period
commencing in the next succeeding week. If an auction date falls on any Interest
Reset Date for a Treasury Rate Note, then such Interest Reset Date will instead
be the first Business Day immediately following such auction date. Unless
otherwise specified in the applicable Prospectus Supplement, the "Calculation
Date" pertaining to any Interest Determination Date will be the earlier of (i)
the tenth calendar day after the Interest Determination Date or, if such day is
not a Business Day, the next day that is a Business Day, or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or Maturity, as
the case may be.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
Stated Maturity of the instrument or obligation on which the interest rate
formula of such Floating Rate Note is calculated, as specified in the applicable
Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, each
Floating Rate Note will accrue interest from and including its Original Issue
Date at the rate determined as provided in such Note and as specified in the
applicable Prospectus Supplement. Unless otherwise specified in the applicable
Prospectus Supplement, payments of interest on any Floating Rate Note with
respect to any Interest Payment Date will include interest accrued from and
including the Original Issue Date, or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for, to
but excluding the Interest Payment Date or Maturity. With respect to Floating
Rate Notes, accrued interest is calculated by multiplying the face amount of a
Note by an accrued interest factor. This accrued interest factor is computed by
adding the interest factors calculated for each day from and including the
Original Issue Date, or from and including the last date to which interest has
been paid or duly provided for, to but excluding the date for which accrued
interest is being calculated. The interest factor for each such day (unless
otherwise specified) is computed by dividing the interest rate applicable to
such day by 360, in the case of Commercial Paper Rate Notes, LIBOR Notes and
Prime Rate Notes or by the actual number of days in the year, in the case of
Treasury Rate Notes.
The Calculation Agent will calculate the interest rate on the Floating Rate
Notes, as provided below. The Trustee will, upon the request of the Holder of
any Floating Rate Note, provide the interest rate then in effect and, if then
determined, the interest rate which will become effective as a result of a
determination made with respect to the most recent Interest Determination Date
(defined below) with respect to such Note. For purposes of calculating the rate
of interest payable on Floating Rate Notes, the Company has entered into or will
enter into an agreement with the Calculation Agent. The Calculation Agent's
determination of any interest rate shall be final and binding in the absence of
manifest error.
COMMERCIAL PAPER RATE NOTES
Each Commercial Paper Rate Note will bear interest at the interest rate
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the Commercial Paper Rate Note and in
the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
in the applicable Prospectus Supplement as published by the Board of Governors
of the Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication of the Board of Governors
("H.15(519)") under the heading "Commercial Paper." In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate with respect to such Commercial Paper Interest
Determination Date will be the Money Market Yield of the rate on such Commercial
Paper Interest Determination Date for commercial paper having the Index Maturity
specified in the applicable Prospectus Supplement as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" or any successor
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publication ("Composite Quotations") under the heading "Commercial Paper." If by
3:00 P.M., New York City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, then the Commercial Paper
Rate with respect to such Commercial Paper Interest Determination Date will be
calculated by the Calculation Agent and will be the Money Market Yield of the
arithmetic mean of the offered rates (quoted on a bank discount basis) as of
11:00 A.M., New York City time, on such Commercial Paper Interest Determination
Date of three leading dealers of commercial paper in The City of New York
selected by the Calculation Agent for commercial paper having the Index Maturity
specified in the applicable Prospectus Supplement placed for an industrial
issuer whose bond rating is "AA," or the equivalent, from a nationally
recognized securities rating agency; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate with respect to such Commercial Paper
Interest Determination Date will be the Commercial Paper Rate in effect
immediately prior to such Commercial Paper Interest Determination Date.
"Money Market Yield" will be a yield (expressed as a percentage rounded, if
necessary, to the nearest one hundred-thousandth of a percent) calculated in
accordance with the following formula:
<TABLE>
<S> <C> <C>
D x 360
Money Market Yield = -------------- x 100
360 - (D x M)
</TABLE>
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period for which accrued interest is being calculated.
LIBOR NOTES
Each LIBOR Note will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
the LIBOR Note and in the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, "LIBOR"
means, with respect to any LIBOR Interest Determination Date, the rate
determined by the Calculation Agent in accordance with the following provisions:
(i) With respect to any LIBOR Interest Determination Date, LIBOR will be
either: (a) if "LIBOR Reuters" is specified in the Note and the applicable
Prospectus Supplement, the arithmetic mean of the offered rates (unless the
specified Designated LIBOR Page (as defined below) by its terms provides only
for a single rate, in which case such single rate will be used) for deposits in
United States dollars having the Index Maturity specified in the Note and the
applicable Prospectus Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, which appear on
the Designated LIBOR Page specified in the Note and the applicable Prospectus
Supplement as of 11:00 A.M., London time, on that LIBOR Interest Determination
Date, if at least two such offered rates appear (unless, as aforesaid, only a
single rate is required) on such Designated LIBOR Page, or (b) if "LIBOR
Telerate" is specified in the Note and the applicable Prospectus Supplement, the
rate for deposits in United States dollars having the Index Maturity specified
in the Note and the applicable Prospectus Supplement, commencing on the second
London Business Day immediately following such LIBOR Interest Determination
Date, which appears on the Designated LIBOR Page specified in the Note and the
applicable Prospectus Supplement as of 11:00 A.M., London time, on that LIBOR
Interest Determination Date. Notwithstanding the foregoing, if fewer than two
offered rates appear on the Designated LIBOR Page with respect to LIBOR Reuters
(unless the specified Designated LIBOR Page by its terms provides only for a
single rate, in which case such single rate will be used), or if no rate appears
on the Designated LIBOR Page with respect to LIBOR Telerate, whichever may be
applicable, LIBOR with respect to such
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LIBOR Interest Determination Date will be determined as if the parties had
specified the rate described in clause (ii) below.
(ii) With respect to any LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Designated LIBOR Page with respect to LIBOR
Reuters (unless the specified Designated LIBOR Page by its terms provides only
for a single rate, in which case such single rate will be used), or if no rate
appears on the Designated LIBOR Page with respect to LIBOR Telerate, as the case
may be, the Calculation Agent will request the principal London office of each
of four major banks in the London interbank market selected by the Calculation
Agent to provide the Calculation Agent with its offered rate quotation for
deposits in United States dollars for the period of the Index Maturity specified
in the Note and the applicable Prospectus Supplement, commencing on the second
London Business Day immediately following such LIBOR Interest Determination
Date, to prime banks in the London interbank market as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date and in a principal amount that
is representative for a single transaction in United States dollars in such
market at such time. If at least two such quotations are provided, LIBOR with
respect to such LIBOR Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR with respect to such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted as of 11:00
A.M. New York City Time, on such LIBOR Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent for loans
in United States Dollars to leading European banks, commencing on the second
London Business Day immediately following such LIBOR Interest Determination Date
having the Index Maturity specified in the Note and the applicable Prospectus
Supplement in a principal amount that is representative for a single transaction
in such United States dollars in such market at such time; PROVIDED, HOWEVER,
that if the banks so selected by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such LIBOR Interest
Determination Date will be LIBOR in effect immediately prior to such LIBOR
Interest Determination Date.
"Designated LIBOR Page" means either (a) the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for United States Dollars (if "LIBOR Reuters" is specified in the
Note and the applicable Prospectus Supplement), or (b) the display on the Dow
Jones Telerate Service for the purpose of displaying the London interbank rates
of major banks for United States dollars (if "LIBOR Telerate" is specified in
the Note and the applicable Prospectus Supplement). If neither LIBOR Reuters nor
LIBOR Telerate is specified in the Note and the applicable Prospectus
Supplement, LIBOR for United States dollars will be determined as if LIBOR
Telerate (and page 3750) had been chosen.
PRIME RATE NOTES
Each Prime Rate Note will bear interest at the interest rate (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in the Prime Rate Note and in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus Supplement, "Prime
Rate" means, with respect to any Prime Interest Determination Date, the rate on
such date as published in H.15(519) under the heading "Bank Prime Loan." In the
event that such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate with respect to such Prime Interest Determination Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
of interest publicly announced by each bank that appears on the Reuters Screen
USPRIME1 as such bank's prime rate or base lending rate as in effect with
respect to such Prime Interest Determination Date. If fewer than four such rates
appear on the Reuters Screen USPRIME1 with respect to such Prime Interest
Determination Date, the Prime Rate with respect to such Prime Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the prime rates quoted on the basis of the actual number of
days in the year divided by 360 as of
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the close of business on such Prime Interest Determination Date by at least two
of the three major money center banks in The City of New York selected by the
Calculation Agent. If fewer than two quotations are provided, the Prime Rate
with respect to such Prime Interest Determination Date will be determined on the
basis of the rates furnished in The City of New York by the appropriate number
of substitute banks or trust companies organized and doing business under the
laws of the United States, or any state thereof, having total equity capital of
at least $500,000,000 and being subject to supervision or examination by federal
or state authority, selected by the Calculation Agent to provide such rate or
rates; PROVIDED, HOWEVER, that if the appropriate number of substitute banks or
trust companies selected as aforesaid are not quoting as mentioned in this
sentence, the Prime Rate with respect to such Prime Interest Determination Date
will be the Prime Rate in effect immediately prior to such Prime Interest
Determination Date.
"Reuters Screen USPRIME1" means the display designated as page "USPRIME1" on
the Reuters Monitor Money Rate Service (or such other page which may replace the
USPRIME1 page on the service for the purpose of displaying the prime rate or
base lending rate of major banks).
TREASURY RATE NOTES
Each Treasury Rate Note will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in the Treasury Rate Note and in the applicable Prospectus
Supplement.
Unless otherwise specified in the applicable Prospectus Supplement,
"Treasury Rate" means, with respect to any Treasury Interest Determination Date,
the rate resulting from the most recent auction of direct obligations of the
United States ("Treasury bills") having the Index Maturity specified in the
applicable Prospectus Supplement, as such rate is published in H.15(519) under
the heading, "Treasury bills--auction average (investment)" or, if not so
published by 3:00 P.M., New York City time, on the Calculation Date pertaining
to such Treasury Interest Determination Date, the average auction rate on such
Treasury Interest Determination Date (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and applied on a daily basis)
as otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury Bills having the specified
Index Maturity are not reported as provided above by 3:00 P.M., New York City
time, on the Calculation Date pertaining to such Treasury Interest Determination
Date, or if no such auction is held in a particular week, then the Treasury Rate
with respect to such Treasury Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary U.S. government securities
dealers selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the Index Maturity specified in the applicable
Prospectus Supplement; PROVIDED, HOWEVER, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate with respect to such Treasury Interest Determination
Date will be the Treasury Rate in effect immediately prior to such Treasury
Interest Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
The Company may from time to time offer Original Issue Discount Notes. The
Prospectus Supplement applicable to certain Original Issue Discount Notes may
provide that Holders of such Notes will not receive periodic payments of
interest. For purposes of determining whether Holders of the requisite principal
amount of Notes outstanding under the Indenture have made a demand or given a
notice or waiver or taken any other action, the outstanding principal amount of
Original Issue Discount Notes shall be deemed to be the amount of the principal
that would be due and payable upon declaration of acceleration of the Stated
Maturity thereof as of the date of such determination. See "General."
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"Original Issue Discount Note" means (i) a Note that has a "stated
redemption price at maturity" that exceeds its "issue price" (each as defined
for United States federal income tax purposes) by at least 0.25% of its stated
redemption price at maturity multiplied by the number of complete years from the
Original Issue Date to the Stated Maturity for such Note (or, in the case of a
Note that provides for payment of any amount other than the "qualified stated
interest" (as so defined) prior to maturity, the weighted average maturity of
the Note) and (ii) any other Note designated by the Company as issued with
original issue discount for United States federal income tax purposes.
AMORTIZING NOTES
The Company may from time to time offer Notes for which payments of
principal and interest are made in installments over the life of the Note
("Amortizing Notes"). Interest on each Amortizing Note will be computed as
specified in the applicable Prospectus Supplement. Unless otherwise specified in
the applicable Prospectus Supplement, payments with respect to an Amortizing
Note will be applied first to interest due and payable thereon and then to the
reduction of the unpaid principal amount thereof. A table setting forth
repayment information with respect to each Amortizing Note will be attached to
such Note and to the applicable Prospectus Supplement and will be available,
upon request, to subsequent Holders.
RESET NOTES
The Prospectus Supplement relating to each Note will indicate whether the
Company has the option with respect to such Note to reset the interest rate, in
the case of a Fixed Rate Note, or to reset the Spread and/or Spread Multiplier,
in the case of a Floating Rate Note (in each case, a "Reset Note"), and, if so,
(i) the date or dates on which such interest rate or such Spread and/or Spread
Multiplier, as the case may be, may be reset (each an "Optional Interest Reset
Date") and (ii) the formula, if any, for such resetting.
The Company may exercise such option with respect to a Note by notifying the
Trustee of such exercise at least 45 but not more than 60 calendar days prior to
an Optional Interest Reset Date for such Note. If the Company so notifies the
Trustee of such exercise, the Trustee will send not later than 40 calendar days
prior to such Optional Interest Reset Date, by telegram, telex, facsimile
transmission, hand delivery or letter (first class, postage prepaid) to the
Holder of such Note a notice (the "Reset Notice") indicating (i) that the
Company has elected to reset the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, (ii) such new interest rate or such new Spread and/or Spread Multiplier,
as the case may be, and (iii) the provisions, if any, for redemption of such
Note during the period from such Optional Interest Reset Date to the next
Optional Interest Reset Date or, if there is no such next Optional Interest
Reset Date, to the Stated Maturity of such Note (each such period a "Subsequent
Interest Period"), including the date or dates on which or the period or periods
during which and the price or prices at which such redemption may occur during
such Subsequent Interest Period.
Notwithstanding the foregoing, not later than 20 calendar days prior to an
Optional Interest Reset Date for a Note, the Company may, at its option, revoke
the interest rate, in the case of a Fixed Rate Note, or the Spread and/or Spread
Multiplier, in the case of a Floating Rate Note, provided for in the Reset
Notice and establish a higher interest rate, in the case of a Fixed Rate Note,
or a Spread and/or Spread Multiplier resulting in a higher interest rate, in the
case of a Floating Rate Note, for the Subsequent Interest Period commencing on
such Optional Interest Reset Date by causing the Trustee to send by telegram,
telex, facsimile transmission, hand delivery or letter (first class, postage
prepaid) notice of such higher interest rate or Spread and/or Spread Multiplier
resulting in a higher interest rate, as the case may be, to the Holder of such
Note. Such notice will be irrevocable. All Notes with respect to which the
interest rate or Spread and/or Spread Multiplier is reset on an Optional
Interest Reset Date to a higher interest rate or Spread and/or Spread Multiplier
resulting in a higher interest rate will bear such higher interest rate, in the
case of a Fixed Rate Note, or Spread and/or Spread Multiplier resulting in a
higher interest
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rate, in the case of a Floating Rate Note, whether or not tendered for repayment
as provided in the next paragraph.
If the Company elects prior to an Optional Interest Reset Date to reset the
interest rate or the Spread and/or Spread Multiplier of a Note, the Holder of
such Note will have the option to elect repayment of such Note, in whole but not
in part, by the Company on such Optional Interest Reset Date at a price equal to
the principal amount thereof plus accrued and unpaid interest to but excluding
such Optional Interest Reset Date. In order for a Note to be so repaid on an
Optional Interest Reset Date, the Holder thereof must follow the procedures set
forth below under "Redemption and Repayment" for optional repayment, except that
the period for delivery of such Note or notification to the Trustee will be at
least 25 but not more than 35 calendar days prior to such Optional Interest
Reset Date. A Holder who has tendered a Note for repayment following receipt of
a Reset Notice may revoke such tender for repayment by written notice to the
Trustee received prior to 5:00 P.M., New York City time, on the tenth calendar
day prior to such Optional Interest Reset Date.
EXTENSION OF MATURITY
The Prospectus Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of from one to five whole years (each an "Extension Period") up to
but not beyond the date (the "Final Maturity Date") specified in such Prospectus
Supplement.
The Company may exercise such option with respect to a Note by notifying the
Trustee of such exercise at least 45 but not more than 60 calendar days prior to
the Stated Maturity of such Note (including, if such Stated Maturity has
previously been extended, the Stated Maturity as previously extended) in effect
prior to the exercise of such option (the "Pre-Exercise Stated Maturity Date").
If the Company so notifies the Trustee of such exercise, the Trustee will send
not later than 40 calendar days prior to the Pre-Exercise Stated Maturity Date,
by telegram, telex, facsimile transmission, hand delivery or letter (first
class, postage prepaid) to the Holder of such Note a notice (the "Extension
Notice") relating to such Extension Period, indicating (i) that the Company has
elected to extend the Stated Maturity of such Note, (ii) the new Stated
Maturity, (iii) in the case of a Fixed Rate Note, the interest rate applicable
to such Extension Period or, in the case of a Floating Rate Note, the Spread
and/or Spread Multiplier applicable to the Extension Period, and (iv) the
provisions, if any, for redemption of such Note during the Extension Period,
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during the Extension
Period. Upon the sending by the Trustee of an Extension Notice to the Holder of
a Note, the Stated Maturity of such Note will be extended automatically, and,
except as modified by the Extension Notice and as described in the next two
paragraphs, such Note will have the same terms as prior to the sending of such
Extension Notice.
Notwithstanding the foregoing, not later than 20 calendar days prior to the
Pre-Exercise Stated Maturity Date for a Note, the Company may, at its option,
revoke the interest rate, in the case of a Fixed Rate Note, or the Spread and/or
Spread Multiplier, in the case of a Floating Rate Note, provided for in the
Extension Notice and establish a higher interest rate, in the case of a Fixed
Rate Note, or a Spread and/or Spread Multiplier resulting in a higher interest
rate, in the case of a Floating Rate Note, for the Extension Period by causing
the Trustee to send by telegram, telex, facsimile transmission, hand delivery or
letter (first class, postage prepaid) notice of such higher interest rate or
Spread and/or Spread Multiplier resulting in a higher interest rate, as the case
may be, to the Holder of such Note. Such notice will be irrevocable. All Notes
with respect to which the Stated Maturity is extended will bear such higher
interest rate, in the case of a Fixed Rate Note, or Spread and/or Spread
Multiplier resulting in a higher interest rate, in the case of a Floating Rate
Note, for the Extension Period, whether or not tendered for repayment as
provided in the next paragraph.
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If the Company extends the Stated Maturity of a Note (including, if such
Stated Maturity has previously been extended, the Stated Maturity as previously
extended), the Holder of such Note will have the option to elect repayment of
such Note, in whole but not in part, by the Company on the Pre-Exercise Stated
Maturity Date (including the last day of the then current Extension Period) at a
price equal to the principal amount thereof plus accrued and unpaid interest to
but excluding such date. In order for a Note to be so repaid on the Original
Stated Maturity Date, the Holder thereof must follow the procedures set forth
below under "Redemption and Repayment" for optional repayment, except that the
period for delivery of such Note or notification to the Trustee will be at least
25 but not more than 35 calendar days prior to the Original Stated Maturity
Date. A Holder who has tendered a Note for repayment following receipt of an
Extension Notice may revoke such tender for repayment by written notice to the
Trustee received prior to 5:00 P.M., New York City time, on the tenth calendar
day prior to the Original Stated Maturity Date.
RENEWABLE NOTES
The applicable Prospectus Supplement will indicate whether a Note (other
than an Amortizing Note) will mature at its Pre-Exercise Stated Maturity Date
unless the term of all or any portion of any such Note is renewed by the Holder
in accordance with the procedures described in such Prospectus Supplement.
COMBINATION OF PROVISIONS
If so specified in the applicable Prospectus Supplement, any Note may be
subject to all of the provisions, or any combination of the provisions,
described above under "Reset Notes," "Extension of Maturity" and "Renewable
Notes."
REDEMPTION AND REPAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Notes will not be subject to any sinking fund. The Notes will be redeemable at
the option of the Company prior to the Stated Maturity thereof only if an
Initial Redemption Date is specified in the applicable Prospectus Supplement
("Initial Redemption Date"). If so specified, the Notes will be subject to
redemption at the option of the Company on the date or dates and at the prices
specified in such Prospectus Supplement. The selection of Notes or portions
thereof to be redeemed prior to their Stated Maturity shall be in the sole
discretion of the Company. Each Note which by its terms is redeemable prior to
its Stated Maturity may be redeemed by the Company in whole or in part without
also redeeming any other Note which is redeemable prior to its Stated Maturity.
The Company may exercise any such option by causing the Trustee to mail a notice
of such redemption at least 30 but not more than 60 calendar days prior to the
date of redemption in accordance with the provisions of the Indenture. In the
event of redemption of a Note in part only, such Note will be cancelled and a
new Note or Notes representing the unredeemed portion thereof will be issued in
the name of the Holder thereof. (Section 3.02)
Unless otherwise specified in the applicable Prospectus Supplement, a Note
will not be repayable prior to Stated Maturity at the option of the Holder. If
so specified, a Note will be repayable at the option of the Holder, in whole or
in part, on a date or dates prior to Stated Maturity and at a price or prices
specified in the applicable Prospectus Supplement, plus accrued and unpaid
interest to but excluding the date of repayment.
In order for a Note that is repayable at the option of the Holder to be
repaid prior to Stated Maturity, the Trustee must receive at least 30 but not
more than 45 calendar days prior to the repayment date (i) the Note with the
form entitled "Option to Elect Repayment" set forth in the Note duly completed
or (ii) a telegram, telex, facsimile transmission, hand delivery or letter
(first class, postage prepaid) from a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States setting forth the name of the Holder of the
Note, the principal
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amount of the Note, the principal amount of the Note to be repaid, the
certificate number or a description of the tenor and terms of the Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid with the form entitled "Option to Elect
Repayment" set forth in the Note duly completed will be received by the Trustee
not later than five Business Days after the date of such telegram, telex,
facsimile transmission, hand delivery or letter and such Note and form duly
completed are received by the Trustee by such fifth Business Day. Exercise of
the repayment option by the Holder of a Note will be irrevocable, except that a
Holder who has tendered a Note for repayment may revoke such tender for
repayment by written notice to the Paying Agent received prior to 5:00 P.M., New
York City time, on the tenth calendar day prior to the repayment date. The
repayment option may be exercised by the Holder of a Note for less than the
entire principal amount of the Note provided that the principal amount of the
Note remaining outstanding after such repayment is an authorized denomination.
Upon such partial repayment such Note will be cancelled and a new Note or Notes
for the remaining principal amount thereof will be issued in the name of the
Holder thereof.
While any Book-Entry Note is represented by one or more global Notes (each,
a "Global Note") held by or on behalf of the Depositary, and registered in the
name of the Depositary or its nominee, any such option for repayment may be
exercised by the applicable Participant (as defined below under "Book-Entry
System") that has an account with the Depositary, on behalf of a Beneficial
Owner of the Global Note or Notes representing such Book-Entry Notes, by
delivering a written notice substantially similar to the above-mentioned form
duly completed to the Trustee at its Corporate Trust Office (or such other
address of which the Company will from time to time notify the Holders), at
least 30 but not more than 60 calendar days prior to the date of repayment.
Notices of election from Participants on behalf of Beneficial Owners of the
Global Note or Notes representing such Book-Entry Notes to exercise their option
to have such Book-Entry Notes repaid must be received by the Trustee by 5:00
P.M., New York City time, on the last day for giving such notice. In order to
ensure that a notice is received by the Trustee on a particular day, the
Beneficial Owner of the Global Note or Notes representing such Book-Entry Notes
must so direct the applicable Participant before such Participant's deadline for
accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly,
Beneficial Owners of the Global Note or Notes representing Book-Entry Notes
should consult the Participants through which they own their interest therein
for the respective deadlines for such Participants. All notices shall be
executed by a duly authorized officer of such Participant (with signatures
guaranteed) and will be irrevocable. In addition, Beneficial Owners of the
Global Note or Notes representing Book-Entry Notes shall effect delivery at the
time such notices of election are given to the Depositary by causing the
applicable Participant to transfer such Beneficial Owner's interest in the
Global Note or Notes representing such Book-Entry Notes, on the Depositary's
records, to the Trustee. See "Book-Entry System." (Section 3.04)
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws or regulations in
connection with any such repayment.
REPURCHASE
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Trustee
for cancellation.
OTHER PROVISIONS
Any provisions with respect to the determination of an Interest Rate Basis,
the specifications of an Interest Rate Basis, calculation of the interest rate
applicable to, or the principal payable at Maturity on, any Note, its Interest
Payment Dates or any other matter relating thereto may be modified by the terms
as specified on the face of such Note, or in an annex relating thereto if so
specified on the face thereof, and/or in the applicable Prospectus Supplement.
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BOOK-ENTRY SYSTEM
DTC will act as securities depositary for the Book-Entry Notes. The
Book-Entry Notes will be issued as fully-registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully-registered Global Note
will be issued for each issue of the Notes, each in the aggregate principal
amount of such issue, and will be deposited with DTC. If, however, the aggregate
principal amount of any issue exceeds the maximum principal amount (if any)
permitted by DTC, one Global Note will be issued with respect to such maximum
principal amount and an additional Global Note will be issued with respect to
any remaining principal amount of such issue.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC holds securities
that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants ("Direct Participants")
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to DTC's system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchases of Book-Entry Notes under DTC's system must be made by or through
Direct Participants, which will receive a credit for the Book-Entry Notes on
DTC's records. The ownership interest of each actual purchaser of each
Book-Entry Note ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. A Beneficial Owner will not receive written
confirmation from DTC of its purchase, but such Beneficial Owner is expected to
receive a written confirmation providing details of such transaction, as well as
periodic statements of its holdings, from the Direct or Indirect Participant
through which such Beneficial Owner entered into such transaction. Transfers of
ownership interests in the Book-Entry Notes are to be accomplished by entries
made on the books of Participants acting on behalf of the Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Book-Entry Notes, except in the event that use of the book-entry
system for one or more Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global Notes deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Global Notes with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Book-Entry Notes; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Book-Entry Notes are credited, which may or may not be the Beneficial Owners.
The Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices for Book-Entry Notes shall be sent to Cede & Co. If less
than all of the Book-Entry Notes within an issue are being redeemed, DTC's
current practice is to determine by lot the amount of the interest of each
Direct Participant in such issue to be redeemed.
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Neither DTC nor Cede & Co. will consent or vote with respect to Book-Entry
Notes. Under its usual procedures, DTC will mail an "Omnibus Proxy" to the
issuer as soon as possible after the Record Date. The Omnibus Proxy assigns Cede
& Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Book-Entry Notes are credited on the Record Date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Notes will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on the payable date. Payments
by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as in the case of securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participants and not of DTC, the paying agent or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal and interest to DTC is the
responsibility of the Company or the paying agent, disbursement of such payments
to Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
A Beneficial Owner must give notice to elect to have its Book-Entry Notes
purchased or tendered, through its Participant, to the paying agent, and must
effect delivery of such Book-Entry Notes by causing the Direct Participant to
transfer the Participant's interest in the Book-Entry Notes, on DTC's records,
to the paying agent. The requirement for physical delivery of Book-Entry Notes
in connection with a demand for purchase or a mandatory purchase will be deemed
satisfied when the ownership rights in the Book-Entry Notes are transferred by
Direct Participants on DTC's records.
If DTC is at any time unwilling or unable to continue as depositary or if
DTC ceases to be a "clearing agency" registered pursuant to Section 17A of the
Exchange Act, and, in either case, a successor depositary is not appointed by
the Company within 90 days, or if any Notes are represented by a Global Note at
a time when an Event of Default with respect to the Notes shall have occurred
and be continuing, the Company will issue individual Certificated Notes in
exchange for Book-Entry Notes represented by Global Notes. In addition, the
Company may at any time, and in its sole discretion, determine that one or more
Book-Entry Notes will no longer be represented by one or more Global Notes and,
in such event, will issue individual Certificated Notes in exchange for
Book-Entry Notes represented by such Global Notes.
The Company may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor Notes depositary). In that event,
Certificated Notes will be printed and delivered in exchange for the Book-Entry
Notes represented by the Global Notes held by DTC.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof. So long as DTC or its
nominee is the registered owner of a Global Note, DTC or its nominee, as the
case may be, will be considered the sole Holder of the Notes represented by such
Global Note for all purposes under the Indenture. Except as provided above,
owners of beneficial interests in a Global Note will not be entitled to have the
Note represented by such Global Note registered in their names, will not receive
or be entitled to receive physical delivery of such Note in certificated form
and will not be considered the owners or Holders thereof under the Indenture.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in certificated form; accordingly, such
laws may limit the transferability of beneficial interests in a Global Note.
None of the Company, the agent, the Trustee, any paying agent or the
registrar for the Notes will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in a Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. (Section 2.12)
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EXCHANGE, REGISTRATION AND TRANSFER
Notes will be exchangeable for registered Notes of like aggregate principal
amount and of like Stated Maturity (as defined below under "Certain
Definitions") and with like terms and conditions. Upon surrender for
registration of transfer of any Note at the office or agency of the Company
maintained for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee, one or more
new registered Notes of the like aggregate principal amount of such
denominations as are authorized for Notes of a like Stated Maturity and with
like terms and conditions. No service charge will be made for any transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 3.05)
The Company shall not be required (i) to register, transfer or exchange
Notes during a period beginning at the opening of business 15 days before the
day of the transmission of a notice of redemption of Notes of a like Stated
Maturity and with like terms and conditions selected for redemption and ending
at the close of business on the day of such transmission, or (ii) to register,
transfer or exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part. (Section 3.05)
EVENTS OF DEFAULT
Under the Indenture, "Event of Default" with respect to any Note means any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law,
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body): (1) default in the
payment of any interest upon any Note when it becomes due and payable, and
continuance of such default for a period of 30 days; (2) default in the payment
of the principal of (and premium, if any, on) any Note at its Maturity; (3)
default in the performance or breach of any covenant or warranty in the
Indenture (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in the Indenture specifically dealt with), and
continuance of such default or breach for a period of 60 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 25% in aggregate principal amount of the Notes then
outstanding, a written notice specifying such default or breach and requiring it
to be remedied; (4) default (i) in the payment of any principal of or interest
on any Indebtedness of the Company or any Subsidiary of the Company (other than
Notes), aggregating more than $10,000,000 in principal amount, when due after
giving effect to any applicable grace period or (ii) in the performance of any
other term or provision of any Indebtedness of the Company or any Subsidiary of
the Company (other than Notes) in excess of $10,000,000 principal amount that
results in such Indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, and such
acceleration shall not have been rescinded or annulled, or such Indebtedness
shall not have been discharged, within a period of 15 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 25% in aggregate principal amount of the Notes then
outstanding, a written notice specifying such default or defaults; (5) the entry
against the Company or any Subsidiary of the Company of one or more judgments,
decrees or orders by a court from which no appeal may be or is taken for the
payment of money, either individually or in the aggregate, in excess of
$10,000,000, and the continuance of such judgment, decree or order unsatisfied
and in effect for any period of 45 consecutive days after the amount thereof is
due without a stay of execution; (6) certain events of bankruptcy, insolvency or
reorganization with respect to the Company; or (7) any other Event of Default
with respect to the subject Note described in the applicable Prospectus
Supplement. (Section 8.01)
The Indenture requires the Company to file with the Trustee, annually, an
officer's certificate as to the Company's compliance with all conditions and
covenants under the Indenture. (Section 6.04) The Indenture provides that the
Trustee may withhold notice to the Holders of Notes of any default (except
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payment defaults on any Note) if it determines that the withholding of such
notice is in the interest of the Holders of such Notes. (Section 8.12)
If an Event of Default with respect to the Notes at the time outstanding
occurs and is continuing, then in every case the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Notes then outstanding may
declare the principal amount (or, if any Notes are Original Issue Discount
Notes, the Amortized Face Amount) of all the Notes to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or Amortized
Face Amount) shall become immediately due and payable. Upon payment of such
amount in United States dollars, all obligations of the Company in respect of
the payment of principal of the Notes shall terminate (except as otherwise
provided in the Indenture or the Prospectus Supplement). (Section 8.02)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default with respect to the Notes shall occur and
be continuing, the Trustee shall be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
Holders of the Notes unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction.
(Section 9.03) The Holders of a majority in principal amount of the outstanding
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee under the Indenture, or
exercising any trust or power conferred on the Trustee with respect to the
Notes, unless the Trustee determines that the proceeding or action so directed
may not lawfully be taken, would involve the Trustee in personal liability or
would be unduly prejudicial to other Holders of Notes. (Section 8.11)
At any time after such a declaration of acceleration with respect to the
Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as provided in the Indenture, the Holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if (1) the Company has paid or deposited with the Trustee a
sum in United States dollars sufficient to pay (A) all overdue installments of
interest on all Notes, (B) the principal of (and premium, if any, on) any Notes
which have become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such Notes; (C) to
the extent that payment of such interest is lawful, interest upon overdue
installments of interest on each Note at the rate borne by such Note, and (D)
all sums paid or advanced by the Trustee and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to the Notes, other than the nonpayment
of the principal of the Notes which have become due solely by such declaration
of acceleration, have been cured or waived as provided in the Indenture. No such
rescission and waiver will affect any subsequent default or impair any right
consequent thereon. (Section 8.02)
MERGER OR CONSOLIDATION
The Indenture provides that 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, (1) unless 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 (the "successor corporation")
is a corporation organized and existing under the laws of the United States or
any State or the District of Columbia and expressly assumes by a supplemental
indenture the due and punctual payment of the principal of (and premium, if any)
and interest on all Notes and the performance of every covenant of the Indenture
on the part of the Company to be performed or observed; (2) unless immediately
after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time, or both, would become an Event of Default,
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shall have occurred and be continuing; (3) if, as a result of any such
consolidation or merger or such conveyance, transfer or lease, properties or
assets of the Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not otherwise be permitted by the
Indenture without making effective provision whereby the Notes then outstanding
and any other indebtedness of the Company then entitled thereto will be equally
and ratably secured with any and all indebtedness and obligations secured
thereby, the Company or such successor corporation or Person, as the case may
be, will take such steps as will be necessary effectively to secure all Notes
equally and ratably with (or prior to) all indebtedness secured thereby; and (4)
unless the Company has delivered to the Trustee an officers' certificate and an
opinion of counsel each stating that such consolidation, merger, conveyance,
transfer or lease and such supplemental indenture comply with the provisions of
the Indenture and that all conditions precedent therein provided for relating to
such transaction have been complied with. (Section 12.01)
MODIFICATION OR WAIVER
Without the consent of any Holders, the Company and the Trustee, at any time
and from time to time, may enter into a supplemental indenture for any of the
following purposes: (1) to make such provision in regard to matters or questions
arising under the Indenture as may be necessary or desirable and not
inconsistent with the Indenture or for the purpose of supplying any omission,
curing any ambiguity, or curing, correcting or supplementing any defective or
inconsistent provision; PROVIDED that such provisions may not adversely affect
the interests of Holders of outstanding Notes created prior to the execution of
such supplemental indenture in any material respect; (2) to change or eliminate
any of the provisions of this Indenture; PROVIDED that any such change or
elimination shall become effective only when there is no outstanding Note
created prior to the execution of such supplemental indenture which is entitled
to the benefit of such provision; (3) to secure the Notes; (4) to establish the
form of Notes as permitted by the Indenture or to establish or reflect any terms
of any Note determined in accordance with the Indenture; (5) to evidence the
succession of another corporation to the Company, and the assumption by any such
successor of the covenants of the Company in the Indenture and in the Notes; (6)
to grant to or confer upon the Trustee for the benefit of the Holders any
additional rights, remedies, powers or authority; (7) to permit the Trustee to
comply with any duties imposed upon it by law; (8) to specify further the duties
and responsibilities of, and to define further the relationships among, the
Trustee, any Authenticating Agent and any paying agent; (9) to add to the
covenants of the Company for the benefit of the Holders of all or any Notes (and
if such covenants are to be for the benefit of less than all Notes, stating that
such covenants are expressly being included solely for the benefit of such
Notes), or to surrender a right or power conferred on the Company in the
Indenture; and (10) to add any additional Events of Default (and if such Events
of Default are to be applicable to less than all Notes, stating that such Events
of Default are expressly being included for the benefit of such Notes). (Section
13.01)
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding that would be affected by the
particular supplemental indenture, the Company and the Trustee, may at any time
and from time to time, enter into a supplemental indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of modifying in any manner the rights of the
Holders of such Notes; PROVIDED, HOWEVER, that no such supplemental indenture
may (i) change the Stated Maturity of any Note; or reduce the rate of interest
on any Note; or change the method of calculating interest, or any term used in
the calculation of interest or the period for which interest is payable, on any
Floating Rate Note; or reduce the principal amount of any Note or any premium
thereon, or reduce the amount of the principal of an Original Issue Discount
Note that would be due and payable upon a declaration of acceleration of the
Maturity thereof, or adversely affect the right of repayment or renewal, if any,
at the option of the Holder; or change the currency of payment of any Note; or
change the date on which any Note may be redeemed; or adversely affect the
rights of any Holder to institute suit for the enforcement of any payment of
principal of or any premium or interest on any Note; in each case without the
consent of the Holder of each Note then outstanding that would be affected
thereby, including Notes for which an offer to purchase has been accepted by the
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Company, or (ii) reduce the aforesaid percentage of the principal amount of
Notes, the Holders of which are required to consent to any such supplemental
indenture, or the percentage in aggregate principal amount of the Notes then
outstanding, the consent of the Holders of which is required for any waiver of
certain past defaults or Events of Default hereunder or the consequences
thereof, in each case without the consent of the Holders of all of the Notes
then outstanding. (Section 13.02)
Prior to any declaration accelerating the Maturity of the Notes, the Holders
of not less than a majority in aggregate principal amount of the Notes then
outstanding may on behalf of the Holders of all the Notes waive any past default
or Event of Default under the Indenture and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any Note,
or (2) in respect of a covenant or provision hereof which pursuant to the second
paragraph under "Modification or Waiver" cannot be modified or amended without
the consent of the Holder of each Note then outstanding that would be affected
thereby. Upon any such waiver, such default will cease to exist, and any Event
of Default arising therefrom will be deemed to have been cured, for every
purpose of the Indenture and the Notes, but no such waiver will extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. (Section 8.11)
The Company may omit in any particular instance to comply with the covenants
in the Indenture described above under "Restrictions on Secured Debt" (and if so
specified in the applicable Prospectus Supplement, any covenant not set forth in
the Indenture but specified in such Prospectus Supplement to be applicable to
any Note, except as otherwise provided in such Prospectus Supplement), if before
the time for such compliance the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding either waive such compliance in
such instance or generally waive compliance with such covenants, but no such
waiver may extend to or affect any covenant except to the extent expressly so
waived, and, until such waiver becomes effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant will remain in
full force and effect. (Section 6.07)
DISCHARGE OF INDENTURE
The Indenture may be discharged, subject to certain terms and conditions,
when (1) either (A) all Notes theretofore authenticated and delivered have been
delivered to the Trustee for cancellation, or (B) all such Notes not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, (ii)
will become due and payable at their Stated Maturity within one year, or (iii)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice by the Trustee, and the Company, in the
case of (i), (ii) or (iii) of this subclause (B), has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust for such purpose
an amount in United States dollars, U.S. Government Obligations maturing as to
principal and interest in such amounts and at such times as will ensure the
availability of United States dollars, or a combination of United States dollars
and U.S. Government Obligations, sufficient to pay and discharge the entire
indebtedness on such Notes for principal (and premium, if any) and interest to
the date of such deposit (in the case of Notes which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
PROVIDED, HOWEVER, in the event a petition for relief under any applicable
federal or state bankruptcy, insolvency or other similar law is filed with
respect to the Company within 91 days after the deposit and the Trustee is
required to return the deposited money to the Company, the obligations of the
Company under the Indenture with respect to such Notes will not be deemed
terminated or discharged; (2) the Company has paid or caused to be paid all
other sums payable under the Indenture by the Company; (3) the Company has
delivered to the Trustee an officers' certificate and an opinion of counsel each
stating that all conditions precedent therein provided for relating to the
satisfaction and discharge of the Indenture with respect to the Notes have been
complied with; and (4) the Company has delivered to the Trustee an opinion of
counsel or a ruling of the Internal Revenue Service to the effect that Holders
of the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge. (Section 5.01)
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PAYMENT AND PAYING AGENTS
So long as any of the Notes remain outstanding, the Company will maintain in
the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be presented for registration of transfer and for exchange as in the
Indenture provided, and where, at any time when the Company is obligated to make
a payment upon Notes (other than a payment which it is permitted to make by
check), the Notes may be presented for payment, and will maintain at any such
office or agency and at its principal office an office or agency where notices
and demands to or upon the Company in respect of the Notes or of the Indenture
may be served; PROVIDED that the Company may maintain at its principal executive
offices, one or more other offices or agencies for any or all of the foregoing
purposes. The Company has appointed the Trustee as agent of the Company for the
foregoing purposes. (Section 6.02)
REGARDING THE TRUSTEE
The First National Bank of Chicago is one of a number of banks with which
the Company maintains ordinary banking relationships and from which the Company
has obtained credit facilities and lines of credit, and acts as the trustee
under an indenture under which subordinated debentures of the Company may be or
become outstanding.
CERTAIN DEFINITIONS
Set forth below is a summary of certain defined terms as used in the
Indenture. Reference is made to Article One of the Indenture for the full
definition of all such terms.
"Common Shareholders' Equity," at any time, means the total common
shareholders' equity of the Company and its consolidated subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, as of the end of the most recently completed fiscal
quarter of the Company for which financial information is then available.
"Holder" means the person in whose name a Registered Note is registered in
the Note register.
"Indebtedness" means with respect to any person (i) any liability of such
person (a) for borrowed money, or (b) evidenced by a bond, note, debenture or
similar instrument (including purchase money obligations but excluding trade
payables), or (c) for the payment of money relating to a lease that is required
to be classified as a capitalized lease obligation in accordance with generally
accepted accounting principles; (ii) any liability of others described in the
preceding clause (i) that such person has guaranteed, that is recourse to such
person or that is otherwise its legal liability; and (iii) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (i) and (ii) above.
"Maturity" when used with respect to any Note means the date on which the
principal of the Note or an installment of principal becomes due and payable as
provided therein or in the Indenture, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, repayment at the option of the
Holder or otherwise.
"Outstanding" when used with respect to Notes, means, as of the date of
determination, all the Notes theretofore authenticated and delivered under the
Indenture, except as provided in such Indenture.
"Principal Facility" means the real property, fixtures, machinery and
equipment relating to any facility owned by the Company or any Subsidiary (which
may include a network of electric or gas distribution facilities or a network of
electric or gas transmissions facilities), except any facility that, in the
opinion of the Board of Directors, is not of material importance to the business
conducted by the Company and its Subsidiaries, taken as a whole.
"Regulated Subsidiary" means any Subsidiary which owns or operates
facilities used for the generation, transmission or distribution of electric
energy and is subject to the jurisdiction of any governmental
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authority of the United States or any state or political subdivision thereof, as
to any of its: rates; services; accounts; issuances of securities; affiliate
transactions; or construction, acquisition or sale of any such facilities,
except that any "exempt wholesale generator", "qualifying facility", "foreign
utility company", and "power marketer", each as defined in the Indenture, shall
not be a Regulated Subsidiary.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency, is at the
time, directly or indirectly, owned or controlled by the Company or by one or
more Subsidiaries thereof, or by the Company and one or more Subsidiaries.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged, or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States, which, in either case under clauses (i) or (ii), are not callable
or redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; PROVIDED that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the outstanding
voting stock (other than directors' qualifying shares) is at the time, directly
or indirectly, owned by the Company, or by one or more Wholly-Owned Subsidiaries
of the Company or by the Company and one or more Wholly-Owned Subsidiaries.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the principal United States federal income
tax consequences of the purchase, ownership and disposition of Notes to
beneficial owners ("holders") of Notes purchasing Notes at their original
issuance. This summary is based on the Internal Revenue Code of 1986, as amended
(the "Code"), legislative history, administrative pronouncements, judicial
decisions and final, temporary and proposed Treasury Regulations, changes to any
of which subsequent to the date hereof may affect the tax consequences described
herein. Any such change may apply retroactively. This summary is also based on
final Treasury Regulations (the "1996 OID Regulations") published by the
Internal Revenue Service ("IRS") on June 14, 1996, which set forth rules
applicable to "contingent payment debt instruments."
This summary discusses only the principal United States federal income tax
consequences to those holders holding Notes as capital assets within the meaning
of Section 1221 of the Code. It does not address all of the tax consequences
that may be relevant to a holder in light of the holder's particular
circumstances or to holders subject to special rules (including pension plans
and other tax-exempt investors, banks, thrifts, insurance companies, real estate
investment trusts, regulated investment companies, dealers in securities,
currencies and persons so treated for federal income tax purposes, persons whose
functional currency (as defined in Section 985 of the Code) is other than the
United States dollar, and persons who hold Notes as part of a straddle, hedging
or conversion transaction). This summary also assumes that a taxpayer obtains
any necessary consent of the IRS before changing a method of accounting.
Persons considering the purchase of Notes should consult their tax advisors
with regard to the application of United States federal income tax laws to their
particular situations as well as any tax consequences to them arising under the
laws of any state, local or foreign taxing jurisdiction. State, local
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and foreign income tax laws may differ substantially from the corresponding
federal income tax laws, and this discussion does not purport to describe any
aspect of the tax laws of any state, local or foreign jurisdiction. Therefore,
potential investors should consult their own tax advisors with respect to the
various state, local and foreign tax consequences of an investment in Notes.
As used herein, the term "United States Holder" means a beneficial owner of
a Note who or which is, for United States federal income tax purposes, either
(i) a citizen or resident of the United States, (ii) a corporation or
partnership created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) an estate (or, for tax years ending on
or before December 31, 1996, a trust) the income of which is subject to United
States federal income taxation regardless of its source or (iv) for tax years
beginning after December 31, 1996 (unless earlier elected), any trust if a court
within the United States is able to exercise primary jurisdiction over the
administration of the trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust. The term also
includes certain holders who are former citizens of the United States whose
income and gain from the Notes will be subject to United States taxation.
TAXATION OF INTEREST
The taxation of interest on a Note depends on whether it constitutes
"qualified stated interest" (as defined below). Interest on a Note that
constitutes qualified stated interest is includible in a United States Holder's
income as ordinary interest income when actually or constructively received, if
such Holder uses the cash method of accounting for federal income tax purposes,
or when accrued, if such Holder uses an accrual method of accounting for federal
income tax purposes. Interest that does not constitute qualified stated interest
is included in a United States Holder's income under the rules described below
under "Original Issue Discount," regardless of such Holder's method of
accounting. Notwithstanding the foregoing, interest that is payable on a Note
with a maturity of one year or less from its issue date (a "Short-Term Note") is
included in a United States Holder's income under the rules described below
under "Short-Term Notes."
FIXED RATE NOTES
Interest on a Fixed Rate Note will constitute "qualified stated interest" if
the interest is unconditionally payable, or will be constructively received
under Section 451 of the Code, in cash or in property (other than debt
instruments of the Company) at least annually at a single fixed rate.
FLOATING RATE NOTES
Interest on a Floating Rate Note that is unconditionally payable, or will be
constructively received under Section 451 of the Code, in cash or in property
(other than debt instruments of the Company) at least annually will constitute
"qualified stated interest" if the Note is a "variable rate debt instrument"
("VRDI") under the rules described below and the interest is payable at a single
"qualified floating rate" or single "objective rate" (each as defined below). If
the Note is a VRDI but the interest is payable other than at a single qualified
floating rate or at a single objective rate, special rules apply to determine
the portion of such interest that constitutes "qualified stated interest." See
"Original Issue Discount Floating--RATE NOTES THAT ARE VRDIS," below.
DEFINITION OF VARIABLE RATE DEBT INSTRUMENT (VRDI), QUALIFIED FLOATING RATE
AND OBJECTIVE RATE
A Note is a VRDI if all of the four following conditions are met. First, the
"issue price" of the Note (as described below) must not exceed the total
noncontingent principal payments by more than an amount equal to the lesser of
(i) .015 multiplied by the product of the total noncontingent principal payments
and the number of complete years to maturity from the issue date (or, in the
case of a Note that provides for
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payment of any amount other than qualified stated interest before maturity, its
weighted average maturity) and (ii) 15% of the total noncontingent principal
payments.
Second, the Note must provide for stated interest (compounded or paid at
least annually) at (a) one or more qualified floating rates, (b) a single fixed
rate and one or more qualified floating rates, (c) a single objective rate or
(d) a single fixed rate and a single objective rate that is a "qualified inverse
floating rate" (as defined below).
Third, the Note must provide that a qualified floating rate or objective
rate in effect at any time during the term of the Note is set at the value of
the rate on any day that is no earlier than three months prior to the first day
on which that value is in effect and no later than one year following that first
day.
Fourth, the Note may not provide for any principal payments that are
contingent except as provided in the first requirement set forth above.
Subject to certain exceptions, a variable rate of interest on a Note is a
"qualified floating rate" if variations in the value of the rate can reasonably
be expected to measure contemporaneous fluctuations in the cost of newly
borrowed funds in United States dollars. A variable rate will be considered a
qualified floating rate if the variable rate equals (i) the product of an
otherwise qualified floating rate and a fixed multiple (I.E., a Spread
Multiplier) that is greater than 0.65, but not more than 1.35 or (ii) an
otherwise qualified floating rate (or the product described in clause (i)) plus
or minus a fixed rate (I.E., a Spread). If the variable rate equals the product
of an otherwise qualified floating rate and a single Spread Multiplier greater
than 1.35 or less than or equal to 0.65, however, such rate will generally
constitute an objective rate, described more fully below. A variable rate will
not be considered a qualified floating rate if the variable rate is subject to a
cap, floor, governor (I.E., a restriction on the amount of increase or decrease
in the stated interest rate) or similar restriction that is reasonably expected
as of the issue date to cause the yield on the Note to be significantly more or
less than the expected yield determined without the restriction (other than a
cap, floor or governor that is fixed throughout the term of the Note).
Subject to certain exceptions, an "objective rate" is a rate (other than a
qualified floating rate) that is determined using a single fixed formula and
that is based on objective financial or economic information that is neither
within the control of the Company (or a related party) nor unique to the
circumstances of the Company (or a related party). For example, an objective
rate generally includes a rate that is based on one or more qualified floating
rates or on the yield of actively traded personal property (within the meaning
of Section 1092(d)(1) of the Code). Notwithstanding the first sentence of this
paragraph, a rate on a Note is not an objective rate if it is reasonably
expected that the average value of the rate during the first half of the Note's
term will be either significantly less than or significantly greater than the
average value of the rate during the final half of the Note's term. An objective
rate is a "qualified inverse floating rate" if (a) the rate is equal to a fixed
rate minus a qualified floating rate and (b) the variations in the rate can
reasonably be expected to reflect inversely contemporaneous variations in the
cost of newly borrowed funds (disregarding any caps, floors, governors or
similar restrictions that would not, as described above, cause a rate to fail to
be a qualified floating rate).
If interest on a Note is stated at a fixed rate for an initial period of
less than one year, followed by a variable rate that is either a qualified
floating rate or an objective rate for a subsequent period, and the value of the
variable rate on the issue date is intended to approximate the fixed rate, the
fixed rate and the variable rate together constitute a single qualified floating
rate or objective rate.
ORIGINAL ISSUE DISCOUNT
Original issue discount ("OID") with respect to a Note is the excess, if
any, of the Note's "stated redemption price at maturity" over the Note's "issue
price." A Note's "stated redemption price at maturity" is the sum of all
payments provided by the Note (whether designated as interest or as principal)
other than payments of qualified stated interest. The "issue price" of a Note is
the first price at which a
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substantial amount of the Notes in the issuance that includes such Note is sold
for money (excluding sales to bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement agents or
wholesalers).
As described more fully below, United States Holders of Notes with OID that
mature more than one year from their issue date generally will be required to
include such OID in income as it accrues in accordance with the constant yield
method described below, irrespective of the receipt of the related cash
payments. A United States Holder's tax basis in a Note is increased by each
accrual of OID and decreased by each payment other than a payment of qualified
stated interest.
The amount of OID with respect to a Note will be treated as zero if the OID
is less than an amount equal to .0025 multiplied by the product of the stated
redemption price at maturity and the number of complete years to maturity (or,
in the case of a Note that provides for payment of any amount other than
qualified stated interest prior to maturity, the weighted average maturity of
the Note). If the amount of OID with respect to a Note is less than that amount,
the OID that is not included in payments of stated interest is generally
included in income as capital gain as principal payments are made. The amount
includible with respect to a principal payment equals the product of the total
amount of OID and a fraction, the numerator of which is the amount of such
principal payment and the denominator of which is the stated principal amount of
the Note.
FIXED RATE NOTES
In the case of OID with respect to a Fixed Rate Note, the amount of OID
includible in the income of a United States Holder for any taxable year is
determined under the constant yield method, as follows. First, the "yield to
maturity" of the Note is computed. The yield to maturity is the discount rate
that, when used in computing the present value of all interest and principal
payments to be made under the Note (including payments of qualified stated
interest), produces an amount equal to the issue price of the Note. The yield to
maturity is constant over the term of the Note and, when expressed as a
percentage, must be calculated to at least two decimal places.
Second, the term of the Note is divided into "accrual periods." Accrual
periods may be of any length and may vary in length over the term of the Note,
provided that each accrual period is no longer than one year and that each
scheduled payment of principal or interest occurs either on the final day of an
accrual period or on the first day of an accrual period.
Third, the total amount of OID on the Note is allocated among accrual
periods. In general, the OID allocable to an accrual period equals the product
of the "adjusted issue price" of the Note at the beginning of the accrual period
and the yield to maturity of the Note, less the amount of any qualified stated
interest allocable to the accrual period. The adjusted issue price of a Note at
the beginning of the first accrual period is its issue price. Thereafter, the
adjusted issue price of the Note is its issue price, increased by the amount of
OID previously includible in the gross income of any holder and decreased by the
amount of any payment previously made on the Note other than a payment of
qualified stated interest. For purposes of computing the adjusted issue price of
a Note, the amount of OID previously includible in the gross income of any
holder is determined without regard to "premium" and "acquisition premium," as
those terms are defined below under "Premium and Acquisition Premium."
Fourth, the "daily portions" of OID are determined by allocating to each day
in an accrual period its ratable portion of the OID allocable to the accrual
period.
A United States Holder includes in income in any taxable year the daily
portions of OID for each day during the taxable year that such Holder held
Notes. In general, under the constant yield method described above, United
States Holders will be required to include in income increasingly greater
amounts of OID in successive accrual periods.
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FLOATING RATE NOTES THAT ARE VRDIS
The taxation of OID (including interest that does not constitute qualified
stated interest) on a Floating Rate Note will depend on whether the Note is a
"VRDI," as that term is defined above under "Taxation of Interest--DEFINITION OF
VARIABLE RATE DEBT INSTRUMENT (VRDI), QUALIFIED FLOATING RATE AND OBJECTIVE
RATE."
In the case of a VRDI that provides for qualified stated interest, the
amount of qualified stated interest and the amount of OID, if any, includible in
income during a taxable year are determined under the rules applicable to Fixed
Rate Notes (described above) by assuming that the variable rate is a fixed rate
equal to (i) in the case of a qualified floating rate or a qualified inverse
floating rate, the value, as of the issue date, of the qualified floating rate
or qualified inverse floating rate, or (ii) in the case of an objective rate
(other than a qualified inverse floating rate), the rate that reflects the yield
that is reasonably expected for the Note. Qualified stated interest allocable to
an accrual period is increased (or decreased) if the interest actually paid
during an accrual period exceeds (or is less than) the interest assumed to be
paid during the accrual period.
If a Note that is a VRDI does not provide for interest at a single variable
rate as described above, the amount of interest and OID accruals are determined
by constructing an equivalent fixed rate debt instrument, as follows.
First, in the case of an instrument that provides for interest at one or
more qualified floating rates or at a qualified inverse floating rate and, in
addition, at a fixed rate, replace the fixed rate with a qualified floating rate
(or qualified inverse floating rate) such that the fair market value of the
instrument, so modified, as of the issue date would be approximately the same as
the fair market value of the unmodified instrument.
Second, determine the fixed rate substitute for each variable rate provided
by the Note. The fixed rate substitute for each qualified floating rate provided
by the Note is the value of that qualified floating rate on the issue date. If
the Note provides for two or more qualified floating rates with different
intervals between interest adjustment dates (for example, the 30-day Commercial
Paper Rate and quarterly LIBOR), the fixed rate substitutes are based on
intervals that are equal in length (for example, the 90-day Commercial Paper
Rate and quarterly LIBOR, or the 30-day Commercial Paper Rate and monthly
LIBOR). The fixed rate substitute for an objective rate that is a qualified
inverse floating rate is the value of the qualified inverse floating rate on the
issue date. The fixed rate substitute for an objective rate (other than a
qualified inverse floating rate) is a fixed rate that reflects the yield that is
reasonably expected for the Note.
Third, construct an equivalent fixed rate debt instrument that has terms
that are identical to those provided under the Note, except that the equivalent
fixed rate debt instrument provides for the fixed rate substitutes determined in
the second step, in lieu of the qualified floating rates or objective rate
provided by the Note.
Fourth, determine the amount of qualified stated interest and OID for the
equivalent fixed rate debt instrument under the rules (described above) for
Fixed Rate Notes. These amounts are taken into account as if the United States
Holder held the equivalent fixed rate debt instrument. See "Taxation of
Interest" and "Original Issue Discount--FIXED RATE NOTES," above.
Fifth, make appropriate adjustments for the actual values of the variable
rates. In this step, qualified stated interest or OID allocable to an accrual
period is increased (or decreased) if the interest actually accrued or paid
during the accrual period exceeds (or is less than) the interest assumed to be
accrued or paid during the accrual period under the equivalent fixed rate debt
instrument.
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FLOATING RATE NOTES THAT ARE NOT VRDIS
The tax treatment of Floating Rate Notes that are not VRDIs ("Contingent
Notes") is as follows. First, the Company is required to determine, as of the
issue date, the comparable yield for the Contingent Note. The comparable yield
is generally the yield at which the Company would issue a fixed rate debt
instrument with terms and conditions similar to those of the Contingent Note
(including the level of subordination, term, timing of payments and general
market conditions, but not taking into consideration the riskiness of the
contingencies or the liquidity of the Contingent Note), but not less than the
applicable federal rate announced monthly by the IRS (the "AFR"). In certain
cases where Contingent Notes are marketed or sold in substantial part to
tax-exempt investors or other investors for whom the prescribed inclusion of
interest is not expected to have a substantial effect on their U.S. tax
liability, the comparable yield for the Contingent Note, without proper evidence
to the contrary, is presumed to be the AFR.
Second, solely for tax purposes, the Company constructs a projected schedule
of payments determined under the 1996 OID Regulations for the Contingent Note
(the "Schedule"). The Schedule is determined as of the issue date and generally
remains in place throughout the term of the Contingent Note. If a right to a
contingent payment is based on market information, the amount of the projected
payment is the forward price of the contingent payment. If a contingent payment
is not based on market information, the amount of the projected payment is the
expected value of the contingent payment as of the issue date. The Schedule must
produce the comparable yield determined as set forth above. Otherwise, the
Schedule must be adjusted under the rules set forth in the 1996 OID Regulations.
Third, under the usual rules applicable to OID and based on the Schedule,
the interest income on the Contingent Note for each accrual period is determined
by multiplying the comparable yield of the Contingent Note (adjusted for the
length of the accrual period) by the Contingent Note's adjusted issue price at
the beginning of the accrual period (determined under rules set forth in the
1996 OID Regulations). The amount so determined is then allocated on a ratable
basis to each day in the accrual period that the United States Holder held the
Contingent Note.
Fourth, appropriate adjustments are made to the interest income determined
under the foregoing rules to account for any differences between the Schedule
and actual contingent payments. Under the rules set forth in the 1996 OID
Regulations, differences between the actual amounts of any contingent payments
made in a calendar year and the projected amounts of such payments are generally
aggregated and taken into account, in the case of a positive difference, as
additional interest income, or, in the case of a negative difference, first as a
reduction in interest income for such year and thereafter, subject to certain
limitations, as ordinary loss.
The Company is required to provide each holder of a Contingent Note with the
Schedule described above. If the Company does not create a Schedule or the
Schedule is unreasonable, a United States Holder must set its own projected
payment schedule and explicitly disclose the use of such schedule and the reason
therefor. Unless otherwise prescribed by the IRS, the United States Holder must
make such disclosure on a statement attached to the United States Holder's
timely filed federal income tax return for the taxable year in which the
Contingent Note was acquired.
In general, any gain realized by a United States Holder on the sale,
exchange or retirement of a Contingent Note is interest income. In general, any
loss on a Contingent Note accounted for under the method described above is
ordinary loss to the extent it does not exceed such Holder's prior interest
inclusions on the Contingent Note (net of negative adjustments). Special rules
apply in determining the tax basis of a Contingent Note and the amount realized
on the retirement of a Contingent Note.
OTHER RULES
Certain Notes having OID may be redeemed prior to maturity or may be
repayable at the option of the holder. Such Notes may be subject to rules that
differ from the general rules discussed above relating
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to the tax treatment of OID. Purchasers of such Notes with a redemption feature
should consult their tax advisors with respect to such feature since the tax
consequences with respect to original issue discount will depend, in part, on
the particular terms and the particular features of the purchased Note.
The Treasury Regulations relating to the tax treatment of OID contain
certain language ("aggregation rules") stating in general that, with some
exceptions, if more than one type of Note is issued in connection with the same
transaction or related transactions, such Notes may be treated as a single debt
instrument with a single issue price, maturity date, yield to maturity and
stated redemption price at maturity for purposes of calculating and accruing any
OID. Unless otherwise provided in the applicable Prospectus Supplement, the
Company does not expect to treat different types of Notes as being subject to
the aggregation rules for purposes of computing OID.
MARKET DISCOUNT
If a United States Holder acquires a Note having a maturity date of more
than one year from the date of its issuance and has a tax basis in the Note that
is, in the case of a Note that does not have OID, less than its stated
redemption price at maturity, or, in the case of a Note that has OID, less than
its adjusted issue price (as defined above), the amount of such difference is
treated as "market discount" for federal income tax purposes, unless such
difference is less than 1/4 of one percent of the stated redemption price at
maturity multiplied by the number of complete years to maturity (from the date
of acquisition).
Under the market discount rules of the Code, a United States Holder is
required to treat any principal payment (or, in the case of a Note that has OID,
any payment that does not constitute a payment of qualified stated interest) on,
or any gain on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the accrued market discount that has not
previously been included in income. Thus, partial principal payments are treated
as ordinary income to the extent of accrued market discount that has not
previously been included in income. If such Note is disposed of by the United
States Holder in certain otherwise nontaxable transactions, accrued market
discount will be includible as ordinary income by the United States Holder as if
such Holder had sold the Note at its then fair market value.
In general, the amount of market discount that has accrued is determined on
a ratable basis. A United States Holder may, however, elect to determine the
amount of accrued market discount on a constant yield to maturity basis. This
election is made on a Note-by-Note basis and is irrevocable.
With respect to Notes with market discount, a United States Holder may not
be allowed to deduct immediately a portion of the interest expense on any
indebtedness incurred or continued to purchase or to carry such Notes. A United
States Holder may elect to include market discount in income currently as it
accrues, in which case the interest deferral rule set forth in the preceding
sentence will not apply. Such an election will apply to all debt instruments
acquired by the United States Holder on or after the first day of the first
taxable year to which such election applies and is irrevocable without the
consent of the IRS. A United States Holder's tax basis in a Note will be
increased by the amount of market discount included in such Holder's income
under such an election.
In lieu of the foregoing rules, different rules apply in the case of
Contingent Notes where a holder's tax basis in a Contingent Note is less than
the Contingent Note's adjusted issue price (determined under special rules set
out in the 1996 OID Regulations). Accordingly, prospective purchasers of
Contingent Notes should consult with their tax advisors with respect to the
application of such rules to such Notes.
PREMIUM AND ACQUISITION PREMIUM
A United States Holder will be treated as having purchased a Note at a
"premium" (or "amortizable bond premium") if the Note's adjusted basis,
immediately after its purchase by such Holder, exceeds the sum of all amounts
payable on the Note after the purchase date other than payments of qualified
stated interest. United States Holders may elect to amortize the premium over
the remaining term of the Note
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(where such Note is not callable prior to its maturity date), as a reduction in
the amount of the interest payments otherwise includible in income, and the
United States Holder will not be required to include in income OID (if any) with
respect to any Note purchased at a premium. If such Note may be called by the
Company prior to maturity after the United States Holder has acquired it, the
amount of amortizable bond premium is determined with reference to either the
amount payable at maturity, or, if it results in a smaller premium attributable
to the period through the earlier call date, with reference to the amount
payable on the earlier call date. If a United States Holder makes this election,
the premium will be allocated among all the interest payments on the Note, on
the basis of the United States Holders's yield to maturity, with compounding at
the close of each accrual period. A United States Holder who elects to amortize
premium must reduce the tax basis of the Note by the amount of the premium
amortized in any year. If this election is made with respect to any Note, it
will also apply to all debt instruments held by the United States Holder at the
beginning of the first taxable year to which the election applies and to all
debt instruments acquired by the United States Holder, and will be binding for
all subsequent taxable years unless the election is revoked with the consent of
the IRS.
On June 27, 1996, the IRS published in the Federal Register proposed
regulations (the "Proposed Premium Regulations") on the amortization of bond
premium. The Proposed Premium Regulations describe the constant yield method
under which such premium is amortized and provide that the resulting offset to
interest income can be taken into account only as a United States Holder takes
the corresponding interest income into account under such holder's regular
accounting method. In the case of instruments that may be redeemed at the option
of the Company or repaid at the option of the holder prior to maturity, the
Proposed Premium Regulations provide that the premium is calculated by assuming
that the Company will exercise or not exercise its redemption rights in the
manner that maximizes the United States Holder's yield and the United States
Holder will exercise or not exercise its repayment option in a manner that
maximizes the United States Holder's yield. The Proposed Premium Regulations are
proposed to be effective for debt instruments acquired on or after the date 60
days after the date final regulations are published in the Federal Register.
However, if a United States Holder elects to amortize bond premium for the
taxable year containing such effective date, the Proposed Premium Regulations
would apply to all the United States Holder's debt instruments held on or after
the first day of that taxable year. It cannot be predicted at this time whether
the Proposed Premium Regulations will become effective or what, if any,
modifications will be made to them prior to their becoming effective.
If a United States Holder purchases a Note issued with OID at an
"acquisition premium," the amount of OID that the United States Holder includes
in gross income is reduced to reflect the acquisition premium. A Note is
purchased at an acquisition premium if its adjusted basis, immediately after its
purchase, is (a) less than or equal to the sum of all amounts payable on the
Note after the purchase date other than payments of qualified stated interest
and (b) greater than the Note's "adjusted issue price" (as described above under
"Original Issue Discount--FIXED RATE NOTES").
If a Note is purchased at an acquisition premium, the United States Holder
reduces the amount of OID otherwise includible in income during an accrual
period by an amount equal to (i) the amount of OID otherwise includible in
income multiplied by (ii) a fraction, the numerator of which is the excess of
the adjusted basis of the Note immediately after its acquisition by the
purchaser over the adjusted issue price of the Note and the denominator of which
is the excess of the sum of all amounts payable on the Note after the purchase
date, other than payments of qualified stated interest, over the Note's adjusted
issue price.
As an alternative to reducing the amount of OID otherwise includible in
income by this fraction, the United States Holder may elect to compute OID
accruals by treating the purchase as a purchase at original issuance and
applying the constant yield method described above.
In lieu of the foregoing rules, different rules apply in the case of
Contingent Notes where a holder's tax basis in a Contingent Note is greater than
the Contingent Note's adjusted issue price (determined
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under special rules set out in the 1996 OID Regulations). Accordingly,
prospective purchasers of Contingent Notes should consult with their tax
advisors with respect to the application of such rules to such Notes.
SHORT-TERM NOTES
In the case of a Short-Term Note, no interest is treated as qualified stated
interest, and therefore all interest is included in OID. United States Holders
that report income for federal income tax purposes on an accrual method and
certain other United States Holders, including banks and dealers in securities,
are required to include OID in income on such Short-Term Notes on a
straight-line basis, unless an election is made to accrue the OID according to a
constant yield method based on daily compounding.
Any other United States Holder of a Short-Term Note is not required to
accrue OID for federal income tax purposes, unless it elects to do so, with the
consequence that the reporting of such income is deferred until it is received.
In the case of a United States Holder that is not required, and does not elect,
to include OID in income currently, any gain realized on the sale, exchange or
retirement of a Short-Term Note is ordinary income to the extent of the OID
accrued on a straight-line basis (or, if elected, according to a constant yield
method based on daily compounding) through the date of sale, exchange or
retirement. In addition, United States Holders that are not required, and do not
elect, to include OID in income currently are required to defer deductions for
any interest paid on indebtedness incurred or continued to purchase or carry a
Short-Term Note in an amount not exceeding the deferred interest income with
respect to such Short-Term Note (which includes both the accrued OID and accrued
interest that are payable but that have not been included in gross income),
until such deferred interest income is realized. A United States Holder of a
Short-Term Note may elect to apply the foregoing rules (except for the rule
characterizing gain on sale, exchange or retirement as ordinary) with respect to
"acquisition discount" rather than OID. Acquisition discount is the excess of
the stated redemption price at maturity of the Short-Term Note over the United
States Holder's basis in the Short-Term Note. This election applies to all
obligations acquired by the taxpayer on or after the first day of the first
taxable year to which such election applies, unless revoked with the consent of
the IRS. A United States Holder's tax basis in a Short-Term Note is increased by
the amount included in such Holder's income on such a Note.
ELECTION TO TREAT ALL INTEREST AS OID
United States Holders may elect to include in gross income all interest that
accrues on a Note, including any stated interest, acquisition discount, OID,
market discount, DE MINIMIS OID, DE MINIMIS market discount and unstated
interest (as adjusted by amortizable bond premium and acquisition premium), by
using the constant yield method described above under "Original Issue Discount."
Such an election for a Note with amortizable bond premium will result in a
deemed election to amortize bond premium for all debt instruments owned and
later acquired by the United States Holder with amortizable bond premium and may
be revoked only with the permission of the IRS. Similarly, such an election for
a Note with market discount will result in a deemed election to accrue market
discount in income currently for such Note and for all other debt instruments
acquired by the United States Holder with market discount on or after the first
day of the taxable year to which such election first applies, and may be revoked
only with the permission of the IRS. A United States Holder's tax basis in a
Note will be increased by each accrual of the amounts treated as OID under the
constant yield election described in this paragraph.
EXTENDIBLE NOTES, RENEWABLE NOTES AND RESET NOTES
If so specified in an applicable Prospectus Supplement relating to a Note,
the Company or a holder may have the option to extend the maturity of or renew
such Note. See "Description of Notes--Extension of Maturity" and "Description of
Notes--Renewable Notes." In addition, the Company may have the option to reset
the interest rate, the Spread or the Spread Multiplier with respect to a Note.
See
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"Description of Notes--Reset Notes." The treatment of a United States Holder of
Notes to which such options apply will depend, in part, on the terms established
for such Notes by the Company pursuant to the exercise of such option by the
Company or a holder. Upon the exercise of any such option, the United States
Holder of such Notes may be treated for federal income tax purposes as having
exchanged such Notes (the "Old Notes") for new Notes with revised terms (the
"New Notes"). If such holder is treated as having exchanged Old Notes for New
Notes, such exchange may be treated as either a taxable exchange or a tax-free
recapitalization.
Final Treasury Regulations under Section 1001 of the Code, published on June
26, 1996 (the "Final Section 1001 Regulations"), generally provide that the
exercise of an option provided to an issuer or a holder to change a term of a
debt instrument (such as the maturity or the interest rate) in a manner such as
that contemplated for Extendible Notes, Renewable Notes and Reset Notes will
create a deemed exchange of Old Notes for New Notes if such exercise modifies
such terms to a degree that is "economically significant." With respect to
certain types of debt instruments, under the Final Section 1001 Regulations a
deemed exchange for tax purposes occurs if the exercise of such an option alters
the annual yield of the debt instrument by more than the greater of (i) 25 basis
points or (ii) 5 percent of the annual yield of the debt instrument prior to
modification. The exercise of an option that changes the timing of payments
under a debt instrument creates a deemed exchange under the Final Section 1001
Regulations (whether or not the annual yield is altered) if there is a "material
deferral" of scheduled payments. In this connection, the Final Section 1001
Regulations generally provide that a deferral of scheduled payments within a
safe-harbor period which begins on the original due date for the first deferred
payment and extends for a period not longer than the lesser of five years or 50
percent of the original term of the debt instrument will not be considered to be
a material deferral.
If the exercise of the option by the Company or a holder is not treated as
an exchange of Old Notes for New Notes, no gain or loss will be recognized by a
United States Holder as a result thereof. If the exercise of the option is
treated as a taxable exchange of Old Notes for New Notes, a United States Holder
will recognize gain or loss equal to the difference between the issue price of
the New Notes and such Holder's tax basis in the Old Notes. However, if the
exercise of the option is treated as a tax-free recapitalization, no loss will
be recognized by a United States Holder as a result thereof and gain, if any,
will be recognized to the extent of the fair market value of the excess, if any,
of the principal amount of securities received over the principal amount of
securities surrendered. In this regard, the meaning of the term "principal
amount" is not clear. Such term could be interpreted to mean "issue price" with
respect to securities that are received and "adjusted issue price" with respect
to securities that are surrendered. Legislation to that effect has been
introduced in the past. It is not possible to determine whether such legislation
will be reintroduced or enacted, and, if enacted, whether it would apply to a
recapitalization occurring prior to the date of enactment.
The presence of such options may also affect the calculation of interest
income and OID, among other things. For purposes of determining the yield and
maturity of a Note, if the Company has an unconditional option or combination of
options to require payments to be made on the Note under an alternative payment
schedule or schedules (e.g., an option to extend or an option to call the Note
at a fixed premium), it will be deemed to exercise or not exercise an option or
combination of options in a manner that minimizes the yield on the Note.
Conversely, a holder having such option or combination of such options will be
deemed to exercise or not exercise such option or combination of options in a
manner that maximizes the yield on such Note. If both the Company and the holder
have options, the foregoing rules are applied to the options in the order that
they may be exercised. Thus, the deemed exercise of one option may eliminate
other options that are later in time. If the exercise of such option or options
actually occurs or does not occur, contrary to what is deemed to occur pursuant
to the foregoing rules, then, solely for purposes of the accrual of OID, the
yield and maturity of the Note are redetermined by treating the Note as reissued
on the date of the occurrence or non-occurrence of the exercise for an amount
equal to its adjusted issue price on that date. Depending on the terms of the
options described above, the presence of
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such options may instead cause the Notes to be taxable as Contingent Notes under
the 1996 OID Regulations. See "Original Issue Discount--FLOATING RATE NOTES THAT
ARE NOT VRDIS."
THE FOREGOING DISCUSSION OF EXTENDIBLE NOTES, RENEWABLE NOTES AND RESET
NOTES IS PROVIDED FOR GENERAL INFORMATION ONLY. ADDITIONAL TAX CONSIDERATIONS
MAY ARISE FROM THE OWNERSHIP OF SUCH NOTES IN LIGHT OF THE PARTICULAR FEATURES
OR COMBINATION OF FEATURES OF SUCH NOTES AND, ACCORDINGLY, PERSONS CONSIDERING
THE PURCHASE OF SUCH NOTES ARE ADVISED AND EXPECTED TO CONSULT WITH THEIR OWN
LEGAL AND TAX ADVISERS REGARDING THE TAX CONSEQUENCES OF THE OWNERSHIP OF SUCH
NOTES.
INTEGRATION OF NOTES WITH OTHER FINANCIAL INSTRUMENTS
Any United States Holder of Notes that also acquires or has acquired any
financial instrument which, in combination with such Notes, would permit the
calculation of a single yield to maturity or could generally constitute a VRDI
of an equivalent term, may in certain circumstances treat such Notes and such
financial instrument as an integrated debt instrument for purposes of the Code,
with a single determination of issue price and the character and timing of
income, deductions, gains and losses. (For purposes of determining OID, none of
the payments under the integrated debt instrument will be treated as qualified
stated interest.) Moreover, under the 1996 OID Regulations, the IRS may require
in certain circumstances that a United States Holder who owns Notes integrate
such Notes with a financial instrument held or acquired by such Holder or a
related party. United States Holders should consult their tax advisors as to
such possible integration.
SALE OR EXCHANGE OF NOTES
A United States Holder generally will recognize gain or loss upon the sale
or exchange of a Note equal to the difference between the amount realized upon
such sale or exchange and the United States Holder's adjusted basis in the Note.
Such adjusted basis in the Note generally will equal the cost of the Note,
increased by OID, acquisition discount or market discount previously included in
respect thereof, and reduced (but not below zero) by any payments on the Note
other than payments of qualified stated interest and by any premium that the
United States Holder has taken into account. To the extent attributable to
accrued but unpaid qualified stated interest, the amount realized by the United
States Holder will be treated as a payment of interest. Generally, any gain or
loss will be capital gain or loss if the Note was held as a capital asset,
except as provided under "Market Discount," "Short-Term Notes" and "Original
Issue Discount--FLOATING RATE NOTES THAT ARE NOT VRDIS," above. Special rules
apply in determining the tax basis of a Contingent Note and the amount realized
on the retirement of a Contingent Note. The excess of net long-term capital
gains over net short-term capital losses is taxed at a lower rate than ordinary
income for certain non-corporate taxpayers. The distinction between capital gain
or loss and ordinary income or loss is also relevant for purposes of, among
other things, limitations on the deductibility of capital losses.
FOREIGN HOLDERS
As used herein, the term "Non-United States Holder" means a holder of a Note
that is, for United States federal income tax purposes, (i) a nonresident alien
individual, (ii) a foreign corporation, (iii) a nonresident alien fiduciary of a
foreign estate or trust or (iv) a foreign partnership one or more of the members
of which is, for United States federal income tax purposes, a nonresident alien
individual, a foreign corporation or a nonresident alien fiduciary of a foreign
estate or trust.
On April 15, 1996, proposed Treasury Regulations (the "1996 Proposed
Regulations") were issued which, if adopted in final form, could affect the
United States taxation of Non-United States Holders. The 1996 Proposed
Regulations are generally proposed to be effective for payments after December
31, 1997, regardless of the issue date of the Note with respect to which such
payments are made, subject to certain transition rules. It cannot be predicted
at this time whether the 1996 Proposed Regulations will become
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effective as proposed or what, if any, modifications may be made to them. The
discussion under this heading and under "Backup Withholding and Information
Reporting," below, is not intended to include a complete discussion of the
provisions of the 1996 Proposed Regulations, and prospective investors are urged
to consult their tax advisors with respect to the effect the 1996 Proposed
Regulations may have if adopted.
Under current United States federal income tax law now in effect, and
subject to the discussion of backup withholding in the following section,
payments of principal and interest (including OID) with respect to a Note by the
Company or by any paying agent to any Non-United States Holder will not be
subject to the withholding of United States federal income tax, provided, in the
case of interest (including OID), that (i) such Holder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote, (ii) such Holder is not for federal
income tax purposes a controlled foreign corporation related, directly or
indirectly, to the Company through stock ownership, (iii) such Holder is not a
bank receiving interest described in Section 881(c)(3)(A) of the Code and (iv)
either (A) the beneficial owner of the Note certifies, under penalties of
perjury, to the Company or paying agent, as the case may be, that such Holder is
a Non-United States Holder and provides such Holder's name and address, or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Note, certifies, under penalties of
perjury, to the Company or paying agent, as the case may be, that such
certificate has been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor with a
copy thereof. A certificate described in this paragraph is effective only with
respect to payments of interest (including OID) made to the certifying
Non-United States Holder after the issuance of the certificate in the calendar
year of its issuance and the two immediately succeeding calendar years. Under
temporary Treasury Regulations, the foregoing certification may be provided by
the beneficial owner of a Note on IRS Form W-8.
The 1996 Proposed Regulations provide optional documentation procedures
designed to simplify compliance by withholding agents. The 1996 Proposed
Regulations would not affect the documentation rules described above, but would
add "intermediary certification" options for certain qualifying withholding
agents. Under one such option, a withholding agent would be allowed to rely on
IRS Form W-8 furnished by a financial institution or other intermediary on
behalf of one or more beneficial owners (or other intermediaries) without having
to obtain the beneficial owner certificate described in the preceding paragraph,
provided that the financial institution or intermediary has entered into a
withholding agreement with the IRS and thus is a "qualified intermediary." Under
another option, an authorized foreign agent of the U.S. withholding agent would
be permitted to act on behalf of the U.S. withholding agent, provided certain
conditions are met.
For purposes of establishing entitlement to the withholding exemption
described above, the 1996 Proposed Regulations generally would, if adopted,
treat as the beneficial owners of payments on a Note those persons that, under
United States tax principles, are the taxpayers with respect to such payments.
For example, the partners of a foreign partnership, rather than the partnership
itself, would be required to provide the required certifications to qualify for
such withholding exemption. Thus, subject to certain exceptions, each partner,
rather than the partnership, would be required to provide the required
certifications to qualify for the withholding exemption described above.
The 1996 Proposed Regulations provide certain presumptions with respect to
withholding for holders not providing the required certifications to qualify for
the withholding exemption described above. In addition, the 1996 Proposed
Regulations would replace a number of current tax certification forms (including
IRS Form W-8 and IRS Form 4224, discussed below) with a single, restated form
(and, in certain circumstances, additional information) and standardize the
period of time for which withholding agents could rely on such certifications.
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Notwithstanding the foregoing, interest described in Section 871(h)(4) of
the Code will be subject to United States withholding tax at a 30% rate (or such
lower rate as may be provided by an applicable treaty). In general, interest
described in Section 871(h)(4) of the Code includes (subject to certain
exceptions) any interest the amount of which is determined by reference to
receipts, sales or other cash flow of the issuer or a related person, any income
or profits of the issuer or a related person, any change in the value of any
property of the issuer or a related person or any dividends, partnership
distribution or similar payments made by the issuer or a related person.
Interest described in Section 871(h)(4) of the Code may include other types of
contingent interest identified by the IRS in future Treasury Regulations.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest (including OID) on the Note is effectively connected
with the conduct of such trade or business, the Non-United States Holder,
although exempt from the withholding tax discussed above, will be subject to
United States federal income tax on such interest (including OID) in the same
manner as if it were a United States Holder. In lieu of the certificate
described above, such Holder will be required to provide a properly executed IRS
Form 4224 in order to claim an exemption from withholding tax. In addition, if
such Holder is a foreign corporation, it may be subject to a branch profits tax
equal to 30% (or such lower rate as may be specified by an applicable treaty) of
its effectively connected earnings and profits for the taxable year, subject to
adjustments. For this purpose, interest (including OID) on a Note will be
included in the earnings and profits of such Holder if such interest (including
OID) is effectively connected with the conduct by such Holder of a trade or
business in the United States.
Generally, any gain or income (other than that attributable to accrued
interest or OID) realized upon the sale, exchange, retirement or other
disposition of a Note will not be subject to United States federal income tax
unless (i) such gain or income is effectively connected with a trade or business
in the United States of the Non-United States Holder or (ii) in the case of a
Non-United States Holder who is a nonresident alien individual, the Non-United
States Holder is present in the United States for 183 days or more in the
taxable year of such sale, exchange, retirement or other disposition and either
(a) such individual has a "tax home" (as defined in Section 911(d)(3) of the
Code) in the United States or (b) the gain is attributable to an office or other
fixed place of business maintained by such individual in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to interest (including OID) and principal payments made to,
and to the proceeds of sales before maturity by, certain non-corporate United
States Holders. In addition, a 31% backup withholding tax will apply if the
non-corporate United States Holder (i) fails to furnish such holder's Taxpayer
Identification Number ("TIN") (which, for an individual, would be his or her
Social Security Number) to the payor in the manner required, (ii) furnishes an
incorrect TIN and the payor is so notified by the IRS, (iii) is notified by the
IRS that it has failed properly to report payments of interest and dividends or
(iv) in certain circumstances, fails to certify, under penalties of perjury,
that it has not been notified by the IRS that it is subject to backup
withholding for failure properly to report interest and dividend payments.
Backup withholding will not apply with respect to payments made to certain
exempt recipients, including corporations, tax-exempt organizations, qualified
pension and profit-sharing trusts and individual retirement accounts, provided
that they establish entitlement to an exemption.
In the case of a Non-United States Holder, under Treasury Regulations,
backup withholding and information reporting will not apply to payments of
principal and interest made by the Company or any paying agent thereof on a Note
with respect to which such holder has provided the required certification under
penalties of perjury that it is a Non-United States Holder or has otherwise
established an exemption, provided that (i) the Company or paying agent, as the
case may be, does not have actual knowledge that the payee is a United States
person and (ii) certain other conditions are satisfied.
38
<PAGE>
In general, (i) principal or interest payments on a Note collected outside
the United States by a foreign office of a custodian, nominee or other agent
acting on behalf of a beneficial owner of a Note and (ii) payments on the sale,
exchange or retirement of a Note to or through a foreign office of a broker are
not subject to backup withholding or information reporting. However, if such
custodian, nominee, agent or broker is a United States person, a controlled
foreign corporation for United States tax purposes, or a foreign person 50% or
more of whose gross income is effectively connected with the conduct of a United
States trade or business for a specified three-year period, such custodian,
nominee, agent or broker may be subject to certain information reporting (but
not backup withholding) requirements with respect to such payments unless such
custodian, nominee, agent or broker has in its records documentary evidence that
the beneficial owner is not a United States person and certain conditions are
met or the beneficial owner otherwise establishes an exemption.
The 1996 Proposed Regulations would, if adopted, alter the foregoing rules
in certain respects. In particular, the 1996 Proposed Regulations would require
backup withholding in the event that the custodian, nominee, agent or broker has
actual knowledge that the beneficial owner is a United States person.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a holder under the backup withholding rules will be
allowed as a refund or a credit against such holder's United States federal
income tax, provided that the required information is furnished to the IRS.
Holders should consult their tax advisors regarding the application of
information reporting and backup withholding to their particular situations, the
availability of an exemption therefrom, and the procedure for obtaining such an
exemption, if available.
PLAN OF DISTRIBUTION
The Company may sell the Notes in and/or outside the United States: (i)
through underwriters or dealers; (ii) directly to a limited number of purchasers
or to a single purchaser; or (iii) through agents. The Prospectus Supplement
with respect to the Notes being offered (the "Offered Notes") will set forth the
terms of the offering of the Offered Notes, including the name or names of any
underwriters or agents, the purchase price of the Offered Notes and the proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Notes 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. The Notes
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more underwriters.
The underwriter or underwriters with respect to a particular underwritten
offering of Notes, or, if an underwriting syndicate is used, the managing
underwriter or underwriters, will be set forth on the cover of the applicable
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters to purchase the Offered
Notes will be subject to conditions precedent and the underwriters will be
obligated to purchase all of the Offered Notes if any are purchased.
If dealers are utilized in the sale of Offered Notes in respect of which
this Prospectus is delivered, and if so specified in the applicable Prospectus
Supplement, the Company will sell such Offered Notes to the dealers as
principals. The dealers may then resell such Offered Notes to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
applicable Prospectus Supplement.
39
<PAGE>
The Notes may 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
Offered Notes in respect to which this Prospectus is delivered will be named,
and any commissions payable by the Company to such agent will be set forth, in
the Prospectus Supplement.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof. Underwriters, dealers and agents may be
customers of, may engage in transactions with, or perform services for, the
Company in the ordinary course of business.
LEGAL MATTERS
The legality of the Notes offered hereby will be passed upon for MidAmerican
Energy by John A. Rasmussen, Jr., Group Vice President and General Counsel of
MidAmerican Energy, and for the Agent by Sidley & Austin, Chicago, Illinois.
Sidley & Austin will rely upon the opinion of Mr. Rasmussen as to matters of
Iowa law and the opinion of such firm will be conditioned upon, and subject to
certain assumptions regarding, future action required to be taken by MidAmerican
Energy and the Trustee in connection with the issuance and sale of any
particular Note, the specific terms of the Notes and other matters which may
affect the validity of the Notes but which cannot be ascertained on the date of
such opinion. Sidley & Austin regularly serves as special counsel to MidAmerican
Energy and to its affiliates on certain matters. Mr. Rasmussen is an officer and
full-time employee of MidAmerican Energy and at September 30, 1996, he owned
directly and/or beneficially 6,200 shares of common stock of MidAmerican Energy
and had been granted, pursuant to and subject to the terms of MidAmerican
Energy's Long-Term Incentive Plan, options to purchase 40,000 shares of
MidAmerican Energy common stock and 6,500 performance shares.
EXPERTS
The consolidated financial statements and supporting schedules included in
or incorporated by reference in MidAmerican Energy's 1995 Annual Report on Form
10-K have been audited by Arthur Andersen LLP, independent public accountants,
as set forth in its report. The consolidated financial statements and supporting
schedules referred to above have been incorporated herein in reliance upon the
authority of Arthur Andersen LLP as experts in giving said reports.
40
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS (OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT) AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE AGENT. THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS AND
ANY PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MIDAMERICAN
ENERGY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents
by Reference............................................................ 2
The Company............................................................... 3
Ratios of Earnings to Fixed Charges....................................... 3
Use of Proceeds........................................................... 4
Description of Notes...................................................... 4
United States Federal Income Tax
Consequences............................................................ 26
Plan of Distribution...................................................... 39
Legal Matters............................................................. 40
Experts................................................................... 40
</TABLE>
[LOGO]
MEDIUM-TERM NOTES
DUE FROM NINE MONTHS TO 30
YEARS FROM DATE OF ISSUE
-----------------
P R O S P E C T U S
-------------------
------------
, 1996
- -------------------------------------------
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- -------------------------------------------
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<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 BE 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>
SUBJECT TO COMPLETION, DATED , 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1996
[LOGO] PREFERRED SECURITIES
MIDAMERICAN ENERGY FINANCING I
% PREFERRED SECURITIES, SERIES A
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED AS SET FORTH HEREIN, BY
MIDAMERICAN ENERGY COMPANY
----------
The % Preferred Securities, Series A (the "Series A Preferred
Securities") offered hereby are being issued by and represent undivided
preferred beneficial interests in the assets of MidAmerican Energy Financing I,
a statutory business trust formed under the laws of the State of Delaware (the
"Series A Issuer" or the "Series A Trust"). The preferred interests represented
by the Series A Preferred Securities will have a preference under certain
circumstances with respect to cash distributions and amounts payable on
liquidation, redemption or otherwise over the trust interests represented by the
Series A Common Securities (as defined herein) issued by the Series A Issuer.
See "Description of the Preferred Securities -- Subordination of Common
Securities" in the accompanying Prospectus.
MidAmerican Energy Company, an Iowa corporation ("MidAmerican Energy" or the
"Company"), is the owner of the trust interests represented by the common
securities (the "Series A Common Securities" and together with the Series A
Preferred Securities the "Series A Trust Securities") issued by the Series A
Issuer. The Series A Issuer exists for the sole purpose of issuing its trust
interests and investing the proceeds thereof in the % Deferrable Interest
Subordinated Debentures, Series A (the "Series A Debentures") issued by
MidAmerican Energy. The Series A Debentures will mature on , 20 ,
which date may be extended to a date not later than , 20 if
certain conditions are met. See "Certain Terms of the Series A Debentures --
General". MidAmerican Energy has the right to, at any time, cause the
termination of the Series A Issuer and the distribution of the Series A
Debentures to the Holders of the Series A Trust Securities on a pro rata basis
in liquidation of such Holders' interests in the Trust. See "Certain Terms of
the Series A Preferred Securities -- Termination of the Series A Issuer and
Distribution of the Series A Debentures". The First National Bank of Chicago is
the Property Trustee of the Series A Issuer and the Indenture Trustee and
Guarantee Trustee of MidAmerican Energy.
(COVER CONTINUED ON NEXT PAGE)
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A PREFERRED SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENT OF DISTRIBUTIONS ON THE
SERIES A PREFERRED SECURITIES AND INTEREST ON THE SERIES A DEBENTURES MAY BE
DEFERRED AND THE RELATED FEDERAL INCOME TAX CONSEQUENCES.
----------------
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 SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO THE
INITIAL PUBLIC UNDERWRITING SERIES A
OFFERING PRICE COMMISSION (1) ISSUER (2)(3)
-------------- ---------------- ----------------
<S> <C> <C> <C>
Per Series A Preferred Security..................................... $ (2) $
Total............................................................... $ (2) $
</TABLE>
- ----------
(1) The Series A Issuer and MidAmerican Energy have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting".
(2) In view of the fact that the entire proceeds of the sale of the Series A
Preferred Securities will be used to purchase the Series A Debentures, the
Underwriting Agreement provides that MidAmerican Energy will pay to the
Underwriters, as compensation for their arranging the investment therein of
such proceeds, $ per Series A Preferred Security (or $
("Underwriters' Compensation") in the aggregate). See "Underwriting".
(3) Expenses of the offering, which are payable by MidAmerican Energy, are
estimated to be $ .
------------------
The Series A Preferred Securities offered hereby are offered severally by
the Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Series A Preferred Securities will be ready for delivery in
book-entry form only through the facilities of The Depository Trust Company on
or about , 1996, against payment therefor in immediately available
funds.
[NAMES OF UNDERWRITERS]
-----------
The date of this Prospectus Supplement is , 1996.
<PAGE>
(COVER CONTINUED)
Owners (the "Holders") of the Series A Preferred Securities will be entitled
to receive preferential cumulative cash distributions accruing from the date of
original issuance and payable quarterly in arrears on the first day of March,
June, September and December of each year, commencing , at the per
annum rate of % of the liquidation preference amount of $25 per Series A
Preferred Security (together, at any given time, with any accrued but unpaid
such amounts and interest thereon, if any, "Distributions"). Interest on the
Series A Debentures is the sole source of income for the Series A Issuer from
which payment of Distributions on the Series A Preferred Securities can be made.
MidAmerican Energy has the right to defer payments of interest on the Series
A Debentures by extending the interest payment period thereon at any time or
from time to time for up to 20 consecutive quarters (each, an "Extension
Period"), provided that any such Extension Period may not extend beyond the
maturity of the Series A Debentures and that MidAmerican Energy may not defer
any payment of Additional Interest Attributable to Taxes (as defined in the
accompanying Prospectus). If interest payments on the Series A Debentures are
deferred, Distributions on the Series A Preferred Securities will also be
deferred. During an Extension Period, quarterly Distributions on the Series A
Preferred Securities will continue to accrue and Distributions that are in
arrears will bear interest on the amount thereof at the per annum rate of
[ ]% (to the extent permitted by applicable law, compounded quarterly), and
Holders of Series A Preferred Securities will be required to accrue income for
United States federal income tax purposes. See "Description of the Series A
Debentures -- Option to Extend Interest Payment Period" and "United States
Federal Income Taxation -- Interest Income and Original Issue Discount." Upon
the termination of any Extension Period and the payment of all amounts then due,
including interest on deferred interest payments, MidAmerican Energy may select
a new Extension Period, subject to the above requirements.
The payment of Distributions and payments on liquidation of the Series A
Issuer or the redemption of Series A Preferred Securities, in each case out of
moneys held by the Series A Issuer as set forth below, are guaranteed by
MidAmerican Energy to the extent the Series A Issuer has sufficient funds
available to make such payments (the "Series A Guarantee"). See "Certain Terms
of the Series A Guarantee." If MidAmerican Energy fails to make interest
payments on the Series A Debentures held by the Series A Issuer, the Series A
Issuer will have insufficient funds to pay Distributions on the Series A
Preferred Securities. The Series A Guarantee does not cover payment of
Distributions when the Series A Issuer does not have sufficient funds to pay
such Distributions. In such event, a Holder of Series A Preferred Securities
will have the right to institute a suit directly against MidAmerican Energy to
enforce payment of principal of or interest on the Series A Debentures. See
"Description of the Debentures -- Enforcement of Certain Rights by Holders of
Preferred Securities" in the accompanying Prospectus. MidAmerican Energy's
obligations under the Series A Guarantee are subordinate and junior in right of
payment to all liabilities of MidAmerican Energy, including the Series A
Debentures, except any liabilities that may be made PARI PASSU expressly by
their terms. MidAmerican Energy has agreed in an Agreement as to Expenses and
Liabilities (the "Expense Agreement") to provide funds to the Series A Issuer as
needed to pay obligations of the Series A Issuer to parties other than Holders
of Series A Trust Securities. The Series A Debentures and the Series A
Guarantee, together with the obligations (the "Back-Up Obligations") of
MidAmerican Energy with respect to the Series A Preferred Securities under the
Indenture, the Series A Supplemental Indenture (as defined herein), the Series A
Trust Agreement (as defined herein) and the Expense Agreement, constitute a full
and unconditional guarantee of the Series A Preferred Securities by MidAmerican
Energy. Although certain terms of the Indenture may be modified or waived
without the consent of holders of Series A Preferred Securities, no such
modification or waiver would make such guarantee less than full and
unconditional.
The Series A Preferred Securities are subject to mandatory redemption upon
repayment of the Series A Debentures at maturity or upon their earlier
redemption. See "Description of the Preferred Securities -- Redemption
Procedures" in the accompanying Prospectus. MidAmerican Energy will have the
option at any time on or after , to redeem the Series A Debentures, in
whole or in part. MidAmerican Energy also will have the option, upon the
occurrence and during the continuation of a Tax Event (as defined herein), to
redeem at any time the Series A Debentures, in whole but not in part, which will
result in the redemption of all the Series A Trust Securities by the Series A
Issuer. Any redemption of Series A Trust Securities by the Series A Issuer will
be in amounts having an aggregate liquidation preference amount equal to the
aggregate principal of Series A Debentures to be
S-2
<PAGE>
redeemed and will be at a redemption price equal to 100% of such liquidation
preference amount, plus accrued and unpaid Distributions, if any, to the
redemption date. Each class of the Series A Trust Securities will be redeemed in
proportion to the percentage they represent of all the Series A Trust
Securities. See "Description of the Debentures -- Optional Redemption" in the
accompanying Prospectus.
MidAmerican Energy will have the right, at any time, to cause the
termination of the Series A Issuer and, in connection therewith, after
satisfaction of liabilities owed by the Series A Issuer to its creditors, if
any, to cause the distribution of Series A Debentures to the Holders of Series A
Preferred Securities and the Common Securities in liquidation of the Series A
Issuer. See "Certain Terms of the Series A Preferred Securities -- Termination
of Series A Issuer and Distribution of Series A Debentures".
The Series A Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the accompanying Prospectus) of
MidAmerican Energy. The terms of the Series A Debentures place no limitation on
the amount of Senior Indebtedness that may be incurred by MidAmerican Energy. As
of , , MidAmerican Energy had approximately $ billion principal
amount of indebtedness for borrowed money and capital lease obligations
constituting Senior Indebtedness. See "Description of the Debentures --
Subordination" and "Description of the Preferred Securities" in the accompanying
Prospectus.
In the event of the liquidation of the Series A Issuer, the Holders of the
Series A Trust Securities will be entitled to receive either (i) Series A
Debentures in an aggregate principal amount of $25 per Series A Preferred
Security or (ii) a liquidation preference amount of $25 per Series A Preferred
Security, plus accrued and unpaid Distributions thereon to the date of payment,
subject to certain limitations. See Description of the "Preferred Securities --
Liquidation Distribution upon Termination" in the accompanying Prospectus.
Trading of the Series A Preferred Securities on the New York Stock Exchange
("NYSE") is expected to commence within 30 days after the initial delivery of
the Series A Preferred Securities. If the Series A Debentures are distributed to
the holders of Series A Preferred Securities upon the liquidation of the Series
A Issuer, MidAmerican Energy will use its best efforts to list the Series A
Debentures on the NYSE or such other stock exchanges, if any, on which the
Series A Preferred Securities are then listed.
The Series A Preferred Securities will be represented by a global
certificate registered in the name of The Depository Trust Company ("DTC") or
its nominee. Beneficial interests in the Series A Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by Participants (as defined in the accompanying Prospectus) in DTC.
Except as described herein, Series A Preferred Securities in certificated form
will not be issued in exchange for the global certificate. See "Description of
the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the accompanying Prospectus.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
PREFERRED SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE>
RISK FACTORS
Prospective purchasers of Series A Preferred Securities should carefully
review the information contained elsewhere herein and should particularly
consider the following risk factors with respect to the Series A Preferred
Securities:
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND THE SERIES
A DEBENTURES
MidAmerican Energy's obligations under the Series A Guarantee issued by
MidAmerican Energy for the benefit of the Holders of the Series A Preferred
Securities are unsecured and rank subordinate and junior in right of payment to
all liabilities of MidAmerican Energy, including the Series A Debentures, except
any liabilities that may be made PARI PASSU expressly by their terms. The
obligations of MidAmerican Energy under the Series A Debentures are subordinate
and junior in right of payment to Senior Indebtedness of MidAmerican Energy. As
of , 1996, MidAmerican Energy had approximately $ billion
principal amount of Senior Indebtedness. There are no terms of the Series A
Preferred Securities, the Series A Debentures or the Series A Guarantee that
limit MidAmerican Energy's ability to incur additional indebtedness, including
indebtedness that would rank senior to the Series A Debentures and the Series A
Guarantee. See "Description of the Guarantee -- Status of the Guarantee" and
"Description of the Debentures -- Subordination" in the accompanying Prospectus.
The ability of the Series A Issuer to pay amounts due on the Series A
Preferred Securities is solely dependent upon MidAmerican Energy making payments
on the Series A Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
MidAmerican Energy has the right under the Indenture to extend the interest
payment period at any time and from time to time on the Series A Debentures, for
a period not exceeding 20 consecutive quarters. As a consequence of any such
extension, quarterly Distributions on the Series A Preferred Securities would be
deferred by the Series A Issuer during such Extension Period, but would continue
to accumulate additional Distributions thereon at the rate of % per annum. In
the event that MidAmerican Energy exercises this right, during any Extension
Period MidAmerican Energy may not, and may not permit any of its subsidiaries
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of MidAmerican
Energy's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of
MidAmerican Energy (including other debentures issued pursuant to the Indenture
(as defined in the accompanying Prospectus)) that rank PARI PASSU with or junior
in interest to the Series A Debentures or make any guarantee payments with
respect to any guarantee by MidAmerican Energy of the debt securities of any of
its subsidiaries if such guarantee ranks PARI PASSU with or junior in interest
to the Series A Debentures (other than (a) dividends or distributions in
MidAmerican Energy common stock, (b) payments under any Guarantee (as defined in
the accompanying Prospectus), and (c) purchases of common stock related to the
issuance of MidAmerican Energy common stock under any of MidAmerican Energy's
benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, MidAmerican Energy may further extend
the interest payment period, provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters and that such Extension Period may not extend beyond the maturity date
of the Series A Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, MidAmerican Energy may elect to begin a new
Extension Period subject to the above requirements. Consequently, there could be
multiple Extension Periods of varying lengths throughout the term of the Series
A Debentures. See "Certain Terms of the Series A Preferred Securities --
Distributions" and "Certain Terms of the Series A Debentures -- Option to Extend
Interest Payment Period."
S-4
<PAGE>
Should MidAmerican Energy exercise its right to defer payments of interest
by extending the interest payment period, each Holder of Preferred Securities
would be required to accrue income (as original issue discount ("OID")) in
respect of the interest payable thereafter allocable to its Series A Preferred
Securities for United States federal income tax purposes, which would be
allocated but not distributed to Holders of record of Series A Preferred
Securities. As a result, each such Holder of Series A Preferred Securities would
recognize income for United States federal income tax purposes in advance of the
receipt of cash and would not receive the cash from the Series A Trust related
to such income if such Holder disposed of its Series A Preferred Securities
prior to the record date for the date on which distributions of such amounts
were made. See "United States Federal Income Taxation -- Interest Income and
Original Issue Discount."
MidAmerican Energy has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series A
Debentures. However, should MidAmerican Energy elect to exercise such right in
the future, the market price of the Series A Preferred Securities is likely to
be affected. A Holder that disposes of its Series A Preferred Securities during
an Extension Period, therefore, might not receive the same return on its
investment as a Holder that continues to hold its Series A Preferred Securities.
In addition, as a result of the existence of MidAmerican Energy's right to defer
interest payments, the market price of the Series A Preferred Securities (which
represent a preferred undivided beneficial interest in the Series A Debentures)
may be more volatile than other securities which do not contain such rights.
TERMINATION OF SERIES A ISSUER AND DISTRIBUTION OF SERIES A DEBENTURES
MidAmerican Energy has the right to, at any time, direct the Property
Trustee to dissolve the Series A Issuer and, in connection therewith, after
satisfaction of creditors of the Series A Issuer, if any, cause the Series A
Debentures to be distributed to the Holders of Series A Trust Securities on a
pro rata basis in liquidation of such Holders' interests in the Trust. Under
current United States federal income tax law, a distribution of Series A
Debentures upon the termination and dissolution of the Series A Issuer would not
be a taxable event to holders of the Series A Preferred Securities. If, however,
the Series A Trust is characterized for United States federal income tax
purposes as an association taxable as a corporation at the time of dissolution,
the distribution of the Series A Debentures would be a taxable event to Holders.
See "United States Federal Income Taxation -- Receipt of Series A Debentures or
Cash Upon Liquidation of the Series A Trust." Because Holders of Series A
Preferred Securities may receive Series A Debentures, prospective purchasers of
Series A Preferred Securities are also making an investment decision with regard
to the Series A Debentures and should carefully review all the information
regarding the Series A Debentures contained herein. See "Description of the
Series A Preferred Securities -- Termination of Series A Issuer and Distribution
of Series A Debentures" herein and "Description of the Series A Debentures --
General" in the accompanying Prospectus.
MARKET PRICE
There can be no assurance as to the market prices for Series A Preferred
Securities or Series A Debentures that may be distributed in exchange for Series
A Preferred Securities if the Series A Issuer were to be terminated and
dissolved. Accordingly, the Series A Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Series A Debentures that a Holder of Series A Preferred Securities may
receive on termination and liquidation of the Series A Issuer, may trade at a
discount to the price that the investor paid to purchase the Series A Preferred
Securities offered hereby.
S-5
<PAGE>
TAX EVENT REDEMPTION
Upon the occurrence and during the continuance of a Tax Event (as
hereinafter defined), MidAmerican Energy has the right to redeem the Series A
Debentures, in whole but not in part, and thereby cause a mandatory redemption
of all the Series A Preferred Securities and Series A Common Securities within
90 days following the occurrence of such Tax Event. See "Certain Terms of the
Series A Preferred Securities -- Tax Event Redemption." The receipt of cash by
the Holders of the Series A Preferred Securities upon a dissolution of the
Series A Trust would be a taxable event to such Holders. See "United States
Federal Income Taxation -- Receipt of Series A Debentures or Cash Upon
Liquidation of the Series A Trust."
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released, which would, among other things, generally deny interest deductions
for United States federal income tax purposes of interest on an instrument,
issued by a corporation, that has a maximum weighted average maturity of more
than 40 years. The Bill would also generally deny interest deductions for
interest on an instrument, issued by a corporation, that has a maximum term of
more than 20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party (other
than a corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. The above-described provisions of the Bill were
proposed to be effective generally for debt instruments issued on or after
December 7, 1995. If either of such provisions were to apply to the Series A
Debentures, the Company would be unable to deduct interest on the Series A
Debentures for United States federal income tax purposes. However, on March 29,
1996, the Chairmen of the Senate Finance and House Ways and Means Committees
issued a joint statement to the effect that it was their intention that the
effective date of the President's legislative proposals, if adopted, will be no
earlier than the date of appropriate Congressional action. The Company believes
that, under current law, it will be able to deduct interest on the Series A
Debentures. There can be no assurance, however, that current or future
legislative proposals or final legislation will not affect the ability of the
Company to deduct interest on the Series A Debentures. Such a change could give
rise to a Tax Event which may permit the Company to cause a redemption of the
Series A Preferred Securities. See "Certain Terms of the Series A Preferred
Securities -- Tax Event Redemption" and "United States Federal Income Taxation
- -- Possible Tax Law Changes."
RIGHTS UNDER THE GUARANTEE; LIMITATION AS TO FUNDS AVAILABLE TO THE SERIES A
ISSUER
The Series A Guarantee guarantees to the Holders of the Series A Preferred
Securities to the extent not paid by the Series A Issuer, the payment (but not
the collection) of (i) any accrued and unpaid Distributions required to be paid
on the Series A Preferred Securities, to the extent the Series A Issuer has
funds available therefor, (ii) the redemption price, and all accrued and unpaid
distributions to the date of redemption, with respect to Series A Preferred
Securities called for redemption by the Series A Issuer, to the extent the
Series A Issuer has funds available therefor and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Series A Issuer
(unless the Series A Debentures are distributed to Holders of the Series A
Preferred Securities), the lesser of (a) the aggregate of the liquidation
preference amount and all accrued and unpaid Distributions on the Series A
Preferred Securities to the date of payment and (b) the amount of assets of the
Series A Issuer remaining available for distribution to Holders of the Series A
Preferred Securities in liquidation of the Series A Issuer. The Holders of not
less than a majority in aggregate Liquidation Amount (as defined herein) of the
Series A Preferred Securities have the right to waive any default by MidAmerican
on any of its payment obligations under the Series A Guarantee, and to direct
the time, method and place of conducting any proceeding for any remedy available
to the indenture trustee under the Series A Guarantee (the "Series A Guarantee
Trustee") or to direct the exercise of any trust power conferred upon the Series
A
S-6
<PAGE>
Guarantee Trustee under the Series A Guarantee. Any Holder of Series A Preferred
Securities may institute a legal proceeding directly against MidAmerican Energy
to enforce its rights under the Series A Guarantee without first instituting a
legal proceeding against the Series A Issuer, the Guarantee Trustee or any other
person or entity. If MidAmerican Energy were to default on its obligations under
the Series A Debentures, the Series A Issuer would lack available funds for the
payment of Distributions or amounts payable on redemption of the Series A
Preferred Securities or otherwise, and in such event Holders of the Series A
Preferred Securities would not be able to rely upon the Series A Guarantee for
payment of such amounts. Instead, Holders of Series A Preferred Securities would
have the limited enforcement rights described under "Description of Preferred
Securities--Events of Default; Notice" in the accompanying Prospectus. See
"Description of the Guarantees -- Status of the Guarantees" and "Description of
the Debentures -- Subordination" in the accompanying Prospectus. The Series A
Trust Agreement provides that each Holder of Series A Preferred Securities by
acceptance thereof agrees to the provisions of the Series A Guarantee and the
Indenture (as defined in the accompanying Prospectus).
LIMITED VOTING RIGHTS
Holders of Series A Preferred Securities will generally have limited voting
rights relating only to the modification of the Series A Preferred Securities
and the dissolution, winding-up or termination of the Series A Issuer. Holders
of Series A Preferred Securities will not be entitled to vote to appoint, remove
or replace the Property Trustee or the Delaware Trustee under the Series A Trust
Agreement, which voting rights are vested exclusively in the Holder of the
Series A Common Securities except upon the occurrence of certain events. The
Administrative Trustees under the Series A Trust Agreement and MidAmerican
Energy may amend the Series A Trust Agreement to ensure that the Series A Issuer
will be classified for United States federal income tax purposes as a grantor
trust without the consent of Holders, even if such action adversely affects the
interests of Holders. See "Description of the Preferred Securities -- Voting
Rights", "-- Amendments" and "-- Co-Trustees and Separate Property Trustees" in
the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A PREFERRED SECURITIES
The Series A Preferred Securities constitute a new issue of securities with
no established trading market. While MidAmerican Energy will apply to list the
Series A Preferred Securities on the NYSE, a minimum of 400 beneficial holders
and 1,000,000 outstanding securities is required for listing a new class of
securities on the NYSE. Accordingly, no assurance can be given as to the
liquidity of or the development and maintenance of trading markets for the
Series A Preferred Securities. If approved for listing, the Series A Preferred
Securities may trade at a price that does not fully reflect the value of accrued
but unpaid interest with respect to the underlying Series A Debentures. A Holder
that uses the accrual method of accounting for tax purposes (and a cash method
holder, if the Series A Debentures are deemed to have been issued with OID) and
that disposes of Series A Preferred Securities between record dates for payments
of Distributions thereon will be required to include accrued but unpaid interest
on the Series A Debentures through the date of disposition in income as ordinary
income and to add such amount to such Holder's adjusted tax basis in such
Holder's pro rata share of the underlying Series A Debentures deemed disposed
of. To the extent the selling price is less than such Holder's adjusted tax
basis (which will include all accrued and unpaid interest), such Holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "United States Federal Income Taxation -- Interest Income and
Original Issue Discount" and "-- Sales of Series A Preferred Securities."
MIDAMERICAN ENERGY FINANCING I
MidAmerican Energy Financing I is a statutory business trust formed under
the Delaware Business Trust Act pursuant to (i) a Trust Agreement executed by
MidAmerican Energy, as Depositor of the
S-7
<PAGE>
Series A Issuer, and the Trustees referred to therein and (ii) the filing of a
Certificate of Trust with the Delaware Secretary of State on October 31, 1996.
Such Trust Agreement will be amended and restated in its entirety (as so amended
and restated, the "Series A Trust Agreement") substantially in the form filed as
an exhibit to the Registration Statement of which this Prospectus Supplement is
a part. The Series A Trust Agreement will be qualified as an indenture under the
Trust Indenture Act. The Series A Issuer exists for the exclusive purposes of
(i) issuing the Series A Preferred Securities and the Series A Common Securities
representing trust interests in the Series A Issuer, (ii) purchasing the Series
A Debentures with the Series A Common Securities and the proceeds from the sale
of the Series A Preferred Securities and (iii) engaging only in those other
activities necessary or incidental thereto. MidAmerican Energy has agreed to pay
all fees and expenses related to the Series A Issuer and the offering of the
Series A Preferred Securities.
All of the Series A Common Securities will be owned by MidAmerican Energy.
The Series A Common Securities will rank PARI PASSU, and payments will be made
thereon pro rata, with the Series A Preferred Securities, except that upon the
occurrence and continuance of a default under the Indenture, the rights of the
Holders of the Series A Common Securities to payment in respect of Distributions
and payments upon liquidation, redemption and otherwise will be subordinate to
the rights of the Holders of the Series A Preferred Securities. MidAmerican
Energy will acquire Series A Common Securities having an aggregate Liquidation
Amount equal to 3% of the total capital of the Series A Issuer.
The Series A Issuer will terminate on unless earlier
terminated as provided in the Series A Trust Agreement. The Series A Issuer's
business and affairs will be conducted by the Administrative Trustees. The
duties and obligations of the Trustees will be governed by the Series A Trust
Agreement. Philip G. Lindner, J. Sue Rozema and Paul J. Leighton, all officers
of MidAmerican Energy, will be appointed as Administrative Trustees pursuant to
the terms of the Series A Trust Agreement. Under the Series A Trust Agreement,
the Administrative Trustees will have certain duties and powers including, but
not limited to, the delivery of certain notices to the Holders of the Series A
Preferred Securities, the appointment of the Paying Agent (as defined in the
accompanying Prospectus) and the Registrar (as defined in the accompanying
Prospectus) and the registering of transfers of the Series A Preferred
Securities. Under the Series A Trust Agreement, The First National Bank of
Chicago, as the Property Trustee, will have certain duties and powers including,
but not limited to, holding legal title to the Series A Debentures on behalf of
the Series A Trust, the collection of payments in respect of the Series A
Debentures, maintenance of the Payment Account (as defined in the Series A Trust
Agreement), the sending of default notices with respect to the Series A
Preferred Securities and the distribution of the assets of the Series A Trust in
the event of a winding up of the Series A Trust. First Chicago Delaware, Inc.
will act as Delaware Trustee for the sole purpose of complying with certain
Delaware law. MidAmerican Energy has the sole right to appoint and remove all of
the Trustees. See "Description of the Preferred Securities" in the accompanying
Prospectus. The Series A Trust Agreement, the Indenture and the Series A
Guarantee will each be qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). The First National Bank of
Chicago will act as indenture trustee under the Series A Guarantee for the
purposes of compliance with the Trust Indenture Act and will hold the Guarantee
for the benefit of the Holders of the Series A Preferred Securities. The First
National Bank of Chicago will also act as trustee for the Series A Debentures
and as Property Trustee under the Series A Trust Agreement.
S-8
<PAGE>
MIDAMERICAN ENERGY COMPANY
GENERAL
MidAmerican Energy was formed on July 1, 1995 through the merger (the
"Merger") of Iowa-Illinois Gas and Electric Company ("Iowa-Illinois"), Midwest
Resources Inc. ("Midwest Resources") and Midwest Power Systems Inc. ("Midwest
Power") with and into MidAmerican Energy. MidAmerican Energy is a combination
electric and natural gas public utility engaged in the generation, transmission,
distribution and sale of electric energy in Illinois, Iowa and South Dakota, and
the purchase, distribution, transportation and sale of natural gas in those
states and in the state of Nebraska. Nonregulated operations are conducted by
its MidAmerican Capital Company ("MidAmerican Capital"); a separate affiliate,
Midwest Capital Group, Inc. ("Midwest Capital"), functions as a regional
business development company in the utility service territory.
RECENT DEVELOPMENTS
On December 1, 1996, MidAmerican Energy formed a holding company, and
transferred MidAmerican Capital and Midwest Capital to the holding company. The
holding company has three wholly-owned subsidiaries consisting of MidAmerican
Energy (utility operations), MidAmerican Capital and Midwest Capital. The
transaction was structured as a share exchange, with each share of MidAmerican
Energy common stock being exchanged for one share of the holding company common
stock.
On November 14, 1996, MidAmerican Capital agreed to sell its subsidiaries
which conduct oil and gas and gas marketing operations to KCS Energy, Inc. for
approximately $209.5 million in cash, (subject to certain adjustments for real
property title and environmental matters and changes in intercompany accounts)
and warrants to acquire 435,100 shares of KCS Energy, Inc. common stock for $45
per share. In addition, MidAmerican Capital has agreed to convert approximately
$91 million of loans made to such subsidiaries into equity invetment in such
subsidiaries).
USE OF PROCEEDS
The Series A Issuer will use the proceeds from this offering of $ million
of Series A Preferred Securities, together with the issuance of the Series A
Common Securities, to purchase the Series A Debentures. MidAmerican Energy will
use the cash proceeds from the sale of the Series A Debentures net of the
Underwriters' Compensation and the other expenses of this offering, for the
repayment of a portion of its outstanding indebtedness. MidAmerican Energy has
not yet selected the indebtedness to be repaid with such net proceeds.
S-9
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the unaudited consolidated and utility only
ratios and supplemental ratios of earnings to fixed charges and ratios and
supplemental ratios of earnings to fixed charges and preferred dividend
requirements of MidAmerican Energy for each of the years 1991 through 1995 and
for the twelve months ended September 30, 1996.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------------------------- TWELVE MONTHS ENDED
1991 1992 1993 1994 1995 SEPTEMBER 30, 1996
--------- --------- --------- --------- --------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED:
Ratios of Earnings to Fixed Charges(1)........ 2.46x 1.87x 2.84x 2.78x 2.82x 3.08x
Ratios of Earnings to Fixed Charges and
Preferred Dividend Requirements(1).......... 2.21x 1.71x 2.56x 2.44x 2.55x 2.75x
Supplemental Ratios of Earnings to Fixed
Charges(2).................................. 2.39x 1.82x 2.75x 2.70x 2.75x 3.01x
Supplemental Ratios of Earnings to Fixed
Charges and Preferred Dividend
Requirements................................ 2.16x 1.68x 2.49x 2.38x 2.50x 2.70x
UTILITY ONLY (3):
Ratios of Earnings to Fixed Charges(1)........ 2.92x 2.34x 3.40x 3.30x 3.39x 3.72x
Ratios of Earnings to Fixed Charges and
Preferred Dividend Requirements(1).......... 2.54x 2.06x 2.95x 2.75x 2.96x 3.21x
Supplemental Ratios of Earnings to Fixed
Charges(2).................................. 2.80x 2.24x 3.25x 3.16x 3.28x 3.61x
Supplemental Ratios of Earnings to Fixed
Charges and Preferred Dividend
Requirements(2)............................. 2.45x 1.99x 2.85x 2.66x 2.88x 3.13x
</TABLE>
- ---------
(1) For purposes of computing the ratios of earnings to fixed charges,
"earnings" consist of net income from continuing operations before interest
charges and preferred dividend requirements, plus income taxes, plus the
estimated interest component of rentals. "Earnings" also include allowances
for borrowed and other funds used during construction. Fixed charges consist
of interest charges and the estimated interest component of rentals.
(2) The supplemental ratios have been calculated including obligations of the
Company under its long-term power purchase contract with the Nebraska Public
Power District relating to Cooper Nuclear Station.
(3) Reflects the formation of the holding company and the transfer of
MidAmerican Capital and Midwest Capital to the holding company by
MidAmerican Energy.
S-10
<PAGE>
CAPITALIZATION
The following table sets forth the MidAmerican Energy consolidated and
utility only capitalization, and utility only capitalization adjusted to reflect
the sale of the Series A Preferred Securities, as of September 30, 1996.
<TABLE>
<CAPTION>
UNAUDITED
AS OF SEPTEMBER 30, 1996
--------------------------------------------------------------------
UTILITY ONLY
AS
CONSOLIDATED UTILITY ONLY ACTUAL(1) ADJUSTED(1)
-------------------------- -------------------------- ------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT
------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Common shareholders' equity....................... $ 1,238,615 45.3% $ 973,804 45.0% $ 973,804
Preferred shares, not subject to mandatory
redemption...................................... 77,534 2.8 77,534 3.6 77,534
Preferred shares, subject to mandatory
redemption...................................... 50,000 1.8 50,000 2.3 50,000
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely
Company subordinated debt securities(2)......... -- -- -- -- 000,000
Long-term debt:
Mortgage bonds.................................. 947,000 947,000 947,000
Pollution control revenue obligations........... 160,609 160,609 160,609
Other........................................... 345,736 6,168 6,168
Less:
Unamortized debt premium and discount net... (3,714) (3,714) (3,714)
Long-term debt due within one year.......... (77,624) (47,713) (47,713)
------------ ------------ ------------
Total long-term debt...................... 1,372,007 50.1 1,062,350 49.1 1,062,350
------------ ------------ ------------ ------------ ------------
Total capitalization............................ $ 2,738,156 100.0% $ 2,163,688 100.0% $ 0,000,000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Current liabilities:
Long-term debt.................................. $ 77,624 $ 47,713 $ 47,713
Other........................................... 418,280 384,846 384,846
------------ ------------ ------------
Total current liabilities..................... $ 495,904 $ 432,559 $ 432,559
------------ ------------ ------------
------------ ------------ ------------
Other liabilities:
Power purchase contract......................... $ 112,700 $ 112,700 $ 112,700
Deferred income taxes........................... 732,233 620,526 620,526
Investment tax credits.......................... 90,692 90,692 90,692
Other........................................... 226,433 220,604 220,604
------------ ------------ ------------
Total other liabilities....................... $ 1,162,058 $ 1,044,522 $ 1,044,522
------------ ------------ ------------
------------ ------------ ------------
<CAPTION>
PERCENTAGE
------------
<S> <C>
Common shareholders' equity....................... 00.0%
Preferred shares, not subject to mandatory
redemption...................................... 0.0
Preferred shares, subject to mandatory
redemption...................................... 0.0
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust holding solely
Company subordinated debt securities(2)......... 00.0
Long-term debt:
Mortgage bonds..................................
Pollution control revenue obligations...........
Other...........................................
Less:
Unamortized debt premium and discount net...
Long-term debt due within one year..........
Total long-term debt...................... 00.0
------------
Total capitalization............................ 100.0%
------------
------------
Current liabilities:
Long-term debt..................................
Other...........................................
Total current liabilities.....................
Other liabilities:
Power purchase contract.........................
Deferred income taxes...........................
Investment tax credits..........................
Other...........................................
Total other liabilities.......................
</TABLE>
- ---------
(1) Reflects the formation of the holding company and the transfer of
MidAmerican Capital and Midwest Capital to the holding company by
MidAmerican Energy.
(2) The sole assets of the Series A Issuer will be $ million of %
Series A Debentures due of MidAmerican Energy Company, including
$ million of such Debentures attributable to such Preferred Securities.
ACCOUNTING TREATMENT
For financial reporting purposes, the Issuer will be treated as a subsidiary
of MidAmerican Energy and, accordingly, the accounts of the Issuer will be
included in the consolidated financial statements of MidAmerican Energy. The
Series A Preferred Securities will be presented as a separate line item in the
consolidated balance sheet of MidAmerican Energy and appropriate disclosures
about the Series A Preferred Securities, the Series A Guarantee and the Series A
Debentures will be included in the notes to the consolidated financial
statements. For financial reporting purposes, MidAmerican Energy will record
Distributions payable on the Series A Preferred Securities as an expense.
S-11
<PAGE>
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
GENERAL
The following summary of certain terms and provisions of the Series A
Preferred Securities does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Series A Trust Agreement. The
form of the Series A Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part. See "Description of the Preferred Securities" in the
accompanying Prospectus.
DISTRIBUTIONS
The Series A Preferred Securities represent preferred undivided beneficial
interests in the assets of the Series A Issuer, and the Distributions on each
Series A Preferred Security are payable at the rate set forth on the cover page
of this Prospectus Supplement, payable, except in the event of an extension,
quarterly in arrears on March 1, June 1, September 1 and December 1 of each
year. Distributions in arrears after the quarterly payment date therefor will
bear interest on the amount thereof at the same per annum rate (to the extent
permitted by law, compounded quarterly). The term "Distributions", as used
herein, includes interest payable on overdue Distributions, unless otherwise
stated. Distributions will accrue from the date of original issuance of the
Series A Preferred Securities. The amount of Distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and, for any period shorter than a full month, shall be computed on the basis of
the actual number of days elapsed in such period.
So long as no Event of Default under the Indenture has occurred and is
continuing, MidAmerican Energy has the right at any time and from time to time
to extend the interest payment period on the Series A Debentures for not more
than 20 consecutive quarters, provided that any such Extension Period may not
extend beyond the maturity date or redemption date of the Series A Debentures
and that MidAmerican Energy may not defer any payment of Additional Interest
Attributable to Taxes (as defined in the accompanying Prospectus). During any
Extension Period quarterly distributions on the Series A Preferred Securities
would be deferred by the Series A Issuer and would continue to accrue, and
Holders of Series A Preferred Securities would be required to accrue interest
income for United States Federal income tax purposes. See "Certain Terms of the
Series A Debentures -- Option to Extend Interest Payment Period" and "United
States Federal Income Taxation -- Interest Income and Original Issue Discount."
MidAmerican Energy has no current intention of exercising its right to defer
payments of distributions on the Series A Preferred Securities by extending the
interest payment period on the Series A Debentures. The period from the issuance
of the Series A Debentures until their currently scheduled maturity on ,
20 , includes six consecutive periods of 20 consecutive quarters each, during
which MidAmerican Energy could defer interest on the Series A Debentures if it
paid all accrued interest at the end of each such period of 20 consecutive
quarters. During any such Extension Period MidAmerican Energy may not, and may
not permit any of its subsidiaries to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of MidAmerican Energy's capital stock or (ii) make any
payment of principal of, interest or premium, if any, on, or repay, repurchase
or redeem any debt securities of MidAmerican Energy (including other debentures
issued pursuant to the Indenture) that rank PARI PASSU with or junior in
interest to the Series A Debentures or make any guarantee payments with respect
to any guarantee by MidAmerican Energy of the debt securities of any of its
subsidiaries if such guarantee ranks PARI PASSU with or junior in interest to
the Series A Debentures (other than (a) dividends or distributions in
MidAmerican Energy common stock, (b) payments under any Guarantee, and (c)
purchases of MidAmerican Energy common stock related to the issuance of common
stock under any of MidAmerican Energy's benefit plans for its directors,
officers or employees).
S-12
<PAGE>
TERMINATION OF SERIES A ISSUER AND DISTRIBUTION OF SERIES A DEBENTURES
MidAmerican Energy has the right to, at any time, direct the Property
Trustee to dissolve the Series A Issuer and, in connection therewith, after
satisfaction of creditors of the Series A Issuer, if any, cause the Series A
Debentures to be distributed to the Holders of Series A Trust Securities on a
pro rata basis in liquidation of such Holders' interests in the Trust. See
"Description of Preferred Securities -- Liquidation, Distribution Upon
Termination" in the accompanying Prospectus. If the Series A Debentures are
distributed to Holders of the Series A Preferred Securities as a result of the
termination of the Series A Issuer, the Company will use its best efforts to
list the Series A Preferred Securities on the NYSE or on such other exchange as
the Series A Preferred Securities are then listed.
Under current United States Federal income tax law and interpretations, if
the Series A Issuer is treated as a grantor trust at the time of the
distribution, such a distribution would not be a taxable event to Holders of the
Series A Preferred Securities. See "United States Federal Income Taxation --
Receipt of Series A Debentures or Cash Upon Liquidation of the Series A Trust."
REDEMPTION
MidAmerican Energy has the right to redeem the Series A Debentures (a) on or
after , 200 , in whole or in part, or (b) at any time, in whole but not in
part, upon the occurrence of a Tax Event, subject to the conditions described
under "-- Tax Event Redemption," below.
Upon the repayment of the Series A Debentures, whether at maturity or upon
earlier redemption as provided in the Indenture, the proceeds from such payment
will be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Series A Common Securities and the Series A Preferred Securities,
upon not less than 30 nor more than 60 days' notice, at a redemption price equal
to the aggregate Liquidation Amount plus accumulated and unpaid Distributions to
the Redemption Date. See "Certain Terms of the Series A Debentures --
Redemption."
"Like Amount" means (i) with respect to a redemption of the Series A
Preferred Securities and the Series A Common Securities, Series A Trust
Securities having an aggregate Liquidation Amount equal to the principal amount
of Series A Debentures to be contemporaneously redeemed in accordance with the
Indenture and the proceeds of which shall be used to pay the Redemption Price of
such Series A Trust Securities and (ii) with respect to a distribution of Series
A Debentures to Holders of Series A Trust Securities in connection with a
termination or liquidation of the Series A Issuer, Series A Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Series A Trust
Securities of the Holders to such Series A Debentures are distributed.
TAX EVENT REDEMPTION
If a Tax Event shall occur and be continuing with respect to the Series A
Issuer or the Series A Preferred Securities, MidAmerican Energy has the right to
redeem the Series A Debentures in whole (but not in part) and thereby cause a
mandatory redemption of the Series A Preferred Securities in whole (but not in
part) at a redemption price per Series A Preferred Security equal to the
Liquidation Amount plus accumulated and unpaid Distributions thereon within 90
days following the occurrence of such Tax Event. In the event a Tax Event has
occurred and is continuing and MidAmerican Energy does not elect to terminate
the Series A Issuer (as described in "-- Termination of Series A Issuer and
Distribution of Series A Debentures") or redeem the Series A Debentures (as
described in the preceding sentence), the Series A Preferred Securities will
remain outstanding and Additional Interest Attributable to Taxes (as defined in
the accompanying Prospectus) will be payable on the Series A Debentures.
"Tax Event" means the receipt by the Series A Issuer of an opinion of
counsel (which may be counsel to MidAmerican Energy or an affiliate but not an
employee thereof and which must be acceptable to the Property Trustee)
experienced in such matters to the effect that, as a result of (a) any
S-13
<PAGE>
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or (b)
any amendment to, or change in an interpretation or application of, such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination on or after the date of issuance
of the Series A Preferred Securities), there is more than an insubstantial risk
that interest payable by the Company on the Series A Debentures is not, or
within 90 days of the date of such opinion, will not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes.
LIQUIDATION AMOUNT
The Liquidation Amount payable on the Series A Preferred Securities in the
event of any liquidation of the Series A Issuer is $25 per Series A Preferred
Security, plus accumulated and unpaid distributions unless, in connection with
such liquidation, the Series A Debentures are distributed to the Holders of the
Series A Preferred Securities.
RIGHTS UNDER THE SERIES A GUARANTEE AND THE SERIES A DEBENTURES
The Series A Guarantee will be a full unsecured guarantee with respect to
the Series A Preferred Securities from the time of issuance of the Series A
Preferred Securities, but will not apply to any payment of distributions or
other amounts due to the extent the Series A Issuer does not have sufficient
available funds to pay such distributions or other amounts due (which will occur
in the event that MidAmerican Energy has failed to make a payment of principal
or interest on the Series A Debentures). The obligations of MidAmerican Energy
under the Series A Debentures, the Series A Guarantee and the Back-up
Obligations together provide a full and unconditional guarantee of the Series A
Preferred Securities.
If the Guarantee Trustee fails to enforce the Series A Guarantee, any Holder
of Series A Preferred Securities may institute a legal proceeding directly
against MidAmerican Energy to enforce such Holder's rights under the Series A
Guarantee without first instituting a legal proceeding against the Series A
Issuer, the Guarantee Trustee or any other person or entity. There are no
preconditions to a Holder of Series A Preferred Securities instituting a legal
proceeding directly against MidAmerican Energy to enforce such Holder's rights
under the Series A Guarantee.
If and to the extent MidAmerican Energy defaults on its obligation to pay
amounts payable on the Series A Debentures, the Series A Issuer would lack
sufficient available funds for the payment of distributions on or amounts
payable on redemption of the Series A Trust Securities and, in such event,
Holders of the Series A Preferred Securities would not be able to rely on the
Series A Guarantee for payment of such amounts. Instead, Holders of Series A
Preferred Securities would have the limited enforcement rights described under
"Description of Preferred Securities; Events of Default; Notice" in the
accompanying Prospectus.
CERTAIN TERMS OF THE SERIES A GUARANTEE
GENERAL
The following summary description of the Series A Guarantee sets forth
certain portions of the description of the terms and provisions of the Series A
Guarantee included in the accompanying Prospectus under the heading "Description
of the Guarantees," to which reference is hereby made. This summary of certain
terms and provisions of the Series A Guarantee does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the Series A
Guarantee. The form of Series A Guarantee has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part.
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MidAmerican Energy will guarantee, on an unsecured subordinated basis, the
obligations of the Series A Issuer with respect to the Series A Preferred
Securities; provided that the Series A Guarantee will not apply to any payment
of Distributions if and to the extent that the Series A Issuer does not have
funds sufficient to make such payments. If MidAmerican Energy does not make
interest payments on the Series A Debentures held by the Series A Issuer, it is
expected that the Series A Issuer will not pay Distributions on the Series A
Preferred Securities. The Series A Guarantee will rank subordinate and junior in
right of payment to all liabilities of MidAmerican Energy, including the
Debentures, (except liabilities that may be made PARI PASSU with the Series A
Guarantee by their terms). See "Description of the Guarantees -- Status of the
Guarantees" in the accompanying Prospectus.
EVENTS OF DEFAULT
An event of default under the Series A Guarantee will occur upon the failure
of MidAmerican Energy to perform any of its payment obligations thereunder.
If the Guarantee Trustee fails to enforce the Series A Guarantee, any Holder
of Series A Preferred Securities may institute a legal proceeding directly
against MidAmerican Energy to enforce such holder's rights under the Series A
Guarantee without first instituting a legal proceeding against the Series A
Issuer, the Guarantee Trustee or any other person or entity. The Series A
Guarantee is a guarantee of payment, not of collection.
TERMINATION OF THE SERIES A GUARANTEE
The Series A Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of all Series A Preferred Securities,
the distribution of Series A Debentures to Holders of Series A Preferred
Securities in exchange for all of the Series A Preferred Securities or upon
payment in full of the amounts payable upon liquidation of the Series A Issuer.
CERTAIN TERMS OF THE SERIES A DEBENTURES
GENERAL
The following summary description of the Series A Debentures sets forth
certain portions of the description of the terms and provisions of the
Debentures included in the accompanying Prospectus under the heading,
"Description of the Debentures," to which reference is hereby made. This summary
of certain terms and provisions of the Series A Debentures does not purport to
be complete and is subject to, and qualified in its entirety by reference to,
the Indenture, including the Series A Supplemental Indenture. The forms of
Indenture and Supplemental Indenture (as defined in the accompanying Prospectus)
have been filed as exhibits to the Registration Statement of which this
Prospectus Supplement and the accompanying Prospectus are a part.
Concurrently with the issuance of the Series A Preferred Securities, the
Series A Issuer will invest the proceeds thereof, together with the Series A
Common Securities, in the Series A Debentures issued by MidAmerican Energy to
the Series A Issuer. The Series A Debentures will bear interest at the annual
rate of %, payable quarterly in arrears, except in the event of an
extension, on March 1, June 1, September 1 and December 1 of each year
commencing , 19 . Interest which is accrued and unpaid after the
quarterly payment date therefor will bear additional interest on the amount
thereof (to the extent permitted by law, compounded quarterly) at the rate
specified for the Series A Debentures.
The Series A Debentures will be issued under the Indenture and the Series A
Supplemental Indenture. The Series A Debentures will mature on ,
20 , which date may be extended at any time at the election of MidAmerican
Energy for one or more periods, but in no event to a date later than
, 20 (such date, as it may be extended, the "Maturity Date"),
provided that at the time such election is made and at the time of extension (i)
MidAmerican Energy is not in bankruptcy,
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otherwise insolvent or in liquidation, (ii) MidAmerican Energy is not in default
in the payment of any interest or principal on the Series A Debentures, (iii)
the Series A Issuer is not in arrears in payments of Distributions on the Series
A Preferred Securities and no deferred Distributions are accumulated, (iv) the
Series A Debentures are rated not less than BBB - by Standard & Poor's Ratings
Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any
other nationally recognized statistical rating organization and (v) the extended
Maturity Date is no later than the 49th anniversary of the initial issuance of
the Series A Preferred Securities; provided, however, that, if MidAmerican
Energy exercises its right to liquidate the Series A Issuer and distribute the
Series A Debentures to Holders in exchange for the Series A Preferred
Securities, effective upon such exercise the Maturity Date of the Series A
Debentures may be changed to any date elected by MidAmerican Energy that is (i)
no earlier than the date five years after the initial issuance of the Series A
Preferred Securities and (ii) no later than the date 30 years (plus an extended
term of up to an additional 19 years if the above-referenced conditions are
satisfied) after the date of the initial issuance of the Series A Preferred
Securities. The Series A Debentures will be unsecured and will rank junior and
be subordinate in right of payment to all Senior Indebtedness of MidAmerican
Energy. See "Description of the Debentures -- Subordination" in the accompanying
Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
MidAmerican Energy has the right at any time and from time to time, so long
as no Event of Default under the Indenture has occurred and is continuing, to
extend the interest payment period for the Series A Debentures for up to 20
consecutive quarters; provided that no Extension Period may extend beyond the
maturity of the Series A Debentures and that MidAmerican Energy may not defer
any payment of Additional Interest Attributable to Taxes (which will be payable
on the relevant interest payment date). At the end of the Extension Period,
MidAmerican Energy is obligated to pay all interest then accrued and unpaid
(together with interest thereon to the extent permitted by law). During any such
Extension Period MidAmerican Energy may not, and may not permit any of its
subsidiaries to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
MidAmerican Energy's capital stock or (ii) make any payment of principal of,
interest or premium, if any, on, or repay, repurchase or redeem any debt
securities of MidAmerican Energy (including other debentures issued pursuant to
the Indenture) that rank PARI PASSU with or junior in interest to the Series A
Debentures or make any guarantee payments with respect to any guarantee by
MidAmerican Energy of the debt securities of any of its subsidiaries if such
guarantee ranks PARI PASSU with or junior in interest to the Series A Debentures
(other than (a) dividends or distributions in MidAmerican Energy common stock,
(b) payments under any Guarantee, and (c) purchases of MidAmerican Energy common
stock related to the issuance of common stock under any of MidAmerican Energy's
benefit plans for its directors, officers or employees). This covenant
effectively requires that any Extension Period with respect to the Series A
Debentures also apply to other debentures which may be issued by MidAmerican
Energy pursuant to the Indenture. Prior to the termination of any Extension
Period, MidAmerican Energy may further extend the interest payment period,
provided that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters or extend beyond the
maturity of the Series A Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, MidAmerican Energy may select a
new Extension Period subject to the above requirements.
REDEMPTION
The Series A Debentures are redeemable prior to maturity at the option of
MidAmerican Energy (i) at any time on or after , 200 , in whole
or in part, and (ii) if a Tax Event occurs and is continuing, in whole, but not
in part, in each case at a Redemption Price equal to 100% of the principal
amount thereof plus accrued interest to the Redemption Date. The Series A
Debentures will be subject to optional redemption in whole, but not in part,
upon the termination and liquidation of the Series A Issuer
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pursuant to an order for the dissolution, termination or liquidation of the
Series A Issuer entered by a court of competent jurisdiction. For so long as the
Series A Trust is the holder of all Series A Debentures outstanding, the
proceeds of any redemption described in this paragraph will be used by the
Series A Issuer to redeem the Series A Preferred Securities and the Series A
Common Securities in accordance with their terms.
MidAmerican Energy may not redeem the Series A Debentures in part unless all
accrued and unpaid interest (including any Additional Interest) has been paid in
full on all Series A Debentures outstanding for all quarterly interest periods
on or prior to the Redemption Date.
DISTRIBUTIONS OF SERIES A DEBENTURES
Under certain circumstances involving the termination of the Series A
Issuer, Series A Debentures may be distributed to the Holders of the Series A
Preferred Securities in liquidation of the Series A Issuer, after satisfaction
of all liabilities to creditors of the Series A Issuer as provided by applicable
law. If distributed to Holders of Series A Preferred Securities in liquidation,
the Series A Debentures will initially be issued in the form of one or more
global securities, and DTC, or any successor depositary for the Series A
Preferred Securities, will act as depositary for the Series A Debentures. It is
anticipated that the depositary arrangements for the Series A Debentures, if
distributed, would be substantially identical to those in effect for the Series
A Preferred Securities. Neither MidAmerican Energy, the Debenture Trustee, any
Paying Agent nor any other agent of MidAmerican Energy or the Debenture Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of persons holding Series A Debentures in the
form of a global security for the Series A Debentures or for maintaining,
supervising or reviewing any records relating to such persons.
A global security will be exchangeable for Series A Debentures registered in
the names of persons other than DTC or its nominee only if (i) DTC notifies
MidAmerican Energy that it is unwilling or unable to continue as a depositary
for such global security 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, as amended, at a time when DTC is required to
be so registered to act as such depositary, (ii) MidAmerican Energy in its sole
discretion determines that such global security shall be so exchangeable, or
(iii) there shall have occurred and be continuing an Event of Default with
respect to such global security. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as DTC shall direct. It is expected that
such instructions will be based upon directions received by DTC from its
Participants (as defined in the accompanying Prospectus) with respect to the
ownership of beneficial interests in such global security. In the event that
Series A Debentures are issued in definitive form, such Series A Debentures will
be issued in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below.
Payments on Series A Debentures represented by a global security will be
made to DTC, as the depositary for the Series A Debentures. In the event Series
A Debentures are issued in definitive form, principal and interest will be
payable, the transfer of the Series A Debentures will be registrable, and Series
A Debentures will be exchangeable for Series A Debentures of other denominations
of a like aggregate principal amount, at the corporate office of the Debenture
Trustee in Chicago, Illinois, or at the offices of any paying or transfer agent
appointed by MidAmerican Energy, provided that payment of interest may be made,
at the option of MidAmerican Energy, by check mailed to the addresses of the
persons entitled thereto or by wire transfer. In addition, if the Series A
Debentures are issued in certificated form, the record dates for payment of
interest will be the 15th day preceding the first day of March, June, September
and December, respectively. For a description of DTC and the terms of the
depositary arrangements relating to payments, transfers, voting rights and other
matters, see "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the accompanying Prospectus.
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If the Series A Debentures are distributed to the Holders of Series A
Preferred Securities upon the liquidation of the Series A Issuer, MidAmerican
Energy will use its best efforts to list the Series A Debentures on such stock
exchanges, if any, as the Series A Preferred Securities are then listed.
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of certain of the material United States federal
income tax consequences of the purchase, ownership and disposition of Series A
Preferred Securities. Unless otherwise stated, this summary deals only with
Series A Preferred Securities held as capital assets by persons that purchase
the Series A Preferred Securities upon original issuance. This summary does not
address all the tax consequences that may be relevant to persons that may be
subject to special tax treatment such as, for example, banks, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, persons whose functional
currency is other than the United States dollar, persons who hold Series A
Preferred Securities as part of a straddle, hedging or conversion transaction
or, except as specifically described herein, foreign taxpayers. In addition,
this summary does not address any aspects of state, local, or foreign laws. This
summary is based on the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated thereunder and administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. Each person should consult its tax
advisor as to its particular tax consequences of acquiring, holding, and
disposing of the Series A Preferred Securities, including the tax consequences
under state, local, and foreign laws.
CLASSIFICATION OF THE SERIES A DEBENTURES
It is a condition to the issuance of the Series A Preferred Securities that
Sidley & Austin, acting as counsel to the underwriters in connection with this
offering, render its opinion generally to the effect that, under then current
United States federal income tax law and assuming full compliance with the terms
of the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Series A Debentures held by the
Series A Trust will be classified for United States federal income tax purposes
as indebtedness of the Company. Accordingly, corporate Holders of Series A
Preferred Securities will not be entitled to a dividends-received deduction with
respect to any income recognized with respect to the Series A Preferred
Securities.
CLASSIFICATION OF THE SERIES A TRUST
It is a condition to the issuance of the Series A Preferred Securities that
Sidley & Austin, acting as counsel to the underwriters in connection with this
offering, render its opinion generally to the effect that, under then current
United Stated federal income tax law and assuming full compliance with the terms
of the Series A Trust Agreement and the Indenture (and certain other documents),
and based on certain facts and assumptions contained in such opinion, the Series
A Trust will be classified for United States federal income tax purposes as a
grantor trust and not as an association taxable as a corporation. Accordingly,
for United States federal income tax purposes, each Holder of Series A Preferred
Securities will generally be considered the owner of an undivided interest in
the Series A Debentures, and each Holder will be required to include in its
gross income any interest or original issue discount ("OID") accrued with
respect to its allocable share of those Series A Debentures. Investors should be
aware that the foregoing opinions of Sidley & Austin have not been confirmed by
the Internal Revenue Service (the "Service"), by private ruling or otherwise,
and are not binding on the Service or the courts.
The Company, the Series A Trust, and, by its acceptance of a Series A
Preferred Security or a beneficial interest therein, the Holder of, and any
person that acquires a beneficial interest in, such
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Series A Preferred Security agree to treat such Series A Preferred Security and
the Series A Debentures consistently with the foregoing opinions.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Unless the Series A Debentures are issued with OID, stated interest on the
Series A Debentures will be taxable to a Holder as ordinary income at the time
such interest is paid (if the Holder uses the cash method of accounting for tax
purposes) or accrued (if the Holder uses the accrual method of accounting for
tax purposes). Under regulations of the U.S. Treasury Department, the Series A
Debentures will not be considered issued with OID if the likelihood of
MidAmerican Energy exercising its right to defer interest (as described under
"Certain Terms of the Series A Debentures -- Option to Extend Interest Payment
Period") is considered a "remote contingency" at the time the Series A
Debentures are issued. MidAmerican Energy believes that such likelihood is
remote, because exercise of its right to defer interest would prevent
MidAmerican Energy from declaring dividends on its capital stock. Accordingly,
MidAmerican Energy intends to take the position that the Series A Debentures
will not be issued with OID. However, the definition of the term "remote" in
such regulations has not yet been addressed in any rulings or other
interpretations by the Service, and it is possible that the Service would assert
that the Series A Debentures were issued with OID.
If, notwithstanding MidAmerican Energy's current belief, it does exercise
its right to defer interest payments, the Series A Debentures would be treated
as if they were retired and then reissue with OID at such time. In such case,
the amount of OID would generally be equal to the interest payable thereafter.
If the Series A Debentures were treated as having been issued or reissued
with OID (either because MidAmerican Energy exercises its right to defer
interest payments or because the likelihood of exercise of such right is not
considered a remote contingency at the time of issuance), Holders would include
interest in income on an economic accrual basis, regardless of their method of
tax accounting. The amount of OID that accrued in any quarter would
approximately equal the amount of interest that accrued on the Series A
Debentures in that quarter at the stated interest rate. If interest payments
were received later than the taxable year in which the interest accrued, OID
treatment would have the effect of accelerating the reporting of interest income
for Holders who otherwise use a cash method of tax reporting.
MARKET DISCOUNT AND PREMIUM
Holders of Series A Preferred Securities other than Holders that purchased
the Series A Preferred Securities upon original issuance may be considered to
have acquired their undivided interest in the Series A Debentures with market
discount, amortizable bond premium or acquisition premium as such terms are
defined for the United States federal income tax purposes. Such Holders are
advised to consult their tax advisors as to the income tax consequences of the
acquisition, ownership and disposition of the Series A Preferred Securities.
RECEIPT OF SERIES A DEBENTURES OR CASH UPON LIQUIDATION OF THE SERIES A TRUST
Under certain circumstances, as described under the caption "Certain Terms
of the Series A Preferred Securities -- Termination of Series A Issuer and
Distribution of Series A Debentures" and "Certain Terms of the Series A
Debentures -- Distributions of Series A Debentures," Series A Debentures may be
distributed to Holders in exchange for the Series A Preferred Securities and in
liquidation of the Series A Trust. Under current United States federal income
tax law, such a distribution would be treated as a non-taxable event to each
Holder, and each Holder would have an aggregate tax basis in the Series A
Debentures equal to such Holder's aggregate tax basis in its Series A Preferred
Securities. A Holder's holding period in the Series A Debentures so received in
liquidation of the Series A Trust would include the period during which the
Series A Preferred Securities were held by such Holder.
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Under certain circumstances described herein (see "Certain Terms of the
Series A Preferred Securities -- Redemption" and "Certain Terms of the Series A
Debentures -- Distributions of Series A Debentures,"), the Series A Debentures
may be redeemed for cash and the proceeds of such redemption distributed to
Holders in redemption of their Series A Preferred Securities. Under current
United States federal income tax law, such a redemption would be a taxable
event, and a Holder would recognize gain or loss as if it sold such redeemed
Series A Preferred Securities for cash. See "Sales of Series A Preferred
Securities" below.
SALES OF SERIES A PREFERRED SECURITIES
A Holder that sells Series A Preferred Securities will recognize gain or
loss equal to the difference between such Holder's adjusted tax basis in the
Series A Preferred Securities and the amount realized on the sale of such Series
A Preferred Securities. A Holder's adjusted tax basis in the Series A Preferred
Securities will generally be the initial purchase price increased by OID, if
any, previously includible in such Holder's gross income to the date of
disposition and decreased by payments received on the Series A Preferred
Securities. Such gain or loss will generally be a capital gain or loss and will
generally be a long-term capital gain or loss if the Series A Preferred
Securities have been held for more than one year.
The Series A Preferred Securities may trade at prices that do not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Series A Debentures. A Holder that uses the accrual method of accounting for tax
purposes (and a cash method Holder, if the Series A Debentures are deemed to
have been issued with OID) and that disposes of Series A Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Series A Debentures through the date
of disposition in income as ordinary income, and to add such amount to such
Holder's adjusted tax basis in the pro rata share of the underlying Series A
Debentures deemed disposed of. To the extent that the selling price is less than
the Holder's adjusted tax basis (so determined), a Holder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a nonresident alien individual, a foreign
partnership, or a nonresident fiduciary of a foreign estate or trust. This
discussion assumes that income with respect to the Series A Preferred Securities
is not effectively connected with a trade or business in the United States in
which the United States Alien Holder is engaged.
Under current United States federal income tax law, and subject to the
discussion of backup withholding in the following section: (1) payments with
respect to principal and interest (including any OID) by the Series A Trust or
any of its paying agents to any Holder of a Series A Preferred Security that is
a United States Alien Holder will not be subject to withholding of United States
federal income tax; provided that, in the case of interest, (a) the beneficial
owner of the Series A Preferred Security does not actually or constructively own
10% of more of the total combined voting power of all classes of stock of the
Company entitled to vote, (b) the beneficial owner of the Series A Preferred
Security is not a controlled foreign corporation that is related, directly or
indirectly, to the Company through stock ownership, and (c) either (A) the
beneficial owner of the Series A Preferred Security certifies to the Series A
Trust or its agent, under penalties of perjury, that it is a United States Alien
Holder and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Series A Preferred Securities in such capacity,
certifies to the Series A Trust or its agent, under penalties of perjury, that
such statement has been received from the beneficial owner by it or by a
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Financial Institution between it and the beneficial owner and furnishes the
Series A Trust or its agent with a copy thereof; and (2) a United States Alien
Holder of a Series A Preferred Security will generally not be subject to
withholding of United States federal income tax on any gain realized upon the
sale or other disposition of a Series A Preferred Security.
On April 15, 1996, proposed Treasury Regulations (the "1996 Proposed
Regulations") were issued which, if adopted in final form, could affect the
United States taxation of United States Alien Holders. The 1996 Proposed
Regulations are generally proposed to be effective for payments after December
31, 1997, regardless of the issue date of the instrument with respect to which
such payments are made, subject to certain transition rules. It cannot be
predicted at this time whether the 1996 Proposed Regulations will become
effective as proposed or what, if any, modifications may be made to them.
Prospective investors are urged to consult their tax advisors with respect to
the effect the 1996 Proposed Regulations may have if adopted.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to interest (including OID) and principal payments made to,
and to the proceeds of sales before maturity by, certain non-corporate persons.
In addition, a 31% backup withholding tax applies if a non-corporate person (i)
fails to furnish such person's Taxpayer Identification Number ("TIN") (which,
for an individual, is his or her Social Security Number) to the payor in the
manner required, (ii) furnishes an incorrect TIN and the payor is so notified by
the Service, (iii) is notified by the Service that such person has failed
properly to report payments of interest and dividends or (iv) in certain
circumstances, fails to certify, under penalties of perjury, that such person
has not been notified by the Service that such person is subject to backup
withholding for failure properly to report interest and dividend payments.
Backup withholding does not apply with respect to payments made to certain
exempt recipients, including corporations, tax-exempt organizations, qualified
pension and profit-sharing trusts and individual retirement accounts, provided
that they establish entitlement to an exemption.
In the case of a United States Alien Holder, backup withholding and
information reporting do not apply to payments of principal and interest with
respect to a Series A Preferred Security with respect to which such Holder has
provided the required certification under penalties of perjury that such Holder
is a United States Alien Holder or has otherwise established an exemption,
provided that certain conditions are satisfied.
In general, (i) principal or interest payments with respect to a Series A
Preferred Security collected outside the United States by a foreign office of a
custodian, nominee or other agent acting on behalf of a beneficial owner of a
Series A Preferred Security and (ii) payments on the sale, exchange or
retirement of a Series A Preferred Security to or through a foreign office of a
broker are not subject to backup withholding or information reporting. However,
if such custodian, nominee, agent or broker is a United States person, a
controlled foreign corporation for United States tax purposes, or a foreign
person 50% of more of whose gross income is effectively connected with the
conduct of a United States trade or business for a specified three-year period,
such custodian, nominee, agent or broker may be subject to certain information
reporting (but not backup withholding) requirements with respect to such
payments.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a person under the backup withholding rules are
allowed as a refund or a credit against such person's United States federal
income tax, provided that the required information is furnished to the Service.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's budget proposal, was released. The Bill
would, among other things, generally deny interest deductions for United States
federal income tax purposes of interest on an instrument, issued by
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a corporation, that has a maximum weighted average maturity of more than 40
years. The Bill would also generally deny interest deductions for interest on an
instrument, issued by a corporation, that has a maximum term of more than 20
years and that is not shown as indebtedness on the separate balance sheet of the
issuer, or where the instrument is issued to a related party (other than a
corporation), where the holder or some other related party issues a related
instrument that is not shown as indebtedness on the issuer's consolidated
balance sheet. For purposes of determining the weighted average maturity or the
term of an instrument, any right to extend would be treated as exercised. The
above-described provisions of the Bill were proposed to be effective generally
for instruments issued on or after December 7, 1995. If either provision were to
apply to the Series A Debentures, the Company would be unable to deduct interest
on the Series A Debentures for United States federal income tax purposes.
However, on March 29, 1996, the Chairmen of the Senate Finance and House Ways
and Means Committees issued a joint statement to the effect that it was their
intention that the effective date of the President's legislative proposals, if
adopted, will be no earlier than the date of appropriate Congressional action.
The Company believes that, under current law, it will be able to deduct interest
on the Series A Debentures. There can be no assurance, however, that current or
future legislative proposals or final legislation will not affect the ability of
the Company to deduct interest on the Series A Debentures. Such a change could
give rise to a Tax Event, which may permit the Company to cause a redemption of
the Series A Preferred Securities. See "Certain Terms of the Series A Preferred
Securities -- Tax Event Redemption." Such a tax law change would not alter the
United States federal income tax consequences of the purchase, ownership and
disposition of Series A Preferred Securities to Holders thereof.
S-22
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
MidAmerican Energy and the Series A Issuer have agreed that the Series A Issuer
will sell to each of the Underwriters named below, and each of such
Underwriters, for whom , , ,
and are acting as representatives (the
"Representatives"), has severally agreed to purchase from the Series A Issuer,
the respective number of Series A Preferred Securities set forth opposite its
name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
PREFERRED
UNDERWRITER SECURITIES
- --------------------------------------------------------------------------------- -----------
<S> <C>
-----------
Total....................................................................
-----------
-----------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus Supplement and in part to certain securities
dealers at such price less a concession of $ per Series A Preferred
Security. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per Series A Preferred Security to certain brokers and
dealers. After the Series A Preferred Securities are released for sale to the
public, the offering price and other selling terms may from time to time be
varied by the Representatives.
In view of the fact that the proceeds from the sale of the Series A
Preferred Securities will be used to purchase the Series A Debentures issued by
MidAmerican Energy, the Underwriting Agreement provides that MidAmerican Energy
will pay as Underwriters' Compensation for the Underwriters arranging the
investment therein of such proceeds an amount of $ per Series A Preferred
Security for the accounts of the several Underwriters.
MidAmerican Energy and the Series A Issuer have agreed that, during the
period beginning from the date of the Underwriting Agreement and continuing to
and including the earlier of (i) the date on which the distribution of the
Series A Preferred Securities ceases, as determined by the Representatives, and
(ii) 30 days after the issuance of the Series A Preferred Securities, they will
not offer, sell, contract to sell or otherwise dispose of any securities, any
other beneficial interests in the Series A Issuer or any preferred securities or
interests of any other issuer, as the case may be, that are substantially
similar to the Series A Preferred Securities (including any guarantee of such
securities or interests) or any securities that are convertible into or
exchangeable for, or that represent the right to receive, any such securities or
other interests, without the prior written consent of the Representatives,
except for the Series A Preferred Securities, the Series A Common Securities and
the Series A Guarantee.
S-23
<PAGE>
Prior to this offering, there has been no public market for the Series A
Preferred Securities. Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange under the symbol " ". In order to
meet one of the requirements for listing the Series A Preferred Securities on
the New York Stock Exchange, the Underwriters will undertake to sell lots of 100
or more Series A Preferred Securities to a minimum of 400 beneficial holders.
Trading of the Series A Preferred Securities on the New York Stock Exchange is
expected to commence within a thirty-day period after the initial delivery of
the Series A Preferred Securities. The Representatives have advised MidAmerican
Energy that they intend to make a market in the Series A Preferred Securities
prior to the commencement of trading on the New York Stock Exchange, but are not
obligated to do so and may discontinue market-making at any time without notice.
No assurance can be given as to the liquidity of the trading market for the
Series A Preferred Securities.
MidAmerican Energy and the Series A Issuer have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, services for MidAmerican Energy in
the ordinary course of business, for which such Underwriters or their affiliates
have received or will receive customary fees and commissions.
S-24
<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 BE 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>
SUBJECT TO COMPLETION, DATED , 1996
[LOGO] MIDAMERICAN ENERGY FINANCING I
MIDAMERICAN ENERGY FINANCING II
PREFERRED SECURITIES
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED AS SET FORTH HEREIN BY
MIDAMERICAN ENERGY COMPANY
----------
MidAmerican Energy Financing I and MidAmerican Energy Financing II, each a
statutory business trust formed under the laws of the State of Delaware (each,
an "Issuer" and, collectively, the "Issuers") may severally offer, from time to
time, their respective preferred securities (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of each
Issuer. MidAmerican Energy Company, an Iowa corporation ("MidAmerican Energy" or
the "Company"), will be the sole owner of the undivided common beneficial
interests in such assets represented by common securities (the "Common
Securities", together with the Preferred Securities herein referred to as the
"Trust Securities") of each Issuer. The payment of periodic cash distributions
("Distributions") with respect to the Preferred Securities and payments on
liquidation or redemption with respect to such Preferred Securities will be each
guaranteed by MidAmerican Energy in the case of each Issuer (a "Guarantee"), in
each case only out of funds held by such Issuer. Concurrently with the issuance
by an Issuer of its Preferred Securities, such Issuer will invest the proceeds
thereof in MidAmerican Energy's deferrable interest subordinated debentures (the
"Debentures") having terms corresponding to such Issuer's Preferred Securities.
The Debentures will be unsecured and subordinate indebtedness of MidAmerican
Energy issued under an Indenture dated as of , 1996 between the
Company and The First National Bank of Chicago, as Trustee (such Indenture, as
the same may be supplemented or amended from time to time, herein referred to as
the "Indenture"). The Debentures held by each Issuer will be its sole asset, and
the interest and payments of principal on such Debentures will be its only
revenues. The Debentures purchased by an Issuer may be subsequently distributed
pro rata to holders of Preferred Securities and Common Securities in connection
with the dissolution of such Issuer. See "Description of Preferred Securities --
Termination of an Issuer and Distribution of Debentures". In addition, upon the
occurrence of certain events, MidAmerican Energy may redeem the Debentures and
cause the redemption of the Preferred Securities. See "Description of the
Preferred Securities -- Redemption."
The Preferred Securities may be offered in amounts, at prices and on terms
to be determined at the time of offering, provided, however, that the aggregate
initial public offering price of all Preferred Securities issued pursuant to the
Registration Statement of which this Prospectus forms a part will not exceed
$500,000,000, subject to reduction in the event of sales of certain other
securities included in such Registration Statement. Certain specific terms of
each Issuer's Preferred Securities in respect of which this Prospectus is being
delivered will be set forth in an accompanying Prospectus Supplement, including,
where applicable and to the extent not set forth herein, the identity of the
Issuer, the specific title, the aggregate amount, the distribution rate (or the
method for determining such rate), the stated liquidation preference, redemption
provisions, other rights, the initial public offering price and any other
special terms, as well as any planned listing on a securities exchange, of such
Preferred Securities.
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. See "Plan of
Distribution." The names of any of the underwriters or dealers involved in the
sale of the Preferred Securities in respect of which this Prospectus is being
delivered, the number of Preferred Securities to be purchased by any such
underwriters or dealers, any applicable commissions or discounts and the net
proceeds to each Issuer will be set forth in the applicable Prospectus
Supplement.
Each Prospectus Supplement will also contain information concerning certain
United States federal income tax considerations applicable to the Preferred
Securities offered thereby.
----------------
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 date of this Prospectus is , 1996.
<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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Company and the
Issuers have filed with the Commission a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Preferred Securities offered hereby and
certain other securities. This Prospectus does not contain all of the
information set forth in the Registration Statement and reference is hereby made
to the Registration Statement and the exhibits thereto for further information
with respect to the Company and the Preferred Securities offered hereby. Such
reports, proxy statements, Registration Statement and exhibits and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at its Northeast Regional Office located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Midwest Regional Office located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549. The Company is subject to the electronic filing requirements of the
Commission. Accordingly, pursuant to the rules and regulations of the
Commission, certain documents, including annual and quarterly reports and proxy
statements, filed by the Company with the Commission have been filed
electronically. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants (including the Company) that file electronically with the
Commission at (http:// www.sec.gov). Certain of the Company's securities are
listed on the New York Stock Exchange and such reports, proxy statements and
other information may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
No separate financial statements of the Issuers are included herein. The
Company considers that such financial statements would not be material to
holders of the Preferred Securities because: (i) all of the Common Securities of
the Issuers are owned by MidAmerican Energy, a reporting company under the
Exchange Act; (ii) the Issuers have no independent operations, but exist for the
sole purpose of issuing the Trust Securities and holding the Debentures as trust
assets; and (iii) the obligations of the Issuers under the Preferred Securities,
to the extent funds are available therefor, are fully and unconditionally
guaranteed to the extent set forth herein by MidAmerican Energy.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report of the Company on Form 10-K, as amended, for the year
ended December 31, 1995, the Quarterly Reports of the Company on Form 10-Q for
the period ended March 31, 1996 as amended, and for the periods ended June 30,
1996 and September 30, 1996, and the Current Reports of the Company on Form 8-K
reporting events occurring on February 20, 1996, April 25, 1996, May 28, 1996
and October 17, 1996, are incorporated by reference into this Prospectus. All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Preferred Securities contemplated hereby
shall be deemed to be incorporated by reference into this Prospectus and to be
made a part hereof from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
the Registration Statement and this Prospectus to the extent that a statement
contained herein, in the applicable Prospectus Supplement or in any subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
2
<PAGE>
Copies of the above documents (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents)
may be obtained upon written or oral request without charge from the Company,
666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657 (telephone number
(515) 281-2268), Attention: Investor Relations.
----------------
The Company is incorporated in Iowa. Its executive offices are located at
666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657 (telephone number
(515) 242-4300).
THE ISSUERS
GENERAL
Each of the Issuers is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by MidAmerican Energy as the
depositor of each Issuer (the "Depositor"), and the Issuer Trustees (as defined
herein) and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on October 29, 1996. Each such trust agreement will be
amended and restated in its entirety (as so amended and restated, a "Trust
Agreement" and, collectively, the "Trust Agreements") substantially in the form
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. Each Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
The Issuers exist for the exclusive purpose of (i) issuing Trust Securities
representing undivided beneficial interests in the Issuers, (ii) holding
Debentures as Trust Assets and (iii) engaging only in those other activities
necessary or incidental thereto. All of the Common Securities will be owned by
MidAmerican Energy. The Common Securities will rank PARI PASSU, and payments
will be made thereon pro rata, with the Preferred Securities, except that upon
the occurrence and during the continuance of an Event of Default under the
Indenture (see "Description of the Debentures -- Events of Default"), the rights
of the holders of the corresponding Common Securities to payment in respect of
distributions and payments upon liquidation, redemption or other acquisition of
Common Securities will be subordinated to the rights of the holders of Preferred
Securities. MidAmerican Energy will acquire Common Securities of each Issuer in
an aggregate equal to 3% of the total capital of each Issuer. Each Issuer will
have a term of approximately 30 to 49 years, as specified in the applicable
Prospectus Supplement, but may terminate earlier as provided in the Trust
Agreement with respect to such Issuer. Each Issuer's business and affairs are
conducted by its trustees, each appointed by MidAmerican Energy as holder of the
Common Securities: First Chicago Delaware Inc. (the "Delaware Trustee"), The
First National Bank of Chicago (the "Property Trustee") and three individual
trustees (the "Administrative Trustees") who are employees or officers of or
affiliated with MidAmerican Energy (collectively, the "Issuer Trustees").
MIDAMERICAN ENERGY COMPANY
GENERAL
MidAmerican Energy was formed on July 1, 1995 through the merger (the
"Merger") of Iowa-Illinois Gas and Electric Company ("Iowa-Illinois"), Midwest
Resources Inc. ("Midwest Resources") and Midwest Power Systems Inc. ("Midwest
Power") with and into MidAmerican Energy. MidAmerican Energy is a combination
electric and natural gas public utility engaged in the generation, transmission,
distribution and sale of electric energy in Illinois, Iowa and South Dakota, and
the purchase, distribution, transportation and sale of natural gas in those
states and in the state of Nebraska.
3
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Trust Securities of each Issuer will be created pursuant to the terms of
its Trust Agreements. Each Issuer's Preferred Securities will represent
undivided beneficial interests in the assets of such Issuer and entitle the
owners (the "Holders") thereof to a preference over such Issuer's Common
Securities in certain circumstances with respect to Distributions and amounts
payable on redemption or liquidation, as well as other benefits as described in
the applicable Trust Agreement. The following summaries of certain provisions of
the Trust Agreements do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, the provisions of the Trust
Agreements, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular sections or defined terms of the Trust
Agreements are referred to, such sections or defined terms are incorporated
herein by reference. The Trust Agreements have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
GENERAL
All of the Common Securities are owned by MidAmerican Energy. The Common
Securities of each Issuer will rank PARI PASSU, and payments will be made
thereon pro rata, with the Preferred Securities of each Issuer based on the
liquidation preference amount of its Trust Securities, except as described
herein under "-- Subordination of Common Securities." (Section 4.03). The
Debentures will be owned by the Issuers and held by the Property Trustee in
trust for the benefit of the Holders of the Trust Securities. (Section 2.09).
The Debentures and the Guarantees, together with the obligations of MidAmerican
Energy with respect to the Preferred Securities under the Indenture, the Trust
Agreements and the Expense Agreements constitute full and unconditional
guarantees of the Preferred Securities by MidAmerican Energy.
DISTRIBUTIONS
The Distributions payable on the Preferred Securities will be fixed at the
rate per annum set forth in the applicable Prospectus Supplement. Distributions
that are in arrears will bear interest on the amount thereof at same per annum
rate (to the extent permitted by applicable law, compounded quarterly). The term
"Distributions" as used herein includes interest payable on overdue
Distributions, unless otherwise stated. The amount of Distributions payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a full month, on the basis of the actual
number of days elapsed. (Section 4.01(b)).
Distributions on the Preferred Securities will be cumulative, will accrue
from the date of initial issuance thereof, and will be payable quarterly in
arrears, on March 1, June 1, September 1 and December 1 of each year, except as
otherwise described below. Such Distributions will originally accrue from, and
include, the date of initial issuance and will accrue to, and include, the first
Distribution Date, and thereafter will accrue from, and exclude, the last
Distribution Date through which Distributions have been paid. In the event that
any date on which Distributions are otherwise payable on the Preferred
Securities is not a Business Day, payment of the Distribution payable on such
date will be made on the next succeeding Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution will be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). (Section 4.01(a)). A
Business Day is used herein to mean any day other than a Saturday or a Sunday or
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Property Trustee or the Debenture Trustee (as
defined herein) is closed for business.
4
<PAGE>
MidAmerican Energy will have the right under the Indenture, as supplemented
by a Supplemental Indenture relating to a series of Debentures (a "Supplemental
Indenture"), to extend the interest payment period at any time or from time to
time on each series of Debentures to a period ("Extension Period") not exceeding
20 consecutive quarters. In the event that MidAmerican Energy exercises this
right, during such Extension Period quarterly Distributions on the corresponding
Preferred Securities will be deferred (and the amount of Distributions to which
holders of such Preferred Securities are entitled will accumulate additional
Distributions thereon at the rate per annum set forth in the applicable
Prospectus Supplement, compounded quarterly from the relevant Distribution Date
for such Distributions); provided, however, that distributions attributable to
payments of Additional Interest Attributable to Taxes (as hereinafter defined),
if any, on such Debentures will not be deferred and will be payable on the
relevant interest payment date. During any such Extension Period MidAmerican
Energy may not, and may not permit any of its subsidiaries to, (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of MidAmerican Energy's capital stock
or (ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of MidAmerican Energy (including other
Debentures) that rank PARI PASSU with or junior in interest to the series of
Debentures to which such Extension Period applies, or make any guarantee
payments with respect to any guarantee by MidAmerican Energy of the debt
securities of any of its subsidiaries if such guarantee ranks PARI PASSU or
junior in interest to such series of Debentures (other than (a) dividends or
distributions in common stock of MidAmerican Energy, (b) payments under any
Guarantee, and (c) purchases of common stock related to the issuance of common
stock under any of MidAmerican Energy's benefit plans for its directors,
officers or employees). This covenant effectively requires that any Extension
Period with respect to any series of Debentures also apply to all other series
of Debentures. Prior to the termination of any such Extension Period,
MidAmerican Energy may further extend the interest payment period, provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters and that such Extension Period
may not extend beyond the maturity or the redemption date of the series of the
Debentures in question. Upon the termination of any Extension Period and the
payment of all amounts then due, MidAmerican Energy may select a new Extension
Period, subject to the foregoing requirements. See "Description of the
Debentures -- Interest" and "-- Option to Extend Interest Payment Period."
It is anticipated that the income of each Issuer available for Distributions
to the Holders of the Preferred Securities of such Issuer will be limited to
payments on the Debentures to be purchased by such Issuer with the proceeds of
the issuance and sale of its Trust Securities. See "Description of the
Debentures." If MidAmerican Energy does not make interest payments on the such
Debentures, the Property Trustee will not have funds available to pay
Distributions on such Trust Securities. The payment of Distributions (if and to
the extent an Issuer has sufficient funds available for the payment of such
Distributions) is guaranteed by MidAmerican Energy as set forth herein under
"Description of the Guarantees."
Distributions on the Preferred Securities will be payable to the Holders
thereof as they appear on the register of the applicable Issuer on the relevant
record dates, which as long as the Preferred Securities remain in book-entry
form, will be one Business Day prior to the relevant Distribution Date. Subject
to any applicable laws and regulations and the provision of the applicable Trust
Agreement, each such payment will be made as described under "-- Book-Entry Only
Issuance -- The Depository Trust Company." In the event any Preferred Securities
are not in book-entry form, the relevant record date for such Preferred
Securities will be the date 15 days prior to the relevant Distribution Date or
if such date is not a Business Day, the next succeeding Business Day. (Section
4.01(d)).
REDEMPTION
MANDATORY REDEMPTION. Upon the repayment of any series of the Debentures,
whether at maturity or upon earlier redemption as provided in the Indenture, the
proceeds from such repayment will be
5
<PAGE>
applied by the Property Trustee to redeem a Like Amount (as defined herein) of
corresponding Trust Securities, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to the aggregate Liquidation Amount (as
defined herein) plus accumulated and unpaid Distributions thereon to the
Redemption Date (as defined herein). See "Description of the Debentures --
Optional Redemption."
"Like Amount" means (i) with respect to a redemption of any series of
Preferred Securities, Preferred Securities of such series having a Liquidation
Amount equal to that portion of the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Indenture and the proceeds of
which will be used to pay Liquidation Amount (the "Redemption Price") of such
Preferred Securities plus accumulated and unpaid Distributions to the date of
such payment, and (ii) with respect to a distribution of Debentures to Holders
of any series of Preferred Securities in connection with the termination or
liquidation of the related Issuer, Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of the Holder to whom such
Debentures are distributed. "Liquidation Amount" means the stated amount of $25
per Preferred Security and $25 per Common Security.
OPTIONAL REDEMPTION. MidAmerican Energy will have the right to redeem the
Debentures of any particular series in whole or in part, on or after a date to
be specified in the Prospectus Supplement with respect to such series of
Debentures and thereby cause a mandatory redemption of the corresponding
Preferred Securities as described above.
TAX EVENT REDEMPTION. If a Tax Event shall occur and be continuing at any
time with respect to an Issuer or the Preferred Securities of such Issuer,
MidAmerican Energy has the right to redeem the corresponding Debentures in
whole, but not in part, and thereby cause a mandatory redemption of such
Preferred Securities at a redemption price equal to the aggregate Liquidation
Amount of such Preferred Securities plus accumulated and unpaid Distributions
thereon within 90 days following the occurrence of such Special Event.
"Tax Event" means the receipt by the Issuer of an opinion of counsel (which
may be counsel to the Company or an affiliate but not an employee thereof and
which must be acceptable to the Property Trustee) experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or (b) any amendment to, or change in an
interpretation or application of, such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after the date of issuance of the Preferred
Securities), there is more than an insubstantial risk that interest payable by
the Company on the Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Company, in whole or in part, for United
States federal income tax purposes.
REDEMPTION PROCEDURES
MidAmerican Energy may not redeem fewer than all of a particular series of
Debentures then outstanding and an Issuer may not redeem fewer than all of the
corresponding series of the outstanding Preferred Securities then outstanding
(i) unless all accrued and unpaid Distributions have been paid on all such
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption or (ii) if a partial redemption of such
Preferred Securities would result in the delisting of such Preferred Securities
by any national securities exchange on which such Preferred Securities are then
listed.
Preferred Securities redeemed on each date selected for redemption (the
"Redemption Date") will be redeemed at the Redemption Price with the proceeds
from the contemporaneous redemption of the corresponding Debentures. Redemptions
of an Issuer's Preferred Securities will be made and the Redemption Price will
be deemed payable on each Redemption Date only to the extent that such Issuer
6
<PAGE>
has funds available for the payment of such Redemption Price. (Section 4.02(c)).
See also "Subordination of Common Securities."
If an Issuer gives a notice of redemption in respect of a particular series
of Preferred Securities (which notice will be irrevocable), then, on or before
the Redemption Date, such Issuer, to the extent funds are available, will, so
long as such Preferred Securities are in book-entry form, irrevocably deposit
with DTC funds sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the Redemption Price to the
beneficial Holders of such Preferred Securities. If such Preferred Securities
are no longer in book-entry form, such Issuer, to the extent funds are
available, will irrevocably deposit with the paying agent for such Preferred
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions and authority to pay the Redemption
Price to the Holders thereof upon surrender of their certificates evidencing
such Preferred Securities. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Preferred Securities called for
redemption shall be payable to the Holders of such Preferred Securities on the
relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then on the
Redemption Date, all rights of Holders of such Preferred Securities so called
for redemption will cease, except the right of the Holders of such Preferred
Securities to receive the Redemption Price, but without interest thereon, and
such Preferred Securities will cease to be outstanding. In the event that any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the amount payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay). In the event that payment of the Redemption Price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the applicable Issuer or by MidAmerican Energy
pursuant to the corresponding Guarantee described herein under "Description of
the Guarantees", Distributions on such Preferred Securities will continue to
accrue at the then applicable rate, from the original Redemption Date to the
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities law), MidAmerican Energy or its subsidiaries may at any time
and from time to time purchase outstanding Preferred Securities by tender, in
the open market or by private agreement.
If less than all the outstanding Trust Securities of an Issuer are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of such
securities to be redeemed will be allocated on a pro rata basis to the Common
Securities and the Preferred Securities of such Issuer. The particular Preferred
Securities to be redeemed will be selected not more than 60 days prior to the
Redemption Date by the Property Trustee from the outstanding Preferred
Securities of such series not previously called for redemption, by such method
as the Property Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of Preferred Securities in Liquidation Amounts
equal to $25 or integral multiples thereof. The Property Trustee will promptly
notify the security registrar in writing of the Preferred Securities selected
for redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
each Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of a series of Preferred Securities will relate, in
the case of any Preferred Securities of such series redeemed or to be redeemed
only in part, to the portion of the Liquidation Amount of Preferred Securities
of such series that has been or is to be redeemed. (Section 4.02(f)).
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, Trust Securities
of an Issuer, will be made pro rata based on the Liquidation Amount of the
Common Securities and Preferred Securities comprising such Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date an Event
of Default under the Indenture (as described below, see "Description of the
Debentures -- Events
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of Default") shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any Common Security corresponding
thereto, and no other payment on account of the redemption, liquidation or other
acquisition of the corresponding Common Securities, will be made unless payment
in full in cash of all accrued and unpaid Distributions on all outstanding
Preferred Securities of such series for all distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price, the full
amount of such Redemption Price on all such outstanding Preferred Securities,
shall have been made or provided for, and all funds available to the Property
Trustee will first be applied to the payment in full, in cash, of all
Distributions on, or Redemption Price of, Preferred Securities then due and
payable. (Section 4.03(a)).
In the case of any default under a Trust Agreement resulting from an Event
of Default under the Indenture, MidAmerican Energy as Holder of the Common
Securities issued under such Trust Agreement will be deemed to have waived any
such default under such Trust Agreement until the effect of all such defaults
with respect to the Preferred Securities issued under such Trust Agreement have
been cured, waived or otherwise eliminated. Until any such default under such
Trust Agreement with respect to such Preferred Securities has been so cured,
waived or otherwise eliminated, the Property Trustee will act solely on behalf
of the Holders of such Preferred Securities and not on behalf of the holders of
such Common Securities, and only Holders of such Preferred Securities will have
the right to direct the Property Trustee to act on their behalf. (Section
4.03(b)).
TERMINATION OF AN ISSUER AND DISTRIBUTION OF DEBENTURES
MidAmerican Energy has the right to, at any time, direct the Property
Trustee to dissolve an Issuer and, in connection therewith, after satisfaction
of liabilities owed by such Issuer to the Creditors, if any, cause the
Debentures held by such Issuer to be distributed to the Holders of the Trust
Securities of such Issuer on a pro rata basis in liquidation of such Holders'
interests in the Trust. (See "-- Liquidation, Distribution Upon Termination".
There can be no assurance as to the market price for the Debentures which
may be distributed in exchange for Preferred Securities if a termination and
liquidation of an Issuer were to occur. Accordingly, the Debentures which an
investor may subsequently receive on termination and liquidation of an Issuer
may trade at a discount to the price of the Preferred Securities exchanged.
LIQUIDATION, DISTRIBUTION UPON TERMINATION
Pursuant to either Trust Agreement, an Issuer will dissolve and will be
liquidated by the Property Trustee on the first to occur of: (i) the expiration
of the term of the relevant Trust; (ii) the bankruptcy, dissolution or
liquidation of MidAmerican Energy; (iii) the redemption of all of the Preferred
Securities of such Issuer; (iv) delivery of written direction to the Property
Trustee by MidAmerican Energy, as Depositor, to dissolve such Issuer and
distribute the Debentures held by such Issuer to holders of its Trust Securities
and (v) an order for judicial dissolution of such Issuer having been entered by
a court of competent jurisdiction. (Sections 9.01 and 9.02).
If an automatic or early termination occurs as described in clause (i),
(ii), (iv) or (v) above, such Issuer will be liquidated by the Property Trustee
as expeditiously as the Property Trustee determines to be appropriate by
adequately providing for the satisfaction of liabilities owed such Issuer to its
creditors, if any, and by distributing to each Holder of Preferred Securities
and Common Securities of such Issuer a Like Amount of Debentures, unless such
distribution is determined by the Property Trustee not to be practical, in which
event such Holders will be entitled to receive, out of the assets of such Issuer
available for distribution to Holders after satisfaction of liabilities of such
Issuer to its creditors, if any, as provided by applicable law, an amount
determined as follows. In the case of Holders of Preferred Securities, the
amount will be equal to the aggregate Liquidation Amount of the Preferred
Securities plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"),
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to the extent that there are sufficient assets available. If such Liquidation
Distribution can be paid only in part because such Issuer has insufficient
assets available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by such Issuer on the Preferred Securities shall be
paid on a pro rata basis. MidAmerican Energy, as holder of the Common
Securities, will be entitled to receive Distributions upon any such liquidation
pro rata with the Holders of the Preferred Securities, except that if an Event
of Default under the Indenture has occurred and is continuing, the Preferred
Securities will have a preference over the Common Securities. (Sections 9.04(a)
and 9.04(d)). A Supplemental Indenture may provide that if an early termination
occurs as described in clause (v) above, the Debentures will be subject to
optional redemption in whole but not in part.
On the date fixed for any distribution of Debentures upon termination of an
Issuer (i) the Preferred Securities and the Common Securities issued by such
Issuer will no longer be deemed to be outstanding, (ii) DTC or its nominee, as
the record holder of such Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to be delivered upon
such distribution and (iii) certificates representing such Preferred Securities
will be deemed to represent Debentures of the corresponding series having an
aggregate principal amount equal to the Liquidation Amount of, and bearing
accrued and unpaid interest equal to accrued and unpaid Distributions on, such
Preferred Securities until such certificates are presented to MidAmerican Energy
or its agent for transfer or reissuance. (Section 9.02(c)).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an Event of Default under the
Trust Agreement of an Issuer (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of an Event of Default as defined in Section 801 of the
Indenture (see "Description of the Debentures -- Events of Default"); or
(ii) default by such Issuer in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of 30
days; or
(iii) default by such Issuer in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Issuer in such Trust Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is specifically dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Property Trustee by the
Holders of Preferred Securities of such Issuer having at least 10% of the total
Liquidation Amount of the outstanding Preferred Securities of such Issuer, a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a Notice of Default thereunder; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to such Issuer.
Within five Business Days after the occurrence of any Event of Default with
respect to such Issuer, the Property Trustee will transmit to the holders of the
Trust Securities of such Issuer and MidAmerican Energy notice of any such Event
of Default actually known to the Property Trustee, unless such Event of Default
shall have been cured or waived.
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MERGER OR CONSOLIDATION OF THE PROPERTY TRUSTEE OR THE DELAWARE TRUSTEE
Any entity into which the Property Trustee or the Delaware Trustee may be
merged or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee shall be a party, or any entity succeeding to all or
substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, shall be the successor to such Trustee under the Trust
Agreements, if such entity is otherwise qualified and eligible. (Section 8.12).
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
all of the Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. ("DTC's
nominee"). One or more fully-registered global Preferred Securities
certificates, representing the aggregate number of Preferred Securities of a
particular Issuer, will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act. DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant ("Indirect Participants"). The rules applicable to DTC
and its Direct Participants and Indirect Participants are on file with the
Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security (the "Beneficial Owner") is in turn to be recorded in
the Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as will as
periodic statements of their holdings, from the Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of ownership
interests in the Preferred Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
the Preferred Securities, except in the event that use of the book-entry system
for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Direct Participants with DTC are registered in the name of DTC's nominee,
Cede & Co. The deposit of Preferred Securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Preferred Securities; DTC's
records reflect only the identity of the Direct Participants to whose accounts
such Preferred Securities are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
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Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Redemption notices will be sent to Cede & Co. as the registered Holder of
Preferred Securities. If less than all of the Preferred Securities are being
redeemed, DTC's current practice is to determine by lot the amount of the
interest of each Direct Participant in such issue to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Issuer as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co. consenting or voting
rights to those Direct Participants to whose accounts the Preferred Securities
are credited on the record date identified in a listing attached to the Omnibus
Proxy. MidAmerican Energy and the Issuers believe that the arrangements among
DTC, Direct and Indirect Participants, and Beneficial Owners will enable the
Beneficial Owners to exercise rights equivalent in substance to the rights that
can be directly exercised by a holder of a beneficial interest in the Issuers.
Distribution payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the account of customers in bearer form or registered in "street name," and such
payments will be the responsibility of such Participants and not of DTC, the
Property Trustee, the applicable Issuer or MidAmerican Energy, subject to any
statutory or regulatory requirements to the contrary that may be in effect from
time to time. Payment of Distributions to DTC is the responsibility of the
Issuer in question, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners is the responsibility of Participants.
Except as provided herein, a Beneficial Owner will not be entitled to
receive physical delivery of Preferred Securities. Accordingly, each Beneficial
Owner must rely on the procedures of DTC to exercise any rights under the
Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Issuer in question and MidAmerican Energy. Under such circumstances, in the
event that a successor securities depositary is not obtained, Preferred
Securities certificates are required to be printed and delivered. Additionally,
the Administrative Trustees (with the consent of MidAmerican Energy) may decide
to discontinue use of the system of book-entry transfers through DTC (or any
successor depositary) with respect to the Preferred Securities. In that event,
certificates for the Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that MidAmerican Energy and the Issuers believe
to be reliable, but neither MidAmerican Energy nor the Issuers take
responsibility for the accuracy thereof. Neither MidAmerican Energy nor any
Issuer has responsibility for the performance by DTC or its Participants of
their respective obligations as described herein or under the rules and
procedures governing their respective operations.
VOTING RIGHTS
Holders of Trust Securities will be entitled to one vote for each $25 in
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such holders of Trust Securities are entitled to vote. Except
as described below and under "-- Amendments," and under "Description of the
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Guarantees -- Amendments and Assignment" and as otherwise required by law and
the applicable Trust Agreement, the Holders of the Preferred Securities will
have no voting rights. (Section 6.01(a)).
So long as any Debentures of a particular series are held by the Property
Trustee of an Issuer, the Property Trustee may not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (ii) waive any past default which is waivable under
Section 813 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all such Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or such Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of Preferred Securities of such
Issuer having at least 66 2/3% of the Liquidation Amount of such outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each Holder of Preferred Securities of such Issuer. The
Property Trustee may not revoke any action previously authorized or approved by
a vote of the holders of Preferred Securities of a particular Issuer except
pursuant to a subsequent vote of the Holders of the Preferred Securities of such
Issuer. The Property Trustee will notify all Holders of an affected series of
Preferred Securities of any notice of default received from the Debenture
Trustee. In addition to obtaining the foregoing approvals of the Holders of the
Preferred Securities of a particular series, prior to taking any of the
foregoing actions, the Property Trustee must receive an opinion of counsel
experienced in such matters to the effect that the applicable Issuer will be
classified as a "grantor trust" and will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action. (Section 6.01(b)).
Notwithstanding the foregoing, a Holder of Preferred Securities of a
particular series may institute a proceeding for enforcement of payment to such
Holder directly of principal of or interest on Debentures of the corresponding
series having a principal amount equal to the aggregate Liquidation Amount of
such Preferred Securities of such Holder on or after the due dates specified in
the Debentures.
Any required approval of Holders of Preferred Securities of a particular
series may be given at a separate meeting of Holders of such Preferred
Securities convened for such purpose or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at which Holders of
such Preferred Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be given to each
Holder of such Preferred Securities in the manner set forth in the applicable
Trust Agreement (Section 6.02).
No vote or consent of the Holders of Preferred Securities of a particular
series will be required for the Issuer to redeem and cancel Preferred Securities
of such series in accordance with the applicable Trust Agreement.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by MidAmerican Energy, the Property Trustee or any
affiliate of MidAmerican Energy or the Property Trustee, will, for purposes of
such vote or consent, be treated as if they were not outstanding.
AMENDMENTS
A Trust Agreement may be amended from time to time by the applicable Issuer
(on approval of a majority of the Administrative Trustees) and MidAmerican
Energy, without the consent of any holders of Trust Securities, (i) to cure any
ambiguity, correct or supplement any provision therein which may be inconsistent
with any other provision therein, or to make any other provisions with respect
to matters or questions arising under such Trust Agreement, which are not
inconsistent with the other provisions of such Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of such Trust Agreement to such
extent as shall be necessary to ensure that such Issuer will be classified for
United States federal
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income tax purposes as a grantor trust at any time that any Trust Securities are
outstanding thereunder or to ensure such Issuer's exemption from the status of
an "investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act"); provided, however, that, except in the case of clause (ii),
such action shall not adversely affect in any material respect the interests of
any holder of Trust Securities issued pursuant to such Trust Agreement and, in
the case of clause (i), any amendments of such Trust Agreement shall become
effective when notice thereof is given to the holders of Trust Securities issued
thereunder.
Except as provided below, any provision of either Trust Agreement may be
amended by the Administrative Trustees and MidAmerican Energy with (i) the
consent of Holders of Trust Securities issued pursuant to such Trust Agreement
representing not less than a majority in Liquidation Amount of such Trust
Securities then outstanding and (ii) receipt by the applicable Trustee of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to such Trustee in accordance with such amendment will not affect
the applicable Issuer's status as a grantor trust for United States federal
income tax purposes or affect such Issuer's exemption from status of an
"investment company" under the 1940 Act.
Without the consent of each affected Holder of Trust Securities, a Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution with respect to the Trust Securities issued pursuant to such Trust
Agreement or otherwise adversely affect the amount of any Distribution required
to be made in respect of such Trust Securities as of a specified date or (ii)
restrict the right of a Holder of such Trust Securities to institute suit for
the enforcement of any such payment on or after such date.
REMOVAL OF PROPERTY TRUSTEE
Unless an Event of Default under the Indenture shall have occurred and be
continuing, the Property Trustee may be removed at any time by act of
MidAmerican Energy as the holder of the Common Securities. If an Event of
Default under the Indenture has occurred and is continuing, the Property Trustee
may be removed at such time by act of the Holders of Preferred Securities having
a majority of the Liquidation Amount of the Preferred Securities then
outstanding. In no event will the Holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in MidAmerican Energy as the holder of the
Common Securities. No resignation or removal of the Property Trustee and no
appointment of a successor trustee will be effective until the acceptance of
appointment by the successor Property Trustee in accordance with the provisions
of the Trust Agreements. (Section 8.10).
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default under the Indenture shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property (as defined in the applicable Trust Agreement) may at the
time be located, the holder of the Common Securities and the Property Trustee
will have power to appoint, and upon the written request of the Property
Trustee, MidAmerican Energy, as Depositor, will for such purpose join with the
Property Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more persons approved by
the Property Trustee either to act as co-trustee, jointly with the Property
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity, any property, title, right or power deemed necessary or desirable,
subject to the provisions of such Trust Agreement. If MidAmerican Energy, as
Depositor, does not join in such appointment within 15 days after the receipt by
it of a request so to do, or in case an Event of Default under the Indenture has
occurred and is continuing, the Property Trustee alone will have the power to
make such appointment. (Section 8.09).
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FORM, EXCHANGE AND TRANSFER
Preferred Securities will be issuable only in fully registered form each
having a Liquidation Amount of $25 and any integral multiple thereof.
At the option of the Holder, subject to the terms of the applicable Trust
Agreement, Preferred Securities of any series will be exchangeable for other
Preferred Securities of such series, of any authorized denomination and of like
tenor and aggregate Liquidation Amount.
Subject to the terms of the applicable Trust Agreement, Preferred Securities
of any series may be presented for exchange as provided above or for
registration of transfer (duly endorsed or accompanied by a duly executed
instrument of transfer) at the office of the Transfer Agent designated for such
purpose. The Administrative Trustees may designate MidAmerican Energy as
Transfer Agent and as Registrar. No service charge will be made for any
registration of transfer or exchange of Preferred Securities, but MidAmerican
Energy may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Such transfer or exchange
will be effected upon the Transfer Agent being satisfied with the documents of
title and identity of the person making the request. The Administrative Trustees
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.
An Issuer will not be required to (i) issue, register the transfer of, or
exchange any of its Preferred Securities during a period beginning at the
opening of business 15 calendar days before the day of mailing of a notice of
redemption of any of its Preferred Securities called for redemption and ending
at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Preferred Securities so selected for redemption, in
whole or in part, except the unredeemed portion of any such Preferred Securities
being redeemed in part. (Section 5.04).
REGISTRAR AND TRANSFER AGENT
Initially, The First National Bank of Chicago will act as Registrar and
Transfer Agent for the Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of either Issuer, but upon payment (with the giving of
such indemnity as the Issuer of such Preferred Securities or MidAmerican Energy
may require) in respect of any tax or other governmental charges which may be
imposed in relation to it.
CONCERNING THE PROPERTY TRUSTEE
MidAmerican Energy maintains deposit accounts and conducts other banking
transactions with the Property Trustee in the ordinary course of its businesses.
The Property Trustee also acts as the Guarantee Trustee under the Guarantee, the
Debenture Trustee under the Indenture and under another indenture under which
medium-term notes of MidAmerican Energy are or may become outstanding.
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MISCELLANEOUS
Application will be made to list the Preferred Securities on the New York
Stock Exchange.
The Delaware Trustee will act as the resident trustee in the state of
Delaware and will have no other significant duties. The Property Trustee will
hold the Debentures on behalf of the Issuers and will maintain a payment account
with respect to the Trust Securities, and will also act as trustee under the
Trust Agreements for the purposes of the Trust Indenture Act. See "-- Events of
Default; Notice." The Administrative Trustees will administer the day to day
operations of the Issuers. See "-- Voting Rights."
The Administrative Trustees are authorized and directed to conduct the
affairs of each Issuer and to operate each Issuer so that neither Issuer will be
deemed to be an "investment company" required to be registered under the 1940
Act or classified other than as a grantor trust for United States federal income
tax purposes and so that the Debentures will be treated as indebtedness of
MidAmerican Energy for United States federal income tax purposes. In this
connection, the Administrative Trustees and MidAmerican Energy are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of either Issuer or the Trust Agreements, that the Administrative Trustees and
MidAmerican Energy determine in their discretion to be necessary or desirable
for such purposes, as long as such action does not materially adversely affect
the interests of the Holders of the Preferred Securities. (Section 2.07(d)).
Holders of the Preferred Securities have no preemptive or similar rights.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by MidAmerican Energy for the benefit of the
Holders from time to time of Preferred Securities of each series. Each Guarantee
will be qualified as an indenture under the Trust Indenture Act. The First
National Bank of Chicago will act as Guarantee Trustee under each Guarantee for
the purpose of compliance with the Trust Indenture Act. The terms of each
Guarantee will be those set forth in such Guarantee and those made part of such
Guarantee by the Trust Indenture Act. This summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantees, a form of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part, and
the Trust Indenture Act. The Guarantee Trustee will hold each Guarantee for the
benefit of the Holders of the corresponding Preferred Securities.
GENERAL
MidAmerican Energy will fully and unconditionally agree, to the extent set
forth herein, to pay the Guarantee Payments (as defined herein) in full to the
Holders of the Preferred Securities of a particular series (except to the extent
paid by or on behalf of the applicable Issuer), as and when due, regardless of
any defense, right of set-off or counterclaim that the applicable Issuer may
have or assert. The following payments with respect to the Preferred Securities,
to the extent not paid by or on behalf of the applicable Issuer (the "Guarantee
Payments"), will be subject to the related Guarantee (without duplication): (i)
any accrued and unpaid Distributions required to be paid on the Preferred
Securities of such series, to the extent the Property Trustee has available in
the payment account for such Issuer sufficient funds to make such payment, (ii)
the Redemption Price with respect to any Preferred Securities called for
redemption by the applicable Issuer, to the extent the Property Trustee has
available in the payment account for such Issuer sufficient funds to make such
payment and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the applicable Issuer (other than in connection with a redemption
of all of the Preferred Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accrued and unpaid Distributions on such Preferred
Securities to the date of payment and (b) the amount of assets of such Issuer
remaining available for distribution to Holders of such Preferred Securities in
liquidation of such Issuer. MidAmerican Energy's obligation to make a Guarantee
Payment may be satisfied by direct
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payment of the required amounts by MidAmerican Energy to the Holders of such
Preferred Securities or by causing the applicable Issuer to pay such amounts to
such Holders.
Each Guarantee will be a guarantee with respect to the Preferred Securities
issued by the applicable Issuer from the time of issuance of such Preferred
Securities, but will not apply to (i) any payment of Distributions if and to the
extent that such Issuer does not have funds available to make such payments, or
(ii) collection of payment. If MidAmerican Energy does not make interest
payments on the Debentures held by an Issuer, such Issuer will not have funds
available to pay Distributions on its Preferred Securities. The Guarantees will
rank subordinate and junior in right of payment to all liabliities of
MidAmerican Energy, including the Debentures, (except those made PARI PASSU by
their terms). See "Status of the Guarantees." MidAmerican Energy will agree in
the Agreements as to Expenses and Liabilities (the "Expense Agreements"), a form
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, to provide funds to the Issuers as needed to pay
obligations of the Issuers to parties other than holders of Trust Securities.
The Debentures and the Guarantees, together with the obligations of MidAmerican
Energy with respect to the Preferred Securities under the Indenture, the Trust
Agreements, the Guarantees and the Expense Agreements constitute full and
unconditional guarantees of the Preferred Securities by MidAmerican Energy. No
single document standing alone or operating in conjunction with fewer than all
of the other documents constitutes such guarantees. It is only the combined
operation of these documents that has the effect of providing full and
unconditional guarantees by MidAmerican Energy of the Preferred Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of Holders of Preferred Securities of a particular Issuer (in which
case no vote will be required), the terms of a Guarantee may be changed only
with the prior approval of the Holders of such Preferred Securities having at
least 66 2/3% of the Liquidation Amount of such outstanding Preferred
Securities. All guarantees and agreements contained in any Guarantee will bind
the successors, assigns, receivers, trustees and representatives of MidAmerican
Energy and will inure to the benefit of the Holders of the corresponding
Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of
MidAmerican Energy to perform any of its payment obligations thereunder. The
Holders of Preferred Securities of an Issuer having a majority of the
Liquidation Amount of such Preferred Securities have the right to waive any
default by MidAmerican in any of its payment obligations under the applicable
Guarantee Agreement and to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of such
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under such Guarantee.
Any Holder of Preferred Securities may institute a legal proceeding directly
against MidAmerican Energy to enforce its rights under a Guarantee without first
instituting a legal proceeding against the applicable Issuer, the Guarantee
Trustee or any other person or entity.
MidAmerican Energy, as Guarantor, will be required to provide annually to
the Guarantee Trustee a statement as to the performance by MidAmerican Energy of
certain of its obligations under the Guarantees and as to any default in such
performance and an officer's certificate as to MidAmerican Energy's compliance
with all conditions under the Guarantees.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default by MidAmerican
Energy in performance of a Guarantee, has undertaken to perform only such duties
as are specifically set forth in the Guarantees and, after default with respect
to any Guarantee, must exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to this
provision, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by a Guarantee at the request of any Holder of Preferred
Securities of a particular series unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby. See
"Description of the Preferred Securities -- Concerning the Property Trustee."
TERMINATION OF THE GUARANTEES
A Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of all related Preferred Securities, the
distribution of Debentures to the Holders of such Preferred Securities in
exchange for all of such Preferred Securities or full payment of the amounts
payable upon liquidation of the related Issuer. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any such
Holder of Preferred Securities must restore payment of any sums paid with
respect to such Preferred Securities or under the related Guarantee.
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of MidAmerican Energy
and will rank (i) subordinate and junior in right of payment to all liabilities
of MidAmerican Energy, including the Debentures, (except liabilities that may be
made PARI PASSU by their terms), (ii) PARI PASSU with the most senior preferred
or preference stock now or hereafter issued by MidAmerican Energy and with any
guarantee now or hereafter entered into by MidAmerican Energy in respect of any
preferred or preference stock of any affiliate of MidAmerican Energy and (iii)
senior to MidAmerican Energy's common stock. Each Trust Agreement provides that
each Holder of Preferred Securities issued thereunder agrees, by acceptance
thereof, to the subordination provisions and other terms of the related
Guarantee.
Each Guarantee will rank PARI PASSU with each other Guarantee and with any
similar guarantees issued by the Guarantor on behalf of the holders of Preferred
Securities issued by any other Issuer holding Debentures issued under the
Indenture.
Each Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the applicable Guarantee without first
instituting a legal proceeding against any other person or entity).
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
DESCRIPTION OF THE DEBENTURES
Set forth below is a description of certain terms of the Debentures which
each of the Issuers will hold as trust assets. The following description does
not purport to be complete and is qualified in its entirety by reference to the
description in the Indenture, as supplemented by the Supplemental Indenture
creating each series of Debentures, between MidAmerican Energy and the Trustee
with respect to the Debentures (the "Debenture Trustee"), the forms of which are
filed as exhibits to the Registration Statement of which this Prospectus is a
part, and to the Trust Indenture Act. Whenever particular provisions or defined
terms in the Indenture are referred to herein, such provisions or defined terms
are
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incorporated by reference herein. Section references used herein are references
to provisions of the Indenture unless otherwise noted.
The Indenture provides for the issuance of Debentures in an unlimited amount
from time to time. Each series of Debentures will constitute a separate series
under the Indenture, will be in a principal amount equal to the aggregate stated
Liquidation Amount of the corresponding Preferred Securities plus MidAmerican
Energy's concurrent investment in the corresponding Common Securities and will
rank PARI PASSU with all other series of Debentures.
GENERAL
Each series of Debentures will be limited in aggregate principal amount to
the sum of the aggregate Liquidation Amount of the Preferred Securities of the
applicable Issuer and the consideration paid by MidAmerican Energy for the
Common Securities of such Issuer and will have terms similar to the terms of
such Preferred Securities. The Debentures will be unsecured, subordinated
obligations of MidAmerican Energy which rank junior to all of MidAmerican
Energy's Senior Indebtedness (as defined under "--Subordination" below). Each
series of Debentures will bear interest at the same rate and payable at the same
times, as the Distributions payable on the corresponding series of Trust
Securities, and will have a maturity and redemption provisions correlative to
those of such Trust Securities. The amounts payable as principal and interest on
each series of Debentures will be sufficient to provide for payment of
Distributions payable on the corresponding series of Trust Securities.
Each series of Debentures may be distributed pro rata to the holders of the
corresponding series of Trust Securities in connection with the dissolution or
termination of the applicable Issuer upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. If
Debentures are distributed to Holders of Preferred Securities in connection with
the dissolution or termination of an Issuer, such Debentures will be issued in
fully registered certificated form in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Payments of principal of and interest on Debentures will be payable, the
transfer of Debentures will be registrable, and Debentures will be exchangeable
for Debentures of the same series with other denominations and a like aggregate
principal amount, at the office or agency of the Company in The City of New
York; provided that payment of interest may be made at the option of MidAmerican
Energy by check mailed to the address of the persons entitled thereto and that
the payment in full of principal with respect to any Debenture will be made only
upon surrender of such Debenture to the Debenture Trustee.
OPTIONAL REDEMPTION
MidAmerican Energy will have the right, at any time and from time to time on
or after the date set forth in the applicable Supplemental Indenture, to redeem
any series of Debentures, in whole or in part, at a redemption price as set
forth in such Supplemental Indenture, together with any accrued but unpaid
interest, including Additional Interest Attributable to Taxes, if any, to the
Redemption Date.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Tax Event shall occur and be continuing, MidAmerican Energy will have the right
to redeem any series of Debentures, in whole but not in part, at a redemption
price equal to 100% of the principal amount of such series of Debentures then
outstanding plus any accrued and unpaid interest, including Additional Interest
Attributable to Taxes, if any, to the Redemption Date.
For so long as an Issuer is the holder of all the outstanding Debentures of
a particular series, the proceeds of any such redemption will be used by such
Issuer to redeem its Preferred Securities and Common Securities in accordance
with their terms. MidAmerican Energy may not redeem any series of Debentures in
part unless all accrued and unpaid interest, including any Additional Interest
Attributable
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to Taxes, has been paid in full on all outstanding Debentures of such series for
all quarterly interest periods terminating on or prior to the date of
redemption.
Any optional redemption of a series of Debentures will be made upon not less
than 30 nor more than 60 days' notice from the Debenture Trustee to the holders
of such Debentures, as provided in the Indenture. All notices of redemption will
state the redemption date; the redemption price plus accrued and unpaid
interest; if less than all of such Debentures are to be redeemed, the
identification of those to be redeemed and the portion of the principal amount
of any such Debentures to be redeemed in part; that on the redemption date the
redemption price plus accrued and unpaid interest will become due and payable
upon each such Debenture to be redeemed and that interest thereon will cease to
accrue on and after said date; and the place or places where such Debentures are
to be surrendered for payment of the redemption price plus accrued and unpaid
interest.
Unless otherwise specified in a Prospectus Supplement, a notice of
redemption of Debentures may state that such redemption will be conditional upon
the receipt by the Debenture Trustee or any paying agent, on or prior to the
date fixed for such redemption, of money sufficient to pay the redemption price
plus accrued and unpaid interest, if any, on such Debentures and that if such
money shall not have been so received, such notice will be of no force or effect
and MidAmerican Energy will not be required to redeem such Debentures. In the
event that such notice of redemption contains such a condition and such money is
not so received, the redemption will not be made and within a reasonable time
thereafter notice will be given, in the manner in which the notice of redemption
was given, that such money was not so received and such redemption was not
required to be made, and the Debenture Trustee or paying agent will promptly
return to the holders of such Debentures any of such Debentures which had been
surrendered for payment upon such redemption.
POSSIBLE TAX LAW CHANGES; POSSIBLE REDEMPTION
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill") was
released, which would, among other things, generally deny interest deductions
for United States federal income tax purposes of interest on an instrument,
issued by a corporation, that has a maximum weighted average maturity of more
than 40 years. The Bill would also generally deny interest deductions of
interest on an instrument, issued by a corporation, that has a maximum term of
more than 20 years and that is not shown as indebtedness on the separate balance
sheet of the issuer or, where the instrument is issued to a related party (other
than a corporation), where the holder or some other related party issues a
related instrument that is not shown as indebtedness on the issuer's
consolidated balance sheet. The above-described provisions of the Bill were
proposed to be effective generally for debt instruments issued on or after
December 7, 1995. If either of such provisions were to apply to the Debentures,
the Company would be unable to deduct interest on the Debentures for United
States federal income tax purposes. However, on March 29, 1996, the Chairmen of
the Senate Finance and House Ways and Means Committees issued a joint statement
to the effect that it was their intention that the effective date of the
President's legislative proposals, if adopted, will be no earlier than the date
of appropriate Congressional action. The Company believes that, under current
law, it will be able to deduct interest on the Debentures. There can be no
assurance, however, that current or future legislative proposals or final
legislation will not affect the ability of the Company to deduct interest on the
Series A Debentures. Such a change could give rise to an event which may permit
the Company to cause a redemption of a series of Preferred Securities, as
described in a Prospectus Supplement.
INTEREST
The Debentures of each series will bear interest at the rate per annum set
forth in the applicable Supplemental Indenture and from the date specified
therein. Such interest is payable quarterly in arrears on March 1, June 1,
September 1 and December 1 of each year (each, an "Interest Payment Date"), to
the person in whose name such Debentures are registered, by the close of
business on the Business
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Day 15 days preceding such Interest Payment Date. It is anticipated that each
Issuer will be the sole holder of a particular series of Debentures.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a full
month, on the basis of the actual number of days elapsed. (Section 310). In the
event that any date on which interest is payable on the Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business Day and without any interest or
other payment in respect of any such delay, except that, if such Business Day is
in the next succeeding calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. (Section 113).
OPTION TO EXTEND INTEREST PAYMENT PERIOD
MidAmerican Energy will have the right, at any time and from time to time
during the term of any of the Debentures, to extend the interest payment period
on such Debentures to a period not exceeding 20 consecutive quarters during
which period interest will be compounded quarterly. At the end of an Extension
Period, MidAmerican Energy must pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for such Debentures
compounded quarterly, to the extent permitted by applicable law). However,
during any such Extension Period, MidAmerican Energy may not, and may not permit
any of its subsidiaries to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of MidAmerican Energy's capital stock or (ii) make any payment of principal
of, interest or premium, if any, on, or repay, repurchase or redeem any debt
securities of MidAmerican Energy (including other Debentures) that rank PARI
PASSU with or junior in interest to the series of Debentures to which such
Extension Period applies, or make any guarantee payments with respect to any
guarantee by MidAmerican Energy of the debt securities of any of its
subsidiaries if such guarantee ranks PARI PASSU or junior in interest to such
series of Debentures (other than (a) dividends or distributions in MidAmerican
Energy common stock, (b) payments under any Guarantee, and (c) purchases of
MidAmerican Energy common stock related to the issuance of common stock under
any of MidAmerican Energy's benefit plans for its directors, officers or
employees). This covenant effectively requires that any Extension Period with
respect to payment of interest on a series of Debentures will apply to all other
series of Debentures. Prior to the termination of any such Extension Period,
MidAmerican Energy may further extend the interest payment period, provided that
such Extension Period together with all such previous and further extensions
thereof shall not exceed 20 consecutive quarters at any one time or extend
beyond the Maturity Date of the Debentures in question. Upon the termination of
any such Extension Period and the payment of all amounts then due, MidAmerican
Energy may select a new Extension Period, subject to the above requirements. No
interest will be due and payable during an Extension Period, except at the end
thereof; provided, however, that Additional Interest Attributable to Taxes, if
any, will not be deferred and will be payable on the relevant Interest Payment
Date. MidAmerican Energy will give the Debenture Trustee and the Administrative
Trustees of the Issuer notice of its election of an Extension Period no less
than 15 Business Days prior to the later of (i) the Regular Record Date next
preceding the first Interest Payment Date on which interest would be payable but
for such election and (ii) five Business Days prior to such Interest Payment
Date. Upon receipt of any such notice, the Debenture Trustee will give written
notice of MidAmerican Energy's election by mail to the Holders of the affected
series of Preferred Securities not less than 10 Business Days prior to such
Interest Payment Date. MidAmerican Energy will also make a public announcement
of such election in accordance with New York Stock Exchange Rules not less than
five Business Days prior to such Regular Record Date. (Section 311).
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ADDITIONAL INTEREST ATTRIBUTABLE TO TAXES
So long as Preferred Securities of any series remain outstanding, if the
Issuer thereof would be required to pay, with respect to its income derived from
the interest payments on the corresponding series of Debentures, any amounts for
or on account of any taxes, duties, assessments or governmental charges of
whatever nature imposed by the United States, or any other taxing authority,
then, in any such case, MidAmerican Energy will pay as interest on such
Debentures such additional interest (the "Additional Interest Attributable to
Taxes") as may be necessary in order that the net amounts received and retained
by such Issuer after the payment of such taxes, duties, assessments or
governmental charges will result in such Issuer having such funds as it would
have had in the absence of the payment of such taxes, duties, assessments or
governmental charges. (Section 312).
EXTENSION OR ADJUSTMENT OF STATED MATURITY
If provided in the applicable Prospectus Supplement, MidAmerican Energy will
have the right to (i) extend or shorten the maturity of any series of Debentures
at the time that MidAmerican Energy exercises its right to elect to liquidate
the related Issuer and cause such Debentures to be distributed to the Holders of
such Issuer's Trust Securities in liquidation of such Issuer (see "Description
of the Preferred Securities -- Termination of an Issuer and Distribution of
Debentures"), and (ii) extend the maturity of any series of Debentures at any
time; provided that in the case of both (i) and (ii) above, it can extend the
maturity only if certain conditions specified in the applicable Prospectus
Supplement are met at the time such election is made and at the time of such
extension.
DEFEASANCE
The principal amount of any series of Debentures issued under the Indenture
will be deemed to have been paid for purposes of the Indenture and the entire
indebtedness of MidAmerican Energy in respect thereof will be deemed to have
been satisfied and discharged, if there shall have been irrevocably deposited
with the Debenture Trustee or any paying agent, in trust: (a) money in an amount
which will be sufficient, or (b) in the case of a deposit made prior to the
maturity of such series of Debentures, Government Obligations (as defined
herein), 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 moneys which, together with the money, if any, deposited with or held by
the Debenture 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
the Debentures of such series that are outstanding. For this purpose, Government
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. (Section
701).
Under current United States federal income tax law any deposit contemplated
in the preceding paragraph would be treated as a taxable exchange of such
outstanding Debentures for an issue of obligations of the trust into which such
moneys or Government Obligations were deposited, or a direct interest in the
cash and Government Obligations held by such trust. In that case, Holders of
such outstanding Debentures would recognize a gain or loss for federal income
tax purposes, as if their share of such obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Debentures. In addition, such Holders thereafter would be required to
include in income a share of the income, gain or loss of such trust. The amount
so required to be included in income could be different from the amount that
would be includable 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.
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SUBORDINATION
The Debentures will be subordinate and junior in right of payment to all
Senior Indebtedness of MidAmerican Energy to the extent provided in the
Indenture. In the event that (i) certain events of bankruptcy, insolvency or
reorganization occur, (ii) any Senior Indebtedness is not paid when due, (iii)
any other default has occurred pursuant to which the holders of Senior
Indebtedness have accelerated the maturity thereof and with respect to (ii) and
(iii), such default has not been cured or waived, or (iv) the maturity of any
series of Debentures has been accelerated because of an event of default with
respect thereto which remains uncured, then: (a) the holders of all Senior
Indebtedness will first be entitled to receive payment of the full amount due
thereon before the holders of any Debentures are entitled to receive any payment
on account of the principal of (including any redemption and sinking fund
payment) or interest on Debentures, (b) any payment by, or distribution of
assets of, MidAmerican Energy to which any holders of Debentures or the
Debenture Trustee would be entitled will be paid or delivered by the person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to or for the benefit of the
holders of such Senior Indebtedness to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor) to the holders of
such Senior Indebtedness, before any payment or distribution is made to the
holders of Debentures or to the Debenture Trustee, and (c) any payment by, or
distribution of assets of, MidAmerican Energy in respect of principal of or
interest on Debentures or in connection with any repurchase by MidAmerican
Energy of Debentures and received by the Debenture Trustee or any holder of
Debentures before all Senior Indebtedness is paid in full, will be required to
be paid over to or for the benefit of the holders of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness. (Section 1502). Subject to the prior
payment of all Senior Indebtedness, the rights of the holders of the 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 the Debentures are paid in full. (Section 1504).
The term Senior Indebtedness is defined in the Indenture to mean all
obligations (other than non-recourse obligations and the indebtedness issued
under the Indenture) of, or guaranteed or assumed by, MidAmerican Energy for
borrowed money, including both senior and subordinated indebtedness for borrowed
money (other than the Debentures), or for the payment of money relating to any
lease which is capitalized on the consolidated balance sheet of MidAmerican
Energy and its subsidiaries in accordance with generally accepted accounting
principles as in effect from time to time, 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 Indenture or subsequently
incurred by MidAmerican Energy unless, in the case of any particular
indebtedness, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is not superior
in right of payment to or is PARI PASSU with the Debentures; provided that
MidAmerican Energy's obligations under the Guarantees shall not be deemed to be
Senior Indebtedness. (Section 101).
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
Under the terms of the Indenture, MidAmerican Energy may not consolidate
with or merge into any other entity or convey, transfer or lease its properties
and assets substantially as an entirety to any entity, unless (i) the
corporation formed by such consolidation or into which MidAmerican Energy is
merged or the entity which acquires by conveyance or transfer, or which leases,
the property and assets of MidAmerican Energy substantially as an entirety shall
be an entity organized and validly existing under
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the laws of any domestic jurisdiction and such entity expressly assumes (by a
supplemental indenture) MidAmerican Energy's obligations on all Debentures under
the Indenture, (ii) immediately after giving effect to the transaction, no Event
of Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing, and (iii)
MidAmerican Energy shall have delivered to the Debenture Trustee an Officer's
Certificate and an Opinion of Counsel as provided in the Indenture. (Section
1101).
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to any series of Debentures: (a) failure to pay any
interest on the Debentures of such series within 30 days after the same becomes
due and payable, provided that deferral of payment during an Extension Period
will not constitute an Event of Default; (b) failure to pay principal or
premium, if any, on the Debentures of such series when due and payable; (c)
failure to perform, or breach of, any other covenant or warranty of MidAmerican
Energy in the Indenture (other than a covenant or warranty of MidAmerican Energy
in the Indenture solely for the benefit of one or more series of Debentures
other than such series) for 60 days after written notice to MidAmerican Energy
by the Debenture Trustee, or to MidAmerican Energy and the Debenture Trustee by
the Holders of at least 33% in principal amount of the Debentures of such series
outstanding under the Indenture as provided in the Indenture (provided that such
60 day period shall be automatically extended if corrective action is initiated
by MidAmerican Energy within such period and is being diligently pursued); (d)
the entry by a court having jurisdiction in the premises of (1) a decree or
order for relief in respect of MidAmerican Energy in an involuntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging
MidAmerican Energy bankrupt or insolvent, or approving as properly filed a
petition by one or more persons other than MidAmerican Energy seeking
reorganization, arrangement, adjustment or composition of or in respect of
MidAmerican Energy under any applicable Federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official for MidAmerican Energy or for any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and any such
decree or order for relief or any such other decree or order shall have remained
unstayed and in effect for a period of 90 consecutive days; and (e) the
commencement by MidAmerican Energy of a voluntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief or
to the commencement of any similar case or proceeding against it or the filing
by it of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of MidAmerican
Energy or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the
authorization of such action by the Board of Directors. (Section 801).
An Event of Default with respect to the Debentures of a particular series
may not necessarily constitute an Event of Default with respect to Debentures of
any other series issued under the Indenture.
If an Event of Default with respect to Debentures of any series at the time
outstanding occurs and is continuing, then either the Debenture Trustee or the
holders of at least 33% in principal amount of the outstanding Debentures of
such series may declare the principal of all of the Debentures of such series
and interest accrued thereon to be due and payable immediately (subject to the
subordination provisions of the Indenture), and, should the Debenture Trustee or
such Holders of Debentures fail to make such declaration, the Holders of at
least 33% in aggregate Liquidation Amount of the corresponding series of
Preferred Securities shall have such right. (Section 802).
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At any time after the declaration of acceleration with respect to the
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) MidAmerican Energy has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(1) all overdue interest on all Debentures of such series;
(2) the principal of and premium, if any, on any 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 Debentures;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Debentures, to the extent that payment of such
interest is lawful; and
(4) all amounts due to the Debenture Trustee under the Indenture; and
(b) any other Event or Events of Default with respect to Debentures of such
series, other than the nonpayment of the principal of the Debentures of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the Indenture.
(Section 802).
Subject to the provisions of the Indenture relating to the duties of the
Debenture Trustee in case an Event of Default shall occur and be continuing, the
Debenture Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any of the holders of
the Debentures, unless such holders shall have offered to the Debenture Trustee
reasonable indemnity. (Section 903). If an Event of Default has occurred and is
continuing in respect of a series of Debentures, subject to such provisions for
the indemnification of the Debenture Trustee, the holders of a majority in
principal amount of the outstanding Debentures of such series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee, with respect to the Debentures of such
series; provided, however, that if an Event of Default occurs and is continuing
with respect to more than one series of Debentures, the holders of a majority in
aggregate principal amount of the outstanding Debentures of all such series,
considered as one class, will have the right to make such direction, and not the
holders of the Debentures of any one of such series; and provided, further, that
such direction will not be in conflict with any rule of law or with the
Indenture. (Section 812).
No holder of Debentures of any series will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy thereunder unless (i) such holder has
previously given to the Debenture Trustee written notice of a continuing Event
of Default with respect to the Debentures of such series, (ii) the holders of
not less than a majority in aggregate principal amount of the outstanding
Debentures of all series in respect of which an Event of Default shall have
occurred and be continuing, considered as one class, have made written request
to the Debenture Trustee, and such holder or holders have offered reasonable
indemnity to the Debenture Trustee to institute such proceeding in respect of
such Event of Default in its own name as trustee and (iii) the Debenture Trustee
has failed to institute any proceeding, and has not received from the holders of
a majority in aggregate principal amount of the outstanding Debentures of such
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) a suit instituted by a holder of a Debenture for the enforcement of
payment of the principal of or any premium or interest on such Debenture on or
after the applicable due date specified in such Debenture, or (b) a Direct
Action by a Holder of Preferred Securities as described under "-- Enforcement of
Certain Rights by Holders of Preferred Securities." (Section 808).
24
<PAGE>
MidAmerican Energy will be required to furnish to the Debenture Trustee
annually a statement by an appropriate officer as to such officer's knowledge of
MidAmerican Energy's compliance with all conditions and covenants under the
Indenture, such compliance to be determined without regard to any period of
grace or requirement of notice under the Indenture. (Section 606).
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If an Event of Default with respect to a series of Debentures has occurred
and is continuing and such event is attributable to the failure of MidAmerican
Energy to pay interest or principal on such Debentures on the date such interest
or principal is otherwise payable, a Holder of the corresponding series of
Preferred Securities may institute a legal proceeding directly against
MidAmerican Energy for enforcement of payment to such Holder of the principal of
or interest on such Debentures having a principal amount equal to the aggregate
Liquidation Amount of the related Preferred Securities of such holder (a "Direct
Action"). MidAmerican Energy may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of the Holders
of all of the Preferred Securities. If the right to bring a Direct Action is
removed, the applicable Issuer may become subject to the reporting obligations
under the Securities Exchange Act of 1934, as amended. MidAmerican Energy will
have the right under the Indenture to set-off any payment made to a Holder of
Preferred Securities by MidAmerican Energy in connection with a Direct Action.
The Holders of Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the related Debentures.
MODIFICATION AND WAIVER
Without the consent of any holder of Debentures, MidAmerican Energy and the
Debenture Trustee may amend or supplement the Indenture for any of the following
purposes: (a) to evidence the assumption by any permitted successor to
MidAmerican Energy of the covenants of MidAmerican Energy in the Indenture and
the Debentures; or (b) to add one or more covenants of MidAmerican Energy or
other provisions for the benefit of the holders of outstanding Debentures or to
surrender any right or power conferred upon MidAmerican Energy by the Indenture;
or (c) to add any additional Events of Default with respect to outstanding
Debentures; or (d) to change or eliminate any provision of the Indenture or to
add any new provision to the Indenture, provided that if such change,
elimination or addition will adversely affect the interests of the holders of
Debentures of any series in any material respect, such change, elimination or
addition will become effective with respect to such series only (1) when the
consent of the holders of Debentures of such series has been obtained in
accordance with the Indenture, or (2) when no Debentures of such series remain
outstanding under the Indenture; or (e) to provide collateral security for all
but not part of the Debentures; or (f) to establish the form or terms of
Debentures of any other series as permitted by the 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 the
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 successor Debenture
Trustee under the Indenture with respect to the Debentures of one or more series
and to add to or change any of the provisions of the Indenture as shall be
necessary to provide for or to facilitate the administration of the trusts under
the 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 the Debentures of all or any series; or (j) to change any place where (1)
the principal of and premium, if any, and interest, if any, on all or any series
of Debentures shall be payable, (2) all or any series of Debentures may be
surrendered for registration of transfer or exchange and (3) notices and demands
to or upon MidAmerican Energy in respect of Debentures and the Indenture may be
served; or (k) to cure any ambiguity or inconsistency or to add or change any
other provisions with respect to matters and questions arising under the
Indenture, provided such changes or additions shall not adversely affect the
interests of the holders of Debentures of any series in any material respect.
(Section 1201).
25
<PAGE>
The holders of at least a majority in aggregate principal amount of the
Debentures of all series then outstanding may waive compliance by MidAmerican
Energy with certain restrictive provisions of the Indenture, and the holders of
at least a majority in principal amount of the outstanding Debentures of any
series may waive any past default under the Indenture with respect to such
series (i) except that an Issuer which holds Debentures may not waive any
compliance or default without the approval of the Holders of a majority in
aggregate Liquidation Amount of the its Preferred Securities, and (ii) except
for a default in the payment of principal, premium, or interest and certain
covenants and provisions of the Indenture that cannot be modified or be amended
without the consent of the holder of each outstanding Debenture of such series
affected. (Section 607 and Section 813).
If the Trust Indenture Act is amended after the date of the Indenture to
require changes to the Indenture or the inclusion therein of additional
provisions or to permit changes to, or the elimination of, provisions which, at
the date of the Indenture or at any time thereafter, are required by the Trust
Indenture Act to be contained in the Indenture, the Indenture will be deemed to
have been amended so as to conform to such amendment of the Trust Indenture Act
or to effect such changes, additions or elimination, and MidAmerican Energy and
the Debenture Trustee may, without the consent of any holders, enter into one or
more supplemental indentures to evidence or effect such amendment. (Section
1201).
Except as provided above, the consent of the holders of not less than a
majority in aggregate principal amount of the 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 Indenture or modifying in any manner the rights of the holders of such
Debentures under the Indenture pursuant to one or more supplemental indentures;
provided, however, that if less than all of the series of Debentures outstanding
thereunder are directly affected by a proposed supplemental indenture, then the
consent only of the holders of a majority in aggregate principal amount of
outstanding Debentures of all series so directly affected, considered as one
class, will be required; and provided further, that no such amendment or
modification may (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any 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 change the coin or
currency (or other property) in which any 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 Maturity Date of any 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 Debenture, (b) reduce the
percentage in principal amount of the outstanding Debentures of any series, (or,
if applicable, in Liquidation Amount of Preferred Securities) 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 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 Debenture of such series, or (c)
modify certain of the provisions of the Indenture relating to supplemental
indentures, waivers of certain covenants and waivers of past defaults with
respect to the Debentures of any series, without the consent of the holder of
each outstanding Debenture affected thereby. A supplemental indenture which
changes or eliminates any covenant or other provision of the Indenture which has
expressly been included solely for the benefit of one or more particular series
of Debentures, or modifies the rights of the holders of Debentures of such
series with respect to such covenant or other provision, will be deemed not to
affect the rights under the Indenture of the holders of the Debentures of any
other series. (Section 1202).
The Indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding Debentures have given any request,
demand, authorization, direction, notice, consent or waiver under the Indenture,
or whether a quorum is present at the meeting of the holders of Debentures,
Debentures owned by MidAmerican Energy or any other obligor upon the Debentures
or
26
<PAGE>
any affiliate of MidAmerican Energy or of such other obligor (unless MidAmerican
Energy, such affiliate or such obligor owns all Debentures outstanding under the
Indenture, determined without regard to this provision) shall be disregarded and
deemed not to be outstanding. (Section 101).
If MidAmerican Energy shall solicit from holders of Debentures any request,
demand, authorization, direction, notice, consent, election, waiver or other
act, MidAmerican Energy may, at its option, fix in advance a record date for the
determination of holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other such act, but MidAmerican Energy
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other act may be
given before or after such record date, but only the holders of Debentures of
record at the close of business on such record date shall be deemed to be
holders for the purposes of determining whether holders of the requisite
proportion of the outstanding Debentures have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other act, and for that purpose the outstanding Debentures shall be computed as
of the record date. Any request, demand, authorization, direction, notice,
consent, election, waiver or other act of a holder of a Debenture shall bind
every future holder of the same Debenture and the holder of every 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
Debenture Trustee or MidAmerican Energy in reliance thereon, whether or not
notation of such action is made upon such Debenture. (Section 104).
RESIGNATION OF DEBENTURE TRUSTEE
The Debenture Trustee may resign at any time by giving written notice
thereof to MidAmerican Energy or may be removed at any time by act of the
holders of a majority in principal amount of all series of Debentures then
outstanding delivered to the Debenture Trustee and MidAmerican Energy except
that so long as any Preferred Securities remain outstanding, the Issuer which
issued such Preferred Securities may not act to remove the Debenture Trustee
without the consent of the Holders of a majority in aggregate Liquidation Amount
of such Preferred Securities. No resignation or removal of the Debenture 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 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 Debenture Trustee
appointed by act of the holders of Debentures, if MidAmerican Energy has
delivered to the Debenture 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 Indenture, the Debenture Trustee will be
deemed to have resigned and the successor will be deemed to have been appointed
as trustee in accordance with the Indenture. (Section 910).
NOTICES
Notices to holders of Debentures will be given by mail to the addresses of
such holders as they may appear in the security register therefor. (Section
106).
TITLE
MidAmerican Energy, the Debenture Trustee, and any agent of MidAmerican
Energy or the Debenture Trustee, may treat the person in whose name Debentures
are registered as the absolute owner thereof (whether or not such Debentures may
be overdue) for the purpose of making payments and for all other purposes
irrespective of notice to the contrary. (Section 308).
27
<PAGE>
GOVERNING LAW
The Indenture, the Supplemental Indentures and the Debentures will be
governed by, and construed in accordance with, the laws of the State of New
York. (Section 112).
CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee under the Indenture is The First National Bank of
Chicago. In addition, The First National Bank of Chicago acts as Property
Trustee under the Trust Agreements and as Guarantee Trustee under the Guarantee.
First Chicago Delaware Inc. acts as the Delaware Trustee under the Trust
Agreements. See "Description of the Preferred Securities -- Concerning the
Property Trustee."
28
<PAGE>
RELATIONSHIP AMONG THE PREFERRED
SECURITIES, THE DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on each
series of Debentures, such payments will be sufficient to cover Distributions
and other payments due on the Preferred Securities of the corresponding series,
because: (i) the aggregate principal amount of each series of Debentures will be
equal to the sum of the aggregate Liquidation Amount of the corresponding Trust
Securities; (ii) the interest rate and interest and other payment dates on each
series of Debentures will correspond to the Distribution rate and Distribution
and other payment dates on the Preferred Securities of such series; (iii) the
Expense Agreements entered into by MidAmerican Energy pursuant to the Trust
Agreements provide that MidAmerican Energy will pay for all, and an Issuer will
not be obligated to pay, directly or indirectly, for any, costs, expenses or
liabilities of such Issuer, including any income taxes, duties and other
governmental charges, and all costs and expenses with respect thereto, to which
such Issuer may become subject, except for United States withholding taxes and
such Issuer's payment obligations to holders of the Preferred Securities of a
particular series under such Preferred Securities; and (iv) each Trust Agreement
further provides that the Trustees will not cause or permit an Issuer to, among
other things, engage in any activity that is not consistent with the limited
purposes of each Issuer.
Payments of Distributions and other amounts due on Preferred Securities of
each series (to the extent an Issuer has funds sufficient for such payments) are
guaranteed by MidAmerican Energy as and to the extent set forth under
"Description of the Guarantees." The Debentures and the Guarantees, together
with the obligations of MidAmerican Energy with respect to the Preferred
Securities under the Indenture, the Trust Agreements, the Guarantees and the
Expense Agreements constitute full and unconditional guarantees of the Preferred
Securities by MidAmerican Energy. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes such
guarantees. It is only the combined operation of these documents that has the
effect of providing full and unconditional guarantees by MidAmerican Energy of
the Preferred Securities. If and to the extent that MidAmerican Energy does not
make payments on any series of Debentures, such Issuer will not pay
Distributions or other amounts due on the Preferred Securities of the
corresponding series.
Notwithstanding anything to the contrary in the Indenture, MidAmerican
Energy has the right to set-off any payment it is otherwise required to make
thereunder with and to the extent MidAmerican Energy has theretofore made, or is
concurrently on the date of such payment making, a payment under the related
Guarantee.
If the Guarantee Trustee fails to enforce any Guarantee, a Holder of a
Preferred Security to which such Guarantee applies may institute a legal
proceeding directly against MidAmerican Energy to enforce such Holder's rights
under such Guarantee without first instituting a legal proceeding against the
Issuer of such Preferred Security or any other person or entity.
Each Issuer's Preferred Securities will evidence the rights of the Holders
thereof to the benefits of such Issuer, a trust that exists for the sole purpose
of issuing its Trust Securities and investing the proceeds of its Preferred
Securities in corresponding series of Debentures of MidAmerican Energy while
each series of Debentures represents indebtedness of MidAmerican Energy. A
principal difference between the rights of a Holder of a Preferred Security and
a holder of a Debenture is that a holder of a Debenture will accrue, and
(subject to the permissible extensions of the interest payment period) is
entitled to receive, interest on the principal amount of Debentures held, while
a Holder of Preferred Securities is only entitled to receive Distributions if
and to the extent the Issuer has funds sufficient for the payment of such
Distributions.
Upon any voluntary or involuntary dissolution, winding up or termination of
an Issuer involving the distribution of a series of Debentures, the Holders of
Trust Securities of the corresponding series will be
29
<PAGE>
entitled to receive, out of assets legally available for distribution to such
Holders, a Liquidation Distribution; provided, however, that if an Event of
Default under an applicable Trust Agreement shall have occurred and be
continuing, the holders of the Common Securities outstanding thereunder will be
entitled to receive, out of assets legally available for Distribution to such
holders, Distributions only after the Holders of the corresponding Preferred
Securities. See "Description of the Preferred Securities -- Liquidation,
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or
bankruptcy of MidAmerican Energy, each Issuer, as a Holder of Debentures, would
be a subordinated creditor of MidAmerican Energy, junior in right of payment to
all Senior Indebtedness, but entitled to receive payment in full of principal
and interest before any shareholders of MidAmerican Energy receive any payments
or distributions. Since MidAmerican Energy has agreed to pay for all costs,
expenses and liabilities of the Issuers (other than United States withholding
taxes and other than the Issuers' obligations to the Holders of Preferred
Securities under the Preferred Securities, which obligations are independently
covered by the Guarantees), the positions of a Holder of Preferred Securities
and a holder of Debentures relative to other creditors and to shareholders of
MidAmerican Energy in the event of a liquidation or bankruptcy of MidAmerican
Energy would be substantially the same.
A default or event of default under any Senior Indebtedness will not
constitute a default or Event of Default under the Debentures. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Debentures provide that no payments may be made
in respect of the Debentures until such Senior Indebtedness has been paid in
full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Debentures would
constitute an Event of Default under the Indenture.
PLAN OF DISTRIBUTION
The Preferred Securities may be sold in a public offering to or through
underwriters or dealers designated from time to time. An Issuer may sell its
Preferred Securities as soon as practicable after the effectiveness of the
Registration Statement of which this Prospectus is a part. The names of any
underwriters or dealers involved in the sale of the Preferred Securities of a
particular series in respect of which this Prospectus is delivered, the number
of Preferred Securities to be purchased by any such underwriters or dealers and
the applicable commissions or discounts will be set forth in the applicable
Prospectus Supplement.
Underwriters may offer and sell Preferred Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. In connection with the sale of Preferred Securities,
underwriters will be deemed to have received compensation from MidAmerican
Energy and/or an Issuer in the form of underwriting discounts or commissions.
Underwriters may sell Preferred Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters.
Any underwriting compensation paid by MidAmerican Energy to underwriters in
connection with the offering of the Preferred Securities, and any discounts,
concessions or commissions allowed by such underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement. Underwriters
and dealers participating in the distribution of Preferred Securities may be
deemed to be underwriters, and any discounts and commissions received by them,
and any profit realized by them on resale of such Preferred Securities, may be
deemed to constitute underwriting discounts and commissions under the Securities
Act. Underwriters and dealers may be entitled, pursuant to their agreement with
MidAmerican Energy and an Issuer, to indemnification against and contribution
toward certain civil liabilities, including liabilities under the Securities
Act, and to reimbursement by MidAmerican Energy for certain expenses.
30
<PAGE>
In connection with the offering of the Preferred Securities of a particular
series, the Issuer thereof may grant to the underwriters an option to purchase
additional Preferred Securities to cover over-allotments, if any, at the initial
public offering price (with an additional underwriting commission), as set forth
in the applicable Prospectus Supplement.
Underwriters and dealers may engage in transactions with, or perform
services for, MidAmerican Energy, an Issuer and any of their respective
affiliates.
An Issuer's Preferred Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom an Issuer's
Preferred Securities are sold by such Issuer for public offering and sale may
make a market in such Preferred Securities, but such underwriters will not be
obligated to do so and may discontinue any market-making at any time without
notice. Such Preferred Securities may or may not be listed on a national
securities exchange. No assurance can be given as to the liquidity of or the
existence of meaningful trading markets for any Preferred Securities.
LEGAL MATTERS
Certain legal matters will be passed upon for MidAmerican Energy by John A.
Rasmussen, Jr., Group Vice President and General Counsel of MidAmerican Energy,
and by Richards, Layton & Finger, special Delaware counsel to MidAmerican Energy
and the Issuers. The validity of the Preferred Securities will be passed upon
for the underwriters by Sidley & Austin. Sidley & Austin regularly serves as
special counsel to MidAmerican Energy and its affiliates on certain matters.
Sidley & Austin will rely upon the opinion of John A. Rasmussen, Jr., as to
matters of Iowa law. Mr. Rasmussen is an officer and full-time employee of
MidAmerican Energy and at September 30, 1996, he owned directly and/or
beneficially 6,200 shares of common stock of MidAmerican Energy and had been
granted, pursuant to and subject to the terms of MidAmerican Energy's Long-Term
Incentive Plan, options to purchase 40,000 shares of MidAmerican Energy common
stock and 6,500 performance shares.
EXPERTS
The consolidated financial statements and supporting schedules included in
or incorporated by reference in MidAmerican Energy's 1995 Annual Report on Form
10-K have been audited by Arthur Andersen LLP, independent public accountants,
as set forth in its report. The consolidated financial statements and supporting
schedules referred to above have been incorporated herein in reliance upon the
authority of Arthur Andersen LLP as experts in giving said reports.
31
<PAGE>
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MIDAMERICAN ENERGY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
PAGE
---------
Risk Factors....................................... S-4
MidAmerican Energy Financing I..................... S-7
MidAmerican Energy Company......................... S-9
Ratios of Earnings To Fixed Charges................ S-10
Capitalization..................................... S-11
Accounting Treatment............................... S-11
Certain Terms of the Series A Preferred
Securities....................................... S-12
Certain Terms of the Series A Guarantee............ S-14
Certain Terms of the Series A Debentures........... S-15
United States Federal Income Taxation.............. S-18
Underwriting....................................... S-23
PROSPECTUS
Available Information.............................. 2
Incorporation of Certain Documents by Reference.... 2
The Issuers........................................ 3
MidAmerican Energy Company......................... 3
Description of the Preferred Securities............ 4
Description of the Guarantees...................... 15
Description of the Debentures...................... 17
Relationship Among the Preferred Securities, the
Debentures and the Guarantees.................... 29
Plan of Distribution............................... 30
Legal Matters...................................... 31
Experts............................................ 31
</TABLE>
PREFERRED SECURITIES
MIDAMERICAN ENERGY
FINANCING I
%
PREFERRED SECURITIES, SERIES A
GUARANTEED AS SET FORTH HEREIN, BY
MIDAMERICAN ENERGY
COMPANY
------------
[LOGO]
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit Index
on page E-1 of this Registration Statement, which Index is incorporated herein
by reference.
II-1
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933,
MidAmerican Energy Company, on behalf of the Registrants, 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 amendment to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Des Moines, and State of Iowa as of this day of December, 1996.
MIDAMERICAN ENERGY COMPANY
By Stanley J. Bright*
------------------------------------
Stanley J. Bright*
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated as of this day of December, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<C> <S>
RUSSELL E. CHRISTIANSEN*
------------------------------------------- Chairman of the Board of Directors
Russell E. Christiansen
STANLEY J. BRIGHT*
------------------------------------------- President and Chief Executive Officer and Director
Stanley J. Bright (Principal Executive Officer)
PHILIP G. LINDNER* Senior Vice President and Chief Financial Officer
------------------------------------------- (Principal Financial Officer and Principal
Philip G. Lindner Accounting Officer)
JOHN A. RASMUSSEN, JR.*
------------------------------------------- Director
John A. Rasmussen, Jr.
STEPHEN F. SHELTON*
------------------------------------------- Director
Stephen F. Shelton
RONALD W. STEPIEN*
------------------------------------------- Director
Ronald W. Stepien
BEVERLY A. WHARTON*
------------------------------------------- Director
Beverly A. Wharton
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------------ ------------------------------------------------------
<C> <S>
MIDAMERICAN ENERGY FINANCING I
(Registrant)
By: MidAmerican Energy Company
as Depositor
By: STANLEY J. BRIGHT*
---------------------------------------
Stanley J. Bright
President and Chief Executive Officer
MIDAMERICAN ENERGY FINANCING II
(Registrant)
By: MidAmerican Energy Company
as Depositor
By: STANLEY J. BRIGHT*
---------------------------------------
Stanley J. Bright
President and Chief Executive Officer
*By: /s/ PAUL J. LEIGHTON
--------------------------------------
Paul J. Leighton
ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- --------------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
1(a)* -- Form of Underwriting Agreement relating to the Preferred Securities.
1(b)* -- Form of Distribution Agreement for the Medium-Term Notes.
3(a) -- Restated Articles of Incorporation of MidAmerican Energy Company, as amended. (Filed as Exhibit 3
to MidAmerican's Registration Statement on Form 8-B, File No. 11505.)
3(b) -- Restated Bylaws of MidAmerican Energy Company, as amended. (Filed as Exhibit 3.1 to MidAmerican's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1996, File No. 1-11505.)
4(c)* -- Trust Agreement for MidAmerican Energy Financing I ("MAEF I").
4(d)* -- Trust Agreement for MidAmerican Energy Financing II ("MAEF II").
4(e)+ -- Form of Amended and Restated Trust Agreement relating to the Preferred Securities. (Agreements
are substantially identical except for names and dates).
4(f)+ -- Form of Indenture relating to the Debentures.
4(g)+ -- Form of Supplemental Indenture to Indenture relating to Debentures.
4(h)+ -- Form of Debenture. (Included in Exhibit 4(g).)
4(i)+ -- Form of Guarantee Agreement. (Agreements are substantially identical except for names and dates).
4(j)+ -- Form of Agreement as to Expenses and Liabilities (Included in Exhibit 4(e).)
4(k)+ -- Form of Preferred Securities. (Included in Exhibit 4(e).)
4(l)+ -- Indenture dated as of , 1996 between the Company and The First National Bank of
Chicago, as trustee, relating to the Medium-Term Notes.
4(m)+ -- Forms of Fixed Rate Medium-Term Note. (Included in Exhibit 4(l).)
4(n)+ -- Forms of Floating Rate Medium-Term Note. (Included in Exhibit 4(l).)
4.1 -- General Mortgage Indenture and Deed of Trust dated as of January 1, 1993, between Midwest Power
Systems Inc. and Morgan Guaranty Trust Company of New York, Trustee. (Filed as Exhibit 4(b)-1
to Midwest Resources' Annual Report on Form 10-K for the year ended December 31, 1992, File No.
1-10654.)
4.2 -- First Supplemental Indenture dated as of January 1, 1993, between Midwest Power Systems Inc. and
Morgan Guaranty Trust Company of New York, Trustee. (Filed as Exhibit 4(b)-2 to Midwest
Resources' Annual Report on Form 10-K for the year ended December 31, 1992, File No. 1-10654.)
4.3 -- Second Supplemental Indenture dated as of January 15, 1993, between Midwest Power Systems Inc.
and Morgan Guaranty Trust Company of New York, Trustee. (Filed as Exhibit 4(b)-3 to Midwest
Resources' Annual Report on Form 10-K for the year ended December 31, 1992, File No. 1-10654.)
4.4 -- Third Supplemental Indenture dated as of May 1, 1993, between Midwest Power Systems Inc. and
Morgan Guaranty Trust Company of New York, Trustee. (Filed as Exhibit 4.4 to Midwest Resources'
Annual Report on Form 10-K for the year ended December 31, 1993, File No. 1-10654.)
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- --------------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
4.5 -- Fourth Supplemental Indenture dated as of October 1, 1994, between Midwest Power Systems Inc. and
Harris Trust and Savings Bank, Trustee. (Filed as Exhibit 4.5 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1994, File No. 1-10654.)
4.6 -- Fifth Supplemental Indenture dated as of November 1, 1994, between Midwest Power Systems Inc. and
Harris Trust and Savings Bank, Trustee. (Filed as Exhibit 4.6 to Midwest Resources' Annual
Report on Form 10-K for the year ended December 31, 1994, File No. 1-10654.)
4.7 -- Indenture of Mortgage and Deed of Trust, dated as of March 1, 1947. (Filed by Iowa-Illinois as
Exhibit 7B to File No. 2-6922.)
4.8 -- Sixth Supplemental Indenture dated as of July 1, 1967. (Filed by Iowa-Illinois as Exhibit 1.08 to
File No. 2-228806.)
4.9 -- Twentieth Supplemental Indenture dated as of May 1, 1982. (Filed as Exhibit 4.B.23 to
Iowa-Illinois' Quarterly Report on Form 10-Q for the period ended June 30, 1982, File No.
1-3573.)
4.10 -- Resignation and Appointment of successor Individual Trustee. (Filed by Iowa-Illinois as Exhibit
4.B.30 to Commission File No. 33-39211.)
4.11 -- Twenty-Seventh Supplemental Indenture dated as of October 1, 1991. (Filed as Exhibit 4.31.A to
Iowa-Illinois' Current Report on Form 8-K dated October 1, 1991, File No. 1-3573.)
4.12 -- Twenty-Eighth Supplemental Indenture dated as of May 15, 1992. (Filed as Exhibit 4.31.B to
Iowa-Illinois' Current Report on Form 8-K dated May 21, 1992, File No. 1-3573.)
4.13 -- Twenty-Ninth Supplemental Indenture dated as of March 15, 1993. (Filed as Exhibit 4.32.A to
Iowa-Illinois' Current Report on Form 8-K dated March 24, 1993, File No. 1-3573.)
4.14 -- Thirtieth Supplemental Indenture dated as of October 1, 1993. (Filed as Exhibit 4.34.A to
Iowa-Illinois' Current Report on Form 8-K dated October 7, 1993, File No. 1-3573.)
4.15 -- Sixth Supplemental Indenture dated as of July 1, 1995, between Midwest Power Systems Inc. and
Harris Trust and Savings Bank, Trustee. (Filed as Exhibit 4.15 to MidAmerican's Annual Report
on Form 10-K for the year ended December 31, 1995, File No. 1-11505.)
4.16 -- Thirty-First Supplemental Indenture dated as of July 1, 1995, between Iowa-Illinois Gas and
Electric Company and Harris Trust and Savings Bank, Trustee. (Filed as Exhibit 4.16 to
MidAmerican's Annual Report on Form 10-K for the year ended December 31, 1995, File No.
1-11505.)
5(a)* -- Opinion and Consent of John A. Rasmussen, Jr., Group Vice President and General Counsel of
MidAmerican Energy.
5(b)* -- Opinion and Consent of Richards, Layton & Finger, Special Delaware Counsel to MidAmerican Energy,
MAEF I and MAEF II relating to the legality of the Preferred Securities.
8(a)* -- Opinion and Consent of Sidley & Austin relating to tax matters concerning the Medium-Term Notes.
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- --------------- -------------------------------------------------------------------------------------------------
<C> <C> <S>
8(b)* -- Opinion and Consent of Sidley & Austin relating to tax matters concerning the Preferred
Securities.
12(a) -- Computation of Ratio of Earnings to Fixed Charges and Supplemental Ratio of Earnings to Fixed
Charges and Preferred Dividend Requirements of MidAmerican Energy--Consolidated. (Filed as
Exhibit 12.1 to MidAmerican's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, File No. 1-11505.)
12(b) -- Computation of Ratio of Earnings to Fixed Charges and Supplemental Ratio of Earnings to Fixed
Charges and Preferred Dividend Requirements of MidAmerican Energy--Utility Only. (Filed as
Exhibit 12.2 to MidAmerican's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, File No. 1-11505.)
23(a) -- Consent of Arthur Andersen LLP.
23(b) -- Consent of Deloitte & Touche LLP.
23(c)* -- Consents of John A. Rasmussen, Jr., Richards, Layton & Finger and Sidley & Austin are contained
in Exhibits 5(a), 5(b) and 8, respectively.
24+ -- Powers of Attorney.
25(a)* -- Statement Of Qualifications on Form T-1 of The First National Bank of Chicago as Indenture
Trustee under the Indenture relating to the Medium Term Notes.
25(b)* -- Statement Of Qualifications on Form T-1 of The First National Bank of Chicago as Property Trustee
under the Amended and Restated Trust Agreement for MidAmerican Energy Financing I.
25(c)* -- Statement of Qualifications on Form T-1 of The First National Bank of Chicago as Property Trustee
under the Amended and Restated Trust Agreement for MidAmerican Energy Financing II.
25(d)* -- Statement Of Qualifications on Form T-1 of The First National Bank of Chicago as Indenture
Trustee under the Indenture relating to the Subordinated Debentures.
25(e)* -- Statement Of Qualifications on Form T-1 of The First National Bank of Chicago as Guarantee
Trustee under the Guarantee Agreement for MidAmerican Energy Financing I.
25(f)* -- Statement of Qualifications on Form T-1 of The First National Bank of Chicago as Guarantee
Trustee under the Guarantee Agreement for MidAmerican Energy Financing II.
</TABLE>
- ------------------------
* Previously filed.
+ Amended.
E-3
<PAGE>
Exhibit 4(e)
===============================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
MIDAMERICAN ENERGY COMPANY, as Depositor
and
THE FIRST NATIONAL BANK OF CHICAGO,
FIRST CHICAGO DELAWARE INC.,
PHILIP G. LINDNER
J. SUE ROZEMA
and
PAUL J. LEIGHTON, as Trustees
Dated as of , 1996
MIDAMERICAN ENERGY FINANCING I
===============================================================================
<PAGE>
MidAmerican Energy Financing I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------- ----------------
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.07
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.09
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.08
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.13
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(a)
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.14(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . 8.14(a), 8.14(b)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . 8.02, 8.14(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01, 8.03
(e) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.10
- ----------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
ARTICLE I.
Defined Terms
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II.
Establishment of the Trust
Section 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.02. Office of the Delaware Trustee; Principal Place of
Business . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.03. Initial Contribution of Trust Property, Organizational
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.04. Issuance of the Preferred Securities . . . . . . . . . . . . 15
Section 2.05. Subscription and Purchase of Debentures; Issuance of the
Common Securities . . . . . . . . . . . . . . . . . . . . . 15
Section 2.06. Declaration of Trust; Appointment of Additional
Administrative Trustees . . . . . . . . . . . . . . . . . . 16
Section 2.07. Authorization to Enter into Certain Transactions . . . . . . 16
Section 2.08. Assets of Trust . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.09. Title to Trust Property . . . . . . . . . . . . . . . . . . . 20
ARTICLE III.
Payment Account
Section 3.01. Payment Account . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV.
Distributions; Redemption
Section 4.01. Distributions . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 4.02. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.03. Subordination of Common Securities . . . . . . . . . . . . . . 24
Section 4.04. Payment Procedures . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.05. Tax Returns and Reports . . . . . . . . . . . . . . . . . . . 25
ii
<PAGE>
ARTICLE V.
Trust Securities Certificates
Section 5.01. Initial Ownership . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.02. The Trust Securities Certificates . . . . . . . . . . . . . . 25
Section 5.03. Execution and Delivery of Trust Securities Certificates . . . 26
Section 5.04. Registration of Transfer and Exchange of Preferred
Securities Certificates . . . . . . . . . . . . . . . . . . 26
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.06. Persons Deemed Securityholders . . . . . . . . . . . . . . . . 27
Section 5.07. Access to List of Securityholders' Names and Addresses . . . . 27
Section 5.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . 28
Section 5.09. Appointment of Paying Agent . . . . . . . . . . . . . . . . . 28
Section 5.10. Ownership of Common Securities by Depositor . . . . . . . . . 29
Section 5.11. Definitive Preferred Securities Certificates . . . . . . . . . 29
Section 5.12. Book-Entry System . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.13. Rights of Securityholders . . . . . . . . . . . . . . . . . . 30
Section 5.14. Agreed Tax Treatment . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights . . . . . . . . . . . . . . . . . 31
Section 6.02. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.03. Meetings of Holders of Preferred Securities . . . . . . . . . 33
Section 6.04. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.05. Proxies, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.06. Securityholder Action by Written Consent . . . . . . . . . . . 33
Section 6.07. Record Date for Voting and Other Purposes. . . . . . . . . . . 34
Section 6.08. Acts of Securityholders . . . . . . . . . . . . . . . . . . . 34
Section 6.09. Inspection of Records . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII.
Representations and Warranties of the Property
Trustee and the Delaware Trustee
Section 7.01. Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.02. Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . 36
iii
<PAGE>
ARTICLE VIII.
The Trustees
Section 8.01. Certain Duties and Responsibilities . . . . . . . . . . . . . 37
Section 8.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.03. Certain Rights of Property Trustee . . . . . . . . . . . . . . 38
Section 8.04. Not Responsible for Recitals or Issuance of Securities . . . . 41
Section 8.05. May Hold Securities . . . . . . . . . . . . . . . . . . . . . 41
Section 8.06. Compensation; Fees; Indemnity . . . . . . . . . . . . . . . . 42
Section 8.07. Certain Trustees Required; Eligibility . . . . . . . . . . . . 42
Section 8.08. Conflicting Interests . . . . . . . . . . . . . . . . . . . . 43
Section 8.09. Co-Trustees and Separate Trustee . . . . . . . . . . . . . . . 43
Section 8.10. Resignation and Removal; Appointment of Successor . . . . . . 45
Section 8.11. Acceptance of Appointment by Successor . . . . . . . . . . . . 46
Section 8.12. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 8.13. Preferential Collection of Claims Against Depositor or
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.14. Reports by Property Trustee . . . . . . . . . . . . . . . . . 47
Section 8.15. Reports to the Property Trustee . . . . . . . . . . . . . . . 47
Section 8.16. Evidence of Compliance with Conditions Precedent . . . . . . . 47
Section 8.17. Number of Trustees . . . . . . . . . . . . . . . . . . . . . . 47
Section 8.18. Delegation of Power . . . . . . . . . . . . . . . . . . . . . 48
Section 8.19. Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.20 Outside Business . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX.
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date . . . . . . . . . . . . . . . 50
Section 9.02. Early Termination . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.03. Termination . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.04. Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Guarantee by the Depositor and Assumption of Obligations . . 52
Section 10.02. Limitation of Rights of Securityholders . . . . . . . . . . . 52
Section 10.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 10.04. Separability . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.05. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 54
iv
<PAGE>
Section 10.06. Successors . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.07. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.08. Notice and Demand . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.09. Agreement Not to Petition . . . . . . . . . . . . . . . . . . 55
Section 10.10. Conflict with Trust Indenture Act . . . . . . . . . . . . . . 55
EXHIBITS
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . Certificate of Trust
Exhibit B . . . . . . . . . . . . . . . . . . . . Common Securities Certificate
Exhibit C . . . . . . . . . . . . . . . Agreement as to Expenses and Liabilities
Exhibit D . . . . . . . . . . . . . . . . . . . Preferred Securities Certificate
v
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _________ ___, 1996,
between (i) MidAmerican Energy Company, an Iowa corporation (the
"Depositor"), (ii) The First National Bank of Chicago, a national banking
association duly organized and existing under the laws of the United States,
as trustee (the "Property Trustee" and, in its separate capacity and not in
its capacity as Property Trustee, the "Bank"), (iii) First Chicago Delaware
Inc., a corporation duly organized under the laws of Delaware, as trustee
(the "Delaware Trustee") and (iv) Philip G. Lindner, J. Sue Rozema and Paul
J. Leighton, each an individual, as trustee, and each of whose address is c/o
MidAmerican Energy Company, 666 Grand Avenue, P.O. Box 657, Des Moines, Iowa
50303-0657 (each, an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees") and
(v) the several Holders, as hereinafter defined.
W I T N E S S E T H:
--------------------
WHEREAS, the Depositor, the Property Trustee, the Delaware Trustee and
Paul J. Leighton, as the Administrative Trustee, have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into of that certain Trust Agreement, dated as of
October 24, 1996 (the "Original Trust Agreement"), and by the execution by
the Property Trustee, the Delaware Trustee and Paul J. Leighton, as
Administrative Trustee, and filing with the Secretary of State of the State
of Delaware of the Certificate of Trust, dated October 24, 1996, a copy of
which is attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee, Delaware Trustee and Paul
J. Leighton, as Administrative Trustee, desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Debentures, (ii) the issuance of
the Common Securities by the Trust to the Depositor, (iii) the issuance of
the Preferred Securities by the Trust and (iv) the appointment of additional
Administrative Trustees of the Trust;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of each other
party and for the benefit of the Securityholders, hereby amends and restates
the Original Trust Agreement in its entirety and agrees as follows:
<PAGE>
ARTICLE I.
DEFINED TERMS
SECTION 1.01. DEFINITIONS. For all purposes of this Trust Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and not
to any particular Article, Section or other subdivision.
ACT:
The term "Act" has the meaning specified in Section 6.08.
ADDITIONAL AMOUNT:
The term "Additional Amount" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the sum of the amount of
Additional Interest Attributable to Taxes and Additional Interest
Attributable to Deferral (each as defined in the Subordinated Indenture) paid
by the Depositor on a Like Amount of Debentures for such period.
ADMINISTRATIVE TRUSTEE:
The term "Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this Trust
Agreement solely in their capacities as Administrative Trustees of the Trust
created hereunder and not in their individual capacities, or such trustee's
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
2
<PAGE>
AFFILIATE:
The term "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
BANK:
The term "Bank" has the meaning specified in the preamble to this
Trust Agreement.
BANKRUPTCY EVENT:
The term "Bankruptcy Event" means, with respect to any Person:
(i) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under Federal bankruptcy law or any other
applicable Federal or State law, or appointing a receiver, liquidator,
assignee, trustee sequestrator or other similar official of such Person
or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(ii) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under Federal bankruptcy law or any other applicable Federal
or State law, or the consent by it to the filing of such petition or to
the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due.
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BANKRUPTCY LAW:
The term "Bankruptcy Laws" has the meaning specified in Section 10.09.
BOARD RESOLUTION:
The term "Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors or a duly authorized committee
thereof and to be in full force and effect on the date of such certification,
and delivered to the appropriate Trustee.
BUSINESS DAY:
The term "Business Day" means a day other than (x) a Saturday or a
Sunday, (y) a day on which banks in New York, New York are authorized or
obligated by law or executive order to remain closed or (z) a day on which
the Property Trustee's Corporate Trust Office or the Debenture Trustee's
principal corporate trust office is closed for business.
CERTIFICATE OF TRUST:
The term "Certificate of Trust" has the meaning specified in
Section 2.07(d).
CLEARING AGENCY:
The term "Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
CLOSING DATE:
The term "Closing Date" means the date of delivery of this Trust
Agreement.
CODE:
The term "Code" means the Internal Revenue Code of 1986, as amended.
COMMISSION:
The term "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
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COMMON SECURITY:
The term "Common Security" means an undivided beneficial interest in the
assets of the Trust having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
COMMON SECURITYHOLDER:
The term "Common Securityholder" means a Securityholder that holds Common
Securities.
COMMON SECURITIES CERTIFICATE:
The term "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as
Exhibit B.
CORPORATE TRUST OFFICE:
The term "Corporate Trust Office" means the principal office of the
Property Trustee at which at any particular time its corporate trust business
shall be administered, which office at the date of original execution of this
Trust Agreement is located at One First National Plaza, Suite 0126, Chicago,
IL 60670, Attention: Corporate Trust Administration, except that, with
respect to presentation of the Preferred Securities for payment or
registration of transfers or exchange and the location of the register, such
term means the office or agency of the Trustee at which at any particular
time its corporate agency business shall be conducted, which at the date of
original execution of this Trust Agreement is located as c/o First Chicago
Trust Company of New York, 14 Wall Street, 8th Floor, Window 2, New York, New
York 10005.
COVERED PERSON:
The term "Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or the
Trust's Affiliates; and (b) any Holder of Trust Securities.
DEBENTURE EVENT OF DEFAULT:
The term "Debenture Event of Default" means an "Event of Default" as
defined in the Subordinated Indenture.
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DEBENTURE REDEMPTION DATE:
The term "Debenture Redemption Date" means "Redemption Date" as defined
in the Subordinated Indenture with respect to the Debentures.
DEBENTURE TRUSTEE:
The term "Debenture Trustee" means The First National Bank of Chicago,
as trustee under the Subordinated Indenture.
DEBENTURES:
The term "Debentures" means the $_______ aggregate principal amount of
the Depositor's _______% Deferrable Interest Subordinated Debentures,
Series_____,due ________, issued pursuant to the Subordinated Indenture.
DEFINITIVE PREFERRED SECURITIES CERTIFICATES:
The term "Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.11.
DELAWARE BUSINESS TRUST ACT:
The term "Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. C. Section 3801 ET SEQ., as it may be amended from
time to time.
DELAWARE TRUSTEE:
The term "Delaware Trustee" means the Delaware corporation identified as
the "Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust formed hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
DEPOSITOR:
The term "Depositor" has the meaning specified in the preamble to this
Trust Agreement.
DISTRIBUTION DATE:
The term "Distribution Date" has the meaning specified in Section 4.01(a).
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DISTRIBUTIONS:
The term "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
EARLY TERMINATION EVENT:
The term "Early Termination Event" has the meaning specified in
Section 9.02.
EVENT OF DEFAULT:
The term "Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Trust in the payment of any Redemption
Price, plus accumulated and unpaid distributions of any Trust Security
when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect of any covenant or warranty of the Trustees in this Trust
Agreement (other than a covenant or warranty a default in whose
performance or breach is specifically dealt with in clause (ii) or
(iii), above) and continuation of such default or breach for a period of
60 days after there has been given, by registered or certified mail, to
the Trust by the Holders of at least 10% in Liquidation Amount of the
Outstanding Preferred Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(v) the occurrence of a Bankruptcy Event with respect to the
Trust.
EXCHANGE ACT:
The term "Exchange Act" has the meaning specified in Section 2.07(c).
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EXPENSE AGREEMENT:
The term "Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit C, as amended from time to time.
EXPIRATION DATE:
The term "Expiration Date" shall have the meaning specified in
Section 9.01.
GUARANTEE:
The term "Guarantee" means the Guarantee Agreement executed and delivered
by the Depositor and The First National Bank of Chicago, a national banking
association, as trustee, contemporaneously with the execution and delivery of
this Trust Agreement, for the benefit of the Holders of the Preferred
Securities, as amended from time to time.
HOLDER:
The term "Holder" has the same meaning assigned to Securityholder herein.
INDEMNIFIED PERSON:
The term "Indemnified Person" means any Trustee, any Affiliate of any
Trustee, or any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the Trust
or its Affiliates.
LIEN:
The term "Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment,
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
LIKE AMOUNT:
The term "Like Amount" means (i) Trust Securities having a Liquidation
Amount equal to the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Subordinated Indenture and the proceeds of
which will be used to pay the Redemption Price of such Trust Securities plus
accumulated and unpaid Distributions to the
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date of such payment and (ii) Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities of the Holder to whom such
Debentures are distributed.
LIQUIDATION AMOUNT:
The term "Liquidation Amount" means the stated amount of $25 per Trust
Security.
LIQUIDATION DATE:
The term "Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 9.04(a).
LIQUIDATION DISTRIBUTION:
The term "Liquidation Distribution" has the meaning specified in
Section 9.04(d).
MATURITY DATE:
The term "Maturity Date" has the meaning specified in the Subordinated
Debenture.
OFFER:
The term "Offer" has the meaning specified in Section 2.07(c).
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate
Trustee. One of the officers signing an Officers' Certificate given pursuant
to Section 8.16 shall be the principal executive, financial or accounting
officer of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
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(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
OPINION OF COUNSEL:
The term "Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of the Trust, the Property Trustee, the
Delaware Trustee or the Depositor, and who shall be reasonably acceptable to
the Property Trustee.
ORIGINAL TRUST AGREEMENT:
The term "Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
OUTSTANDING:
The term "Outstanding," when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
delivered under this Trust Agreement, except:
(i) Preferred Securities theretofore canceled by the
Administrative Trustees or delivered to the Administrative Trustees for
cancellation;
(ii) Preferred Securities for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the Holders of such Preferred
Securities; provided that, if such Preferred Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Trust Agreement; and
(iii) Preferred Securities in exchange for or in lieu of which
other Preferred Securities have been delivered pursuant to this Trust
Agreement, including pursuant to Sections 5.04, 5.05 or 5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Preferred Securities owned by
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the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Preferred Securities which such Trustee knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when all of the
outstanding Preferred Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustee the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
OWNER:
The term "Owner" means each Person who is the beneficial owner of a
Preferred Securities Certificate as reflected in the records of the Securities
Depository or, if a Securities Depository Participant is not the beneficial
owner, then as reflected in the records of a Person maintaining an account with
such Securities Depository (directly or indirectly), in accordance with the
rules of such Securities Depository.
PAYING AGENT:
The term "Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.09 and shall initially be The First National
Bank of Chicago.
PAYMENT:
The term "Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee at The First National
Bank of Chicago, or such other banking institution as the Depositor shall
select, in its trust department for the benefit of the Securityholders in which
all amounts paid in respect of the Debentures will be held and from which the
Paying Agent, pursuant to Section 5.09, shall make payments to the
Securityholders in accordance with Sections 4.01 and 4.02.
PERSON:
The term "Person" means any individual, corporation, partnership,
joint venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
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PREFERRED SECURITY:
The term "Preferred Security" means a cumulative quarterly income
preferred security representing an undivided beneficial interest in the assets
of the Trust having a Liquidation Amount of $25 and having rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
PREFERRED SECURITIES CERTIFICATE:
The term "Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the form attached
as Exhibit D.
PROPERTY TRUSTEE:
The term "Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
REDEMPTION DATE:
The term "Redemption Date" means, with respect to any Trust Security
to be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date shall be a Redemption
Date for a Like Amount of Trust Securities.
REDEMPTION PRICE:
The term "Redemption Price" means, with respect to any date fixed for
redemption of any Trust Security, the Liquidation Amount of such Trust Security.
REGISTRAR:
The term "Registrar" shall mean the registrar for the Preferred
Securities appointed by the Trust and shall be initially The First National Bank
of Chicago.
RELEVANT TRUSTEE:
The term "Relevant Trustee" shall have the meaning specified in
Section 8.10.
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RESPONSIBLE OFFICER:
The term "Responsible Officer," when used with respect to the Property
Trustee means an officer of the Property Trustee assigned by the Property
Trustee to administer its corporate trust matter.
SECURITIES DEPOSITORY:
The term "Securities Depository" shall be The Depository Trust
Company.
SECURITIES DEPOSITORY PARTICIPANT:
The term "Securities Depository Participant" means an institution
which deposits securities with a Securities Depository for holding thereby.
SECURITIES REGISTER:
The term "Securities Register" shall mean the Securities Register
described in Section 5.04.
SECURITYHOLDER OR HOLDER:
The term "Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
SUBORDINATED INDENTURE:
The term "Subordinated Indenture" means the Indenture, dated as of
__________, 1996, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
TRANSFER AGENT:
The term "Transfer Agent" shall mean one or more transfer agents for
the Preferred Securities appointed by the Trust and shall be initially The First
National Bank of Chicago.
TRUST:
The term "Trust" means the Delaware business trust created by the
Original Trust Agreement and continued hereby and identified on the cover page
to this Trust Agreement.
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TRUST AGREEMENT:
The term "Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Amended and Restated Trust Agreement and any such
modification, amendment or supplement, the provisions of the Trust Indenture Act
that are deemed to be a part of and govern this Amended and Restated Trust
Agreement and any such modification, amendment or supplement, respectively.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
TRUST PROPERTY:
The term "Trust Property" means (i) the Debentures, (ii) any cash on
deposit in, or owing to, the Payment Account and (iii) all proceeds and rights
in respect of the foregoing and any other property and assets for the time being
held by the Property Trustee pursuant to the trusts of this Trust Agreement.
TRUST SECURITY:
The term "Trust Security" means any one of the Common Securities or
the Preferred Securities.
TRUST SECURITIES CERTIFICATE:
The term "Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
UNDERWRITING AGREEMENT:
The term "Underwriting Agreement" means the Underwriting Agreement,
dated as of _______________ , 1996, among the Trust, the Depositor and the
underwriters named therein.
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ARTICLE II.
ESTABLISHMENT OF THE TRUST
SECTION 2.01. NAME. The Trust continued hereby shall be known as
"MidAmerican Energy Financing _", in which name the Trustees may engage in the
transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The office of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, or at such other address in Delaware as
the Delaware Trustee may designate by written notice to the Securityholders and
the Depositor. The principal place of business of the Trust is c/o MidAmerican
Energy Company, 666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657.
SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY, ORGANIZATIONAL
EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
SECTION 2.04. ISSUANCE OF THE PREFERRED SECURITIES. On ___________ ,
1996 the Depositor and an Administrative Trustee, on behalf of the Trust,
both executed and delivered the Underwriting Agreement. Contemporaneously with
the execution and delivery of this Trust Agreement, one of the Administrative
Trustees, on behalf of the Trust in accordance with Section 5.02, executed
manually and delivered a Preferred Securities Certificate, registered in the
name of the nominee of The Depositary Trust Company, having an aggregate
Liquidation Amount of $ _______________.
SECTION 2.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE OF
THE COMMON SECURITIES. Contemporaneously with the execution and delivery of
this Trust Agreement, the Administrative Trustees, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Debentures, registered in the name
of the Property Trustee and having an aggregate principal amount equal to
$____________, and, in satisfaction of the purchase price for such Debentures,
(x) one of the Administrative Trustees, on behalf of the Trust, shall execute
and deliver to the Depositor Common Securities Certificates, registered in the
name of the Depositor, in an aggregate amount of ____ Common Securities having
an aggregate Liquidation Amount of $ ___________, and (y) the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of $ ____________
representing the proceeds from the sale of the Preferred Securities pursuant to
the Underwriting Agreement.
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SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES. (a) The exclusive purposes and functions of the Trust
are (i) to issue Trust Securities and invest the proceeds thereof in Debentures,
and (ii) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein. The
Property Trustee hereby declares that it will hold the Trust Property in trust
upon and subject to the conditions set forth herein for the benefit of the Trust
and the Securityholders. The Trustees shall have all rights, powers and duties
set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. Anything in this Trust Agreement to
the contrary notwithstanding, the Delaware Trustee shall not be entitled to
exercise any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust
for the sole and limited purpose of fulfilling the requirements of Section 3807
of the Delaware Business Trust Act.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Trust Agreement. Subject to the limitations set forth in paragraph (b)
of this Section and Article VIII and in accordance with the following provisions
(A) and (B), the Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(i) the issuance and sale of the Trust Securities;
(ii) without the consent of any Person, to cause the Trust to
enter into and to execute, deliver and perform on behalf of the Trust,
the Underwriting Agreement, Expense Agreement, and such agreements as
may be necessary or desirable in connection with the consummation of
the transactions contemplated by the Underwriting Agreement (such
execution to be by the Administrative Trustees or any one of them);
(iii) to qualify the Trust to do business in any jurisdiction as
may be necessary or desirable;
(iv) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
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(v) the registration of the Preferred Securities under the
Securities Act of 1933, as amended, and under state securities or blue
sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(vi) the listing of the Preferred Securities upon such securities
exchange or exchanges as shall be determined by the Depositor and the
registration of the Preferred Securities under the Exchange Act, and
the preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(vii) the appointments of a Paying Agent, a Transfer Agent and a
Registrar in accordance with this Trust Agreement (subject to
Section 5.09);
(viii) registering transfers of the Trust Securities in
accordance with this Trust Agreement; and
(ix) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary
or advisable to protect and conserve the Trust Property for the
benefit of the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the power, duty
and authority to act on behalf of the Trust with respect to the following
ministerial matters:
(i) the establishment of the Payment Account;
(ii) the receipt of the Debentures;
(iii) the deposit of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(iv) the distribution of amounts owed to the Securityholders
in respect of the Trust Securities in accordance with the terms
of this Trust Agreement;
(v) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with the terms of this Trust
Agreement;
(vi) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
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(vii) as provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the execution of
the certificate of cancellation to be prepared and filed by the
Administrative Trustees with the Secretary of State of the State of
Delaware; and
(viii) the taking of any ministerial action incidental to
the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to protect and conserve the
Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
Subject to this Section 2.07(a)(B), the Property Trustee shall have
none of the duties, powers or authority of the Administrative Trustee set forth
in Section 2.07(a)(A) or the Depositor set forth in Section 2.07(c). The
Property Trustee shall have the power and authority to exercise all of the
rights, powers and privileges of a holder of Debentures under the Subordinated
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee may, for the benefit of Holders of the Trust Securities, in its
discretion proceed to protect and enforce its rights as holder of the Debentures
subject to the rights of the Holders pursuant to the terms of this Trust
Agreement.
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall cause the Trust not to (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes and not as an association taxable as a corporation, (iv)
incur any indebtedness for borrowed money or (v) take or consent to any action
that would result in the placement of a Lien on any of the Trust Property. The
Trustees shall defend all claims and demands of all Persons at any time claiming
any Lien on any of the Trust Property adverse to the interest of the Trust or
the Securityholders in their capacity as Securityholders.
(c) In connection with the issue of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) to prepare for filing by the Trust with the Commission
and to execute a registration statement on Form S-3 in relation
to the Preferred Securities, including any amendments thereto;
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(ii) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and
advise the Trustees of actions they must take on behalf of the
Trust, and prepare for execution and filing and to execute any
documents to be executed and filed by the Trust or on behalf of
the Trust, as the Depositor deems necessary or advisable in order
to comply with the applicable laws of any such States;
(iii) to prepare for filing by the Trust and to execute
an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities and to file
or cause the Administrative Trustees to file thereafter with such
exchange or market such notifications and documents as may be
necessary from time to time to maintain such listing;
(iv) to prepare for filing by the Trust with the Commission
and to execute a registration statement on Form 8-A relating to
the registration of the Preferred Securities under Section 12(b)
of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), including any amendments thereto;
(v) to execute and deliver on behalf of the Trust the
Underwriting Agreement and such other agreements as may be
necessary or desirable in connection with the consummation
thereof;
(vi) to select the investment banker or bankers to act as
underwriters with respect to the offer and sale by the Trust of
Preferred Securities ("Offer") and negotiate the terms of an
Underwriting Agreement and pricing agreement providing for the
Offer; and
(vii) to take any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or classified other than as a "grantor trust" for United
States federal income tax purposes and not as an association taxable as a
corporation and so that the Debentures will be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this connection,
subject to the provisions of Section 10.03, the Depositor and the Administrative
Trustees are authorized to take any action,
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not inconsistent with applicable law, the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust (as
amended or restated from time to time, the "Certificate of Trust") or this
Trust Agreement, that each of the Depositor and the Administrative Trustees
determines in its discretion to be necessary or desirable for such purposes,
as long as such action does not materially adversely affect the interests of
the Holders of the Preferred Securities.
SECTION 2.08. ASSETS OF TRUST. The assets of the Trust shall consist
of the Trust Property.
SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Trust and the Securityholders in accordance with this Trust
Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.01. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustees and the Paying Agent
appointed by the Administrative Trustees shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Trust Agreement. All monies and other property deposited or held from time
to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Holders of Trust Securities and
for distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
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ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.01. DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from the Closing Date,
and, except in the event that the Depositor exercises its right to extend the
interest payment period for the Debentures pursuant to Section 311 of the
Subordinated Indenture, shall be payable quarterly in arrears on March 1, June
1, September 1 and December 1 of each year, commencing on ___________, 199_. If
any date on which Distributions are otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution shall be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case, with the same force and
effect as if made on such date (each date on which distributions are payable in
accordance with this Section 4.01(a) a "Distribution Date").
(b) Distributions payable on the Trust Securities shall be fixed at a
rate of _____% per annum of the Liquidation Amount of the Trust Securities.
The amount of Distributions payable for any full quarterly period shall be
computed on the basis of twelve 30-day months and a 360-day year and for any
period shorter than a full month, on the basis of the actual number of days
elapsed. If the interest payment period for the Debentures is extended pursuant
to Section 311 of the Subordinated Indenture, then Distributions on the
Preferred Securities will be deferred for the period equal to the extension of
the interest payment period for the Debentures and the rate per annum at which
Distributions on the Trust Securities accumulate shall be increased by an amount
such that the aggregate amount of Distributions that accumulate on all Trust
Securities during any such extended interest payment period is equal to the
aggregate amount of interest (including, to the extent permitted by law,
interest payable on unpaid interest at the percentage rate per annum set forth
above, compounded quarterly) that accrues during any such extended interest
payment period on the Debentures. The amount of Distributions payable for any
period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
funds available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust
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Securities on the relevant record date, which shall be 15 days prior to the
relevant Distribution Date.
w SECTION 4.02. REDEMPTION.
(a) On each Debenture Redemption Date and on the Maturity Date of the
Debentures, the Property Trustee will be required to redeem a Like Amount of
Trust Securities at the Redemption Price plus accumulated and unpaid
Distributions to the date of such payment.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption or liquidation shall state:
(i) the Redemption Date;
(ii) the Redemption Price and the amount of accumulated and
unpaid Dividends to be paid on the Redemption Date;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price plus
accumulated and unpaid Distributions to the date of such payment will
become due and payable upon each such Trust Security to be redeemed
and that interest thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price plus accumulated and unpaid Distributions to
the date of such payment with the proceeds from the contemporaneous redemption
of Debentures. Redemptions of the Trust Securities shall be made and the
Redemption Price plus accumulated and unpaid Distributions to the date of such
payment shall be deemed payable on each Redemption Date only to the extent that
the Trust has funds immediately available in the Payment Account for such
payment.
(d) If the Property Trustee gives a notice of redemption in respect
of any Preferred Securities, then, by 12:00 noon, New York time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee shall
irrevocably deposit with the Paying Agent (or Securities Depository, in the
event the Preferred Securities are book-entry only) funds
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sufficient to pay the applicable Redemption Price plus accumulated and unpaid
Distributions to the date of such payment and will give the Paying Agent (or
Securities Depository, as the case may be) irrevocable instructions and
authority to pay the Redemption Price plus accumulated and unpaid
Distributions to the date of such payment to the Holders thereof upon
surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of
such Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then on the Redemption Date, all rights of Securityholders holding
Trust Securities so called for redemption will cease, except the right of
such Securityholders to receive the Redemption Price plus accumulated and
unpaid Distributions to the date of such payment, but without interest
thereon, and such Trust Securities will cease to be outstanding. In the
event that any Redemption Date is not a Business Day, then payment of the
Redemption Price payable on such date plus accumulated and unpaid
Distributions to such date shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay). In the event that payment of the Redemption Price plus
accumulated and unpaid Distributions in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either
by the Trust or by the Depositor pursuant to the Guarantee, Distributions on
such Trust Securities will continue to accrue, at the then applicable rate,
from the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price plus accumulated and unpaid
Distributions is actually paid, in which case the actual payment date will be
deemed the date fixed for redemption for purposes of calculating the
Redemption Price plus accumulated and unpaid Distributions to such date.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the Holders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be the fifteenth day
prior to the Redemption Date.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated 3% to the Common Securities and 97%
to the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or integral multiples thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the Transfer Agent and Registrar in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any
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Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
SECTION 4.03. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of plus accumulated and unpaid
Distributions on, the Trust Securities, as applicable, shall be made pro rata
based on the Liquidation Amount of the Trust Securities; provided, however, that
if on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including Additional Amounts,
if applicable) on all Outstanding Preferred Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price plus accumulated and unpaid Distributions the full amount of
such Redemption Price plus accumulated and unpaid Distributions on all
Outstanding Preferred Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions (including Additional Amounts,
if applicable) on, or Redemption Price of plus accumulated and unpaid
Distributions on, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from a Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any such Event of Default under this Trust Agreement until
the effect of all such Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated. Until any such
Events of Default under this Trust Agreement with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders ofthe Preferred Securities
and not on behalf of the Holder of the Common Securities, and only the Holders
of the Preferred Securities will have the right to direct the Property Trustee
to act on their behalf.
SECTION 4.04. PAYMENT PROCEDURES. Payments of Distributions in
respect of the Preferred Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Preferred Securities are held by a Securities Depository,
such Distributions shall be made to the Securities Depository, which shall
credit the relevant Persons' accounts at such Securities Depository on the
applicable distribution dates. Payments of Distributions in respect of the
Common Securities shall be made in such manner as shall be mutually agreed
between the Administrative Trustees and the Holder of the Common Securities.
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SECTION 4.05. TAX RETURNS AND REPORTS. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense and
direction, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared or filed) the Internal Revenue Service Form 1041 (or
any successor form) required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the related Internal Revenue Service Form
1099, or any successor form or the information required to be provided on such
form. The Administrative Trustees shall provide the Depositor and the Property
Trustee with a copy of all such returns, reports and schedules promptly after
such filing or furnishing. The Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of the Trust by
the contribution by the Depositor referred to in Section 2.03 and until the
issuance of the Trust Securities, and at any time during which no Trust
Securities are outstanding, the Depositor shall be the sole beneficial owner of
the Trust.
SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The Trust
Securities Certificates shall be issued in denominations of $25 Liquidation
Amount and integral multiples thereof. Subject to Section 2.04 relating to the
original issuance of the Preferred Securities Certificate registered in the name
of the nominee of The Depository Trust Company, the Trust Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee and, if executed on behalf of
the Trust by facsimile signature, countersigned by a Transfer Agent or its
agent. Trust Securities Certificates bearing the manual signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust and, if executed on behalf of the
Trust by facsimile signature, countersigned by a Transfer Agent or its agent,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.04.
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SECTION 5.03. EXECUTION AND DELIVERY OF TRUST SECURITIES
CERTIFICATES. On the Closing Date, the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.04 and 2.05, to be executed on behalf of the Trust, and in the case
of Preferred Securities executed by facsimile signature, countersigned by a
Transfer Agent or its agent, and delivered to or upon the written order of the
Depositor signed by its chairman of the board, any of its vice presidents or its
Treasurer, without further corporate action by the Depositor, in authorized
denominations. The Depositor agrees to indemnify, defend and hold each Transfer
Agent harmless against any and all costs and liabilities incurred without
negligence arising out of or in connection with any such countersigning by it.
SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES. The Registrar shall keep or cause to be kept, at its
principal corporate office, a Securities Register in which, subject to such
reasonable regulations as it may prescribe, the Registrar shall provide for the
registration of Preferred Securities Certificates and the Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees, or any one of them, shall execute on behalf
of the Trust by manual or facsimile signature and, if executed on behalf of the
Trust by facsimile signature, cause a Transfer Agent or its agent to countersign
and deliver, in the name of the designated transferee or transferees, one or
more new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates in
authorized denominations of the same class and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificates to be exchanged
at the office or agency maintained pursuant to Section 5.08.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and a
Transfer Agent duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Administrative Trustees in accordance with customary practice. The
Trust shall not be required to (i) issue, register the transfer of, or exchange
any Preferred Securities during a period beginning at the opening of business 15
calendar days before the day of mailing of a notice of redemption of any
Preferred Securities called for redemption and ending at the close of business
on the day of such mailing or (ii) register the transfer of or exchange any
Preferred Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed in part.
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No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but a Transfer Agent may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Preferred Securities
Certificates.
SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be
surrendered to a Transfer Agent, or if a Transfer Agent shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Transfer Agent and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them and the Depositor harmless, then in the absence of notice that
such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute by manual or facsimile signature and, if execution on
behalf of the Trust is by facsimile signature, countersigned by a Transfer
Agent; and the Administrative Trustees, or any one of them, shall make available
for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Trust Securities Certificate, a new Trust Securities Certificate of
like class, tenor and denomination. In connection with the issuance of any new
Trust Securities Certificate under this Section, the Administrative Trustees or
the Transfer Agent may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith. Any
duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due
presentation of a Trust Securities Certificate for registration of transfer, the
Trustees and the Registrar shall be entitled to treat the Person in whose name
any Trust Securities Certificate shall be registered in the Securities Register
as the owner of such Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever, and neither the Trustee nor
the Registrar shall be bound by any notice to the contrary.
SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
The Administrative Trustees shall furnish or cause to be furnished (x) to the
Depositor, within 15 days after receipt by any Administrative Trustee of a
request therefor from the Depositor in writing and (y) to the Property Trustee,
promptly after receipt by any Administrative Trustee of a request therefor from
the Property Trustee in writing in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, a list, in such form as
the Depositor or the Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of the most recent Record Date. If Holders
of Trust Securities Certificates evidencing ownership at such time and for the
previous six months of not less than 25% of the outstanding aggregate
Liquidation Amount apply in writing to any Administrative Trustee, and
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such application states that the applicants desire to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities Certificates and such application is accompanied by a copy
of the communication that such applicants propose to transmit, then the
Administrative Trustees shall, within five Business Days after the receipt of
such application, afford such applicants access during normal business hours to
the current list of Securityholders. Each Holder, by receiving and holding a
Trust Securities Certificate, shall be deemed to have agreed not to hold either
the Depositor or the Administrative Trustees accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The Company shall or
shall cause the Transfer Agent to maintain in the Borough of Manhattan, The City
of New York, an office or offices or agency or agencies where Preferred
Securities Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company or the Transfer
Agent in respect of the Trust Securities Certificates may be served. The
Company initially designates the Corporate Trust Office of the Property Trustee
as its office for such purposes. The Company shall or shall cause the Transfer
Agent to give prompt written notice to the Depositor, the Property Trustee and
to the Securityholders of any change in any such office or agency.
SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Securityholders from the Payment Account and shall report
the amounts of such distributions to the Administrative Trustees and the
Property Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Payment Account for the purpose of making the Distributions
referred to above. The Property Trustee shall be entitled to rely upon a
certificate of the Paying Agent stating in effect the amount of such funds so to
be withdrawn and that same are to be applied by the Paying Agent in accordance
with this Section 5.09. The Administrative Trustees or any one of them may
revoke such power and remove the Paying Agent if the Administrative Trustees or
any one of them determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Trust Agreement in any
material respect. The Paying Agent may choose any co-paying agent that is
acceptable to the Administrative Trustees and the Depositor. The Paying Agent
shall be permitted to resign upon 30 days' written notice to the Administrative
Trustees and the Depositor. In the event of the removal or resignation of the
Paying Agent, the Administrative Trustees shall appoint a successor that is
reasonably acceptable to the Property Trustee and the Depositor to act as Paying
Agent (which shall be a bank, trust company or an Affiliate of the Depositor).
The Administrative Trustees shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Administrative Trustees to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee
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and upon resignation or removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Paying Agent
appointed hereunder, and the Paying Agent shall be bound by the requirements
with respect to paying agents of securities issued pursuant to the Trust
Indenture Act. Any reference in this Trust Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the
Closing Date, the Depositor shall acquire, and thereafter retain, beneficial and
record ownership of the Common Securities. Any attempted transfer of the Common
Securities shall be void. The Administrative Trustees shall cause each Common
Securities Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE". Common Securities Certificates representing
the Common Securities shall be issued to the Depositor in the form of a
typewritten or definitive Common Securities Certificate.
SECTION 5.11. DEFINITIVE PREFERRED SECURITIES CERTIFICATES. The
Definitive Preferred Securities Certificates shall be typewritten, printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrative Trustees, as evidenced by the execution thereof
by the Administrative Trustees, or any one of them. The Trust shall issue no
Securities in bearer form.
SECTION 5.12. BOOK-ENTRY SYSTEM. Some or all of the Preferred
Securities may be registered in the name of the Securities Depository or a
nominee therefor, and held in the custody of the Securities Depository. In such
event, a single certificate will be issued and delivered to the Securities
Depository for such Preferred Securities, in which case the Owners of such
Preferred Securities will not receive physical delivery of certificates for
Preferred Securities. Except as provided herein, all transfers of beneficial
ownership interests in such Preferred Securities will be made by book-entry
only, and no investor or other party purchasing, selling or otherwise
transferring beneficial ownership of the Preferred Securities will receive, hold
or deliver any certificate for Preferred Securities. The Depositor, the
Trustees and the Paying Agent will recognize the Securities Depository or its
nominee as the Holder of Preferred Securities for all purposes, including
notices and voting; PROVIDED, that solely for the purposes of determining
whether the Holders of the requisite amount of Preferred Securities have voted
on any matter provided for in this Trust Agreement, with respect to the vote by
Owners of Preferred Securities registered in the name of a Securities
Depository, or its nominee, the Trustees may conclusively rely on, and shall be
protected in relying on, any written instrument (including a proxy) delivered to
the Trustees by such Securities Depository setting forth the Owners' votes or
assigning the right to vote on any matter to any other Persons either in whole
or in part.
The Administrative Trustees, at the direction and expense of the
Depositor, may from time to time appoint a Securities Depository or a successor
thereto and enter into a letter
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of representations or other agreement with such Securities Depository to
establish procedures with respect to the Preferred Securities. Any
Securities Depository shall be a Clearing Agency.
The Depositor and the Trustees covenant and agree to meet the
requirements of a Securities Depository for the Preferred Securities with
respect to required notices and other provisions of the letter of
representations or agreement executed with respect to such Preferred Securities.
Whenever the beneficial ownership of any Preferred Securities is
determined through the books of a Securities Depository, the requirements in
this Trust Agreement of holding, delivering or transferring such Preferred
Securities shall be deemed modified with respect to such Preferred Securities to
meet the requirements of the Securities Depository with respect to actions of
the Trustees, the Depositor and the Paying Agent. Any provisions hereof
permitting or requiring delivery of such Preferred Securities shall, while such
Preferred Securities are in a book-entry system, be satisfied by the notation on
the books of the Securities Depository in accordance with applicable state law.
SECTION 5.13. RIGHTS OF SECURITYHOLDERS. (a) The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09, and the Securityholders shall not have
any right or title therein other than an undivided beneficial interest in the
assets of the Trust conferred by their Trust Securities and they shall have no
right to call for any partition or division of property, profits or rights of
the Trust except as described below. The Trust Securities shall be personal
property giving only the rights specifically set forth therein and in this Trust
Agreement. The Preferred Securities shall have no preemptive or similar rights
and when issued and delivered to Securityholders against payment of the purchase
price therefor will be fully paid and nonassessable interests in the Trust.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default that relates to the Debentures, the Debenture
Trustee fails or the holders of not less than 33% in principal amount of the
Debentures then outstanding fail to declare the principal of the Debentures to
be immediately due and payable, the Holders of at least 33% in Liquidation
Amount of the Preferred Securities then Outstanding shall have such right by a
notice in writing to the Depositor and the Debenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on the Debentures
shall become immediately due and payable, provided that the payment of principal
and interest on the Debentures shall remain subordinated to the extent provided
in the Subordinated Indenture.
(c) For so long as any Preferred Securities remain Outstanding, if
the holders of the Debentures fail to waive any past Debenture Event of Default
under the Subordinated Indenture and its consequences with respect to the
Debentures, the Holders of not less than a majority in Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of
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all the Preferred Securities, waive any such past default and its
consequences with respect to the Debentures, except a default in the payment
of principal, premium or interest or a default in respect of a covenant or
provision which under the Subordinated Indenture cannot be modified or
amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
(d) For so long as any Preferred Securities remain Outstanding, to
the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Subordinated Indenture, upon a Debenture Event of Default
specified in Section 801(a) or 801(b) of the Subordinated Indenture, any Holder
of Preferred Securities shall have the right to institute a proceeding directly
against the Depositor, pursuant to Section 808 of the Subordinated Indenture,
for enforcement of payment to such Holder of the principal amount of or interest
on Debentures having a principal amount equal to the Liquidation Amount of the
Preferred Securities of such Holder (a "Direct Action"). The Depositor will be
subrogated to the rights of any such Holder to the extent of payment made to
such Holder pursuant to this Section 5.13(d).
(e) Except as set forth in this Section 5.13, the Holders of
Preferred Securities shall have no right to exercise directly any right or
remedy available to the holders of, or in respect of, the Debentures.
SECTION 5.14. AGREED TAX TREATMENT. Each Preferred Security issued
hereunder shall provide that the Company and, by its acceptance of a Preferred
Security or a beneficial interest therein, the Owner of, and any Person that
acquires a beneficial interest in, such Preferred Security agree that, for
United States federal, state, and local tax purposes, it is intended that such
Preferred Security constitute an undivided interest in indebtedness and agree to
treat such Preferred Security accordingly for such purposes.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.01. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 6.01, in Section 10.03 and as
otherwise required by law, no Holder of Preferred Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Securityholders from time to
time as partners or members of an association.
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(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 813 of
the Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Subordinated
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least 66 2/3% of
the aggregate Liquidation Amount of the Outstanding Preferred Securities;
provided, however, that where a consent under the Subordinated Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by any Trustee without the prior written consent of each
holder of Preferred Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of Holders of the Preferred
Securities, except pursuant to a subsequent vote of Holders of the Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Property Trustee shall, at the expense of the Depositor, obtain an
Opinion of Counsel experienced in such matters to the effect that the Trust will
be classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would materially
adversely affect the powers, preferences or special rights of the Preferred
Securities, whether by way of amendment to the Trust Agreement or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of Outstanding
Preferred Securities as a class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of the Holders of at least 66 2/3% in Liquidation Amount of the
Outstanding Preferred Securities. No amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would not be classified as a
"grantor trust" but as an association taxable as a corporation for United States
federal income tax purposes.
SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the
Holders of Preferred Securities, stating the time, place and purpose of the
meeting, shall be given by the Administrative Trustees pursuant to Section 10.08
to each Holder of a Preferred Security, at the registered address of such
Holder, at least 15 days and not more than 90 days before the meeting. At any
such meeting, any business properly before the meeting may be so considered
whether or not stated in the notice of the meeting. Any adjourned meeting may
be held as adjourned without further notice.
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SECTION 6.03. MEETINGS OF HOLDERS OF PREFERRED SECURITIES. No annual
meeting of Securityholders is required to be held. The Administrative Trustees,
however, shall call a meeting of Securityholders to vote on any matter upon the
written request of the Holders of 25% of the then Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount) and may, at any time
in their discretion, call a meeting of Holders of Preferred Securities to vote
on any matters as to which the Holders of Preferred Securities are entitled to
vote.
Holders of 50% of the then Outstanding Preferred Securities (based
upon their aggregate Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Holders of Preferred Securities present, in person or by proxy, holding more
than the lesser of (x) 66 2/3% of the then Outstanding Preferred Securities
(based upon their aggregate Liquidation Amount) held by the Holders of then
Outstanding Preferred Securities present, either in person or by proxy, at such
meeting and (y) 50% of the Outstanding Preferred Securities (based upon their
aggregate Liquidation Amount) shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled to
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons,
any one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of
a Securityholder shall be deemed valid unless challenged at or prior to its
exercise, or, if earlier, until eleven months after it is sent and the burden of
proving invalidity shall rest on the challenger.
SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding Trust
Securities entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any
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express provision of this Trust Agreement) shall consent to the action in
writing (based upon their aggregate Liquidation Amount).
SECTION 6.07. RECORD DATE FOR VOTING AND OTHER PURPOSES. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
on the Trust Securities in respect of which a record date is not otherwise
provided for in this Trust Agreement, or for the purpose of any other action,
the Administrative Trustees may from time to time fix a date, not more than 90
days prior to the date of any meeting of Securityholders or the payment of any
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.08. ACTS OF SECURITYHOLDERS. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to the Administrative Trustees. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than the individual capacity of such signer, such certificate or affidavit
shall also constitute sufficient proof of the authority of such signer. The
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee deems sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done,
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omitted or suffered to be done by the Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such Trust
Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between or among the Securityholders and
the Administrative Trustees with respect to the authenticity, validity or
binding nature of any request, demand, authorization, direction, consent, waiver
or other Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07
concerning access to the list of Securityholders, upon reasonable notice to the
Administrative Trustees and the Property Trustee, the other records of the Trust
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES OF THE PROPERTY
TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(a) the Property Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States of America;
(b) the Property Trustee has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and constitutes the valid and legally binding
agreement of the Property Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
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(d) the execution, delivery and performance by the Property Trustee
of this Trust Agreement will not violate, conflict with or constitute a breach
of the Property Trustee's charter or by-laws; and
(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Property Trustee contemplated herein require the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing Federal
or state law governing the banking or trust powers of the Property Trustee.
SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee represents and
warrants for the benefit of the Depositor and the Securityholders that:
(a) the Delaware Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) the Delaware Trustee has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Trustee enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware Trustee
of this Trust Agreement will not violate the Delaware Trustee's charter or
by-laws; and
(e) neither the authorization, execution or delivery by the Delaware
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Delaware Trustee contemplated herein require the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to any governmental authority or agency under any existing Federal
or Delaware law governing the corporate powers of the Delaware Trustee.
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ARTICLE VIII.
THE TRUSTEES
SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, the
Trust Indenture Act, and no implied covenants or obligations shall be read into
this Trust Agreement against any of the Trustees. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require any of the
Trustees to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. No Trustee, other than the
Property Trustee, shall be liable for its acts or omissions hereunder unless as
a result of its gross negligence or willful misconduct. Notwithstanding
anything contained in this Trust Agreement to the contrary, the duties and
responsibilities of the Property Trustee under this Trust Agreement shall be
subject to the protections, exculpations and limitations on liability afforded
to the Property Trustee under the provisions of the Trust Indenture Act and, to
the extent applicable, Rule 3A-7 under the Investment Company Act of 1940, as
amended, or any successor rule thereunder. Whether or not therein expressly so
provided, every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property and only to the extent that there shall be sufficient
income or proceeds from the Trust Property to enable the Property Trustee or
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the income and proceeds from the Trust Property to the extent
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.01(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) All duties and responsibilities of the Property Trustee contained
in this Trust Agreement are subject to the following:
(i) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Trust Property
shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account,
subject to the protections and limitations on
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liability afforded to the Property Trustee under this Trust Agreement,
the Trust Indenture Act and, to the extent applicable, Rule 3a-7 under
the Investment Company Act of 1940, as amended;
(ii) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of
the Trust Property or the payment of any taxes or assessments levied
thereon or in connection therewith;
(iii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with
the Depositor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account established by the Property Trustee pursuant to this
Trust Agreement and except to the extent otherwise required by law;
and
(iv) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
SECTION 8.02. NOTICE OF DEFAULTS. Within five Business Days after
the occurrence of any Event of Default, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.08, notice of any default
known to the Property Trustee to the Securityholders and the Depositor, unless
such default shall have been cured or waived. For the purpose of this Section,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the
provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) if (A) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses
of action or (B) in construing any of the provisions in this Trust
Agreement the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained
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herein or (C) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any
matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee
shall deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of action to be
taken. The Property Trustee shall take such action, or refrain
from taking such action, as the Property Trustee shall be
instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days
after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent
practicable shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action
not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for
its own bad faith, negligence or willful misconduct;
(iii) whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(iv) the Property Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(v) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust
Agreement at the request or direction of any of the Securityholders
pursuant to this Trust Agreement, unless such Securityholders shall
have offered to the Property Trustee reasonable security or indemnity
against the costs, expenses (including reasonable attorneys' fees and
expenses) and liabilities which might be incurred by it in complying
with such request or direction;
(vi) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, unless requested in writing to do so by
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one or more Securityholders, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Property Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Depositor
personally or by agent or attorney;
(vii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Property Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder, provided
that the Property Trustee shall be responsible for its own negligence
or recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(viii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Agreement;
(ix) the Property Trustee shall not be charged with knowledge of
any default or Event of Default with respect to the Trust Securities
unless either (1) a Responsible Officer of the Property Trustee shall
have actual knowledge of the default or Event of Default or (2)
written notice of such default or Event of Default shall have been
given to the Property Trustee by the Depositor, the Administrative
Trustees or by any Holder of the Trust Securities;
(x) no provision of this Trust Agreement shall be deemed to
impose any duty or obligation on the Property Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred
or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation; and no permissive
or discretionary power or authority available to the Property Trustee
shall be construed to be a duty;
(xi) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Property
Trustee shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the
terms of this Trust Agreement or adequate indemnity against such risk
or liability is not reasonably assured to it;
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(xii) the Property Trustee shall have no duty
to see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any tax or securities) (or any
rerecording, refiling or registration thereof);
(xiii) the Property Trustee shall have the right
at any time to seek instructions concerning the
administration of this Trust Agreement from any court
of competent jurisdiction; and
(xiv) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable
to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder
the Property Trustee (i) may request instructions from
the Holders of the Trust Securities, which instructions
may only be given by the Holders of the same proportion
of Liquidation Amount of the Trust Securities as would
be entitled to direct the Property Trustee under the
terms of this Trust Agreement in respect of such
remedies, rights or actions, (ii) may refrain from
enforcing such remedy or right or taking such other
action until such instructions are received, and (iii)
shall be protected in acting in accordance with such
instructions.
SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Trust or the Depositor,
and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the value or condition of the property
of the Trust or any part thereof or as to the title of the Trust thereto or
as to the security afforded thereby or hereby, or as to the validity or
genuineness of any securities at any time pledged and deposited with any
Trustees hereunder, nor as to the validity or sufficiency of this Trust
Agreement or the Trust Securities. The Trustees shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities
in accordance with Section 2.05.
SECTION 8.05. MAY HOLD SECURITIES. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity,
may become the owner or pledgee of Trust Securities and may otherwise deal
with the Trust with the same rights it would have if it were not a Trustee or
such other agent.
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SECTION 8.06. COMPENSATION; FEES; INDEMNITY.
The Depositor agrees
(1) to pay to the Trustees from time to time
reasonable compensation for all services rendered by the
Trustees hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable
expenses, disbursements and advances reasonably incurred or
made by the Trustees in accordance with any provision of
this Trust Agreement (including the reasonable compensation
and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance
as may be attributable to its negligence (gross negligence,
in the case of any Administrative Trustee), bad faith or
willful misconduct; and
(3) to indemnify each Trustee, any Affiliate of any
Trustee, and any officer, director, shareholder or employee
of any Trustee for, and to hold each of them harmless
against, any and all loss, damage, claims, liability or
expense as incurred without negligence (gross negligence, in
the case of any Administrative Trustee), bad faith or
willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this
Trust Agreement, including the reasonable costs and expenses
of defending itself against any claim or liability in
connection with the exercise or performance of any of its
powers or duties hereunder.
As security for the performance of the obligations of the Depositor
under this Section, each of the Trustees shall have a lien prior to the Trust
Securities upon all property and funds held or collected by such Trustee as
such, except funds held in trust for the payment of Distributions on the
Trust Securities.
The provisions of this Section shall survive the termination of
this Trust Agreement.
SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that
has a combined capital and surplus of at least $50,000,000. If any such
Person publishes reports of condition at least annually, pursuant to law or
to the requirements of its supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the Property
Trustee with respect to the Trust Securities shall
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cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII.
(b) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind
such entity.
(c) There shall at all times be a Delaware Trustee with respect to
the Trust Securities. The Delaware Trustee shall either be (i) a natural
person who is at least 21 years of age and a resident of the State of
Delaware or (ii) a legal entity with its principal place of business in the
State of Delaware that otherwise meets the requirements of applicable
Delaware law and that shall act through one or more persons authorized to
bind such entity.
SECTION 8.08. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Trust Agreement. The Subordinated Indenture and the Guarantee Agreement
shall be deemed to be specifically described in this Trust Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless a Debenture Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any
part of the Trust Property may at the time be located, the Depositor and the
Property Trustee shall have power to appoint, and upon the written request of
the Property Trustee, the Depositor shall for such purpose join with the
Property Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to appoint, one or more
Persons approved by the Property Trustee either to act as co-trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to
act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions of this
Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case an Event of Default
under the Subordinated Indenture has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
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Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:
(1) The Trust Securities shall be executed and
delivered and all rights, powers, duties, and obligations
hereunder in respect of the custody of securities, cash and
other personal property held by, or required to be deposited
or pledged with, the Trustees designated for such purpose
hereunder, shall be exercised, solely by such Trustees.
(2) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of
any property covered by such appointment shall be conferred
or imposed upon and exercised or performed by the Property
Trustee or by the Property Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction
in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such
act, in which event such rights, powers, duties, and
obligations shall be exercised and performed by such co-
trustee or separate trustee.
(3) The Property Trustee at any time, by an instrument
in writing executed by it, with the written concurrence of
the Depositor, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section
8.09, and, in case an Event of Default under the
Subordinated Indenture has occurred and is continuing, the
Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee
without the concurrence of the Depositor. Upon the written
request of the Property Trustee, the Depositor shall join
with the Property Trustee in the execution, delivery, and
performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned
or removed may be appointed in the manner provided in this
Section.
(4) No co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of the
Trustee, or any other such trustee hereunder.
(5) The Property Trustee shall not be liable by reason
of any act of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property
Trustee shall be deemed to have been delivered to each such
co-trustee and separate trustee.
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SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR. No resignation or removal of any Trustee (as the case
may be, the "Relevant Trustee") and no appointment of a successor
Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance
with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time by giving written
notice thereof to the Common Securityholders. If the instrument of
acceptance by a successor Trustee required by Section 8.11 shall not have
been delivered to the Relevant Trustee within 30 days after the giving of
such notice of resignation, the resigning Relevant Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, the Relevant Trustee may be removed at any time by Act of the
Common Securityholder. If a Debenture Event of Default shall have occurred
and be continuing, the Property Trustee may be removed at such time only by
Act of the Securityholders of a majority of the aggregate Liquidation Amount
of the Outstanding Preferred Securities, delivered to the Property Trustee
(in its individual capacity and on behalf of the Trust).
If the Relevant Trustee shall resign, be removed or become
incapable of continuing to act as Trustee at a time when no Debenture Event
of Default shall have occurred and be continuing, the Common Securityholder,
by Act of the Common Securityholder delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Trustee or Trustees, and the
retiring Relevant Trustee shall comply with the applicable requirements of
Section 8.11. If the Property Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing, the
Preferred Securityholders, by Act of the Preferred Securityholders of a
majority in Liquidation Amount of the Outstanding Preferred Securities
delivered to the retiring Property Trustee, shall promptly appoint a
successor Property Trustee, and such successor Property Trustee shall comply
with the applicable requirements of Section 8.11. If no successor Trustee
shall have been so appointed by the Common Securityholders or the Preferred
Securityholders and accepted appointment in the manner required by Section
8.11, any Securityholder who has been a Securityholder for at least six
months may, on behalf of such Securityholder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of
a successor Trustee.
The retiring Relevant Trustee shall give notice of each resignation
and each removal of the Relevant Trustee and each appointment of a successor
Trustee to the Common Securityholders in the manner provided in Section 10.08
and shall give notice to the Depositor. Each notice shall include the name
and address of the successor Trustee and, in the case of the Property
Trustee, the address of its Corporate Trust Office.
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Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by (i) the
unanimous act of remaining Administrative Trustees if there are at least two
of them or (ii) otherwise by the Depositor (with the successor in each case
being a Person who satisfies the eligibility requirements for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Section 8.07).
Additionally, notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event the Depositor reasonably believes that any
Administrative Trustee who is a natural person has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may
terminate the status of such Person as an Administrative Trustee (in which
case the vacancy so created will be filled in accordance with the preceding
sentence).
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of
the appointment hereunder of a successor Trustee, the retiring Relevant
Trustee and each successor Trustee shall execute and deliver an instrument
wherein each successor Trustee shall accept such appointment and which shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Relevant Trustee with respect to the Trust
Securities and the Trust and upon the execution and delivery of such
instrument the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Relevant
Trustee; but, on request of the Trust or any successor Trustee such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and
the Trust.
Upon request of any such successor Trustee, the retiring Relevant
Trustee shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts referred to in the first or second preceding paragraph, as the
case may be.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any Person into which the Property Trustee or the Delaware Trustee
or any Administrative Trustee or any Trustee that is not a natural person may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
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SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR
OR TRUST. If and when the Property Trustee shall be or become a creditor of
the Depositor or the Trust (or any other obligor upon the Debentures or the
Trust Securities), the Property Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the
Depositor or Trust (or any such other obligor).
SECTION 8.14. REPORTS BY PROPERTY TRUSTEE.
(a) the Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. Such of those reports as are
required to be transmitted by the Property Trustee pursuant to Section 313(a)
of the Trust Indenture Act shall be so transmitted within 60 days after May
15 of each year, commencing May 15, 1997.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which the Trust Securities are listed, with the Commission and
with the Depositor. The Depositor will notify the Property Trustee when any
Trust Securities are listed on any stock exchange.
SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and
the Administrative Trustees on behalf of the Trust shall provide to the
Property Trustee any documents, reports and information required, and the
compliance certificate required, by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement (including
any covenants compliance with which constitutes a condition precedent) that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the
form of an Officers' Certificate.
SECTION 8.17. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be five, provided that Depositor,
by written instrument may increase or decrease the number of Administrative
Trustees.
(b) If a Trustee ceases to hold office for any reason and the
number of Administrative Trustees is not reduced pursuant to Section 8.17(a),
or if the number of
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Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur.
The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.18. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.07(a), including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) the Administrative Trustees shall have power to delegate from
time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 8.19. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting under
this Trust Agreement shall not be liable to the Trust or to any other Covered
Person for its good faith reliance on the provisions of this Trust Agreement.
The provisions of this Trust Agreement, to the extent that they restrict the
duties and liabilities of an Indemnified Person otherwise existing at law or
in equity (other than the duties imposed on the Property Trustee under the
Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act:
(i) whenever a conflict of interest exists or
arises between an Indemnified Person and any Covered
Person; or
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(ii) whenever this Trust Agreement or any other
agreement contemplated herein or therein provides that
an Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Trust Securities, the
Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms,
considering in each case the relative interest of each
party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary
or accepted industry practices, and any applicable
generally accepted accounting practices or principles.
In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or
provided by the Indemnified Person shall not constitute
a breach of this Trust Agreement or any other agreement
contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise;
and
(c) Unless otherwise expressly provided herein and subject to the
provisions of the Trust Indenture Act, whenever in this Trust Agreement an
Indemnified Person is permitted or required to make a decision
(i) in its "discretion" or under a grant of
similar authority, the Indemnified Person shall be
entitled to consider such interests and factors as it
reasonably desires, including its own interests, and
shall have no duty or obligation to give any
consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any other
or different standard imposed by this Trust Agreement
or by applicable law.
SECTION 8.20 OUTSIDE BUSINESS. The Depositor and any Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Trust Securities
shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. Neither the Depositor, nor
any Trustee, shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and the Depositor or any
Trustee shall have the right to take for its own account (individually or as
a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Trustee may engage or be interested in
any financial or other transaction with the Depositor or any Affiliate of the
Depositor, or may act as depository for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Depositor or its Affiliates.
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ARTICLE IX.
TERMINATION AND LIQUIDATION
SECTION 9.01. TERMINATION UPON EXPIRATION DATE. The Trust shall
automatically dissolve on _____________, ______ (the "Expiration Date") and
the Trust Property shall be distributed in accordance with Section 9.04.
SECTION 9.02. EARLY TERMINATION. Upon the first to occur of any
of the following events (such first occurrence, an "Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in
respect of, or the dissolution or liquidation of, the
Depositor;
(ii) the redemption of all of the Preferred Securities;
(iii) delivery of written direction to the
Property Trustee by the Depositor at any time (which
direction is wholly optional and within the discretion
of the Depositor) to dissolve the Trust and distribute
the Debentures to Securityholders in accordance with
Section 9.04;
(iv) an order for judicial dissolution of the
Trust having been entered by a court of competent
jurisdiction;
the Trust shall dissolve and the Trustees shall take such action
as is required by Section 9.04.
SECTION 9.03. TERMINATION. The respective obligations
and responsibilities of the Trustees and the Trust created hereby
shall terminate upon the latest to occur of the following: (i)
the distribution by the Property Trustee to Securityholders upon
the liquidation of the Trust pursuant to Section 9.04, or upon
the redemption of all of the Trust Securities pursuant to Section
4.02, of all amounts required to be distributed hereunder upon
the final payment of the Trust Securities; (ii) the payment or
provision for payment of any expenses owed by the Trust; (iii)
the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders and
(iv) the filing of a certificate of cancellation under the
Delaware Business Trust Act.
SECTION 9.04. LIQUIDATION. (a) Upon the occurrence
of the Expiration Date or an Early Termination Event specified in
clause (i), (iii) or (iv) of Section 9.02, after satisfaction of
all liabilities of the Trust to its creditors, if any, as
provided by applicable law, the Trust shall be liquidated by the
Property Trustee as expeditiously as the Property Trustee
determines to be appropriate by distributing to each
Securityholder a Like Amount of Debentures, subject to Section
9.04(d). Notice of liquidation shall be given by the
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the Administrative Trustees by first-class mail, postage prepaid, mailed not
later than 30 nor more than 60 days prior to the Liquidation Date to each Holder
of Trust Securities at such Holder's address appearing in the Securities
Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the procedures
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.04(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.02(ii) or 9.04(d) applies, in order to
effect the liquidation of the Trust, if any, and distribution of the Debentures
to Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.02(ii) or 9.04(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates (or, at the election of the Depositor, a global
Debenture, subject to the provisions of the Subordinated Indenture) representing
a Like Amount of Debentures will be issued to Holders of Trust Securities
Certificates, upon surrender of such Trust Securities Certificates to the
Administrative Trustees or their agent for exchange, (iii) the Depositor shall
use its reasonable efforts to have the Debentures listed on the New York Stock
Exchange or on such other securities exchange or other organization as the
Preferred Securities are then listed or traded, (iv) any Trust Securities
Certificates not so surrendered for exchange will be deemed to represent a Like
Amount of Debentures, accruing interest at the rate provided for in the
Debentures from the last Distribution Date on which a Distribution was made on
such Trust Certificates until such Trust Securities Certificates are so
surrendered (and until such Trust Securities Certificates are so surrendered, no
payments or interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or
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otherwise, distribution of the Debentures in the manner provided herein is
determined by the Property Trustee not to be practical, the Trust Property
shall be liquidated, and the Trust shall be dissolved, wound-up or
terminated, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution, winding-up or
other termination of the Trust, Securityholders will be entitled to receive
out of the assets of the Trust available for distribution to Securityholders,
after satisfaction of liabilities owed by the Trust to its creditors, if any,
as provided by applicable law, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"). If, upon any
such dissolution, winding up or termination, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The
Holder of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, winding-up or termination pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that,
if a Debenture Event of Default has occurred and is continuing or if a
Debenture Event of Default has not occurred solely by reason of a requirement
that time lapse or notice be given, the Preferred Securities shall have a
priority over the Common Securities.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.01. GUARANTEE BY THE DEPOSITOR AND ASSUMPTION OF
OBLIGATIONS. Subject to the terms and conditions hereof, the Depositor
irrevocably and unconditionally guarantees to each Person to whom the Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries"), and agrees to
assume liability for, the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
"Obligations" means any indebtedness, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders or other similar interests
in the Trust the amounts due such Holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be. This guarantee
and assumption is intended to be for the benefit, of, and to be enforceable by,
all such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.
SECTION 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death or
incapacity of any person having an interest, beneficial or otherwise, in a Trust
Security shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such person or any Securityholder for such
person, to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
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SECTION 10.03. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trust (on approval of a majority of the Administrative Trustees and the
Depositor, without the consent of any Securityholders), (i) to cure any
ambiguity, correct or supplement any provision herein or therein which may be
inconsistent with any other provision herein or therein, or to make any other
provisions with respect to matters or questions arising under this Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement or (ii) to modify, eliminate or add to any provisions of this
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will not be classified for United States federal income tax purposes other than
as a "grantor trust" and not as an association taxable as a corporation at any
time that any Trust Securities are outstanding or to ensure the Trust's
exemption from the status of an "investment company" under the Investment
Company Act of 1940, as amended; provided, however, that, except in the case of
clause (ii), such action shall not adversely affect in any material respect the
interests of any Securityholder and, in the case of clause (i), any amendments
of this Trust Agreement shall become effective when notice thereof is given to
the Securityholders.
(b) Except as provided in Sections 6.01(c) and 10.03(c), any
provision of this Trust Agreement may be amended by the Administrative Trustees
and the Depositor with (i) the consent of Holders of Trust Securities
representing not less than a majority (based upon Liquidation Amounts) of the
Outstanding Trust Securities and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for federal income tax purposes or the Trust's
exemption from status of an "investment company" under the Investment Company
Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the Investment Company Act of 1940, as
amended, afforded by Rule 3a-5 thereunder.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Trustees, this Trust Agreement may
not be amended in a manner which imposes any additional obligation on the
Depositor or any Trustee.
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(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) The Property Trustee is entitled to receive an Opinion of Counsel
as conclusive evidence that any amendment to this Trust Agreement executed
pursuant to this Section 10.03 is authorized or permitted by, and conforms to,
the terms of this Section 10.03, has been duly authorized by and lawfully
executed and delivered on behalf of the other requisite parties, and that it is
proper for the Property Trustee under the provisions of this Section 10.03 to
join in the execution thereof.
SECTION 10.04. SEPARABILITY. In case any provision in this Trust
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. GOVERNING LAW. This Trust Agreement and the rights
and obligations of each of the Securityholders, the Trust and the Trustees with
respect to this Trust Agreement and the Trust Securities shall be construed in
accordance with and governed by the laws of the State of Delaware (without
regard to conflict of laws principles).
SECTION 10.06. SUCCESSORS. This Trust Agreement shall be binding
upon and shall inure to the benefit of any successor to the Trust or the
Relevant Trustees or any of them, including any successor by operation of law.
SECTION 10.07. HEADINGS. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
SECTION 10.08. NOTICE AND DEMAND. Any notice, demand or other
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Preferred Securityholder, to such Preferred
Securityholder as such Securityholder's name and address may appear on the
Securities Register and (ii) in the case of the Common Securityholder or the
Depositor, to MidAmerican Energy Company, 666 Grand Avenue, P.O. Box 657, Des
Moines, Iowa 50303-0657, Attention: Treasurer, facsimile no. 515-242-4261, with
a copy to the Secretary, facsimile no. 515-242-4261. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in
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writing addressed (until another address is published by the Trust) as
follows: (i) with respect to the Property Trustee or the Delaware Trustee,
One First National Plaza, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Administration with a copy to: First Chicago
Delaware Inc., 300 King Street, Wilmington, Delaware 19801 and (ii) with
respect to the Trust or the Administrative Trustees, at the address above for
notice to the Depositor, marked "Attention: Administrative Trustees for
MidAmerican Energy Financing I". Such notice, demand or other communication
to or upon the Trust or the Property Trustee shall be deemed to have been
sufficiently given or made only upon actual receipt of the writing by the
Trust or the Property Trustee.
SECTION 10.09. AGREEMENT NOT TO PETITION. Each of the Trustees and
the Depositor agrees for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article IX, it shall not file, or join in the filing of, a petition against the
Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation
or other similar law (including, without limitation, the United States
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Trust under any Bankruptcy Law. In
the event the Depositor takes action in violation of this Section 10.09, the
Property Trustee agrees, for the benefit of Securityholders, that it shall file
an answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Property Trustee or the Trust may assert.
The provisions of this Section 10.09 shall survive the termination of this Trust
Agreement.
SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act, such
required or deemed provision shall control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing interests in the Trust.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR
ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL
55
<PAGE>
OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL
CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS
HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT AND THE GUARANTEE AND THE AGREEMENT OF THE
TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS
SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
56
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be duly
executed, all as of the day and year first above written.
MIDAMERICAN ENERGY COMPANY
By:
---------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO ,
As Property Trustee
By:
---------------------------------------
Title:
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By:
---------------------------------------
Title:
---------------------------------------
Philip G. Lindner,
solely in his capacity as
Administrative Trustee
---------------------------------------
J. Sue Rozema
solely in her capacity as
Administrative Trustee
---------------------------------------
Paul J. Leighton
solely in his capacity as
Administrative Trustee
57
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MIDAMERICAN ENERGY FINANCING I
THIS CERTIFICATE OF TRUST of MidAmerican Energy Financing I (the
"Trust"), dated as of October 24, 1996, is being duly executed and filed by the
undersigned, as trustees, to create a business trust under the Delaware Business
Trust Act (12 DEL. C. Section 3801, ET SEQ.).
1. Name. The name of the business trust being created hereby is
MidAmerican Energy Financing I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware are
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective as
of its filing.
IN WITNESS WHEREOF, the undersigned, being the only trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
FIRST CHICAGO DELAWARE INC., PAUL J. LEIGHTON,
not in its individual capacity not in his individual capacity
but solely as Trustee but solely as Trustee
By: By:
-------------------------------- --------------------------------
Name: Name:
Title: Title:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Trustee
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-[ ]
Certificate Evidencing Common Securities
of
MIDAMERICAN ENERGY FINANCING I
Common Securities
(Liquidation Amount $25 per Common Security)
MidAmerican Energy Financing I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
MidAmerican Energy Company (the "Holder") is the registered owner of _____
(_____) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"). In
accordance with Section 5.10 of the Trust Agreement (as defined below) the
Common Securities are not transferable and any attempted transfer hereof shall
be void. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of _______ ___, 1996, as the same may be
amended from time to time (the "Trust Agreement"). The Trust will furnish a
copy of the Trust Agreement to the Holder without charge upon written request to
the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, an Administrative Trustee of the Trust has
executed this certificate for and on behalf of the Trust this ____ day of
_________, 199 .
MIDAMERICAN ENERGY
FINANCING I
By:
-----------------------------------
not in his (her) individual
capacity, but solely as
Administrative Trustee
2
<PAGE>
EXHIBIT C
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of ________ ___, 1996, between MidAmerican Energy
Company, an Iowa corporation ("MidAmerican Energy"), and MidAmerican Energy
Financing I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from MidAmerican Energy and to issue its
___% Preferred Securities (the "Preferred Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of ________ __, 1996 as the
same may be amended from time to time (the "Trust Agreement");
WHEREAS, MidAmerican Energy is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the acceptance by each holder of
the Preferred Securities, which acceptance MidAmerican Energy hereby agrees
shall benefit MidAmerican Energy and which acceptance MidAmerican Energy
acknowledges will be made in reliance upon the execution and delivery of this
Agreement, MidAmerican Energy, including in its capacity as holder of the Common
Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. ASSUMPTION BY MIDAMERICAN ENERGY. Subject to the
terms and conditions hereof, MidAmerican Energy hereby irrevocably and
unconditionally assumes the full payment, when and as due, of any and all
Obligations (as hereinafter defined) to each person or entity to whom the
Trust is now or hereafter becomes indebted or liable (the "Beneficiaries").
As used herein, "Obligations" means any indebtedness, expenses or liabilities
of the Trust, other than (i) obligations of the Trust to pay to holders of
any Preferred Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such
other similar interests, as the case may be and (ii) obligations arising out
of the negligence, willful misconduct or bad faith of the Trustees of the
Trust. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.
Section 1.02. TERM OF AGREEMENT. This Agreement shall terminate
and be of no further force and effect upon the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall
continue to be effective or shall be reinstated, as the case may be, if at
any time any holder of Preferred Securities or any Beneficiary must restore
payment of any sums paid under the Preferred Securities, under any Obligation,
under
<PAGE>
the Guarantee Agreement dated the date hereof by MidAmerican Energy and The
First National Bank of Chicago, as guarantee trustee, or under this Agreement
for any reason whatsoever. This Agreement is continuing, irrevocable,
unconditional and absolute.
Section 1.03. WAIVER OF NOTICE. MidAmerican Energy hereby waives
notice of acceptance of this Agreement and of any Obligation to which it
applies or may apply, and MidAmerican Energy hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
Section 1.04. NO IMPAIRMENT. The obligations, covenants,
agreements and duties of MidAmerican Energy under this Agreement shall in no
way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the extension of time for the payment by the Trust of all or
any portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part
of the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust or
any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, MidAmerican Energy with respect to the happening of
any of the foregoing.
Section 1.05. ENFORCEMENT. A Beneficiary may enforce this
Agreement directly against MidAmerican Energy and MidAmerican Energy waives
any right or remedy to require that any action be brought against the Trust
or any other person or entity before proceeding against MidAmerican Energy.
ARTICLE II
Section 2.01. BINDING EFFECT. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of MidAmerican Energy and shall inure to the
benefit of the Beneficiaries.
Section 2.02. AMENDMENT. So long as there remains any Beneficiary
or any Preferred Securities of any series are outstanding, this Agreement
shall not be modified or
2
<PAGE>
amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
Section 2.03. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt
of an answer-back, if sent by telex), to wit:
MidAmerican Energy Financing I
c/o Paul J. Leighton, Administrative Trustee
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
Facsimile No.: 515-242-4261
MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
Facsimile No.: 515-242-4261
Attention: Treasurer
Section 2.04. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES).
THIS AGREEMENT is executed as of the day and year first above written.
3
<PAGE>
(Clearing Agency Legend)
EXHIBIT D
Certificate Number Number of Preferred Securities
P- CUSIP NO.
Certificate Evidencing Preferred Securities
of
MIDAMERICAN ENERGY FINANCING I
_____% Cumulative Quarterly Income Preferred Securities
(Liquidation Amount $25 per Preferred Security)
MidAmerican Energy Financing I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
____________ (the "Holder") is the registered owner of _____ (_____) preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the MidAmerican Energy Financing I ____%
Cumulative Quarterly Income Preferred Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.04 or 5.11 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust dated
as of __________, 1996, as the same may be amended from time to time (the "Trust
Agreement"). The holder of this certificate is entitled to the benefits of the
Guarantee Agreement of MidAmerican Energy Company, an Iowa corporation (the
"Company"), and The First National Bank of Chicago, as guarantee trustee, dated
as of _____________, 1996 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Trust Agreement and the Guarantee to the holder
of this certificate without charge upon written request to the Trust at its
principal place of business or registered office.
The Company and, by its acceptance of these Preferred Securities or a
beneficial interest therein, the owner of, and any person that acquires a
beneficial interest in, these Preferred Securities agree that, for United States
federal, state and local tax purposes, it is intended that these Preferred
Securities constitute an undivided interest in indebtedness and agree to treat
these Preferred Securities accordingly for such purposes.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate for and on behalf of the Trust.
Dated: MIDAMERICAN ENERGY FINANCING I
By:
-------------------------------------
[ ]
not in his (her) individual capacity,
but solely as Administrative Trustee
[TRANSFER AGENT]
2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Insert address and zip code of assignee)
of the Preferred Securities
represented by this Preferred
Securities Certificate and
irrevocably appoints
- -----------------------------------
attorney to transfer such Preferred
Securities Certificate on the books
of the Trust. The attorney may
substitute another to act for him
or her.
Date:
------------------------------
Signature:
-------------------------
(Sign exactly as your
name appears on the other
side of this Preferred
Securities Certificate)
Signature:
-------------------------
(Sign exactly as your
name appears on the other
side of this Preferred
Securities Certificate)
<PAGE>
Exhibit 4(f)
------------------------------------------
MIDAMERICAN ENERGY COMPANY
TO
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
---------
Indenture
(For Unsecured Subordinated Debentures
relating to Trust Securities)
Dated as of , 1996
------------------------------------------
<PAGE>
TABLE OF CONTENTS
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITAL OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Other Provisions of General Application. . . . . . . . 1
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Interest Attributable to Taxes . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . .. . . . . . . . . . . . . . . . . 3
Authorized Officer. . . . . . . . . . . . . . . . . . . . . . 3
Board of Directors. . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . 3
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Securities . . . . . . . . . . . . . . . . . . . . . . 4
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request" or "Company Order. . . . . . . . . . . . . . 4
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . 4
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 5
Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . 5
Dollar, or "$ . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default. . . . . . . . . . . . . . . . . . . . . . . 5
Governmental Authority. . . . . . . . . . . . . . . . . . . . 5
Government Obligations. . . . . . . . . . . . . . . . . . . . 5
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interest Payment Date . . . . . . . . . . . . . . . . . . . . 6
Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . 6
Officer's Certificate . . . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . 7
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 7
Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . 8
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Place of Payment. . . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Security. . . . . . . . . . . . . . . . . . . . . 8
i
<PAGE>
Preferred Securities. . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . 9
Redemption Price. . . . . . . . . . . . . . . . . . . . . . . 9
Regular Record Date . . . . . . . . . . . . . . . . . . . . . 9
Responsible Officer . . . . . . . . . . . . . . . . . . . . . 9
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Security Register" and "Security Registrar. . . . . . . . . . 9
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . 10
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . 10
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
United States . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 102. Compliance Certificates and Opinions . . . . . . . . 11
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . 12
SECTION 104. Acts of Holders. . . . . . . . . . . . . . . . . . . 13
SECTION 105. Notices, etc. to Trustee and Company . . . . . . . . 14
SECTION 106. Notice to Holders of Securities; Waiver. . . . . . . 15
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . 16
SECTION 108. Effect of Headings and Table of Contents . . . . . . 16
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . 16
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . 16
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . 16
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . 16
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . 16
ARTICLE TWO . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Security Forms.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . 17
SECTION 202. Form of Trustee's Certificate of Authentication. . . 17
ARTICLE THREE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The Securities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . 18
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . 22
SECTION 303. Execution, Authentication, Delivery and Dating . . . 22
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . 24
SECTION 305. Registration, Registration of Transfer and Exchange. 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . 25
SECTION 307. Payment of Interest; Interest Rights Preserved . . . 26
ii
<PAGE>
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . 27
SECTION 309. Cancellation by Security Registrar . . . . . . . . . 28
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . 28
SECTION 311. Extension of Interest Payment. . . . . . . . . . . . 28
SECTION 312. Additional Interest Attributable to Taxes. . . . . . 28
SECTION 313. Agreed Tax Treatment . . . . . . . . . . . . . . . . 26
SECTION 314. Extension of Maturity Date; Adjustment of
Maturity Date Upon an Exchange . . . . . . . . 29
ARTICLE FOUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Redemption of Securities . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 401. Applicability of Article . . . . . . . . . . . . . . 29
SECTION 402. Election to Redeem; Notice to Trustee. . . . . . . . 30
SECTION 403. Selection of Securities to Be Redeemed . . . . . . . 30
SECTION 404. Notice of Redemption . . . . . . . . . . . . . . . . 30
SECTION 405. Securities Payable on Redemption Date. . . . . . . . 32
SECTION 406. Securities Redeemed in Part. . . . . . . . . . . . . 32
ARTICLE FIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 501. Applicability of Article . . . . . . . . . . . . . . 32
SECTION 502. Satisfaction of Sinking Fund Payments
with Securities. . . . . . . . . . . . . . . . 33
SECTION 503. Redemption of Securities for Sinking Fund. . . . . . 33
ARTICLE SIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 601. Payment of Principal, Premium and Interest . . . . . 34
SECTION 602. Maintenance of Office or Agency. . . . . . . . . . . 34
SECTION 603. Money for Securities Payments to Be Held in Trust. . 35
SECTION 604. Corporate Existence. . . . . . . . . . . . . . . . . 36
SECTION 605. Maintenance of Properties. . . . . . . . . . . . . . 36
SECTION 606. Annual Officer's Certificate as to Compliance. . . . 37
SECTION 607. Waiver of Certain Covenants. . . . . . . . . . . . . 37
SECTION 608. Restriction on Payment of Dividends. . . . . . . . . 37
SECTION 609. Maintenance of Trust Existence . . . . . . . . . . . 38
ARTICLE SEVEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Satisfaction and Discharge . . . . . . . . . . . . . . . . . . . . . . 38
iii
<PAGE>
SECTION 701. Defeasance . . . . . . . . . . . . . . . . . . . . . 38
SECTION 702. Satisfaction and Discharge of Indenture. . . . . . . 41
SECTION 703. Application of Trust Money . . . . . . . . . . . . . 41
ARTICLE EIGHT .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Events of Default; Remedies. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 801. Events of Default. . . . . . . . . . . . . . . . . . 42
SECTION 802. Acceleration of Maturity; Rescission and Annulment . 43
SECTION 803. Collection of Indebtedness and Suits for
Enforcement by Trustee. . . . . . . . . . . . 45
SECTION 804. Trustee May File Proofs of Claim . . . . . . . . . . 45
SECTION 805. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . 46
SECTION 806. Application Of Money Collected . . . . . . . . . . . 46
SECTION 807. Limitation on Suits. . . . . . . . . . . . . . . . . 47
SECTION 808. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . 47
SECTION 809. Restoration of Rights and Remedies . . . . . . . . . 48
SECTION 810. Rights and Remedies Cumulative . . . . . . . . . . . 48
SECTION 811. Delay or Omission Not Waiver . . . . . . . . . . . . 48
SECTION 812. Control by Holders of Securities . . . . . . . . . . 48
SECTION 813. Waiver of Past Defaults. . . . . . . . . . . . . . . 49
SECTION 814. Undertaking for Costs. . . . . . . . . . . . . . . . 49
SECTION 815. Waiver of Stay or Extension Laws . . . . . . . . . . 50
ARTICLE NINE. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
The Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 901. Certain Duties and Responsibilities. . . . . . . . . 50
SECTION 902. Notice of Defaults . . . . . . . . . . . . . . . . . 50
SECTION 903. Certain Rights of Trustee. . . . . . . . . . . . . . 51
SECTION 904. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . 52
SECTION 905. May Hold Securities. . . . . . . . . . . . . . . . . 52
SECTION 906. Money Held in Trust. . . . . . . . . . . . . . . . . 52
SECTION 907. Compensation and Reimbursement . . . . . . . . . . . 52
SECTION 908. Disqualification; Conflicting Interests. . . . . . . 53
SECTION 909. Corporate Trustee Required; Eligibility. . . . . . . 54
SECTION 910. Resignation and Removal; Appointment of Successor. . 54
SECTION 911. Acceptance of Appointment by Successor . . . . . . . 56
SECTION 912. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . 57
SECTION 913. Preferential Collection of Claims
Against Company. . . . . . . . . . . . . . . 58
SECTION 914. Co trustees and Separate Trustees. . . . . . . . . . 58
SECTION 915. Appointment of Authenticating Agentq . . . . . . . . 59
iv
<PAGE>
ARTICLE TEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Holders' Lists and Reports by Trustee and Company. . . . . . . . . . . 62
SECTION 1001. Lists of Holders. . . . . . . . . . . . . . . . . . 62
SECTION 1002. Reports by Trustee and Company. . . . . . . . . . . 62
ARTICLE ELEVEN.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Consolidation, Merger, Conveyance or Other Transfer . . . . . . . . . 62
SECTION 1101. Company May Consolidate, etc., Only
on Certain Terms.. . . . . . . . . . . . . . 62
SECTION 1102. Successor Corporation Substituted . . . . . . . . . 63
ARTICLE TWELVE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1201. Supplemental Indentures Without
Consent of Holders. . . . . . . . . . . . . . 63
SECTION 1202. Supplemental Indentures With Consent of Holders . . 63
SECTION 1203. Execution of Supplemental Indentures. . . . . . . . 65
SECTION 1204. Effect of Supplemental Indentures . . . . . . . . . 67
SECTION 1205. Conformity With Trust Indenture Act . . . . . . . . 67
SECTION 1206. Reference in Securities to
Supplemental Indentures . . . . . . . . . . . 67
SECTION 1207. Modification Without Supplemental Indenture . . . . 67
ARTICLE THIRTEEN . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Meetings of Holders; Action Without Meeting. . . . . . . . . . . . . . 68
SECTION 1301. Purposes for Which Meetings May Be Called . . . . . 68
SECTION 1302. Call, Notice and Place of Meetings. . . . . . . . . 68
SECTION 1303. Persons Entitled to Vote at Meetings. . . . . . . . 69
SECTION 1304. Quorum; Action. . . . . . . . . . . . . . . . . . . 69
SECTION 1305. Attendance at Meetings; Determination of Voting
Rights; Conduct and Adjournment of Meetings . 70
SECTION 1306. Counting Votes and Recording Action of Meetings . . 71
SECTION 1307. Action Without Meeting. . . . . . . . . . . . . . . 71
ARTICLE FOURTEEN . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Immunity of Incorporators, Stockholders, Officers and Directors. . . . 72
SECTION 1401. Liability Solely Corporate. . . . . . . . . . . . . 72
v
<PAGE>
ARTICLE FIFTEEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Subordination of Securities. . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1501. Securities Subordinate to Senior Indebtedness . . . 72
SECTION 1502. Payment Over of Proceeds of Securities. . . . . . . 73
SECTION 1503. Disputes with Holders of Certain Senior
Indebtedness. . . . . . . . . . . . . . . . . 75
SECTION 1504. Subrogation . . . . . . . . . . . . . . . . . . . . 75
SECTION 1505. Obligation of the Company Unconditional . . . . . . 75
SECTION 1506. Priority of Senior Indebtedness Upon Maturity . . . 76
SECTION 1507. Trustee as Holder of Senior Indebtedness. . . . . . 76
SECTION 1508. Notice to Trustee to Effectuate Subordination . . . 76
SECTION 1509. Modification, Extension, etc. of Senior
Indebtedness. . . . . . . . . . . . . . . . . 77
SECTION 1510. Trustee Has No Fiduciary Duty to Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . . 77
SECTION 1511. Paying Agents Other Than the Trustee. . . . . . . . 77
SECTION 1512. Rights of Holders of Senior Indebtedness
Not Impaired. . . . . . . . . . . . . . . . . 77
SECTION 1513. Effect of Subordination Provisions; Termination . . 78
-vi
<PAGE>
MIDAMERICAN ENERGY COMPANY
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of , 1996
Trust Indenture Act Section Indenture Section
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .909
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .909
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .914
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .908
910
311 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .913
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .913
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .913
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001
313 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1002
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .606
(b). . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d). . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
315 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .901
903
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .902
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .901
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .901
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .814
316 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .812
813
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . . . . .802
812
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . .813
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .808
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .803
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .804
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .603
318 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
-vii-
<PAGE>
INDENTURE, dated as of , 1996, between MIDAMERICAN
ENERGY COMPANY, a corporation duly organized and existing under the laws of
the State of Iowa (herein called the "Company"), having its principal office
at 666 Grand Avenue, P.O. Box 657, Des Moines, Iowa 50303-0657, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, having its
principal corporate trust office at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, as Trustee (herein called the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures (herein called the "Securities"), in an unlimited
aggregate principal amount to be issued in one or more series as contemplated
herein; and all acts necessary to make this Indenture a valid agreement of the
Company have been performed.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, capitalized terms used herein
shall have the meanings assigned to them in Article One of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
any series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all terms used herein without definition which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
<PAGE>
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the
date of such computation or, at the election of the Company from time to
time, at the date of the execution and delivery of this Indenture;
provided, however, that in determining generally accepted accounting
principles applicable to the Company, the Company shall, to the extent
required, conform to any order, rule or regulation of any administrative
agency, regulatory authority or other governmental body having jurisdiction
over the Company; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(e) certain terms, used principally in Article Nine, are defined in
that Article.
ACT:
The term "Act", when used with respect to any Holder of a Security,
has the meaning specified in Section 104.
ADDITIONAL INTEREST ATTRIBUTABLE TO DEFERRAL:
The term "Additional Interest Attributable to Deferral", means the
interest, if any, that shall accrue on any interest on the Securities of any
series the payment of which has not been made on the applicable Interest
Payment Date and which shall accrue at the rate per annum specified or
determined as specified in such Security.
ADDITIONAL INTEREST ATTRIBUTABLE TO TAXES:
The term "Additional Interest Attributable to Taxes" has the meaning
specified in Section 312.
AFFILIATE:
The term "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly
2
<PAGE>
or through one or more intermediaries, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AUTHENTICATING AGENT:
The term "Authenticating Agent" means any Person (other than the
Company or an Affiliate of the Company) authorized by the Trustee pursuant to
Section 915 to act on behalf of the Trustee to authenticate one or more
series of Securities.
AUTHORIZED OFFICER:
The term "Authorized Officer" means the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, or any
other officer or agent of the Company duly authorized by the Board of
Directors to act in respect of matters relating to this Indenture.
BOARD OF DIRECTORS:
The term "Board of Directors" means either the board of directors of
the Company or any committee thereof duly authorized to act in respect of
matters relating to this Indenture.
BOARD RESOLUTION:
The term "Board Resolution" means a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
BUSINESS DAY:
The term "Business Day", when used with respect to a Place of
Payment or any other particular location specified in the Securities or this
Indenture, means any day, other than a Saturday or Sunday, which is not a day
on which banking institutions or trust companies in such Place of Payment or
other location are generally authorized or required by law, regulation or
executive order to remain closed, except as may be otherwise specified as
contemplated by Section 301.
3
<PAGE>
COMMISSION:
The term "Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act
of 1934, as amended, or, if at any time after the date of execution and
delivery of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body, if
any, performing such duties at such time.
COMMON SECURITIES:
The term "Common Securities" means any common securities issued by a
Trust or similar securities issued by permitted successors to such Trust in
accordance with the Trust Agreement pertaining to such Trust.
COMPANY:
The term "Company" means the Person named as the "Company" in the
first paragraph of this Indenture until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
COMPANY REQUEST:
The term "Company Request" or "Company Order" means a written
request or order signed in the name of the Company by an Authorized Officer
and delivered to the Trustee.
CORPORATE TRUST OFFICE:
The term "Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution and delivery
of this Indenture is located at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126, Attention: Corporate Trust Administration,
except that, with respect to presentation of the Securities for payment or
registration of transfers or exchanges and the location of the register, such
term means the office or agency of the Trustee at which at any particular
time its corporate agency business shall be conducted, which at the date of
original execution of this Indenture is located at c/o First Chicago Trust
Company of New York, 14 Wall Street, 8th Floor - Window 2, New York, New York
10005.
4
<PAGE>
CORPORATION:
The term "Corporation" means a corporation, association, company,
joint stock company or business trust.
DEFAULTED INTEREST:
The term "Defaulted Interest" has the meaning specified in Section
307.
DOLLAR:
The term "Dollar, or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal
tender for the payment of public and private debts.
EVENT OF DEFAULT:
The term "Event of Default" has the meaning specified in Section 801.
GOVERNMENTAL AUTHORITY:
The term "Governmental Authority" means the government of the United
States or of any State or Territory thereof or of the District of Columbia or
of any county, municipality or other political subdivision of any or the
foregoing, or any department, agency, authority or other instrumentality of
any of the foregoing.
GOVERNMENT OBLIGATIONS:
The term "Government Obligations" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States and
entitled to the benefit of the full faith and credit thereof; and
(b) certificates, depositary receipts or other instruments which
evidence a direct ownership interest in obligations described in clause (a)
above or in any specific interest or principal payments due in respect
thereof; provided, however, that the custodian of such obligations or
specific interest or principal payment shall be a bank or trust company
(which may include the Trustee or any Paying Agent) subject to Federal or
state supervision or examination with a combined capital and surplus of at
least $50,000,000; and provided,
5
<PAGE>
further, that except as may be otherwise required by law, such custodian
shall be obligated to pay to the holders of such certificates,
depositary receipts or other instruments the full amount receive by such
custodian in respect of such obligations or specific payments and shall
not be permitted to make any deduction therefrom.
GUARANTEE:
The term "Guarantee" means the guarantee agreement delivered from the
Company to a Trust, for the benefit of the holders of Preferred Securities
issued by such Trust.
HOLDER:
The term "Holder" means a Person in whose name a Security is
registered in the Security Register.
INDENTURE:
The term "Indenture" means this instrument as originally executed
and delivered and as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof and shall include the terms of a
particular series of Securities established as contemplated by Section 301.
INTEREST PAYMENT DATE:
The term "Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
MATURITY DATE:
The term "Maturity Date", when used with respect to any Security,
means the date on which the principal of such Security or an installment of
principal becomes due and payable as provided in such Security or in this
Indenture, whether at the Stated Maturity, by declaration of acceleration, upon
call for redemption or otherwise.
OFFICER'S CERTIFICATE:
The term "Officer's Certificate" means a certificate signed by an
Authorized Officer and delivered to the Trustee.
6
<PAGE>
OPINION OF COUNSEL:
The term "Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, or other counsel acceptable
to the Trustee.
OUTSTANDING:
The term "Outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities deemed to have been paid in accordance with Section
701; and
(c) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it and the Company that such Securities are held by a bona
fide purchaser or purchasers in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture,
or the Outstanding Securities of any series, have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether or not
a quorum is present at a meeting of Holders of Securities, Securities owned by
the Company or any other obligor upon the Securities 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 Indenture, or all Outstanding
Securities of each such series, as the case may be, determined without regard
to this provision) shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver or upon any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so
disregarded; provided, however, that Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor;
and provided, further, that, in the case of any Security the principal of which
is payable from time to time without presentment or surrender, the principal
amount of such Security that shall be deemed to be Outstanding at any time for
all purposes of this
7
<PAGE>
Indenture shall be the original principal amount thereof less the aggregate
amount of principal thereof theretofore paid.
PAYING AGENT:
The term "Paying Agent" means any Person, including the Company,
authorized by the Company to pay the principal of, and premium, if any, or
interest, if any, on any Securities on behalf of the Company.
PERSON:
The term "Person" means any individual, corporation, partnership,
joint venture, trust or unincorporated organization or any Governmental
Authority.
PLACE OF PAYMENT:
The term "Place of Payment", when used with respect to the Securities
of any series, means the place or places, specified as contemplated by Section
301, at which, subject to Section 602, principal of and premium, if any, and
interest, if any, on the Securities of such series are payable.
PREDECESSOR SECURITY:
The term "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed (to the
extent lawful) to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
PREFERRED SECURITIES:
The term "Preferred Securities" means any preferred securities issued
by a Trust or similar securities issued by permitted successors to such Trust
in accordance with the Trust Agreement pertaining to such Trust.
PROPERTY TRUSTEE:
The term "Property Trustee" has the meaning specified in each Trust
Agreement.
8
<PAGE>
REDEMPTION DATE:
The term "Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
REDEMPTION PRICE:
The term "Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
REGULAR RECORD DATE:
The term "Regular Record Date" for the interest payable on any
Interest Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 301.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the Trustee,
means any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
SECURITIES:
The term "Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any securities authenticated and
delivered under this Indenture.
SECURITY REGISTER AND SECURITY REGISTRAR:
The terms "Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
SENIOR INDEBTEDNESS:
The term "Senior Indebtedness" means all obligations (other than
non-recourse obligations and the indebtedness issued under this Indenture) of,
or guaranteed or assumed by, the Company for borrowed money, including both
senior and subordinated indebtedness for borrowed money (other than the
Securities), 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 as in
effect from time to time, 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
9
<PAGE>
obligations, whether existing as of the date of this Indenture or
subsequently incurred by the Company unless, in the case of any particular
indebtedness, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is not
superior in right of payment to or is pari passu with the Securities;
provided that the Company's obligations under the Guarantee shall not be
deemed to be Senior Indebtedness.
SPECIAL RECORD DATE:
The term "Special Record Date" for the payment of any Defaulted
Interest on the Securities of any series means a date fixed by the Trustee
pursuant to Section 307.
STATED MATURITY:
The term "Stated Maturity", when used with respect to any obligation
or any installment of principal thereof or interest thereon, means the date on
which the principal of such obligation or such installment of principal or
interest is stated to be due and payable (without regard to any provisions for
redemption, prepayment, acceleration, purchase or extension).
TRUST:
The term "Trust" means MidAmerican Energy Financing I, a statutory
business trust created under the laws of the State of Delaware, MidAmerican
Energy Financing II, a statutory business trust created under the laws of
Delaware, or any other Trust designated pursuant to Section 301 hereof or any
permitted successor under the Trust Agreement pertaining to such Trust.
TRUST AGREEMENT:
The term "Trust Agreement" means any agreement establishing a Trust,
in each case, among the Company, as Depositor, the trustees named therein and
several holders referred to therein as they may be amended from time to time.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
10
<PAGE>
TRUSTEE:
The term "Trustee" means the Person named as the "Trustee" in the
first paragraph of this Indenture until a successor Trustee shall have become
such with respect to one or more series of Securities pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
UNITED STATES:
The term "United States" means the United States of America, its
Territories, its possessions and other areas subject to its political
jurisdiction.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Except as
otherwise expressly provided in this Indenture, upon any application or
request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall, if requested by the Trustee, furnish to
the Trustee an Officer's Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action
(including any covenants compliance with which constitutes a condition
precedent) have been complied with and an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such Officer's
Certificate or opinion are based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officer's Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally filed in the corrected form and, irrespective of the date or dates of
the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is
substituted. Anything in this Indenture to the contrary notwithstanding, if any
such corrective document or instrument indicates that action has been taken by
or at the request of the Company which could not have been taken had the
original document or instrument not contained such error or omission, the action
so taken shall not be invalidated or otherwise rendered ineffective but shall be
and remain in full force and effect, except to the extent that such action was a
result of willful misconduct or bad faith. Without limiting the generality of
the foregoing, any Securities issued under the authority of such defective
document or instrument shall nevertheless be the valid obligations of the
Company entitled to the
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benefits of this Indenture equally and ratably with all other Outstanding
Securities, except as aforesaid.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be made,
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing or, alternatively, may be embodied
in and evidenced by the record of Holders voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of
Holders duly called and held in accordance with the provisions of Article
Thirteen, or a combination of such instruments and any such record. Except
as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments or record or both are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
(subject to section 901) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders shall be proved in the manner provided in Section 1306.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof or may be proved in any other manner which the Trustee
and the Company deem sufficient. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate
or affidavit shall also constitute sufficient proof of his authority.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act of a Holder shall bind every
future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted
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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 Security.
(e) Until such time as written instruments shall have been
delivered to the Trustee with respect to the requisite percentage of
principal amount of Securities for the action contemplated by such
instruments, any such instrument executed and delivered by or on
behalf of a Holder may be revoked with respect to any or all of such
Securities by written notice by such Holder or any subsequent Holder,
proven in the manner in which such instrument was proven.
(f) Securities of any series authenticated and delivered after
any Act of Holders may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any action taken by
such Act of Holders. If the Company shall so determine, new
Securities of any series so modified as to conform, in the opinion of
the Trustee and the Company, to such action may be prepared and
executed by the Company and authenticated and delivered by the Trustee
in exchange for Outstanding Securities of such series.
(g) If the Company shall solicit from Holders any request,
demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, 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 Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
election, waiver or other Act, and for that purpose the Outstanding
Securities shall be computed as of the record date.
SECTION 105. NOTICES, ETC. TO TRUSTEE AND COMPANY. Any request,
demand, authorization, direction, notice, consent, election, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with, the Trustee by any Holder or by the
Company, or the Company by the Trustee or by any Holder, shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and delivered personally to an officer or other responsible employee of
the addressee, or transmitted by facsimile transmission or other direct written
electronic means to such telephone number or other electronic communications
address as the parties hereto shall from time to time designate, or transmitted
by certified or registered mail, charges prepaid, to the applicable address
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set opposite such party's name below or to such other address as either party
hereto may from time to tire designate:
If to the Trustee, to:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
Telephone: (815) 356-0390
Telecopy: (312) 407-1708
If to the Company, to:
MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
Attention:
Telephone: (515) 242-4300
Telecopy: (515) 242-4261
Any communication contemplated herein shall be deemed to have been made,
given, furnished and filed if personally delivered, on the date of delivery;
if transmitted by facsimile transmission or other direct written electronic
means, on the date of transmission; and if transmitted by registered mail, on
the date of receipt.
SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER. Except as
otherwise expressly provided herein, where this Indenture provides for notice
to Holders of any event, such notice shall be sufficiently given, and shall
be deemed given, to Holders if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at the address of such Holder
as it appears in the Security Register, not later than the latest date, if
any, and not earlier than the earliest date, if any, prescribed for the
giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders by mail, then such notification as shall be made with the approval of
the Trustee shall constitute a sufficient notification for every purpose
hereunder. In any case, where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with
respect to other Holders.
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Any notice required by this Indenture may be waived in writing by
the Person entitled to receive such notice, either before or after the event
specified therein, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision
of this Indenture limits, qualifies or conflicts with another provision
hereof which is required or deemed to be included in this Indenture by, or is
otherwise governed by, any of the provisions of the Trust Indenture Act, such
other provision shall control; and if any provision hereof otherwise
conflicts with the Trust Indenture Act, the Trust Indenture Act shall control.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings in this Indenture and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS. All covenants and agreements
in this Indenture by the Company and Trustee shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE. In case any provision in this
Indenture or the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture or
the Securities, express or implied, shall give to any Person, other than the
parties hereto, their successors hereunder, the Holders and, so long as the
notice described in Section 1513 hereof has not been given, the holders of
Senior Indebtedness, any benefit or any legal or equitable right, remedy or
claim under this Indenture; provided, however, if the Property Trustee fails
to enforce its rights with respect to the Securities or the related Trust
Agreement, a holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce the Property Trustee's rights with
respect to the Securities or such Trust Agreement, to the fullest extent
permitted by law, without first instituting any legal proceeding against the
Property Trustee or any other person or entity.
SECTION 112. GOVERNING LAW. This Indenture and the Securities
shall be governed by and construed in accordance with the laws of the State
of New York, except to the extent that the law of any other jurisdiction
shall be mandatorily applicable.
SECTION 113. LEGAL HOLIDAYS. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day at any Place of
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Payment, then (notwithstanding any other provision of this Indenture or of
the Securities other than a provision in Securities of any series, or in the
Board Resolution or Officer's Certificate which establishes the terms of the
Securities of such series, which specifically states that such provision
shall apply in lieu of this Section) payment of interest or principal and
premium, if any, need not be made at such Place of Payment on such date, but
may be made on the next succeeding Business Day at such Place of Payment,
except that if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect, and in the same amount, as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity, as
the case may be, and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to such Business Day.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY. The definitive Securities of each
series shall be in substantially the form or forms thereof established in the
indenture supplemental hereto establishing such series or in a Board
Resolution establishing such series, or in an Officer's Certificate pursuant
to such supplemental indenture or Board Resolution, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
If the form or forms of Securities of any series are established in a Board
Resolution or in an Officer's Certificate pursuant to a Board Resolution,
such Board Resolution and Officer's Certificate, if any, shall be delivered
to the Trustee at or prior to the delivery of the Company Order contemplated
by Section 303 for the authentication and delivery of such Securities.
Unless otherwise specified as contemplated by Section 301, the
Securities of each series shall be issuable in registered form without
coupons. The definitive Securities shall be produced in such manner as shall
be determined by the officers executing such Securities, as evidenced by
their execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication shall be in substantially the form
set forth below:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
----------------------------
as Trustee
By:
------------------------
Authorized Signatory
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited; provided, however, that all Securities shall be
issued to a Trust in exchange for Common Securities of the Trust or to
evidence loans by a Trust of the proceeds of the issuance of Preferred
Securities and Common Securities of such Trust.
The Securities may be issued in one or more series. Prior to the
authentication and delivery of Securities of any series there shall be
established by specification in a supplemental indenture or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental
indenture or a Board Resolution:
a) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of all other
series);
b) any limit upon the aggregate principal amount of the Securities
of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of such series pursuant to Section 304, 305, 306, 406 or 1206
and except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
c) the Person or Persons (without specific identification) to whom
interest on Securities of such series shall be payable on any Interest
Payment Date, if other than the
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Persons in whose names such Securities (or one or more Predecessor
Securities) are registered at the close of business on the Regular
Record Date for such interest;
d) the date or dates on which the principal of the Securities of
such series is payable or any formulary or other method or other means by
which such date or dates shall be determined, by reference or otherwise
(without regard to any provisions for redemption, prepayment, acceleration,
purchase or extension);
e) the rate or rates at which the Securities of such series shall
bear interest, if any (including the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates at which
such Securities shall bear interest prior to the Maturity Date and, if
applicable, the rate or rates at which overdue premium or interest shall
bear interest, if any), or any formulary or other method or other means by
which such rate or rates shall be determined, by reference or otherwise;
the date or dates from which such interest shall accrue; the Interest
Payment Dates on which such interest shall be payable and the Regular
Record Date, if any, for the interest payable on such Securities on any
Interest Payment Date; the right of the Company, if any, to extend the
interest payment periods and the duration of any such extension as
contemplated by Section 311; and the basis of computation of interest, if
other than as provided in Section 310;
f) the place or places at which or methods by which (l) the
principal of and premium, if any, and interest, if any, on Securities of
such series shall be payable, (2) registration of transfer of Securities of
such series may be effected, (3) exchanges of Securities of such series may
be effected and (4) notices and demands to or upon the Company in respect
of the Securities of such series and this Indenture may be served; the
security Registrar for such series; and if such is the case, that the
principal of such Securities shall be payable without presentment or
surrender thereof;
g) 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
the Securities of such series may be redeemed, in whole or in part, at the
option of the Company and any restrictions on such redemptions, including
but not limited to a restriction on a partial redemption by the Company of
the Securities of any series resulting in delisting of such Securities from
any national exchange;
h) the obligation or obligations, if any, of the Company to redeem
or purchase the Securities of such series pursuant to any sinking fund or
other mandatory redemption provisions or at the option of a 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 such
Securities shall be redeemed or purchased, in whole or in part, pursuant to
such
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obligation, and applicable exceptions to the requirements of Section 404
in the case of mandatory redemption or redemption at the option of the
Holder;
i) the denominations in which Securities of such series shall be
issuable if other than denominations of $25 and any integral multiple
thereof;
j) the currency or currencies, including composite currencies, in
which payment of the principal of and premium, if any, and interest, if
any, on the Securities of such series shall be payable (if other than in
Dollars);
k) if the principal of or premium, if any, or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than that in which
the securities are stated to be payable, the period or periods within which
and the terms and conditions upon which, such election may be made;
l) if the principal of or premium, if any, or interest, if any, on
the Securities of such series 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;
m) if the amount payable in respect of principal of or premium, if
any, or interest, if any, on the Securities of such series may be
determined with reference to an index or other fact or event ascertainable
outside this Indenture, the manner in which such amounts shall be
determined to the extent not established pursuant to clause (e) of this
paragraph;
n) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series which shall be payable upon
declaration of acceleration of the Maturity Date thereof pursuant to
Section 802;
o) any addition to or change in the Events of Default which apply to
any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 802;
p) the terms, if any, pursuant to which the Securities of such
series may be converted into or exchanged for shares of capital stock or
other securities of the Company or any other Person;
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q) the obligations or instruments, if any, which shall be considered
to be Government Obligations in respect of the Securities of such series
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 Securities after the satisfaction
and discharge thereof as provided in Section 701;
r) if the Securities of such series are to be issued in global form,
(i) any limitations on the rights of the Holder or Holders of such
Securities 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
Securities;
s) if the Securities of such series are to be issuable as bearer
securities, any and all matters incidental thereto which are not
specifically addressed in a supplemental indenture as contemplated by
clause (g) of Section 1201;
t) to the extent not established pursuant to clause (r) of this
paragraph, any limitations on the rights of the Holders of the Securities
of such Series to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be made for
the registration of transfer or exchange of Securities of such series, the
amount or terms thereof;
u) any exceptions to Section 113, or variation in the definition of
Business Day, with respect to the Securities of such series;
v) the designation of the Trust to which Securities of such series
are to be issued;
w) any addition to or change in the covenants set forth in Article
Six which applies to Securities of the series;
x) subject to Section 314, the right of the Company to change the
Maturity Date of the Securities upon the liquidation of the corresponding
Trust and the exchange of such Securities for the Preferred Securities of
such Trust;
y) subject to Section 314, the right of the Company to extend the
Maturity Date for the Securities of such series; and
z) any other terms of the Securities of such series not inconsistent
with the provisions of this Indenture.
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All securities of any one series shall be substantially identical,
except as to principal amount and date of issue and except as may be set forth
in the terms of such series as contemplated above. The Securities of each
series shall be subordinated in right of payment to Senior Indebtedness as
provided in Article Fifteen.
SECTION 302. DENOMINATIONS. Unless otherwise provided as
contemplated by Section 301 with respect to any series of Securities, the
Securities of each series shall be issuable in denominations of $25 and any
integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, the Securities shall be executed on behalf of the Company by an
Authorized Officer and attested by any other Authorized Officer or by the
Secretary or an Assistant Secretary of the Company. The signature of any or all
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of execution Authorized Officers or the Secretary or an
Assistant Secretary of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.
The Trustee shall authenticate and deliver Securities of a series, for
original issue, at one time or from time to time in accordance with the Company
Order referred to below, upon receipt by the Trustee of:
a) the instrument or instruments establishing the form or forms and
terms of such series, as provided in sections 201 and 301;
b) a Company Order requesting the authentication and delivery of
such Securities and, to the extent that the terms of such Securities shall
not have been established in an indenture supplemental hereto or in a Board
Resolution, or in an Officer's Certificate pursuant to a supplemental
indenture or Board Resolution, all as contemplated by Sections 201 and 301,
establishing such terms;
c) the Securities of such series, executed on behalf of the Company
by an Authorized Officer;
d) an Opinion of Counsel to the effect that:
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(i) the form or forms of such Securities have been duly
authorized by the Company and have been established in conformity with
the provisions of this Indenture;
(ii) the terms of such Securities have been duly authorized by
the Company and have been established in conformity with the
provisions of this Indenture; and
(iii) such Securities, when authenticated and delivered by
the Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
have been duly issued under this Indenture and will constitute valid
and legally binding obligations of the Company, entitled to the
benefits provided by this Indenture, and enforceable in accordance
with their terms, subject, as to enforcement, to laws relating to or
affecting generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
If the form or terms of the Securities of any series have been
established by or pursuant to a Board Resolution or an Officer's Certificate as
permitted by Section 201 or 301, the Trustee shall not be required to
authenticate such Securities if the issuance of such securities pursuant to this
Indenture will materially or adversely affect the Trustee's own rights, duties
or immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, each Security shall be dated the date of its
authentication.
Unless otherwise specified as contemplated by Section 301 with respect
to any series of Securities, no Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee or an Authenticating Agent by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder to the Company, or any Person acting on its behalf, but
shall never have been issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all
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purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits hereof.
SECTION 304. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
order the Trustee shall authenticate and deliver, temporary Securities, which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities;
provided, however, that temporary Securities need not recite specific
redemption, sinking fund, conversion or exchange provisions.
Unless otherwise specified as contemplated by Section 301 with respect
to the Securities of any series, after the preparation of definitive Securities
of such series the temporary Securities of such series shall be exchangeable,
without charge to the Holder thereof, for definitive Securities of such series
upon surrender of such temporary Securities at the office or agency of the
Company maintained pursuant to Section 602 in a Place of Payment for such
Securities. Upon such surrender of temporary securities for such exchange, the
Company shall, except as aforesaid, execute and the Trustee shall authenticate
and deliver in exchange therefor definitive Securities of the same series, of
authorized denominations and of like tenor and aggregate principal amount.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept in each office designated pursuant to Section
602, with respect to the Securities of each series, a register (all registers
kept in accordance with this Section being collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities of such
series and the registration of transfer thereof. The Company shall designate
one Person to maintain the Security Register for the Securities of each series
on a consolidated basis and such Person is referred to herein, with respect to
such series, as the "Security Registrar." Anything herein to the contrary
notwithstanding, the Company may designate one or more of its offices as an
office in which a register with respect to the Securities of one or more series
shall be maintained, and the Company may designate itself the Security Registrar
with respect to one or more of such series. The Security Register shall be open
for inspection by the Trustee and the Company at all reasonable times.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, upon surrender for registration of
transfer of any Security of such series
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at the office or agency of the Company maintained pursuant to Section 602 in
a Place of Payment for such series, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series, of
authorized denominations and of like tenor and aggregate principal amount.
Except as otherwise specified as contemplated by Section 301 with
respect to the Securities of any series, any Security of such series may be
exchanged at the option of the Holder, for one or more new Securities of the
same series, of authorized denominations and of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at any such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities delivered upon any registration of transfer or exchange
of Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Trustee or the
Security Registrar) be duly endorsed or shall be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, duly executed by the Holder thereof or
the attorney of such Holder duly authorized in writing.
Unless otherwise specified as contemplated by Section 301 with respect
to Securities of any series, no service charge shall be made for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 406 or 1206 not
involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series
during a period of 15 days immediately preceding the date of the mailing of any
notice of redemption of such Securities called for redemption or (b) any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If
any mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series, and of like tenor and principal amount and bearing
a number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the ownership of and the destruction, loss or
theft of any Security and (b) such security or indemnity as may be reasonably
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
is held by a Person purporting to be the owner of such security, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security, a new Security of the same series, and
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
Notwithstanding the foregoing, in case any such mutilated, destroyed,
lost or stolen Security has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such
Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone other than
the Holder of such new Security, and any such new Security shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of such series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless
otherwise specified as contemplated by Section 301 with respect to the
Securities of any series, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Subject to Section 311, any interest on any Security of any series
which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the Holder on the related Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in clause (a) or (b) below:
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a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a date (herein called a "Special Record Date") for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the Payment of such Defaulted interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall promptly cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Securities of such series, at the
address of such Holder as it appears in the Security Register, not less
then 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date.
b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
security.
SECTION 308. PERSONS DEEMED OWNERS. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and premium, if any, and
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(subject to Sections 305 and 307) interest, if any, on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION BY SECURITY REGISTRAR. All Securities
surrendered for payment, redemption, registration of transfer or exchange shall,
if surrendered to any Person other than the Security Registrar, be delivered to
the Security Registrar and, if not theretofore canceled, shall be promptly
canceled by the Security Registrar. The Company may at any time deliver to the
Security Registrar for cancellation any securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner whatsoever
or which the Company shall not have issued and sold, and all Securities so
delivered shall be promptly canceled by the Security Registrar. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled securities held by the Security Registrar shall be disposed of in
accordance with a Company Order delivered to the Security Registrar and the
Trustee, and the Security Registrar shall promptly deliver a certificate of
disposition to the Trustee and the Company unless, by a Company Order, similarly
delivered, the Company shall direct that canceled Securities be returned to it.
The Security Registrar shall promptly deliver evidence of any cancellation of a
Security in accordance with this Section 309 to the Trustee and the Company.
SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified
as contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year
consisting of twelve 30-day months and for any period shorter than a full month,
on the basis of the actual number of days elapsed in such period.
SECTION 311. EXTENSION OF INTEREST PAYMENT. The Company shall have
the right at any time, so long as the Company is not in default in the payment
of interest on the Securities of any series hereunder, to extend interest
payment periods on all Securities of one or more series, if so specified as
contemplated by Section 301 with respect to such Securities and upon such terms
as may be specified as contemplated by Section 301 with respect to such
Securities.
SECTION 312. ADDITIONAL INTEREST ATTRIBUTABLE TO TAXES. So long as
any Preferred Securities remain outstanding, if the Trust which issued such
Preferred Securities shall be required to pay, with respect to its income
derived from the interest payments on the Securities of any series, any amounts
for or on account of any taxes, duties, assessments or governmental charges of
whatever nature imposed by the United States, or any other taxing authority,
then, in any such case, the Company will pay as interest on such series such
additional interest ("Additional Interest Attributable to Taxes") as may be
necessary in order that the net amounts received and retained by such Trust
after the payment of such taxes, duties, assessments or
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governmental charges shall result in such Trust's having such funds as it
would have had in the absence of the payment of such taxes, duties,
assessments or governmental charges.
SECTION 313. AGREED TAX TREATMENT. Each Security issued hereunder
shall provide that the Company and, by its acceptance of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Security agree that for United States federal,
state and local tax purposes it is intended that such Security constitute
indebtedness and agree to treat such Security accordingly for such purposes.
SECTION 314. EXTENSION OF MATURITY DATE; ADJUSTMENT OF MATURITY DATE
UPON AN EXCHANGE. If specified as contemplated by Section 301 with respect to
the Securities of a particular series, the Company shall have the right to (a)
change the Maturity Date of the Securities of such series upon the liquidation
of the corresponding Trust and the exchange of such Securities for the Preferred
Securities of such Trust and (b) extend the Maturity Date for the Securities of
such series at any time and from time to time; PROVIDED, that at the time any
election to extend the Maturity Date is made and at the time of such extension
(i) the Company is not in bankruptcy, otherwise insolvent or in liquidation,
(ii) the Company is not in default in the payment of any interest on or
principal of the Securities of such series and no deferred interest payments
thereon have accrued, (iii) such Trust is not in arrears in payments of
Distributions on its Preferred Securities and no deferred Distributions thereon
are accumulated, (iv) the Securities are rated not less than BBB - by Standard &
Poor's Ratings Services or Baa3 by Moody's Investors Service, Inc. or the
equivalent by any other nationally recognized statistical rating organization
and (v) the extended Maturity Date is no later than the 49th anniversary of the
initial issuance of the Preferred Securities of such Trust; and PROVIDED,
FURTHER, that, if the Company exercises its rights to liquidate a Trust and
exchange the Securities of such series for the Preferred Securities of such
Trust as specified in clause (a) above, any changed Maturity Date of the
Securities of such series shall be (A) no earlier than the date five years after
the initial issuance of the Preferred Securities of such Trust and (B) no later
than the date 30 years (plus an extended term of up to an additional 19 years if
the above-referenced conditions are satisfied) after the date of the initial
issuance of the Preferred Securities of such Trust.
ARTICLE FOUR
REDEMPTION OF SECURITIES
SECTION 401. APPLICABILITY OF ARTICLE. Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of such series) in accordance with this Article.
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SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of
the Company to redeem any Securities shall be evidenced by a Board Resolution or
an Officer's Certificate. The Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date and of the principal amount of such Securities to be redeemed. In the case
of any redemption of Securities (a) prior to the expiration of any restriction
on such redemption provided in the terms of such Securities or elsewhere in this
Indenture or (b) pursuant to an election of the Company which is subject to a
condition specified in the terms of such Securities, the Company shall furnish
the Trustee with an Officer's Certificate evidencing compliance with such
restriction or condition.
SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED. If less than
all the Securities of any series are to be redeemed, the particular Securities
to be redeemed shall be selected by the Trustee from the Outstanding Securities
of such series not previously called for redemption, by such method as shall be
provided for any particular series, or, in the absence of any such provision, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of such series; provided,
however, that if, as indicated in an Officer's Certificate, the Company shall
have offered to purchase all or any principal amount of the Securities then
Outstanding of any series and less than all of such Securities as to which such
offer was made shall have been tendered to the Company for such purchase, the
Trustee, if so directed by Company Order, shall select for redemption all or any
principal amount of such Securities which have not been so tendered.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the securities selected for redemption and, in the case
of any Securities selected to be redeemed in part, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such securities which has been or is to be
redeemed.
SECTION 404. NOTICE OF REDEMPTION. Notice of redemption shall be
given in the manner provided in Section 106 to the Holders of the Securities to
be redeemed not less than 30 nor more than 60 days prior to the Redemption Date.
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All notices of redemption shall state:
a) the Redemption Date,
b) the Redemption Price,
c) if less than all the Securities of any series are to be redeemed,
the identification of the particular Securities to be redeemed and the
portion of the principal amount of any Security to be redeemed in part,
d) that on the Redemption Date the Redemption Price, together with
accrued interest, if any, to the Redemption Date, will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, unless it
shall have been specified as contemplated by Section 301 with respect to
such Securities that such surrender shall not be required,
f) that the redemption is for a sinking or other fund, if such is
the case, and
g) such other matters as the Company shall deem desirable or
appropriate.
Unless otherwise specified with respect to any Securities in
accordance with Section 301 with respect to any notice of redemption of
Securities at the election of the Company, and unless, upon the giving of such
notice, such Securities shall be deemed to have been paid in accordance with
Section 701, such notice may state that such redemption shall be conditional
upon the receipt by the Paying Agent or Agents for such Securities, 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 Securities and that if
such money shall not have been so received such notice shall be of no force or
effect and the Company shall not be required to redeem such Securities. In the
event that such notice of redemption contains such a condition and such money is
not so received, the redemption shall not be made and within a reasonable time
thereafter notice shall be given, in the manner in which the notice of
redemption was given, that such money was not so received and such redemption
was not required to be made, and the Paying Agent or Agents for the Securities
otherwise to have been redeemed shall promptly return to the Holders thereof any
of such Securities which had been surrendered for payment upon such redemption.
Notice of redemption of Securities to be redeemed at the election of
the Company, and any notice of non-satisfaction of a condition for redemption as
aforesaid, shall be given by
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the Company or, at the Company's request, by the Security Registrar in the
name and at the expense of the Company. Notice of mandatory redemption of
Securities shall be given by the Security Registrar in the name and at the
expense of the Company.
SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, and the conditions, if any, set
forth in such notice having been satisfied, the Securities or portions
thereof so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless, in the case of an unconditional notice of redemption, the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities or portions thereof, if interest-bearing,
shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with such notice, such Security or portion thereof
shall be paid by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided, however, that no such
surrender shall be a condition to such payment if so specified as
contemplated by Section 301 with respect to such Security; and provided,
further, that except as otherwise specified as contemplated by Section 301
with respect to such Security, any installment of interest on any Security
the Stated Maturity of which installment is on or prior to the Redemption
Date shall be payable to the Holder of such Security, or one or more
Predecessor Securities, registered as such at the close of business on the
related Regular Record Date according to the terms of such Security and
subject to the provisions of Section 307.
SECTION 406. SECURITIES REDEEMED IN PART. Upon the surrender of
any Security which is to be redeemed only in part at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by, the Holder thereof or the attorney of such
Holder duly authorized in writing), the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or securities of the same series, of
any authorized denomination requested by such Holder and of like tenor and in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE FIVE
SINKING FUNDS
SECTION 501. APPLICABILITY OF ARTICLE. The provisions of this
Article shall be applicable to any sinking fund for the retirement of the
Securities of any series, except as otherwise specified as contemplated by
Section 301 for Securities of such series.
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The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to
as an "optional sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 502. Each sinking fund payment
shall be applied to the redemption of Securities of the series in respect of
which it was made as provided for by the terms of such Securities.
SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (a) may deliver to the Trustee Outstanding Securities (other than
any previously called for redemption) of a series in respect of which a
mandatory sinking fund payment is to be made and (b) may apply as a credit
Securities of such series which have been redeemed either at the election of
the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Securities or Outstanding Securities purchased by the Company, in
each case in satisfaction of all or any part of such mandatory sinking fund
payment with respect to the Securities of such series; provided, however,
that no Securities shall be applied in satisfaction of a mandatory sinking
fund payment if such Securities shall have been previously so applied.
Securities so applied shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory
sinking fund payment shall be reduced accordingly.
SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less
than 45 days prior to each sinking fund payment date for the Securities of
any series, the Company shall deliver to the Trustee an Officer's Certificate
specifying:
(a) the amount of the next succeeding mandatory sinking fund payment
for such series;
(b) the amount, if any, of the optional sinking fund payment to be
made together with such mandatory sinking fund payment;
(c) the aggregate sinking fund payment;
(d) the portion, if any, of such aggregate sinking fund payment which
is to be satisfied by the payment of cash;
(e) the portion, if any, of such aggregate sinking fund payment which
is to be satisfied by delivering and crediting Securities of such series
pursuant to Section 502 and stating the basis for such credit and that such
Securities have not previously been so
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credited, and the Company shall also deliver to the Trustee any
Securities to be so delivered. If the Company shall not deliver such
Officer's Certificate, the next succeeding sinking fund payment for such
series shall be made entirely in cash in the amount of the mandatory
sinking fund payment. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section
403 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section
404. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in
Sections 405 and 406.
ARTICLE SIX
COVENANTS
SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company shall pay the principal of and premium, if any, and interest, if
any, (including Additional Interest Attributable to Taxes), on the
Securities of each series in accordance with the terms of such
Securities and this Indenture.
SECTION 602. MAINTENANCE OF OFFICE OR AGENCY. The Company
shall maintain in each Place of Payment for the Securities of each
series an office or agency where payment of such Securities shall be
made, where the registration of transfer or exchange of such Securities
may be effected and where notices and demands to or upon the Company in
respect of such Securities and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location,
and any change in the location, of each such office or agency and prompt
notice to the Holders of any such change in the manner specified in
Section 106. If at any time the Company shall fail to maintain any such
required office or agency in respect of Securities of any series, or
shall fail to furnish the Trustee with the address thereof, payment of
such Securities shall be made, registration of transfer or exchange
thereof may be effected and notices and demands in respect thereof may
be served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent for all such purposes in any
such event.
The Company may also from time to time designate one or more
other offices or agencies with respect to the Securities of one or more
series, for any or all of the foregoing purposes and may from time to
time rescind such designations; provided, however, that, unless
otherwise specified as contemplated by Section 301 with respect to the
Securities of such series, no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office
or agency for such purposes in each Place of Payment for such Securities
in accordance with the requirements set forth above. The Company shall
give prompt written notice to the Trustee, and prompt notice to the
Holders in the manner specified in Section 106, of any
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such designation or rescission and of any change in the location of any
such other office or agency.
Anything herein to the contrary notwithstanding, any office or
agency required by this Section may be maintained at an office of the
Company, in which event the Company shall perform all functions to be
performed at such office or agency.
SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN
TRUST. If the Company shall at any time act as its own Paying Agent
with respect to the Securities of any series, it shall, on or before
each due date of the principal of and premium, if any, and interest, if
any, on any of such Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the
principal and premium or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided.
The Company shall promptly notify the Trustee of any failure by the
Company (or any other obligor on such Securities) to make any payment of
principal of or premium, if any, or interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents for
the Securities of any series, it shall, on or before each due date of
the principal of and premium, if any, and interest, if any, on such
Securities, deposit with such Paying Agents sums sufficient (without
duplication) to pay the principal and premium or interest so becoming
due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company shall promptly notify the Trustee of
any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of
any series, other than the Company or the Trustee, to execute and
deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, or interest, if any, on such Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any failure by the Company (or any
other obligor upon such Securities) to make any payment of principal of or
premium, if any, or interest, if any, on such Securities; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying
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Agent and furnish to the Trustee such information as it possesses
regarding the names and addresses of the Persons entitled to such sums.
The Company may at any time pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company
or such Paying Agent and, if so stated in a Company Order delivered to
the Trustee, in accordance with the provisions of Article Seven; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of
and premium, if any, or interest, if any, on any Security and remaining
unclaimed for two years after such principal and premium, if any, or
interest has become due and payable shall be paid to the Company on
Company Request, or, if then held by the Company, shall be discharged
from such trust; and, upon such payment or discharge, the Holder of such
Security shall, as an unsecured general creditor and not as a Holder of
an Outstanding Security, look only to the Company for payment of the
amount so due and payable and remaining unpaid, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being
required to make any such payment to the Company, may at the expense of
the Company cause to be mailed, on one occasion only, notice to such
Holder that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of
such mailing, any unclaimed balance of such money then remaining will be
paid to the Company.
SECTION 604. CORPORATE EXISTENCE. Subject to the rights of
the Company under Article Eleven, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect
its corporate existence.
SECTION 605. MAINTENANCE OF PROPERTIES. 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 in this Section
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.
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SECTION 606. ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
Not later that March 15 in each year, commencing March 15, 1997, the
Company shall deliver to the Trustee an Officer's Certificate which need
not comply with Section 102, executed by the principal executive
officer, the principal financial officer or the principal accounting
officer of the Company, as to such officer's knowledge of the Company's
compliance with all conditions and covenants under this Indenture, such
compliance to be determined without regard to any period of grace or
requirement of notice under this Indenture.
SECTION 607. WAIVER OF CERTAIN COVENANTS. The Company may
omit in any particular instance to comply with any term, provision or
condition set forth in (a) Section 602 or any additional covenant or
restriction specified with respect to the Securities of any series, as
contemplated by Section 301, if before the time for such compliance the
Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of all series with respect to which compliance
with Section 602 or such additional covenant or restriction is to be
omitted, considered as one class, shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance
with such term, provision or condition and (b) Section 604, 605 or
Article Eleven if before the time for such compliance the Holders of at
least a majority in principal amount of Securities Outstanding under
this Indenture shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such
term, provision or condition; but, in the case of (a) or (b), no such
waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain
in full force and effect; provided, however, that so long as a Trust
holds Securities of any series, such Trust may not waive compliance or
waive any default in compliance by the Company with any covenant or
other term contained in this Indenture or the Securities of such series
without the approval of the holders of at least a majority in aggregate
liquidation amount of the outstanding Preferred Securities issued by
such Trust affected, obtained as provided in the Trust Agreement
pertaining to such Trust.
SECTION 608. RESTRICTION ON PAYMENT OF DIVIDENDS. So long as
any Preferred Securities of any series remain outstanding, the Company
shall not declare or pay any dividend on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of the Company's
capital stock, or make any guarantee payments with respect to the
foregoing (other than payments under the Guarantee relating to such
Preferred Securities) if at such time (a) the Company shall be in
default with respect to its payment or other obligations under the
Guarantee relating to such Preferred Securities, (b) there shall have
occurred and be continuing a payment default (whether before or after
expiration of any period of grace) or an Event of Default hereunder or
(c) the Company shall have elected to extend any interest payment period
as provided in Section 311, and any such period, or any extension
thereof, shall be continuing.
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SECTION 609. MAINTENANCE OF TRUST EXISTENCE. So long as
Preferred Securities of any series remain outstanding, the Company shall
(i) maintain direct or indirect ownership of all interests in the Trust
which issued such Preferred Securities, other than such Preferred
Securities, (ii) not voluntarily (to the extent permitted by law)
dissolve, liquidate or wind up such Trust, except in connection with a
distribution of the Securities to the holders of the Preferred
Securities in liquidation of such Trust, (iii) remain the sole Depositor
under the Trust Agreement (the "Depositor") of such Trust and timely
perform in all material respects all of its duties as Depositor of such
Trust, and (iv) use reasonable efforts to cause such Trust to remain a
business trust and otherwise continue to be treated as a grantor trust
for Federal income tax purposes; provided that any permitted successor
to the Company under this Indenture may succeed to the Company's duties
as Depositor of such Trust; and provided further that the Company may
permit such Trust to consolidate or merge with or into another business
trust or other permitted successor under the Trust Agreement pertaining
to such Trust as long as the Company agrees to comply with this Section
609 with respect to such successor business trust or other permitted
successor.
ARTICLE SEVEN
SATISFACTION AND DISCHARGE
SECTION 701. DEFEASANCE. Any Security or Securities, or any
portion of the principal amount thereof, shall be deemed to have been
paid for all purposes of this Indenture, and the entire indebtedness of
the Company in respect thereof shall be deemed to have been satisfied
and discharged, if there shall have been irrevocably deposited with the
Trustee or any Paying Agent (other than the Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the Maturity Date of such
Securities or portions thereof, Government Obligations, which shall 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
moneys which, together with the money, if any, deposited with or held by
the Trustee or such Paying Agent, shall be sufficient, or
(c) a combination of (a) or (b) which shall 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 on or
prior to the Maturity Date; provided, however, that in the case of the
provision for payment or redemption of less than all the Securities of
any series, such Securities or portions thereof shall have been selected
by the Trustee as provided herein and,
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in the case of a redemption, the notice requisite to the validity of
such redemption shall have been given or irrevocable authority shall
have been given by the Company to the Trustee to give such notice, under
arrangements satisfactory to the Trustee; and provided, further, that
the Company shall have delivered to the Trustee and such Paying Agent:
(x) if such deposit shall have been made prior to the Maturity
Date of such Securities, a Company Order stating that the money and
Government Obligations deposited in accordance with this Section shall
be held in trust, as provided in Section 703; and
(y) if Government Obligations shall have been deposited, an
Opinion of Counsel that the obligations so deposited constitute
Government Obligations and do not contain provisions permitting the
redemption or other prepayment at the option of the issuer thereof,
and an opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that the
requirements set forth in clause (b) above have been satisfied; and
(z) if such deposit shall have been made prior to the Maturity
Date of such Securities, an Officer's Certificate stating the
Company's intention that, upon delivery of such Officer's Certificate,
its indebtedness in respect of such securities or portions thereof
will have been satisfied and discharged as contemplated in this
Section.
Upon the deposit of money or Government Obligations, or both,
in accordance with this Section, together with the documents required by
clauses (x), (y) and (z) above, the Trustee shall, upon receipt of a
Company Request, acknowledge in writing that the Securities or portions
thereof with respect to which such deposit was made are deemed to have
been paid for all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof has been satisfied and
discharged as contemplated in this Section. In the event that all of
the conditions set forth in the preceding paragraph shall have been
satisfied in respect of any Securities or portions thereof except that,
for any reason, the Officer's Certificate specified in clause (z) shall
not have been delivered, such Securities or portions thereof shall
nevertheless be deemed to have been paid for all purposes of this
Indenture, and the Holders of such Securities or portions thereof shall
nevertheless be no longer entitled to the benefits of this Indenture or
of any of the covenants of the Company under Article Six (except the
covenants contained in Sections 602 and 603) or any other covenants made
in respect of such Securities or portions thereof as contemplated by
Section 301, but the indebtedness of the Company in respect of such
Securities or portions thereof shall not be deemed to have been
satisfied and discharged prior to the Maturity Date for any other
purpose, and the Holders of such Securities or portions thereof shall
continue to be entitled to look to the Company for payment of the
indebtedness represented thereby; and,
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upon Company Request, the Trustee shall acknowledge in writing that such
Securities or portions thereof are deemed to have been paid for all
purposes of this Indenture.
If payment at Stated Maturity of less than all of the
Securities of any series is to be provided for in the manner and with
the effect provided in this Section, the Security Registrar shall select
such Securities, or portions thereof, in the manner specified by Section
403 for selection for redemption of less than all the Securities of a
series.
In the event that Securities which shall be deemed to have been
paid for purposes of this Indenture, and, if such is the case, in
respect of which the Company's indebtedness shall have been satisfied
and discharged, all as provided in this Section do not mature and are
not to be redeemed within the 60 day period commencing with the date of
the deposit of moneys or Government Obligations, as aforesaid, the
Company shall, as promptly as practicable, give a notice, in the same
manner as a notice of redemption with respect to such Securities, to the
Holders of such Securities to the effect that such deposit has been made
and the effect thereof.
Notwithstanding that any Securities shall be deemed to have
been paid for purposes of this Indenture, as aforesaid, the obligations
of the Company and the Trustee in respect of such Securities under
Sections 304, 305, 306, 404, 503 (as to notice of redemption), 602, 603,
907 and 915 and this Article Seven shall survive.
The Company shall pay, and shall indemnify the Trustee or any
Paying Agent with which Government Obligations shall have been deposited
as provided in this Section against, any tax, fee or other charge
imposed on or assessed against such Government Obligations or the
principal or interest received in respect of such Government
Obligations, including, but not limited to, any such tax payable by any
entity deemed, for tax purposes, to have been created as a result of
such deposit.
Anything herein to the contrary notwithstanding, (a) if, at any
time after a Security would be deemed to have been paid for purposes of
this Indenture, and, if such is the case, the Company's indebtedness in
respect thereof would be deemed to have been satisfied or discharged
pursuant to this Section (without regard to the provisions of this
paragraph), the Trustee or any Paying Agent, as the case may be, shall
be required to return the money or Government Obligations, or
combination thereof, deposited with it as aforesaid to the Company or
its representative under any applicable Federal or State bankruptcy,
insolvency or other similar law, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and discharge
of the Company's indebtedness in respect thereof shall retroactively be
deemed not to have been effected, and such Security shall be deemed to
remain Outstanding and (b) any satisfaction and discharge of the
Company's indebtedness in respect of any Security shall be subject to
the provisions of the last paragraph of Section 603.
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SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE. This
Indenture shall upon Company Request cease to be of further effect
(except as hereinafter expressly provided), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) no Securities remain Outstanding hereunder; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of
Section 701, any security, previously deemed to have been paid for
purposes of this Indenture, shall be deemed retroactively not to have
been so paid, this Indenture shall thereupon be deemed retroactively not
to have been satisfied and discharged, as aforesaid, and to remain in
full force and effect, and the Company shall execute and deliver such
instruments as the Trustee shall reasonably request to evidence and
acknowledge the same.
Notwithstanding the satisfaction and discharge of this
Indenture as aforesaid, the obligations of the Company and the Trustee
under Sections 304, 305, 306, 404, 503 (as to notice of redemption),
602, 603, 907 and 915 and this Article Seven shall survive.
Upon satisfaction and discharge of this Indenture as provided
in this Section, the Trustee shall assign, transfer and turn over to the
Company, subject to the lien provided by Section 907, any and all money,
securities and other property then held by the Trustee for the benefit
of the Holders of the Securities other than money and Government
Obligations held by the Trustee pursuant to Section 703.
SECTION 703. APPLICATION OF TRUST MONEY. Neither the
Government Obligations nor the money deposited pursuant to Section 701,
nor the principal or interest payments on any such Government
Obligations, shall be withdrawn or used for any purpose other than, and
shall be held in trust for, the payment of the principal of and premium,
if any, and interest, if any, on the Securities or portions of principal
amount thereof in respect of which such deposit was made, all subject,
however, to the provisions of Section 603; provided, however, that, so
long as there shall not have occurred and be continuing an Event of
Default any cash received from such principal or interest payments on
such Government Obligations, if not then needed for such purpose,
shall, to the extent practicable, be invested in Government Obligations
of the type described in clause (b) in the first paragraph of Section
701 maturing at such times and in such amounts as shall 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 on and
prior to the Maturity Date thereof, and interest earned from such
reinvestment shall be paid over to the Company as received, free and
clear of any trust, lien or pledge under this Indenture except the lien
provided
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by Section 907; and provided, further, that, so long as there shall not
have occurred and be continuing an Event of Default, any moneys held in
accordance with this Section on the Maturity Date of all such Securities
in excess of the amount required to pay the principal of and premium, if
any, and interest, if any, then due on such Securities shall be paid
over to the Company free and clear of any trust, lien or pledge under
this Indenture except the lien provided by Section 907; and provided,
further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this
Section shall be held until such Event of Default shall have been waived
or cured.
ARTICLE EIGHT
EVENTS OF DEFAULT; REMEDIES
SECTION 801. EVENTS OF DEFAULT. "Event of Default" wherever
used herein with respect to Securities of any series, means any one of
the following events:
(a) failure to pay interest, if any, including any Additional
Interest Attributable to Taxes, on any Security of such series within 30
days after the same becomes due and payable (whether or not payment is
prohibited by the provisions of Article Fifteen hereof); provided, however,
that a valid extension of the interest payment period by the Company as
contemplated in Section 311 of this Indenture shall not constitute a
failure to pay interest for this purpose; or
(b) failure to pay the principal of or premium, if any, on any
Security of such series at its Maturity Date (whether or not payment is
prohibited by the provisions of Article Fifteen hereof); or
(c) failure to perform or breach of any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty a default in
the performance of which or breach of which is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of one or more series of Securities other
than such series) for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 33% in principal amount
of the Outstanding Securities of such series, a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, unless the Trustee, or the
Trustee and the Holders of a principal amount of Securities of such series
not less than the principal amount of Securities the Holders of which gave
such notice, as the case may be, shall agree in writing to an extension of
such period prior to its expiration; provided, however, that the Trustee,
or the Trustee and the Holders of such principal
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amount of Securities of such series, as the case may be, shall be deemed
to have agreed to an extension of such period if corrective action is
initiated by the Company within such period and is being diligently
pursued; or
(d) the entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official for the Company or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree
or order for relief or any such other decree or order shall have remained
unstayed and in effect for a period of 90 consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in a case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the authorization of such action by the Board of Directors; or
(f) any other Event of Default specified with respect to Securities
of such series.
SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If an Event of Default with respect to Securities of any series
at the time Outstanding shall have occurred and be continuing, either the
Trustee or the Holders of not less than 33% in principal amount of the
Securities of such series may then declare the principal of all Securities of
such series and interest accrued thereon to be due and payable immediately,
provided that, in the case of Securities of a series issued to a Trust, if, upon
an Event of Default, the Trustee or the Holders of not less than 33% in
principal amount of the Outstanding Securities of
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that series fail to declare the principal of all the Securities of that
series to be immediately due and payable, the holders of at least 33% in
aggregate liquidation amount of the corresponding series of Preferred
Securities then outstanding (if any) shall have such right by a notice
in writing to the Company and the Trustee; and upon any such declaration
such principal amount (or specified amount) of and the accrued interest
(including any Additional Interest Attributable to Taxes) on all the
Securities of that series shall become immediately due and payable
(provided that the payment of principal and interest on such Securities
shall remain subordinated to the extent provided in Article Fifteen
hereof).
(b) At any time after such a declaration of acceleration with
respect to Securities of any series shall have been made pursuant to
paragraph (a) above and before a judgment or decree for payment of the
money due shall have been obtained by the Trustee as hereinafter in this
Article provided, the Event or Events of Default giving rise to such
declaration of acceleration shall, without further act, be deemed to
have been waived, and such declaration and its consequences shall,
without further act, be deemed to have been rescinded and annulled, if
(i) the Company shall have paid or deposited with the Trustee a sum
sufficient to pay
(1) all overdue interest on all Securities of such series;
(2) the principal of and premium, if any, on any Securities 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 Securities;
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest, if any, at the rate or rates
prescribed therefor in such Securities;
(4) all amounts due to the Trustee under Section 907;
and
(ii) any other Event or Events of Default with respect to Securities
of such series, other than the nonpayment of the principal of Securities of
such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 813.
No such rescission shall affect any subsequent Event of Default or
impair any right consequent thereon.
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SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. If an Event of Default described in clause (a)
or (b) of Section 801 shall have occurred and be continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of the
Holders of the Securities of the series with respect to which such Event
of Default shall have occurred, the whole amount then due and payable on
such Securities for principal and premium, if any, and interest, if any,
and, to the extent permitted by law, interest on premium, if any, and on
any overdue principal and interest, at the rate or rates prescribed
therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to pay any amounts due to the Trustee
under Section 907.
If the Company shall fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any other
obligor upon such Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series
shall have occurred and be continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders
of Securities of such series by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest, if any, owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for amounts due to the Trustee under Section 907) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amounts due it under
Section 907.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof
or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the
Holders in respect of which such judgment has been recovered.
SECTION 806. APPLICATION OF MONEY COLLECTED. Subject to the
provisions of Article Fifteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or premium, if any, or interest, if
any, upon presentation of the Securities in respect of which or for the
benefit of which such money shall have been collected and the notation
thereon of the payment if only partially paid and upon surrender thereof
if fully paid:
First: To the payment of all amounts due the Trustee under Section
907;
Second: To the payment of the amounts then due and unpaid upon the
Securities for principal of and premium, if any, and interest, if any, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any,
and interest, if any, respectively; and
Third: To the payment of the remainder, if any, to the Company or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction way direct.
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SECTION 807. LIMITATION ON SUITS. No Holder shall have any
right to institute any proceedings, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of
such series;
(b) the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one
class, shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities of all
series in respect of which an Event of Default shall have occurred and be
continuing, considered as one class;
it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other of such Holders or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all of such Holders.
SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in
this Indenture, the Holder of any Security shall have the right, which
is absolute and unconditional, to receive payment of the principal of
(and premium, if any) and (subject to Sections 307 and 311) interest
(including any Additional Interest Attributable to Taxes) on such
Security on the Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute
suit for the enforcement of any such payment, and such rights shall not
be impaired without the consent of such Holder. In the case of
Securities of a series issued to a Trust, any holder of the
corresponding series of Preferred Securities shall have the right, upon
the occurrence of an Event of Default described in Section 801(a) or
801(b) hereof, to institute a suit directly against the
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Company for enforcement of payment to such holder of principal of (and
premium, if any) and (subject to Sections 307 and 311) interest
(including any Additional Interest Attributable to Taxes) on the
Securities of such series having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of the
corresponding series held by such holder.
SECTION 809. RESTORATION OF RIGHTS AND REMEDIES. If the
Trustee or any Holder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case,
subject to any determination in such proceeding, the Company, the
Trustee and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies
of the Trustee and such Holder shall continue as though no such
proceeding had been instituted.
SECTION 810. RIGHTS AND REMEDIES CUMULATIVE. Except as
otherwise provided in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.
SECTION 811. DELAY OR OMISSION NOT WAIVER. No delay or
omission of the Trustee or of any Holder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the
Trustee or to the Holders say be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
SECTION 812. CONTROL BY HOLDERS OF SECURITIES. If an Event of
Default shall have occurred and be continuing in respect of a series of
Securities, the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series; provided,
however, that if an Event of Default shall have occurred and be
continuing with respect to more than one series of Securities, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of all such series, considered as one class, shall have the
right to make such direction, and not the Holders of the Securities of
any one of such series; and provided, further, that such direction shall
not be in conflict with any rule of law or with this Indenture. Before
proceeding to exercise any right or power hereunder at the direction of
such Holders, the Trustee shall be entitled to receive from such Holders
reasonable security or
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indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with any such direction.
SECTION 813. WAIVER OF PAST DEFAULTS. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series
waive any past default hereunder and its consequences with respect to
such series, and, in the case of Securities of a series issued to a
Trust, should the holders of such Securities fail to waive such default,
the holders of a majority in aggregate liquidation amount of the related
series of Preferred Securities shall have such right, in each case
except for a default
(a) in the payment of the principal of or premium, if any, or
interest (including any Additional Interest Attributable to Taxes) on any
Security of such series, or
(b) in respect of a covenant or provision hereof which under Section
1202 cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected;
provided, however, that so long as a Trust holds the Securities of any
series, such Trust may not waive any past default without the consent of
at least a majority in aggregate liquidation amount of the outstanding
Preferred Securities issued by such Trust affected, obtained as provided
in the Trust Agreement pertaining to such Trust.
Upon any such waiver, such default shall cease to exist, and
any and all Events of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.
SECTION 814. UNDERTAKING FOR COSTS. The Company and the
Trustee agree, and each Holder by acceptance of a Security, shall be
deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including
reasonable attorneys fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in aggregate principal
amount of the Outstanding Securities of all series in respect of which
such suit may be brought, considered as one class, or to any suit
instituted by any Holder for the enforcement of the payment of the
principal of or premium, if any, or interest, if any, on any Security on
or after
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the Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 815. WAIVER OF STAY OR EXTENSION LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE NINE
THE TRUSTEE
SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee in the
Trust Indenture Act and no implied covenants or obligations shall be read
into this Indenture against the Trustee.
(b) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Notwithstanding anything contained in this Indenture to the
contrary, the duties and responsibilities of the Trustee under this
Indenture shall be subject to the protections, exculpations and limitations
on liability afforded to the Trustee under the provisions of the Trust
Indenture Act.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 902. NOTICE OF DEFAULTS. The Trustee shall give
notice of any default hereunder with respect to the Securities of any
series to the Holders of Securities of such series in the manner and to
the extent required to do so by the Trust Indenture Act, unless such
default
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shall have been cured or waived; provided, however, that in the case of
any default of the character specified in Section 801(c), no such notice
to Holders shall be given until at least 45 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time, or both, would become,
an Event of Default.
SECTION 903. CERTAIN RIGHTS OF TRUSTEE. Subject to the
provisions of Section 901 and to the applicable provisions of the Trust
Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided herein, and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any Holder pursuant to this Indenture, unless such Holder shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may take such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall (subject to applicable legal
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requirements) be entitled to examine, during normal business hours, the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be charged with knowledge of any default or
Event of Default, as the case may be, with respect to the Securities of any
series for which it in acting as Trustee unless either (1) a Responsible
Officer of the Trustee shall have actual knowledge of the default or Event
of Default, as the case may be, or (2) written notice of such default or
Event of Default, as the case may be, shall have been given to the Trustee
by the Company, any other obligor on such Securities or by any Holder of
such Securities.
SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 905. MAY HOLD SECURITIES. Each of the Trustee, any
Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 908 and 913, may
otherwise deal with the Company with the same rights it would have if it were
not the Trustee, Authenticating Agent, Paying Agent, Security Registrar or
such other agent.
SECTION 906. MONEY HELD IN TRUST. Money held by the Trustee in
trust hereunder need not be segregated from other funds, except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as expressly provided herein or
otherwise agreed with, and for the sole benefit of, the Company.
SECTION 907. COMPENSATION AND REIMBURSEMENT. The Company shall
(a) pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shalt not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
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(b) except as otherwise expressly provided herein, reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the extent
that any such expense, disbursement or advance may be attributable to the
Trustee's negligence, willful misconduct or bad faith; and
(c) indemnify the Trustee for, and hold it harmless from and against,
any loss, liability or expense reasonably incurred by it arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder or the performance of its duties hereunder, including the
reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence, wilful misconduct or bad
faith.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such other than
property and funds held in trust under Section 703 (except as otherwise provided
in Section 703). "Trustee" for purposes of this Section shall include any
predecessor Trustee; provided, however, that the negligence, wilful misconduct
or bad faith of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
In addition to the rights provided to the Trustee pursuant to the
provisions of the immediately preceding paragraph of this Section 907, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 801(d) or Section 801(e), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee
shall have or acquire any conflicting interest within the meaning of the Trust
Indenture Act, it shall either eliminate such conflicting interest or resign to
the extent, in the manner and with the effect, and subject to the conditions,
provided in the Trust Indenture Act and this Indenture. For purposes of Section
310(b)(l) of the Trust Indenture Act and to the extent permitted thereby, the
Trustee, in its capacity as trustee in respect of the Securities of any series,
shall not be deemed to have a conflicting interest arising from its capacity as
trustee in respect of the Securities of any other series. The Trust Agreement
and the Guarantee Agreement pertaining to each Trust shall be deemed to be
specifically described in this Indenture for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
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SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or State authority, or
(b) if and to the extent permitted by the Commission by rule,
regulation or order upon application, a corporation or other Person
organized and doing business under the laws of a foreign government,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 or the Dollar
equivalent of the applicable foreign currency and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
and, in either ease, qualified and eligible under this Article and the Trust
Indenture Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 911.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 911
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the
Trustee and to the Company; provided that so long as any Preferred
Securities remain outstanding, the Trust which issued such Preferred
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Securities shall not execute any Act to remove the Trustee without the
consent of the holders of a majority in aggregate liquidation amount of
Preferred Securities issued by such Trust outstanding, obtained as provided
in the Trust Agreement pertaining to such Trust.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 908 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder for at least six months, or
(2) the Trustee shall cease to be eligible under Section 909 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or (y) subject to Section 814, any Holder
who has been a bona fide Holder for at least six months may, on behalf of itself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause
(other than as contemplated in clause (y) in subsection (d) of this
Section), with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series) and shall comply with the applicable requirements of
Section 911. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 911,
become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and
accepted
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appointment in the manner required by Section 911, any Holder who
has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of itself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(f) So long as no event which is, or after notice or lapse of time,
or both, would become, an Event of Default shall have occurred and be
continuing, and except with respect to a Trustee appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) a Board Resolution appointing a successor
Trustee, effective as of a date specified therein, and (ii) an instrument
of acceptance of such appointment, effective as of such date, by such
successor Trustee in accordance with Section 911, the Trustee shall be
deemed to have resigned as contemplated in subsection (b) of this Section,
the successor Trustee shall be deemed to have been appointed by the Company
pursuant to subsection (e) of this Section and such appointment shall be
deemed to have been accepted as contemplated in Section 911, all as of such
date, and all other provisions of this Section and Section 911 shall be
applicable to such resignation, appointment and acceptance except to the
extent inconsistent with this subsection (f).
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of
any series by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders of Securities of such series as their names
and addresses appear in the Security Register. Each notice shall include
the name of the successor Trustee with respect to the Securities of such
series and the address of its corporate trust office.
SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of all series, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all sums owed to it,
execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee and (3)
shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution
and delivery of such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent provided therein
and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee, upon payment of all sums owed to it, shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any instruments which fully vest in and confirm to such successor
Trustee all such rights, powers and trusts referred to in subsection (a) or
(b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution
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or filing of any paper or any further act on the part of any of the parties
hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If
the Trustee shall be or become a creditor of the Company or any other obligor
upon the Securities (other than by reason of a relationship described in Section
311(b) of the Trust Indenture Act), the Trustee shall be subject to any and all
applicable provisions of the Trust Indenture Act regarding the collection of
claims against the Company or such other obligor. For purposes of Section 311(b)
of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(b) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 914. CO-TRUSTEES AND SEPARATE TRUSTEES. At any time or
times, for the purpose of meeting the legal requirements of any applicable
jurisdiction, the Company and the Trustee shall have power to appoint, and, upon
the written request of the Trustee or of the Holders of at least 33% in
principal amount of the Securities then Outstanding, the Company shall for such
purpose join with the Trustee in the execution and delivery of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Trustee either to act as co-trustee, jointly with the Trustee, or to act as
separate trustee, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons, in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Company does
not join in such appointment within 15 days after the receipt by it of a request
so to do, or if an Event of Default shall have occurred and be continuing, the
Trustee alone shall have power to make such appointment.
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Should any written instrument or instruments from the Company be
required by any co-trustee or separate trustee so appointed to more fully
confirm to such co-trustee or separate trustee such property, title, right or
power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Company.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following conditions:
(a) the Securities shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely
by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
either by the Trustee or by the Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of
any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company, may accept the resignation of or
remove any co-trustee or separate trustee appointed under this Section,
and, if an Event of Default shall have occurred and be continuing, the
Trustee shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Company.
Upon the written request of the Trustee, the Company shall join with the
Trustee in the execution and delivery of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section;
(d) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
trustee hereunder; and
(e) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 915. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may
appoint an Authenticating Agent or Agents with respect to the Securities of one
or more series, which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series
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issued upon original issuance and upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States, any State or territory thereof or the
District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments in accordance
with and subject to the provisions of Section 907.
The provisions of Sections 308, 904 and 905 shall be applicable to
each Authenticating Agent.
If an appointment with respect to the Securities of one or more series
shall be made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
------------------------
As Trustee
By
----------------------
As Authenticating
Agent
By
----------------------
Authorized Signatory
If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel), shall appoint, in accordance with this Section and in accordance with
such procedures as shall be acceptable to the Trustee, an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.
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ARTICLE TEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 1001. LISTS OF HOLDERS. Semiannually, not later than
June 1 and December 1 in each year, commencing June 1, 1997, and at such
other times as the Trustee may request in writing, the Company shall
furnish or cause to be furnished to the Trustee information as to the
names and addresses of the Holders, and the Trustee shall preserve such
information and similar information received by it in any other capacity
and afford to the Holders access to information so preserved by it, all
to such extent, if any, and in such manner as shall be required by the
Trust Indenture Act; provided, however, that no such list need be
furnished so long as the Trustee shall be the Security Registrar.
SECTION 1002. REPORTS BY TRUSTEE AND COMPANY. Within 60 days
after May 15 of each year, commencing May 15, 1997, the Trustee shall
transmit to the Holders and the Commission a report required to be
transmitted by the Trustee pursuant to Section 313(a) of the Trust
Indenture Act, in such manner and to the extent required by the Trust
Indenture Act. The Trustee shall transmit to the Holders and the
Commission, and the Company shall file with the Trustee (within 30 days
after filing with the Commission in the case of reports which pursuant
to the Trust Indenture Act must be filed with the Commission and
furnished to the Trustee) and transmit to the Holders, such other
information, reports and other documents, if any, at such times and in
such manner, as shall be required by the Trust Indenture Act.
ARTICLE ELEVEN
CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER
SECTION 1101. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. The Company shall not consolidate with or merge into any other
corporation, or convey or otherwise transfer or lease its properties and
assets substantially as an entirety to any Person, unless
(a) 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 validly existing under the laws
of the United States, any State thereof or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and premium, if any, and interest, if
any, on all
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Outstanding Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, or other transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transactions have been
complied with.
SECTION 1102. SUCCESSOR CORPORATION SUBSTITUTED. Upon any
consolidation by the Company with or merger by the Company into any
other corporation or any conveyance, or other transfer or lease of the
properties and assets of the Company substantially as an entirety in
accordance with Section 1101, the successor corporation formed by such
consolidation or into which the Company is merged or the Person to which
such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities Outstanding
hereunder.
ARTICLE TWELVE
SUPPLEMENTAL INDENTURES
SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS. Without the consent of any Holders, the Company and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities, all as provided in Article Eleven; 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
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long as there shall be Outstanding Securities of one or more specified
series, or to surrender any right or power herein conferred upon the
Company; or
(c) to add any additional Events of Default with respect to all or
any series of Securities Outstanding hereunder; or
(d) to change or eliminate any provision of this Indenture or to add
any new provision to this Indenture; provided, however, that if such
change, elimination or addition shall adversely affect the interests of the
Holders of Securities of any series Outstanding on the date of such
indenture supplemental hereto in any material respect, such change,
elimination or addition shall become effective with respect to such series
only pursuant to the provisions of Section 1202 hereof or when no Security
of such series remains Outstanding; or
(e) to provide collateral security for all but not part of the
Securities; or
(f) to establish the form or terms of Securities of any series as
contemplated by Sections 201 and 301; 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 the 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
hereunder by a separate or successor Trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee pursuant to
the requirements of Section 911(b); or
(i) to provide for the procedures required to permit the Company to
utilize, at its option, a noncertificated system of registration for all,
or any series of, the Securities; or
(j) to change any place or places where (1) the principal of and
premium, if any, and interest, if any, on all or any series of Securities
shall be payable, (2) all or any series of Securities may be surrendered
for registration of transfer, (3) all or any series of Securities may be
surrendered for exchange and (4) notices and demands to or upon the Company
in respect of all or any series of Securities and this Indenture may be
served; or
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(k) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other changes to the provisions hereof or to add
other provisions with respect to matters or questions arising under this
Indenture, provided that such other changes or additions shall not
adversely affect the interests of the Holders of Securities of any series
in any material respect.
Without limiting the generality of the foregoing, if the
Trust Indenture Act as in effect at the date of the execution and
delivery of this Indenture or at any time thereafter shall be
amended and
(x) if any such amendment shall require one or more changes to
any provisions hereof or the inclusion herein of any additional
provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise, this
Indenture shall be deemed to have been amended so as to conform to
such amendment to the Trust Indenture Act, and the Company and the
Trustee may, without the consent of any Holders, enter into an
indenture supplemental hereto to effect or evidence such changes or
additional provisions; or
(y) if any such amendment shall permit one or more changes to,
or the elimination of, any provisions hereof which, at the date of the
execution and delivery hereof or at any time thereafter, are required
by the Trust Indenture Act to be contained herein, this Indenture
shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent
of any Holders, enter into an indenture supplemental hereto to
evidence such amendment hereof.
SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of all series then
Outstanding under this Indenture, considered as one class, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or modifying in any manner the rights of
the Holders of Securities of such series under this Indenture; provided,
however, that if there shall be Securities of more than one series
Outstanding hereunder and if a proposed supplemental indenture shall
directly affect the rights of the Holders of Securities of one or more,
but less than all, of such series, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding
Securities of all series so directly affected, considered as one class,
shall be required; and provided, further, that no such supplemental
indenture shall:
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(a) except to the extent permitted by Section 311 or as otherwise
specified as contemplated by Section 301 with respect to the extension of
the interest payment period of the Securities of any series, change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, 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 change the coin or currency
(or other property), in which any Security 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 thereof
(or, in the case of redemption, on or after the Redemption Date), without,
in any such case, the consent of the Holder of such Security, or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series (or, if applicable, in liquidation amount of any
series of Preferred Securities), 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
this Indenture or of any default hereunder and its consequences, or reduce
the requirements of Section 1304 for quorum or voting, without, in any such
case, the consent of the Holder of each Outstanding Security of such
series, or
(c) modify any of the provisions of this Section, Section 607 or
Section 813 with respect to the Securities of any series, except to
increase the percentages in principal amount referred to in this Section or
such other Sections or to provide that other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause
shall not be deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant changes in this
Section, or the deletion of this proviso, in accordance with the
requirements of Sections 911(b) and 1201(h).
Notwithstanding the foregoing, so long as any of the Preferred
Securities remain outstanding, the Trustee may not consent to a
supplemental indenture under this Section 1202 without the prior
consent, obtained as provided in the Trust Agreement pertaining to each
Trust which issued such Preferred Securities, of the holders of not less
than a majority in aggregate liquidation amount of all Preferred
Securities issued by each such Trust affected thereby, considered as
one class, or, in the case of changes described in clauses (a), (b) and
(c) above, 100% in aggregate liquidation amount of all such Preferred
Securities then outstanding which would be affected thereby, considered
as one class. A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of
such series with respect to such covenant or other provision, shall
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be deemed not to affect the rights under this Indenture of the Holders
of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof. A waiver by a Holder of such Holder's right to
consent under this Section shall be deemed to be a consent of such
Holder.
SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES. In
executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 901) shall be fully
protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's own
rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. Any
supplemental indenture permitted by this Article may restate this
Indenture in its entirety, and, upon the execution and delivery thereof,
any such restatement shall supersede this Indenture as theretofore in
effect for all purposes.
SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT. Every
supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES. Securities of any series authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article
may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new
Securities of any series so modified as to conform, in the opinion of
the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE. If
the terms of any particular series of Securities shall have been
established in a Board Resolution or an Officer's Certificate as
contemplated by Section 301, and not in an indenture supplemental
hereto,
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additions to, changes in or the elimination of any of such terms may be
effected by means of a supplemental Board Resolution or Officer's
Certificate, as the case may be, delivered to, and accepted by, the
Trustee; provided, however, that such supplemental Board Resolution or
Officer's Certificate shall not be accepted by the Trustee or otherwise
be effective unless all conditions set forth in this Indenture which
would be required to be satisfied if such additions, changes or
elimination were contained in a supplemental indenture shall have been
appropriately satisfied. Upon the acceptance thereof by the Trustee, any
such supplemental Board Resolution or Officer's Certificate shall be
deemed to be a "supplemental indenture" for purposes of Section 1204 and
1206.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS; ACTION WITHOUT MEETING
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A
meeting of Holders of Securities of one or more, or all, series may be
called at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be
made, given or taken by Holders of Securities of such series.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of one or more, or all, series for any purpose specified in
Section 1301, to be held at such time and at such place in the State of
Illinois, as the Trustee shall determine, or, with the approval of the
Company, at any other place. Notice of every such meeting, setting forth
the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(b) If the Trustee shall have been requested to call a meeting of the
Holders of Securities of one or more, or all, series by the Company or by
the Holders of 33% in aggregate principal amount of all of such series,
considered as one class, for any purpose specified in Section 1301, by
written request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have given the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
State of Illinois, or in such other place as shall be determined or
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approved by the Company, for such meeting and may call such meeting for
such purposes by giving notice thereof as provided in subsection (a) of
this Section.
(c) Any meeting of Holders of Securities of one or more, or all,
series shall be valid without notice if the Holders of all Outstanding
Securities of such series are present in person or by proxy and if
representatives of the Company and the Trustee are present, or if notice is
waived in writing before or after the meeting by the Holders of all
Outstanding Securities of such series, or by such of them as are not
present at the meeting in person or by proxy, and by the Company and the
Trustee.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS. To be
entitled to vote at any meeting of Holders of Securities of one or more,
or all, series a Person shall be (a) a Holder of one or more Outstanding
Securities of such series, or (b) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more Outstanding
Securities of such series by such Holder or Holders. The only Persons
who shall be entitled to attend any meeting of Holders of Securities of
any series shall be the Persons entitled to vote at such meeting and
their counsel, any representatives of the Trustee and its counsel and
any representatives of the Company and its counsel.
SECTION 1304. QUORUM; ACTION. The Persons entitled to vote a
majority in aggregate principal amount of the Outstanding Securities of
the series with respect to which a meeting shall have been called as
herein before provided, considered as one class, shall constitute a
quorum for a meeting of Holders of Securities of such series; provided,
however, that if any action is to be taken at such meeting which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of such series, considered as one class, the
Persons entitled to vote such specified percentage in principal amount
of the Outstanding Securities of such series, considered as one class,
shall constitute a quorum. In the absence of a quorum within one hour of
the time appointed for any such meeting, the meeting shall, if convened
at the request of Holders of Securities of such series, be dissolved. In
any other case the meeting may be adjourned for such period as may be
determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any such adjourned meeting,
such adjourned meeting may be further adjourned for such period as may
be determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Except as provided by Section 1305(e), notice of
the reconvening of any meeting adjourned for more than 30 days shall be
given as provided in Section 1302(a) not less than 10 days prior to the
date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.
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Except as limited by Section 1202, any resolution presented to
a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of the series with respect to which such meeting shall have
been called, considered as one class; provided, however, that, except as
so limited, any resolution with respect to any action which this
Indenture expressly provides may be taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Securities of such series, considered as one class, may be
adopted at a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the
Outstanding Securities of such series, considered as one class.
Any resolution passed or decision taken at any meeting of
Holders of Securities duly held in accordance with this Section shall be
binding on all the Holders of Securities of the series with respect to
which such meeting shall have been held, whether or not present or
represented at the meeting.
SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING
RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.
(a) Attendance at meetings of Holders of Securities may be in person
or by proxy; and, to the extent permitted by law, any such proxy shall
remain in effect and be binding upon any future Holder of the Securities
with respect to which it was given unless and until specifically revoked by
the Holder or future Holder of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved
in the manner specified in Section 104. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 104 or
other proof.
(c) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders as provided in Section 1302(b), in
which case the Company or the Holders of
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Securities of the series calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the
Persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities of all series represented at the meeting,
considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one vote
for each $1 principal amount of Securities held or represented by such
Holder; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or
proxy.
(e) Any meeting duly called pursuant to Section 1302 at which a
quorum is present may be adjourned from time to time by Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
of all series represented at the meeting, considered as one class; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amounts
and serial numbers of the Outstanding Securities, of the series with
respect to which the meeting shall have been called, held or represented
by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of
the meeting their verified written reports of all votes cast at the
meeting. A record of the proceedings of each meeting of Holders shall be
prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote
by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was given as provided in Section 1302 and,
if applicable, Section 1304. Each copy shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting
and one such copy shall be delivered to the Company, and another to the
Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
SECTION 1307. ACTION WITHOUT MEETING. In lieu of a vote of
Holders at a meeting as herein before contemplated in this Article, any
request, demand, authorization, direction, notice, consent, waiver or
other action may be made, given or taken by Holders by written
instruments as provided in Section 104.
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ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 1401. LIABILITY SOLELY CORPORATE. No recourse shall be
had for the payment of the principal of or premium, if any, or interest, if
any, on any Securities, 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 this Indenture, against
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 this Indenture and all the Securities
are solely corporate obligations, and that no personal liability whatsoever
shall attach to, or be incurred by, any incorporator, stockholder, officer or
director, past, present or future, of the Company or of any predecessor or
successor corporation, either directly or indirectly through the Company or
any predecessor or successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or to be
implied herefrom or therefrom, 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 this Indenture and the issuance of the
Securities.
ARTICLE FIFTEEN
SUBORDINATION OF SECURITIES
SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS. The
Company, for itself, its successors and assigns, covenants and agrees, and
each Holder of the Securities of each series, by its acceptance thereof,
likewise covenants and agrees, that the payment of the principal of and
premium, if any, and interest, if any, on each and all of the Securities is
hereby expressly subordinated and subject to the extent and in the manner set
forth in this Article, in right of payment to the prior payment in full of
all Senior Indebtedness.
Each Holder of the Securities of each series, by its acceptance
thereof, authorizes and directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate the subordination as
provided in this Article, and appoints the Trustee its attorney-in-fact for
any and all such purposes.
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SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES. In the
event (a) of any insolvency or bankruptcy proceedings or any receivership,
liquidation, reorganization or other similar proceedings in respect of the
Company or a substantial part of its property, or of any proceedings for
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, or (b) subject to the provisions of
Section 1503, that (i) a default shall have occurred with respect to the
payment of principal of or interest on or other monetary amounts due and
payable on any Senior Indebtedness, or (ii) there shall have occurred a
default (other than a default in the payment of principal or interest or
other monetary amounts due and payable) in respect of any Senior
Indebtedness, as defined therein or in the instrument under which the same is
outstanding, and the holder or holders thereof shall have accelerated the
maturity thereof in accordance with the terms of such instrument, and, in
the cases of subclauses (i) and (ii) of this clause (b), such default shall
not have been cured or waived or shall not have ceased to exist, or (c) that
the principal of and accrued interest on the Securities of any series shall
have been declared due and payable pursuant to Section 801 and such
declaration shall not have been rescinded and annulled as provided in Section
802, then:
(1) the holders of all Senior Indebtedness shall first be
entitled to receive payment of the full amount due thereon, or
provision shall be made for such payment in money or money's
worth, before the Holders of any of the Securities are entitled
to receive a payment on account of the principal of or interest
on the indebtedness evidenced by the Securities, including,
without limitation, any payments made pursuant to Articles Four
and Five;
(2) any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or
securities, to which any Holder or the Trustee would be entitled
except for the provisions of this Article, shall be paid or
delivered by the person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of such Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented
by each, to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid after giving effect to any
concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the indebtedness evidenced
by the Securities or to the Trustee under this Indenture; and
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(3) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind
or character, whether in cash, property or securities, in respect
of principal of or interest on the Securities or in connection
with any repurchase by the Company of the Securities, shall be
received by the Trustee or any Holder before all Senior
Indebtedness is paid in full, or provision is made for such
payment in money or money's worth, such payment or distribution
in respect of principal of or interest on the Securities or in
connection with any repurchase by the Company of the Securities
shall be paid over to the holders of such Senior Indebtedness or
their representative or representatives or to the trustee or
trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been issued,
ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution (or provision therefor) to
the holders of such Senior Indebtedness.
Notwithstanding the foregoing, at any time after the 123rd day following the
date of deposit of cash or Government Obligations pursuant to Section 701
(provided all conditions set out in such Section shall have been satisfied), the
funds so deposited and any interest thereon will not be subject to any rights of
holders of Senior Indebtedness including, without limitation, those arising
under this Article Fifteen; provided that no event described in clauses (d) and
(e) of Section 801 with respect to the Company has occurred during such 123-day
period.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinate
in right of payment to all Senior Indebtedness which may at the time be
outstanding to the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article Eleven hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 1502 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article Eleven hereof. Nothing in Section 1501 or in this Section
1502 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 907.
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SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS.
Any failure by the Company to make any payment on or perform any other
obligation in respect of Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly, by the
Company for money borrowed (or any deferral, renewal, extension or refunding
thereof) or any other obligation as to which the provisions of this Section
shall have been waived by the Company in the instrument or instruments by which
the Company incurred, assumed, guaranteed or otherwise created such indebtedness
or obligation, shall not be deemed a default under clause (b) of Section 1502 if
(i) the Company shall be disputing its obligation to make such payment or
perform such obligation and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which is in full force and
effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, or (B) in the event that a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay or
execution shall have been obtained pending such appeal or review.
SECTION 1504. SUBROGATION. Senior Indebtedness shall not be deemed
to have been paid in full unless the holders thereof shall have received cash
(or securities or other property satisfactory to such holders) in full payment
of such Senior Indebtedness then outstanding. Subject to the prior payment in
full of all Senior Indebtedness, the rights of the Holders of the Securities
shall be subrogated to the rights of the holders of Senior Indebtedness to
receive any further payments or distributions of cash, property or securities of
the Company applicable to the holders of the Senior Indebtedness until all
amounts owing on the Securities shall be paid in full; and such payments or
distributions of cash, property or securities received by the Holders of the
Securities, by reason of such subrogation, which otherwise would be paid or
distributed to the holders of such Senior Indebtedness shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders, be deemed to be a payment by the Company to or on account of Senior
Indebtedness, it being understood that the provisions of this Article are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than the
holders of Senior Indebtedness and the Holders, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article
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of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets or securities of the
Company referred to in this Article, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon, and all other facts pertinent thereto or
to this Article.
SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS UPON MATURITY. Upon
the maturity of the principal of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all matured principal of Senior Indebtedness and
interest and premium, if any, thereon shall first be paid in full before any
payment of principal or premium, if any, or interest, if any, is made upon the
Securities or before any Securities can be acquired by the Company or any
sinking fund payment is made with respect to the Securities (except that
required sinking fund payments may be reduced by Securities acquired before such
maturity of such Senior Indebtedness).
SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS. The Trustee
shall be entitled to all rights set forth in this Article with respect to any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness. Nothing in this Article shall deprive the Trustee
of any of its rights as such holder.
SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of moneys to or by the
Trustee unless and until the Trustee shall have received written notice thereof
from the Company, from a Holder or from a holder of any Senior Indebtedness or
from any representative or representatives of such holder and, prior to the
receipt of any such written notice, the Trustee shall be entitled, subject to
Section 901, in all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the date upon which
by the terms hereof any such moneys may become payable for any purpose, or in
the event of the execution of an instrument pursuant to Section 702
acknowledging satisfaction and discharge of this Indenture, then if prior to the
second Business Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Trustee may, in its discretion, receive such moneys and/or apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary, which may be received by it on or after such date; provided,
however, that no such
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application shall affect the obligations under this Article of the persons
receiving such moneys from the Trustee.
SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS.
The holders of Senior Indebtedness may, without affecting in any manner the
subordination of the payment of the principal of and premium, if any, and
interest, if any, on the Securities, at any time or from time to time and 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 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR
INDEBTEDNESS. With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and objectives as
are specifically set forth in this Indenture, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if it shall mistakenly pay over or deliver to the
Holders or the Company or any other Person, money or assets to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Sections 1507,
1508 and 1510 shall not apply to the Company if it acts as Paying Agent.
SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT IMPAIRED.
No right of any present or future holder of Senior Indebtedness to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
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SECTION 1513. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION.
Notwithstanding anything contained herein to the contrary, other than as
provided in the immediately succeeding sentence, all the provisions of this
Indenture shall be subject to the provisions of this Article, so far as the same
may be applicable thereto.
Notwithstanding anything contained herein to the contrary, the
provisions of this Article Fifteen shall be of no further effect, and the
Securities shall no longer be subordinated in right of payment to the prior
payment of Senior Indebtedness, if the Company shall have delivered to the
Trustee a notice to such effect. Any such notice delivered by the Company shall
not be deemed to be a supplemental indenture for purposes of Article Twelve.
------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
MIDAMERICAN ENERGY COMPANY
By:
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THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
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STATE OF )
----------------
) ss.:
COUNTY OF )
----------------
On the th day of , 1996, before me personally
came , to me known, who, being by me duly sworn, did depose and
say that he is the of MidAmerican Energy Company, one of
the corporations described herein and which executed the foregoing instrument;
and that he signed his name thereto by authority of the Board of Directors of
said corporation.
------------------------------------
Notary Public, State of
------------
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STATE OF )
--------------------
) ss.:
COUNTY OF )
-------------------
On the th day of , 1996, 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,
one of the corporations described herein 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.
------------------------------------
Notary Public, State of
------------
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Exhibit 4(g)
[Draft - 12/05/96]
MIDAMERICAN ENERGY COMPANY
TO
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
___________________
______ SUPPLEMENTAL INDENTURE
Dated as of ___________, ____
TO
INDENTURE
Dated as of ___________, ____
___________________
_____% Deferrable Interest Subordinated
Debentures Series [ ] Due ____
<PAGE>
______ SUPPLEMENTAL INDENTURE, dated as of __________, ____ (the
"______ Supplemental Indenture"), between MidAmerican Energy Company, an Iowa
corporation (the "Company"), and The First National Bank of Chicago, as
trustee (the "Trustee") under the Indenture dated as of ___________, 199_,
from the Company to the Trustee (the "Indenture").
WHEREAS, the Company has executed and delivered the Indenture to
the Trustee in order to provide for the future issuance of its deferrable
interest subordinated debentures (the "Securities"), such Securities to be
issued from time to time in one or more series as may be determined by the
Company under the Indenture, in an unlimited aggregate principal amount that
may be authenticated and delivered thereunder as provided in the Indenture;
WHEREAS, MidAmerican Energy Financing [I][II] (the "Series [ ]
Trust") may pursuant to the Underwriting Agreement dated _________, 199_
among the Company, the Series [ ] Trust and the Underwriters named therein
issue $_________ aggregate liquidation amount of its ___% cumulative
quarterly income preferred securities, Series [ ] (the "Series [ ] Preferred
Securities") with a liquidation amount of $25 per Series [ ] Preferred
Security;
WHEREAS, the Company is guaranteeing (the "Parent Guarantee") the
payment of distributions on the Series [ ] Preferred Securities, the payment
of the redemption price and the payment on liquidation with respect to the
Series [ ] Preferred Securities, to the extent provided in the Guarantee
Agreement of even date herewith between the Company and The First National
Bank of Chicago, as guarantee trustee for the benefit of the holders of the
Series [ ] Preferred Securities;
WHEREAS, the Company wishes to sell to the Series [ ] Trust, and
the Series [ ] Trust wishes to purchase from the Company, Series [ ]
Securities (as defined below) in an aggregate principal amount equal to
$_________, and in satisfaction of the purchase price for such Series [ ]
Securities, the Administrative Trustees of the Series [ ] Trust, on behalf of
the Series [ ]Trust, wish to (i) execute and deliver to the Company Common
Securities certificates representing Common Securities of the Series [ ]
Trust, registered in the name of the Company, having an aggregate liquidation
amount of $_________ (the "Series [ ] Common Securities") and (ii) deliver
to the Company the sum of $___________;
WHEREAS, the Company has duly authorized the creation of an issue
of its _____% Deferrable Interest Subordinated Debentures Series [ ] (the
"Series [ ] Securities"), of the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and
delivery of this ______ Supplemental Indenture; and
WHEREAS, all things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this ______
Supplemental Indenture a valid agreement of the Company, each in accordance with
their terms, have been done; and
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WHEREAS, capitalized terms used herein without definition shall
have the meanings specified in the Indenture.
NOW, THEREFORE, THIS _____ SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Series [ ]
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Series [ ] Securities as follows:
ARTICLE ONE
GENERAL TERMS OF THE SERIES [ ] SECURITIES
SECTION 1.01. TITLE; STATED MATURITY; INTEREST. The aggregate
principal amount of Securities which may be authenticated and delivered under
this ______ Supplemental Indenture is limited to $__________ at any time
Outstanding; provided, however, that such amount may be increased by a Board
Resolution to that effect.
The Securities shall be known and designated as the "____%
Deferrable Interest Subordinated Debentures, Series [ ]" of the Company. The
principal amount of the Series [ ] Securities (together with any accrued and
unpaid interest thereon) shall be payable in a single installment on
__________, ____; PROVIDED, that the Company may (i) change the Maturity Date
upon the exchange of the Series [ ] Securities for the Series [ ] Preferred
Securities subject to certain conditions set forth in Section 314 of the
Indenture, which changed Maturity Date shall in no case be earlier than
__________, ____ or later than __________, ____ and (ii) extend the Maturity
Date subject to certain conditions specified in Section 314 of the Indenture,
which extended Maturity Date shall in no case be later than __________,
_____. The Series [ ] Securities shall bear interest at the rate of ____%
per annum, from _________, ____, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, as the case may
be, payable quarterly (subject to deferral as set forth herein), in arrears,
on the first day of March, June, September and December of each year,
commencing _________, ____. The amount of interest payable for any such
period will be computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a full month, on the basis of the
actual number of days elapsed in such period. In the event that any Interest
Payment Date is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
Interest Payment Date shall be the immediately preceding Business Day, in
each case with the same force and effect as if made on such Interest Payment
Date. Any interest installment in arrears or deferred
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during an extension of an Interest Payment Period as set forth below will
bear interest at the rate of __% per annum, compounded quarterly (to the
extent permitted by applicable law).
Each installment of interest on a Series [ ] Security shall be
payable to the Person in whose name such Series [ ] Security is registered at
the close of business on the Business Day 15 days preceding the corresponding
Interest Payment Date (the "Regular Record Date") for the Series [ ]
Securities; provided, however, that if the Series [ ] Securities are held
neither by the Series [ ] Trust nor by a securities depositary, the Company
shall have the right to change the Regular Record Date by one or more Officer's
Certificates. Any installment of interest on the Series [ ] Securities not
punctually paid or duly provided for shall forthwith cease to be payable to the
Holders of such Series [ ] Securities on such Regular Record Date, and may be
paid to the Persons in whose names the Series [ ] Securities are registered at
the close of business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest. Notice of such Defaulted Interest and
Special Record Date shall be given to the Holders of the Series [ ] Securities
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Series [ ] Securities may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
The Company shall have the right, at any time during the term of the
Series [ ] Securities, from time to time to extend the interest payment period
thereon for up to 20 consecutive quarters (the "Extension Period") during which
period interest will compound quarterly and the Company shall have the right to
make partial payments of interest on any Interest Payment Date; provided that no
Extension Period may extend beyond the Maturity Date of the Securities and
provided further that the Company shall not defer the interest payment period
with respect to Additional Interest Attributable to Taxes and shall make payment
thereof on the relevant Interest Payment Date. At the end of the Extension
Period, the Company shall pay all interest then accrued and unpaid thereon
(together with additional interest thereon at the rate of __% per annum,
compounded quarterly, to the extent permitted by applicable law). During any
such Extension Period the Company will not, and will not permit any subsidiary
of the Company to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's outstanding capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Securities) that rank PARI PASSU with
or junior in interest to the Series [ ] Securities or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks PARI PASSU or junior in
interest to the Series [ ] Securities (other than (a) dividends or
distributions in common stock of the Company, (b) payments under any Guarantee,
and (c) purchases of common stock related to the issuance of common stock under
any of the Company's benefit plans for its directors, officers or employees).
Prior to the termination of any such Extension Period,
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the Company may further extend the interest payment period, PROVIDED that no
Extension Period shall exceed 20 consecutive quarters or extend beyond the
Maturity Date of the Series [ ] Securities. Upon the termination of any
Extension Period and upon the payment of all amounts then due, the Company
may select a new Extension Period, subject to the foregoing requirements.
Except for Additional Interest Attributable to Taxes, no interest shall be
due and payable during an Extension Period, except at the end thereof. The
Company shall give the Trustee and, if any Series [ ] Preferred Securities
are Outstanding, the Administrative Trustees of the Series [ ] Trust notice
of its election of an Extension Period no less than 15 Business Days prior to
the later of (i) the Regular Record Date next preceding the first Interest
Payment Date on which a distribution would occur but for such election and
(ii) five Business Days prior to such Interest Payment Date. Upon receipt of
any such notice, the Trustee shall give written notice of the Company's
election by mail to the Holders of the Series [ ] Securities not less than 10
Business Days prior to such Interest Payment Date. The Company also shall
make a public announcement of such election in accordance with New York Stock
Exchange Rules not less than five Business Days prior to such Regular Record
Date.
The principal of and interest on the Series [ ] Securities shall be
payable at, and registration and registration of transfers of the Series [ ]
Securities may be effected at, the office or agency of the Company in
______________________; provided, however, that, at the option of the Company,
payment of interest may be made (i) by check mailed to the address of the
Persons entitled thereto under the Indenture or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto under the Indenture; provided further,
that for so long as any Series [ ] Security is registered in the name of the
Property Trustee of the Series [ ] Trust, payment of principal (including
Redemption Price and interest) shall be made by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Property Trustee of the Series [ ] Trust. The Trustee will initially be the
agent of the Company for such service of notices and demands; provided, however,
that the Company reserves the right to change, by one or more Officer's
Certificates, any such office or agent. The Company will be the Security
Registrar and the Paying Agent for the Series [ ] Securities.
The Series [ ] Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Fifteen of the Indenture. The Series
[ ] Securities shall be senior to the Parent Guarantee.
The Series [ ] Securities shall be redeemable as provided in Section
102 below and in Article Four of the Indenture.
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SECTION 1.02. REDEMPTION. At any time on or after _____________,
the Company shall have the right to redeem the Series [ ] Securities, in
whole or, subject to the last paragraph of this Section 102, in part, from
time to time, at a Redemption Price equal to 100% of the principal amount of
Series [ ]Securities to be redeemed plus accrued but unpaid interest,
including any Additional Interest Attributable to Taxes, if any, to the
Redemption Date.
If a Tax Event shall occur and be continuing, the Company shall have
the right to redeem the Series [ ] Securities within 90 days of the occurrence
of such Tax Event in whole but not in part, at a Redemption Price equal to 100%
of the principal amount thereof plus accrued but unpaid interest, including
Additional Interest Attributable to Taxes, if any, to the Redemption Date.
TAX EVENT:
The term "Tax Event" means the receipt by the Series [ ] Trust of
an opinion of counsel (which may be counsel to the Company or an affiliate but
not an employee thereof and which must be acceptable to the Property Trustee of
the Series [ ] Trust) experienced in such matters to the effect that, as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or (b) any amendment to, or change in an interpretation or application of, such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after the
date of issuance of the Series [ ] Preferred Securities), there is more than an
insubstantial risk that interest payable by the Company on the Series [ ]
Securities is not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes.
SECTION 1.03. GLOBAL SECURITY. In the event that, at any time
subsequent to the initial authentication and delivery of the Series [ ]
Securities, the Series [ ] Securities are to be held by a securities
depositary, the Company may at such time establish the matters contemplated in
clause (r) in the second paragraph of Section 301 of the Indenture in an
Officer's Certificate supplemental to this Supplemental Indenture.
SECTION 1.04. EXCHANGE. At any time, the Company may terminate the
Series [ ] Trust and cause the Series [ ] Securities to be distributed to
holders of the Series [ ] Preferred Securities and Series [ ] Common
Securities in liquidation of the Series [ ] Trust.
SECTION 1.05. REGISTRATION OF TRANSFER OR EXCHANGE. No service charge
shall be made for the registration of transfer or exchange of the Series [ ]
Securities; provided,
<PAGE>
-6-
however, that the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
the exchange or transfer.
SECTION 1.06. FORM OF SERIES [ ] SECURITY. Series
[ ] Securities shall have such other terms and provisions as are provided in
the form set forth in Exhibit A hereto, and shall be issued in substantially
such form.
SECTION 1.07. LISTING. In the event that the Series [ ] Securities
are distributed to holders of the Preferred Securities as a result of the
termination of Series [ ] Trust, the Company will use its best efforts to list
the Series [ ] Securities on the New York Stock Exchange or on such other
exchange as the Series [ ] Preferred Securities are then listed.
ARTICLE TWO
MISCELLANEOUS PROVISIONS
SECTION 2.01. DEFINITIONS OF TERMS. Except as otherwise expressly
provided in this _____ Supplemental Indenture or in the form of Series [ ]
Security otherwise clearly required by the context hereof or thereof, all terms
used herein that are defined in the Indenture shall have the meanings assigned
to them therein.
SECTION 2.02. RATIFICATION OF INDENTURE. The Indenture, as
supplemented by this _____ Supplemental Indenture, is in all respects ratified
and confirmed, and this _____ Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.
SECTION 2.03. RECITALS. The recitals herein contained are made by
the Company and not by the Trustee, and the Trustee assumes no responsibility
for the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this _____ Supplemental Indenture.
SECTION 2.04. COUNTERPARTS. This _____ Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
<PAGE>
-7-
IN WITNESS WHEREOF, the parties hereto have caused this _____
Supplemental Indenture to be duly executed and attested, on the date or dates
indicated in the acknowledgments and as of the day and year first above
written.
MIDAMERICAN ENERGY COMPANY
By_______________________
Name:
Title:
Attest:
_______________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By_______________________
Name:
Title:
Attest:
_______________________
Name:
Title:
(Seal)
<PAGE>
-8-
EXHIBIT A
[FORM OF FACE OF SERIES [ ] SECURITY]
MIDAMERICAN ENERGY COMPANY
____% Deferrable Interest Subordinated
Debenture Series [ ] Due ____
No.
$________
MIDAMERICAN ENERGY COMPANY, a corporation duly organized and existing
under the laws of the State of Iowa (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________________, or registered
assigns, the principal sum of __________ DOLLARS ($__________) on _________,
____, and to pay interest on said principal sum from ___________, ____, or from,
and excluding, the most recent Interest Payment Date through which interest has
been paid or duly provided for, quarterly in arrears on the first day of March,
June, September and December of each year, commencing __________, ____, at the
rate of ____% per annum until the principal hereof is paid or made available for
payment. The amount payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. Interest on the
Securities of this series will accrue from, and including, __________, ____
through the first Interest Payment Date, and thereafter will accrue from, and
excluding, the last Interest Payment Date through which interest has been paid
or duly provided for. In the event that any Interest Payment Date is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such Interest Payment Date. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the Business Day 15 days preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, of which notice shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not
<PAGE>
-9-
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated by the Person entitled thereto as specified in the Securities
Register.
Reference is hereby made to the further provisions of this Security
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: ____________, ___
MIDAMERICAN ENERGY COMPANY
By:____________________
Name:
Title:
Attest:
____________________
CERTIFICATE OF AUTHENTICATION
<PAGE>
-10-
Dated:
This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:___________________________
Authorized Signatory
<PAGE>
-11-
FORM OF REVERSE OF SERIES [ ] SECURITY
This Security is one of a duly authorized issue of securities of the
Company, designated as its ____% Deferrable Interest Subordinated Debentures
(herein called the "Securities"), limited in aggregate principal amount to
$__________ issued under an Indenture, dated as of __________, ____,
supplemented by a ______ Supplemental Indenture, dated as of _________, ____,
(herein called the "Indenture"), from the Company to The First National Bank of
Chicago, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and such supplemental
indenture (the "Supplemental Indenture") reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail, at any time on or after
__________, ____ as a whole or in part, at the election of the Company, at a
Redemption Price equal to 100% of the principal amount, together in the case of
any such redemption with accrued interest to, but not including, the Redemption
Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holder of such Security, or one or more
Predecessor Securities, of record at the close of business on the related
Regular Record Date referred to on the face hereof, all as provided in the
Indenture.
The Securities of this series will also be redeemable at the option of
the Company if a Tax Event (as defined in the Supplemental Indenture) shall
occur and be continuing, in whole but not in part, at a redemption price equal
to 100% of the principal amount of the Securities of this series then
Outstanding plus any accrued and unpaid interest, including Additional Interest
Attributable to Taxes, if any, to the redemption date, upon not less than 30 nor
more than 60 days' notice given as provided in the Indenture.
In the event of the redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinated and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by
<PAGE>
-12-
such provisions, (b) authorizes and directs the Trustee on behalf of such
Holder to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination so provided and (c) appoints the Trustee the
attorney-in-fact of such Holder for any and all such purposes. Each Holder
hereof, by acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such Holder upon said provisions.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected. The Indenture also contains
provisions permitting Holders of specified percentages in principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in aggregate
principal amount of the Securities of all series at the time Outstanding in
respect of which an Event of Default shall have occurred and be continuing shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of Securities of all series at the time Outstanding
in respect of which an Event of Default shall have occurred and be continuing a
direction inconsistent with
<PAGE>
-13-
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this
Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
The Company has the right, at any time during the term of the
Securities of this series, from time to time to extend the interest payment
period thereon for up to 20 consecutive quarters (the "Extension Period") during
which period interest will compound quarterly and the Company shall have the
right to make partial payments of interest on any Interest Payment Date;
provided that no Extension Period may extend beyond the Maturity Date of the
Securities and provided further that the Company shall not defer the interest
payment period with respect to Additional Interest Attributable to Taxes and
shall make payment thereof on the relevant Interest Payment Date. At the end of
the Extension Period, the Company shall pay all interest then accrued and unpaid
thereon (together with additional interest thereon at the rate of __% per annum,
compounded quarterly, to the extent permitted by applicable law). During any
such Extension Period the Company will not, and will not permit any subsidiary
of the Company to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's outstanding capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including other Securities) that rank PARI PASSU with
or junior in interest to the Series [ ] Securities or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks PARI PASSU or junior in
interest to the Series [ ] Securities (other than (a) dividends or
distributions in common stock of the Company, (b) payments under any Guarantee,
and (c) purchases of common stock related to the issuance of common stock under
any of the Company's benefit plans for its directors, officers or employees).
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, PROVIDED that no Extension Period shall
exceed 20 consecutive quarters or extend beyond the Maturity Date of the Series
[ ] Securities. Upon the termination of any Extension Period and upon the
payment of all amounts then due, the Company may select a new Extension Period,
subject to the foregoing requirements. Except for Additional Interest
Attributable to Taxes, no interest shall be due and payable during an Extension
Period, except at the end thereof. Notice of the Company's election of an
Extension Period will be given as provided in or pursuant to the Indenture.
The Securities are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject
<PAGE>
-14-
to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this
series and of like tenor and of authorized denominations, as requested by the
Holder surrendering the same.
As provided in the Indenture, the Company shall not be required to
make transfers or exchanges of Securities of this series for a period of 15 days
immediately preceding the date of the mailing of any notice of redemption of
such Securities and the Company shall not be required to make transfers or
exchanges of any Securities of this series so selected for redemption in whole
or in part (except the unredeemed portion of thereof).
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and any agent of the company or the Trustee
may treat the Person in whose name this Security is registered as the absolute
owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state and local
tax purposes it is intended that this Security constitute indebtedness and agree
to treat this security accordingly for such purposes.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
<PAGE>
Exhibit 4(i)
GUARANTEE AGREEMENT
Between
MidAmerican Energy Company
(as Guarantor)
and
The First National Bank of Chicago
(as Guarantee Trustee)
dated as of
, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.01. Trust Indenture Act; Application. . . . . . . . . . . . .4
SECTION 2.02. Lists of Holders of Preferred Securities. . . . . . . . .4
SECTION 2.03. Reports by the Guarantee Trustee. . . . . . . . . . . . .5
SECTION 2.04. Periodic Reports to Guarantee Trustee. . . . . . . . . .5
SECTION 2.05. Evidence of Compliance with Conditions Precedent. . . . .5
SECTION 2.06. Events of Default; Waiver . . . . . . . . . . . . . . . .5
SECTION 2.07. Events of Default; Notice . . . . . . . . . . . . . . . .5
SECTION 2.08. Conflicting Interests . . . . . . . . . . . . . . . . . .6
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE. . . . . . . . .6
SECTION 3.01. Powers and Duties of the Guarantee Trustee. . . . . . . .6
SECTION 3.02. Certain Rights of Guarantee Trustee.. . . . . . . . . . .8
ARTICLE IV GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.01. Guarantee Trustee; Eligibility. . . . . . . . . . . . . 10
SECTION 4.02. Compensation and Reimbursement. . . . . . . . . . . . . 10
SECTION 4.03. Appointment, Removal and Resignation of Guarantee
Trustee.. . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.02. Waiver of Notice and Demand . . . . . . . . . . . . . . 12
SECTION 5.03. Obligations Not Affected. . . . . . . . . . . . . . . . 12
SECTION 5.04. Rights of Holders . . . . . . . . . . . . . . . . . . . 13
SECTION 5.05. Guarantee of Payment. . . . . . . . . . . . . . . . . . 13
SECTION 5.06. Subrogation . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.07. Independent Obligations.. . . . . . . . . . . . . . . . 14
ARCTICLE VI SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01. Subordination . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.01. Termination . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.01. Successors and Assigns. . . . . . . . . . . . . . . . . 15
SECTION 8.02. Amendments. . . . . . . . . . . . . . . . . . . . . . . 15
- i -
<PAGE>
SECTION 8.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8.04. Benefit . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.05. Interpretation. . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.06. Governing Law . . . . . . . . . . . . . . . . . . . . . 17
- ii -
<PAGE>
CROSS-REFERENCE TABLE
---------------------
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ------------------- ----------
310(a) ..................................................... 4.01(a)
310(b) ..................................................... 4.01(c), 2.08
310(c) ..................................................... Inapplicable
311(a) ..................................................... 2.02(b)
311(b) ..................................................... 2.02(b)
311(c) ..................................................... Inapplicable
312(a) ..................................................... 2.02(a)
312(b) ..................................................... 2.02(b)
313 ..................................................... 2.03
314(a) ..................................................... 2.04
314(b) ..................................................... Inapplicable
314(c) ..................................................... 2.05
314(d) ..................................................... Inapplicable
314(e) ..................................................... 1.01, 2.05, 3.02
314(f) ..................................................... 2.01, 3.02
315(a) ..................................................... 3.01(b)
315(b) ..................................................... 2.07
315(c) ..................................................... 3.01(b)
315(d) ..................................................... 3.01(c)
316(a) ..................................................... 5.04, 2.06
316(b) ..................................................... 5.03
316(c) ..................................................... 2.02
317(a) ..................................................... Inapplicable
317(b) ..................................................... Inapplicable
318(a) ..................................................... 2.01(b)
318(b) ..................................................... 2.01
318(c) ..................................................... 2.01(a)
_____________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
- iii -
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
__________ , 1996, is executed and delivered by MidAmerican Energy Company,
an Iowa corporation (the "Guarantor"), and The First National Bank of
Chicago, as guarantee trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of MidAmerican Energy Financing [ ], a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of __________, 1996 between the Trustees of the
Issuer, MidAmerican Energy Company, as Depositor, and the several Holders (as
defined therein) the Issuer is issuing as of the date hereof $_______
aggregate liquidation amount of its _____% cumulative quarterly income
preferred securities (the "Preferred Securities") representing preferred
undivided beneficial ownership interests in the Issuer and having the terms
set forth in the Trust Agreement;
WHEREAS, the Preferred Securities are to be issued for sale by the
Issuer and the proceeds are to be invested in $ _______ principal amount of
Debentures (as defined in the Trust Agreement); and
WHEREAS, in order to enhance the value of the Preferred Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the purchase of Debentures,
which purchase the Guarantor hereby agrees shall benefit the Guarantor, the
Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires, have
the following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement as in effect on the date hereof.
AFFILIATE:
Affiliate of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or
<PAGE>
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
COMMON SECURITIES:
The term "Common Securities" means the securities representing
common undivided beneficial ownership interests in the Issuer.
EVENT OF DEFAULT:
The term "Event of Default" means a default by the Guarantor on any
of its payment obligations under this Guarantee Agreement.
GUARANTEE PAYMENTS:
The term "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by or on behalf of the Issuer: (i) any accrued
and unpaid Distributions that are required to be paid on such Preferred
Securities but only if and to the extent that the Property Trustee has
available in the Payment Account funds sufficient to make such payment, (ii)
the redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption, with respect to the Preferred
Securities called for redemption by the Issuer but only if and to the extent
that the Property Trustee has available in the Payment Account funds
sufficient to make such payment, (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with a redemption of all of the Preferred Securities), the lesser
of (a) the aggregate of the Liquidation Amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
GUARANTEE TRUSTEE:
The term "Guarantee Trustee" means The First National Bank of
Chicago, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement
and thereafter means each such Successor Guarantee Trustee.
HOLDER:
The term "Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities then outstanding;
provided, however, that in determining whether the holders of the requisite
percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate
of the Guarantor.
- 2 -
<PAGE>
INDENTURE:
The term "Indenture" means the Indenture dated as of ___________,
1996, among the Guarantor and The First National Bank of Chicago, as trustee,
pursuant to which the Debentures are issued.
MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES:
The term "Majority in liquidation amount of the Preferred
Securities" means a vote by Holders, voting separately as a class, of more
than 50% of the aggregate liquidation amount of all Preferred Securities.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Guarantor, and delivered to the Guarantee
Trustee. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Guarantee Agreement shall
include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
PERSON:
The term "Person" means any individual, corporation, partnership,
joint venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
- 3 -
<PAGE>
RESPONSIBLE OFFICER:
The term "Responsible Officer" means, with respect to the Guarantee
Trustee, any vice-president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
SUCCESSOR GUARANTEE TRUSTEE:
The term "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.01.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required or deemed to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.02. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, not later than December 1 and June 1 in
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
a date not more than 15 days prior to the delivery thereof,
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and (b) at such other times as the Guarantee Trustee may request in writing,
within 30 days after the receipt by the Guarantor of any such request, a List
of Holders as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Guarantee Trustee by the Guarantor.
The Guarantee Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a) of the Trust Indenture Act, subject to the provisions of
Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days
after May 15 of each year, commencing May 15, 1997, the Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act in the form and in the manner provided by
Section 313(a) of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Sections 313(b), (c) and (d) of the Trust
Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee any documents, reports and
information required, and the compliance certificate required, by Section 314
of the Trust Indenture Act in the form, in the manner and at the times
required by Section 314 of the Trust Indenture Act.
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent provided for in this Guarantee
Agreement as and to the extent required by Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the
form of an Officers' Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of all of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Guarantee Agreement, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.07. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured
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before the giving of such notice, provided that, the Guarantee Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors or
Responsible Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.08. CONFLICTING INTERESTS. The Trust Agreement and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement or any rights hereunder to any Person
except a Holder exercising his or her rights pursuant to Section 5.04 or to a
Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee
of its appointment to act as Successor Guarantee Trustee. The right, title
and interest of the Guarantee Trustee shall automatically vest in any
Successor Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) The Guarantee Trustee, prior to the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.06), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee or such Responsible Officer was negligent in ascertaining
the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a
Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is
not reasonably assured to it.
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SECTION 3.02. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) the Guarantee Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall
be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee may consult with counsel of its
choice, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the Guarantor
or any of its Affiliates and may include any of its employees;
the Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee
Agreement from any court of competent jurisdiction;
(v) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee
such adequate security and indemnity as would satisfy a
reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that, nothing
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contained in this Section 3.02(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement;
(vi) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(vii) the Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by
it hereunder;
(viii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee Trustee
(1) may request instructions from the Holders, (2) may refrain
from enforcing such remedy or right or taking such other action
until such instructions are received, and (3) shall be protected
in acting in accordance with such instructions; and
(ix) the Guarantee Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Guarantee.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available
to the Guarantee Trustee shall be construed to be a duty.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act
as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for
the purposes of this Section 4.01(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.03(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. COMPENSATION AND REIMBURSEMENT.
The Guarantor agrees:
(a) to pay the Guarantee Trustee from time to time such reasonable
compensation as the Guarantor and the Guarantee Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
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(b) except as otherwise expressly provided herein, to reimburse
the Guarantee Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with the provisions of this Guarantee (including the reasonable
compensation and expenses of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or
bad faith; and
(c) to indemnify each of the Guarantee Trustee and any predecessor
Guarantee Trustee for, and to hold it harmless from and against, any and all
loss, damage, claim, liability or expense, including taxes (other than taxes
based upon the income of the Guarantee Trustee) incurred without negligence
or bad faith on its part, arising out of or in connection with the acceptance
of the administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any its powers or duties hereunder.
As security for the performance of the obligations of the Guarantor
under this Section, the Guarantee Trustee shall have a lien prior to the
Preferred Securities upon all the property and funds held or collected by the
Guarantee Trustee as such, except funds held in trust for the payment of
principal of, and premium (if any) or interest on, particular obligations of
the Guarantor under this Guarantee Agreement.
The provisions of this Section shall survive the termination of
this Guarantee Agreement.
SECTION 4.03. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.03(b), unless an Event of Default shall
have occurred and be continuing, the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Guarantee Trustee and delivered to the Guarantor
and the resigning Guarantee Trustee.
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(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.03 within 60 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition any court of competent jurisdiction
for appointment of a Successor Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) The Guarantor shall give notice of each resignation and each
removal of the Guarantee Trustee and each appointment of a successor
Guarantee Trustee to all Holders in the manner provided in Section 8.03
hereof. Each notice shall include the name of the successor Guarantee
Trustee and the address of its Corporate Trust Office.
ARTICLE V
GUARANTEE
SECTION 5.01. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability
to which it applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall
in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for
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payment of Distributions, Redemption Price, Liquidation Distribution or
other sum payable that results from the extension of any interest
payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf
of the Holders; (iii) the Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv)
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement without first instituting a
legal proceeding against the Issuer or any other person or entity.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments
in full (without duplication).
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SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement;
provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Guarantee Agreement, if, at the time of any such payment, any amounts of
Guarantee Payments are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the
Issuer with respect to the Preferred Securities and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.03.
ARTICLE VI
SUBORDINATION
SECTION 6.01. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the Debentures, except those made PARI PASSU or
subordinate by their terms, (ii) PARI PASSU with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor. Nothing in this Section 6.01
shall apply to claims of, or payments to, the Guarantee Trustee under or
pursuant to Section 4.02 hereof.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of the
Redemption Price of all Preferred Securities, and all accrued and unpaid
Distributions to the date of redemption, (ii) the distribution of Debentures
to Holders in exchange for all of the Preferred Securities or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case
may be, if at any time any Holder must restore
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payment of any sums paid with respect to the Preferred Securities or under
this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article Eleven of the
Indenture, the Guarantor shall not assign its obligations hereunder.
SECTION 8.02. AMENDMENTS. This Guarantee Agreement may be amended
only by an instrument in writing entered into by the Guarantor and the
Guarantee Trustee. Except with respect to any changes which do not
materially adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than 66 2/3% in aggregate
liquidation amount of all the outstanding Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings of
Holders shall apply to the giving of such approval. Nothing herein contained
shall be deemed to require that the Guarantee Trustee enter into any
amendment of this Guarantee Agreement.
SECTION 8.03. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed
by the party giving such notice, and delivered, telecopied or mailed by first
class mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities:
MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
Attention: Treasurer
with a copy to the General Counsel of the Guarantor.
(b) if given to the Issuer, in care of the Administrative
Trustees, at the Issuer's (and the Administrative Trustee's) address
set forth below or such other address as the Administrative Trustees
on behalf of the Issuer may give notice of to the Holders:
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MidAmerican Energy Financing [ ]
c/o MidAmerican Energy Company
666 Grand Avenue
P.O. Box 657
Des Moines, Iowa 50303-0657
(c) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice
of to the Holders of the Preferred Securities:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Administration
Telephone: (815) 356-3090
Telecopy: (312) 407-1708
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have
been delivered on the date of such refusal or inability to deliver.
SECTION 8.04. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 8.05. INTERPRETATION. In this Guarantee Agreement, unless
the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06. GOVERNING LAW. This Guarantee Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of New York.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
MidAmerican Energy Company
By:
-------------------------------
Name:
Title:
The First National Bank of Chicago,
as Guarantee Trustee
By: -------------------------------
Name:
Title:
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Exhibit 4l
12/04/96
- --------------------------------------------------------------------------------
MIDAMERICAN ENERGY COMPANY
AND
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
----------------------------
INDENTURE
DATED AS OF _________, 1996
----------------------------
- ----------------------------------------------------------------------------
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TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Section 1.01. General . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.02. TIA . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.03. Other Definitions . . . . . . . . . . . . . . . . . . . .2
Accrued Interest . . . . . . . . . . . . . . . . . . . . . . . . .2
Accrued Interest Factor. . . . . . . . . . . . . . . . . . . . . .2
Amortized Face Amount . . . . . . . . . . . . . . . . . . . . . . .2
Amortizing Note . . . . . . . . . . . . . . . . . . . . . . . . . .3
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . .3
Authorized Agent . . . . . . . . . . . . . . . . . . . . . . . . .3
Authorized Newspaper . . . . . . . . . . . . . . . . . . . . . . .3
Basis Point . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . .4
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . .4
Bond Indenture . . . . . . . . . . . . . . . . . . . . . . . . . .4
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Calculation Agent . . . . . . . . . . . . . . . . . . . . . . . . .4
Calculation Date . . . . . . . . . . . . . . . . . . . . . . . . .4
Commercial Paper Rate . . . . . . . . . . . . . . . . . . . . . . .4
Commercial Paper Rate Interest Determination Date . . . . . . . . .5
Commercial Paper Rate Notes . . . . . . . . . . . . . . . . . . . .5
Common Shareholders Equity . . . . . . . . . . . . . . . . . . . .5
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Composite Quotations . . . . . . . . . . . . . . . . . . . . . . .8
Corporate Trust Office of the Trustee . . . . . . . . . . . . . . .8
CUSIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Designated LIBOR Page . . . . . . . . . . . . . . . . . . . . . . .8
Discharged . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . .9
Extension Notice . . . . . . . . . . . . . . . . . . . . . . . . .9
Extension Period . . . . . . . . . . . . . . . . . . . . . . . . .9
Final Maturity Date . . . . . . . . . . . . . . . . . . . . . . . 10
First Mortgage Bonds . . . . . . . . . . . . . . . . . . . . . . 10
Fixed Rate Amortizing Note . . . . . . . . . . . . . . . . . . . 10
Fixed Rate Note . . . . . . . . . . . . . . . . . . . . . . . . . 10
Floating Rate Note . . . . . . . . . . . . . . . . . . . . . . . 10
Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
H.15(519): . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Index Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 11
Initial Interest Rate . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
Initial Redemption Date . . . . . . . . . . . . . . . . . . . . . 11
Interest Accrual Period . . . . . . . . . . . . . . . . . . . . . 11
Interest Determination Date . . . . . . . . . . . . . . . . . . . 12
Interest Factor . . . . . . . . . . . . . . . . . . . . . . . . . 12
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . 12
Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Interest Rate Basis; Base Rate . . . . . . . . . . . . . . . . . 13
Interest Reset Date . . . . . . . . . . . . . . . . . . . . . . . 14
Interest Reset Period . . . . . . . . . . . . . . . . . . . . . . 14
Iowa-Illinois Indenture . . . . . . . . . . . . . . . . . . . . . 15
Issue Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
LIBOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
LIBOR Interest Determination Date . . . . . . . . . . . . . . . . 17
LIBOR Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
London Business Day . . . . . . . . . . . . . . . . . . . . . . . 17
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . 17
Midwest Power Indenture . . . . . . . . . . . . . . . . . . . . . 17
Minimum Interest Rate . . . . . . . . . . . . . . . . . . . . . . 18
Money Market Yield . . . . . . . . . . . . . . . . . . . . . . . 18
Note or Notes; Outstanding . . . . . . . . . . . . . . . . . . . 18
Noteholder; Holder . . . . . . . . . . . . . . . . . . . . . . . 19
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 19
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 19
Optional Interest Reset Date: . . . . . . . . . . . . . . . . . . 19
Original Issue Date . . . . . . . . . . . . . . . . . . . . . . . 19
Original Issue Discount Note . . . . . . . . . . . . . . . . . . 20
Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . . 20
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Pre-Exercise Stated Maturity Date . . . . . . . . . . . . . . . . 22
Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Prime Rate Interest Determination Date . . . . . . . . . . . . . 23
Prime Rate Notes . . . . . . . . . . . . . . . . . . . . . . . . 24
Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . 24
Principal Executive Offices of the Company . . . . . . . . . . . 24
Principal Facility . . . . . . . . . . . . . . . . . . . . . . . 24
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 25
Reset Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Reset Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 26
Reuters Screen USPRIME1 . . . . . . . . . . . . . . . . . . . . . 26
Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Spread Multiplier . . . . . . . . . . . . . . . . . . . . . . . . 26
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 27
Subsequent Interest Period . . . . . . . . . . . . . . . . . . . 27
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Treasury Bills . . . . . . . . . . . . . . . . . . . . . . . . . 27
Treasury Rate . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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Treasury Rate Interest Determination Date . . . . . . . . . . . . 28
Treasury Rate Notes . . . . . . . . . . . . . . . . . . . . . . . 28
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . 29
Wholly-Owned Subsidiary . . . . . . . . . . . . . . . . . . . . . 29
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . . . . 29
Zero Coupon Note . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE TWO
FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Form Generally. . . . . . . . . . . . . . . . . . . . . 30
Section 2.02. Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . . . . . . . . . 30
Section 2.03. Amount Unlimited. . . . . . . . . . . . . . . . . . . . 31
Section 2.04. Denominations, Dates, Interest Payment
and Record Dates. . . . . . . . . . . . . . . . . . . . 31
Section 2.05. Execution, Authentication, Delivery and
Dating. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.06. Exchange and Registration of Transfer of
Notes . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.07. Mutilated, Destroyed, Lost or Stolen
Notes . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.08. Temporary Notes . . . . . . . . . . . . . . . . . . . . 38
Section 2.09. Cancellation of Notes Paid, etc . . . . . . . . . . . . 38
Section 2.10. Interest Rights Preserved . . . . . . . . . . . . . . . 38
Section 2.11. Payment of Notes. . . . . . . . . . . . . . . . . . . . 39
Section 2.12. Notes Issuable in the Form of a Global
Note. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE THREE
REDEMPTION OF NOTES; REPAYMENT PRIOR TO STATED MATURITY
Section 3.01. Applicability of Redemption Provisions. . . . . . . . . 43
Section 3.02. Notice of Redemption; Selection of Notes. . . . . . . . 43
Section 3.03. Payment of Notes on Redemption; Deposit
of Redemption Price . . . . . . . . . . . . . . . . . . 44
Section 3.04. Repayment at the Option of the Holder . . . . . . . . . 45
Section 3.05. Extension . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.06. Reset Notes . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE FOUR
FIRST MORTGAGE BONDS
Section 4.01. Issuance Restrictions . . . . . . . . . . . . . . . . . 49
Section 4.02. First Mortgage Bonds held by the Trustee. . . . . . . . 50
Section 4.03. Trustee to Exercise Rights of First
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Mortgage Bondholder . . . . . . . . . . . . . . . . . . 50
Section 4.04. No Transfer of First Mortgage Bonds;
Exception . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.05. Release of First Mortgage Bonds . . . . . . . . . . . . 50
Section 4.06. Voting of First Mortgage Bonds. . . . . . . . . . . . . 50
Section 4.07. Discharge of Bond Indenture . . . . . . . . . . . . . . 51
ARTICLE FIVE
SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS
Section 5.01. Satisfaction and Discharge. . . . . . . . . . . . . . . 52
Section 5.02. Deposited Moneys to Be Held in Trust by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.03. Return of Unclaimed Moneys. . . . . . . . . . . . . . . 54
Section 5.04. Reinstatement . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE SIX
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . 54
Section 6.02. Office for Notices and Payments, etc. . . . . . . . . . 55
Section 6.03. Appointments to Fill Vacancies in
Trustee's Office. . . . . . . . . . . . . . . . . . . . 55
Section 6.04. Annual Statement and Notice . . . . . . . . . . . . . . 55
Section 6.05. Corporate Existence . . . . . . . . . . . . . . . . . . 56
Section 6.06. Limitation Upon Mortgages and Liens. . . . . . . . . . . 56
Section 6.07. Waiver of Certain Covenants. . . . . . . . . . . . . . . 56
ARTICLE SEVEN
NOTEHOLDER LISTS AND REPORTS BY THE COMPANYAND THE TRUSTEE
Section 7.01. Noteholder Lists. . . . . . . . . . . . . . . . . . . . 57
Section 7.02. Securities and Exchange Commission
Reports . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.03. Reports by the Trustee. . . . . . . . . . . . . . . . . 57
ARTICLE EIGHT
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON EVENT OF DEFAULT
Section 8.01. Events of Default . . . . . . . . . . . . . . . . . . . 57
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Section 8.02. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . . . 59
Section 8.03. Collection and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 8.04. Trustee May File Proofs of Claim. . . . . . . . . . . . 61
Section 8.05. Trustee May Enforce Claims Without
Possession of Notes . . . . . . . . . . . . . . . . . . 62
Section 8.06. Application of Moneys Collected by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 8.07. Proceedings by Noteholders. . . . . . . . . . . . . . . 64
Section 8.08. Proceedings by Trustee. . . . . . . . . . . . . . . . . 64
Section 8.09. Remedies Cumulative and Continuing. . . . . . . . . . . 65
Section 8.10. Restoration of Rights and Remedies. . . . . . . . . . . 65
Section 8.11. Direction of Proceedings and Waiver of
Defaults by Majority Noteholders. . . . . . . . . . . . 65
Section 8.12. Notice of Default . . . . . . . . . . . . . . . . . . . 66
Section 8.13. Undertaking to Pay Costs. . . . . . . . . . . . . . . . 66
ARTICLE NINE
CONCERNING THE TRUSTEE
Section 9.01. Certain Duties and Responsibilities . . . . . . . . . . 67
Section 9.02. Notice of Defaults. . . . . . . . . . . . . . . . . . . 68
Section 9.03. Certain Rights of Trustee . . . . . . . . . . . . . . . 68
Section 9.04. Not Responsible for Recitals or Issuance
of Notes. . . . . . . . . . . . . . . . . . . . . . . . 70
Section 9.05. May Hold Notes. . . . . . . . . . . . . . . . . . . . . 70
Section 9.06. Money Held in Trust . . . . . . . . . . . . . . . . . . 70
Section 9.07. Compensation and Reimbursement. . . . . . . . . . . . . 70
Section 9.08. Disqualification; Conflicting Interests . . . . . . . . 71
Section 9.09. Corporate Trustee Required; Eligibility . . . . . . . . 77
Section 9.10. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . 77
Section 9.11. Acceptance of Appointment by Successor. . . . . . . . . 79
Section 9.12. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . . . 79
Section 9.13. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 9.14. Appointment of Authenticating Agent . . . . . . . . . . 84
ARTICLE TEN
CONCERNING THE NOTEHOLDERS
Section 10.01. Action by Noteholders. . . . . . . . . . . . . . . . . 86
Section 10.02. Proof of Execution by Noteholders. . . . . . . . . . . 87
Section 10.03. Who Deemed Absolute Owners . . . . . . . . . . . . . . 87
Section 10.04. Company-Owned Notes Disregarded. . . . . . . . . . . . 87
Section 10.05. Revocation of Consents; Future Holders
v
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Bound . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 10.06. Record Date for Noteholder Acts. . . . . . . . . . . . 88
ARTICLE ELEVEN
NOTEHOLDERS' MEETING
Section 11.01. Purposes of Meetings . . . . . . . . . . . . . . . . . 88
Section 11.02. Call of Meetings by Trustee. . . . . . . . . . . . . . 89
Section 11.03. Call of Meetings by Company or
Noteholders. . . . . . . . . . . . . . . . . . . . . . 89
Section 11.04. Qualifications for Voting. . . . . . . . . . . . . . . 89
Section 11.05. Regulations. . . . . . . . . . . . . . . . . . . . . . 90
Section 11.06. Voting . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 11.07. Right of Trustee or Noteholders not
Delayed. . . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE TWELVE
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 12.01. Company May Consolidate, etc., only on
Certain Terms. . . . . . . . . . . . . . . . . . . . . 91
Section 12.02. Successor Corporation Substituted. . . . . . . . . . . 92
ARTICLE THIRTEEN
SUPPLEMENTAL INDENTURES
Section 13.01. Supplemental Indentures without Consent
of Noteholders . . . . . . . . . . . . . . . . . . . . 93
Section 13.02. Supplemental Indentures with Consent of
Noteholders. . . . . . . . . . . . . . . . . . . . . . 94
Section 13.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures. . . . . . . . . . . 96
Section 13.04. Notation on Notes. . . . . . . . . . . . . . . . . . . 96
Section 13.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee. . . . . . . . . . . 96
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,OFFICERS AND DIRECTORS
Section 14.01. Indenture and Notes Solely Corporate
Obligations. . . . . . . . . . . . . . . . . . . . . . 96
vi
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ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
Section 15.01. Provisions Binding on Company's
Successors . . . . . . . . . . . . . . . . . . . . . . 97
Section 15.02. Official Acts by Successor Corporation . . . . . . . . 97
Section 15.03. Addresses for Notices, etc . . . . . . . . . . . . . . 97
Section 15.04. Governing Law. . . . . . . . . . . . . . . . . . . . . 97
Section 15.05. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . . . . . . 98
Section 15.06. Business Days. . . . . . . . . . . . . . . . . . . . . 99
Section 15.07. Trust Indenture Act to Control . . . . . . . . . . . . 99
Section 15.08. Table of Contents, Headings, etc . . . . . . . . . . . 99
Section 15.09. Execution in Counterparts. . . . . . . . . . . . . . .100
Section 15.10. Manner of Mailing Notice to
Noteholders. . . . . . . . . . . . . . . . . . . . . .100
EXHIBIT A - Global Fixed Rate Note . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B - Fixed Rate Note. . . . . . . . . . . . . . . . . . . . . .B-1
EXHIBIT C - Global Floating Rate Note. . . . . . . . . . . . . . . . .C-1
EXHIBIT D - Floating Rate Note . . . . . . . . . . . . . . . . . . . .D-1
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TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of
_________, 1996, between MidAmerican Energy Company and The First
National Bank of Chicago, as trustee.
SECTION OF ACT SECTION OF INDENTURE
-------------- --------------------
310(a)(1) and (2) ................... 9.09
310(a)(3) and (4) ................... Not applicable
310(a)(5) ........................... 9.08
310(b) .............................. 9.08 and 9.10
310(c) .............................. Not applicable
311(a) and (b) ...................... 9.13
311(c) .............................. Not applicable
312(a) .............................. 7.01
312(b) and (c) ...................... 7.01
313(a) .............................. 7.03
313(b)(1) ........................... Not applicable
313(b)(2) ........................... 7.03
313(c) .............................. 7.03
313(d) .............................. 7.03
314(a) .............................. 6.04, 7.02
314(b) .............................. Not applicable
314(c)(1) and (2) ................... 15.05
314(c)(3) ........................... Not applicable
314(d) .............................. Not applicable
314(e) .............................. 15.05
314(f) .............................. Not applicable
315(a), (c) and (d) ................. 9.01
315(b) .............................. 8.12; 9.02
315(e) .............................. 8.13
316(a)(1) ........................... 8.01 and 8.11
316(a)(2) ........................... Omitted
316(a) last sentence ................ 10.04
316(b) .............................. 8.07
316(c) .............................. 10.06
317(a)(1)............................ 8.03
317(a)(2)............................ 8.04
317(b) .............................. Omitted
318(a) .............................. 15.07
_________________________
This tie-sheet does not constitute a part of the Indenture.
<PAGE>
THIS INDENTURE, dated as of __________, 1996, between
MidAmerican Energy Company, a corporation duly organized and existing
under the laws of the State of Iowa (hereinafter sometimes called 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, as trustee (hereinafter called the "Trustee").
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide
for the issuance from time to time of its Medium-Term Notes (hereinafter
sometimes called "Notes"), to be issued as in this Indenture provided;
AND WHEREAS, all acts and things necessary to make this
Indenture a valid agreement according to its terms have been done and
performed, and the execution of this Indenture and the issue hereunder
of the Notes have in all respects been duly authorized;
NOW THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Notes are, and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the
Notes by the Holders thereof and of the sum of one dollar duly paid to
it by the Trustee at the execution of these presents, the receipt
whereof is hereby acknowledged, the Company covenants and agrees with
the Trustee for the equal and proportionate benefit of the respective
Holders from time to time of the Notes, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. GENERAL. The terms defined in this Article One
(except as herein otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings
specified in this Article One.
SECTION 1.02. TIA. (a) Whenever this Indenture refers to a
provision of the Trust Indenture Act of 1939, as amended ("TIA"), such
provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms incorporated in this Indenture have
the following meanings:
<PAGE>
"indenture securities" means the Notes.
"indenture note holder" means a Noteholder or a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
(b) All terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule of
the Securities and Exchange Commission have the meanings assigned to
them in the TIA or such statute or rule as in force on the date of
execution of this Indenture.
SECTION 1.03. OTHER DEFINITIONS. For purposes of this
Indenture, the following terms have the following meanings:
ACCRUED INTEREST:
The term "Accrued Interest" at any Interest Payment Date (a)
for a Floating Rate Note shall mean the amount obtained by multiplying
the principal amount of such Floating Rate Note by its Accrued Interest
Factor, and (b) for a Fixed Rate Note, shall mean the amount obtained by
multiplying the principal amount of such Fixed Rate Note by its Interest
Rate, and multiplying the product thus obtained by a fraction, the
numerator of which is the number of days in the Interest Reset Period
for such Note ending on such Interest Payment Date based on a 360-day
year of twelve 30-day months, and the denominator of which is 360.
ACCRUED INTEREST FACTOR:
The term "Accrued Interest Factor" at any Interest Payment Date
for a Floating Rate Note shall mean the sum of the Interest Factors for
such Floating Rate Note calculated for each day in the Interest Reset
Period for such Note ending on such Interest Payment Date or the prior
Record Date, as the case may be.
AMORTIZED FACE AMOUNT:
The term "Amortized Face Amount" of an Original Issue Discount
Note as of the date that (i) the principal amount of such Note is to be
repaid prior to its Stated Maturity, whether upon declaration of
acceleration, call for redemption, repayment at the option of the Holder
or otherwise, or (ii) any consent,
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notice, request, direction, waiver or suit by the Noteholders shall be deemed to
be given, made or commenced under this Indenture, shall mean the principal
amount of such Note multiplied by its Issue Price plus the portion of the
difference between the dollar amount thus obtained and the principal amount of
such Note that has accreted at the Yield to Maturity of such Note (computed in
accordance with generally accepted United States bond yield computation
principles) to such date, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount stated in the
applicable Company Order.
AMORTIZING NOTE:
The term "Amortizing Note" shall mean a Note for which payments of
principal of and interest on such Note are made in installments over the life of
such Note, and unless otherwise specified in the applicable Company Order,
payments with respect to an Amortizing Note shall be applied first to interest
due and payable thereon and then to the reduction of the unpaid principal amount
thereof.
AUTHENTICATING AGENT:
The term "Authenticating Agent" shall mean the agent of the Trustee
which shall be appointed and acting pursuant to Section 9.14.
AUTHORIZED AGENT:
The term "Authorized Agent" shall mean an agent of the Company
designated by an Officers' Certificate to give to the Trustee the information
specified in clause (a) of "Company Order" for the issuance of a Note.
AUTHORIZED NEWSPAPER:
The term "Authorized Newspaper" shall mean a newspaper of general
circulation in the relevant area, printed in the English language and
customarily published on each Business Day; whenever successive publications in
an Authorized Newspaper are required by this Indenture, such publications may be
made on the same or different days and in the same or in different Authorized
Newspapers.
BASIS POINT:
The term "Basis Point" shall mean one-one hundredth of a percentage
point.
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BOARD OF DIRECTORS:
The term "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee of such Board or any other duly authorized
Committee of such Board.
BOARD RESOLUTION:
The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
BOND INDENTURE:
The term "Bond Indenture" shall mean the Iowa-Illinois Indenture or
the Midwest Power Indenture.
BUSINESS DAY:
The term "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday that in The City of New York, is not a day on which banking
institutions are authorized or obligated by law, regulation or executive order
to close and, with respect to LIBOR Notes, is also a London Business Day, unless
otherwise specified in the applicable Company Order.
CALCULATION AGENT:
The term "Calculation Agent" for a particular Floating Rate Note shall
mean the Trustee, unless otherwise specified in the applicable Company Order.
CALCULATION DATE:
The term "Calculation Date" shall mean with regard to any particular
Interest Determination Date, the earlier of (i) the tenth calendar day after
such Interest Determination Date, or, if any such day is not a Business Day, the
next day that is a Business Day, or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or Maturity, as the case may be.
COMMERCIAL PAPER RATE:
The term "Commercial Paper Rate" for a particular Floating Rate Note,
unless otherwise indicated in the applicable Company Order, shall mean, with
respect to any Commercial Paper Rate Interest Determination Date, the Money
Market Yield on such date of the rate for commercial paper having the Index
Maturity
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specified in such Company Order, as such rate shall be published in H.15(519)
under the heading "Commercial Paper". In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Rate Interest Determination Date, then
the Commercial Paper Rate shall be the Money Market Yield on such Commercial
Paper Rate Interest Determination Date of the rate for commercial paper of
the specified Index Maturity as published in Composite Quotations under the
heading "Commercial Paper". If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, then the Commercial Paper Rate for such Commercial Paper Rate
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates
(quoted on a bank discount basis) as of 11:00 A.M., New York City time, on
such Commercial Paper Rate Interest Determination Date of three leading
dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index Maturity placed
for an industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency; PROVIDED, HOWEVER, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as set forth
above, the Commercial Paper Rate will be the Commercial Paper Rate
immediately prior to such Commercial Paper Rate Interest Determination Date.
COMMERCIAL PAPER RATE INTEREST DETERMINATION DATE:
The term "Commercial Paper Rate Interest Determination Date"
pertaining to an Interest Reset Date for a Commercial Paper Rate Note shall mean
the second Business Day immediately preceding such Interest Reset Date, unless
otherwise specified in the applicable Company Order.
COMMERCIAL PAPER RATE NOTES:
The term "Commercial Paper Rate Notes" shall mean Floating Rate Notes
which are specified in the applicable Company Order as bearing interest at an
interest rate calculated with reference to the Commercial Paper Rate.
COMMON SHAREHOLDERS EQUITY:
The term "Common Shareholders Equity" shall mean, at any time, the
total shareholders' equity of the Company and its consolidated subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, as of the end of the most recently completed fiscal
quarter of the Company for which financial information is then available.
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COMPANY:
The term "Company" shall mean the corporation named as the "Company"
in the first paragraph of this Indenture, and its successors and assigns.
COMPANY ORDER:
The term "Company Order" shall mean:
(a) a written order signed in the name of the Company by the
Chairman of the Board, the President or any Vice President and by the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee, to
authenticate a Note and to make it available for delivery, and specifying for
such Note the following information:
(1) the name of the Person in which a Note to be issued and
authenticated shall be registered;
(2) the address of such Person;
(3) the taxpayer identification number of such Person;
(4) the principal amount of such Note and, if multiple Notes are to
be issued to such Person, the denominations of such Notes;
(5) the Issue Price of such Note;
(6) the Original Issue Date of such Note;
(7) the date upon which such Note is scheduled to mature, any
Extension Period or Extension Periods, the Final Maturity Date and any
procedures pursuant to which the Holder of such Note may renew such Note;
(8) if the Note is to be redeemable at the option of the Company, the
Initial Redemption Date and the date or dates on which, and the price or
prices at which, such Note is redeemable at the option of the Company;
(9) if the Note is to be repayable prior to Stated Maturity at the
option of the Holder, the date or dates on which, and the price or prices
at which, such Note is repayable at the option of the Holder;
(10) if the Note is a Fixed Rate Note, the rate of interest on such
Note and the Interest Payment Dates, if
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other than January 15 and July 15, and the Record Dates, if other than
January 1 and July 1;
(11) if the Note is an Original Issue Discount Note, its Yield to
Maturity;
(12) if such Note is an Amortizing Note, a table setting forth the
schedule of dates and amounts of payments of principal of and interest on
such Note or the formula for the amortization of principal and/or interest;
(13) if the Note is a Reset Note, the Optional Interest Reset Date and
the formula, if any, for resetting the interest rate of a Fixed Rate Note
or the Spread and/or Spread Multiplier of a Floating Rate Note;
(14) if the Note is a Floating Rate Note, its:
(A) Initial Interest Rate (F) Interest Reset Dates
(B) Interest Rate Basis or (G) Spread
Base Rate (including any (H) Spread Multiplier
Designated LIBOR Page) (I) Maximum Interest Rate
(C) Index Maturity (J) Minimum Interest Rate
(D) Interest Determination (K) Interest Payment Dates
Dates (L) Record Dates
(E) Interest Reset Period
(15) whether or not such Note is to be issued in the form of a Global
Note to the Depositary;
(16) the name and address of the Calculation Agent, if other than the
Trustee;
(17) if other than denominations of $1,000 and integral multiples
thereof, the authorized denominations in which Notes shall be issued; and
(18) all other information necessary for the issuance of such Note not
inconsistent with the provisions of this Indenture; or
(b) confirmation given to the Trustee by an officer of the Company
designated by an Officers' Certificate, by telephone, confirmed by telex or
facsimile or similar writing, of the information given to the Trustee by an
Authorized Agent for the issuance of a Note, and the written order of the
Company to authenticate such Note and to make it available for delivery.
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COMPOSITE QUOTATIONS:
The term "Composite Quotations" shall mean the daily statistical
release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication published by the Federal Reserve Bank of New York.
CORPORATE TRUST OFFICE OF THE TRUSTEE:
The term "Corporate Trust Office of the Trustee" (or other similar
term) shall mean the principal office of the Trustee at which at any particular
time its corporate business shall be administered, which office at the date of
original execution of this Indenture is located at One First National Plaza,
Suite 0126, Chicago, Illinois 60670, Attention: Corporate Trust Administration,
except that, with respect to presentation of the Notes for payment or
registration of transfers or exchanges and the location of the register, such
term means the office or agency of the Trustee at which at any particular time
its corporate agency business shall be conducted, which at the date of original
execution of this Indenture is located at c/o First Chicago Trust Company of New
York, 14 Wall Street-8th Floor-Window 2, New York, New York 10005.
CUSIP:
The term "CUSIP" shall mean the registered trademark "Committee on
Uniform Securities Identification Procedures" or "CUSIP" and a unique system of
identification of each public issue of a security owned by the American Bankers
Association and administered by Standard and Poor's Corporation, as agent of the
American Bankers Association.
DEPOSITARY:
The term "Depositary" shall mean, unless otherwise specified by the
Company pursuant to Section 2.05 hereof, The Depository Trust Company, New York,
New York, or any successor thereto registered as a Clearing Agency under the
Securities and Exchange Act of 1934, as amended, or any successor statute or
regulation.
DESIGNATED LIBOR PAGE:
The term "Designated LIBOR Page" shall mean either (a) the display on the
Reuters Monitor Money Rates Service for the purpose of displaying the London
interbank rates of major banks for United States Dollars (if "LIBOR Reuters" is
specified in the applicable Company Order), or (b) the display on the Dow Jones
Telerate Service for the purpose of displaying the London interbank rates of
major banks for United States dollars (if
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"LIBOR Telerate" is specified in the applicable Company Order). If neither
LIBOR Reuters nor LIBOR Telerate is specified in the applicable Company
Order, LIBOR for United States dollars will be determined as if LIBOR
Telerate (and page 3750) had been chosen.
DISCHARGED:
The term "Discharged" means, with respect to all Notes at the time
outstanding, that the Company shall be deemed to have paid and discharged the
entire indebtedness represented by, and obligations under, all Notes and to have
satisfied all the obligations under the Indenture relating to such Notes except
(i) the rights of Holders of such Notes to receive, from the trust fund provided
for under Sections 5.01 and 5.02, payment of the principal of (and premium, if
any) and interest on such Notes when such payments are due, (ii) the Company's
obligations with respect to such Notes under Sections 2.06, 2.07 and 6.02 and
(iii) the rights, powers, trusts, duties and immunities of the Trustee under the
Indenture.
EVENT OF DEFAULT:
The term "Event of Default" shall mean any event specified in Section
8.01, continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.
EXTENSION NOTICE:
The term "Extension Notice" shall mean a notice sent by the Trustee by
telegram, telex, facsimile transmission, hand delivery or letter (first class,
postage prepaid) to the Holder of a Note with respect to which the Company has
exercised its option to extend the Stated Maturity, indicating (i) that the
Company has elected to extend the Stated Maturity of such Note, (ii) the new
Stated Maturity, (iii) in the case of a Fixed Rate Note, the interest rate
applicable to the Extension Period or, in the case of a Floating Rate Note, the
Spread and/or Spread Multiplier applicable to the Extension Period, and (iv) any
provisions for redemption of such Note during the Extension Period, including
the date or dates on which or the period or periods during which and the price
or prices at which such redemption may occur during the Extension Period.
EXTENSION PERIOD:
The term "Extension Period" shall mean a period of from one to five
whole years for which the Company may, at its option, extend the Stated Maturity
of a particular Note.
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FINAL MATURITY DATE:
The term "Final Maturity Date" shall mean the date beyond which the
Stated Maturity of a particular Note may not be extended at the option of the
Company.
FIRST MORTGAGE BONDS:
The term "First Mortgage Bonds" shall mean the first mortgage bonds
issued under the Iowa-Illinois Indenture or the Midwest Power Indenture.
FIXED RATE AMORTIZING NOTE:
The term "Fixed Rate Amortizing Note" shall mean a Fixed Rate Note
which is an Amortizing Note.
FIXED RATE NOTE:
The term "Fixed Rate Note" shall mean a Note which bears interest at a
fixed rate (which may be zero in the case of a Zero Coupon Note) specified in
the applicable Company Order.
FLOATING RATE NOTE:
The term "Floating Rate Note" shall mean a Note which bears interest
at a variable rate determined by reference to interest rate formula, and
includes a Commercial Paper Rate Note, a LIBOR Note, a Prime Rate Note or a
Treasury Rate Note.
GLOBAL NOTE:
The term "Global Note" shall mean a single Note that pursuant to
Section 2.05 is issued to evidence Notes having identical terms and provisions,
which is delivered to the Depositary or pursuant to instructions of the
Depositary and which shall be registered in the name of the Depositary or its
nominee.
H.15(519):
The term "H.15(519)" shall mean the publication "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication published by
the Board of Governors of the Federal Reserve System.
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INDEBTEDNESS:
The term "Indebtedness" shall mean with respect to any Person (i) any
liability of such Person (a) for borrowed money, or (b) evidenced by a bond,
note, debenture or similar instrument (including purchase money obligations but
excluding trade payables), or (c) for the payment of money relating to a lease
that is required to be classified as a capitalized lease obligation in
accordance with generally accepted accounting principles; (ii) any liability of
others described in the preceding clause (i) that such Person has guaranteed,
that is recourse to such Person or that is otherwise its legal liability; and
(iii) any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (i) and (ii)
above.
INDENTURE:
The term "Indenture" shall mean this instrument as originally executed
or, if amended or supplemented as herein provided, as so amended or
supplemented.
INDEX MATURITY:
The term "Index Maturity" of a particular Floating Rate Note shall
mean the period to Stated Maturity of the instrument or obligation from which
the Base Rate of such Floating Rate Note is calculated, as specified in the
applicable Company Order.
INITIAL INTEREST RATE:
The term "Initial Interest Rate" for a particular Floating Rate Note
shall mean the interest rate specified in the applicable Company Order as in
effect from the Original Issue Date of such Floating Rate Note to its first
Interest Reset Date.
INITIAL REDEMPTION DATE:
The term "Initial Redemption Date" shall mean the earliest date, if
any, on which a particular Note shall be redeemable at the option of the Company
prior to the Stated Maturity of such Note, as specified in the applicable
Company Order.
INTEREST ACCRUAL PERIOD:
The term "Interest Accrual Period" for a particular Floating Rate Note
shall mean the period from the date of issue of such Floating Rate Note, or from
an Interest Reset Date, if any, to its next subsequent Interest Reset Date.
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INTEREST DETERMINATION DATE:
The term "Interest Determination Date" shall mean each Commercial
Paper Rate Interest Determination Date, LIBOR Interest Determination Date, Prime
Rate Interest Determination Date and Treasury Rate Interest Determination Date.
INTEREST FACTOR:
The term "Interest Factor" for a Floating Rate Note for each day in an
Interest Accrual Period for such Floating Rate Note shall be computed by
dividing the Interest Rate applicable to such day by 360, in the case of
Commercial Paper Rate Notes, LIBOR Notes and Prime Rate Notes, or by the actual
number of days in the year, in the case of Treasury Rate Notes.
INTEREST PAYMENT DATE:
(a) The term "Interest Payment Date" shall mean with respect to a
Floating Rate Note, including a Floating Rate Amortizing Note, which has an
Interest Reset Date which is (1) daily, weekly or monthly: the third Wednesday
of each month or the third Wednesday of March, June, September and December of
each year, as specified in the applicable Company Order, (2) quarterly: the
third Wednesday of March, June, September and December of each year, as
specified in the applicable Company Order, (3) semiannually: the third Wednesday
of the two months of each year, as specified in the applicable Company Order;
(4) annually: the third Wednesday of one month of each year, as specified in the
applicable Company Order, and, in each case, the date of Maturity of such
Floating Rate Note and, with respect to defaulted interest on such Floating Rate
Note, the date established by the Company for the payment of such defaulted
interest. If any Interest Payment Date (other than at Maturity) for any
Floating Rate Note would fall on a day that is not a Business Day with respect
to such Floating Rate Note, such Interest Payment Date will be the following day
that is a Business Day with respect to such Floating Rate Note, except that, in
the case of a LIBOR Note, if such Business Day with respect to such Floating
Rate Note is in the next succeeding calendar month, such Interest Payment Date
shall be the immediately preceding London Business Day.
(b) the term "Interest Payment Date" shall mean with respect to a
Fixed Rate Note, including a Fixed Rate Amortizing Note, each January 15 and
July 15, or such other dates which are specified in the applicable Company Order
during the period such Fixed Rate Note is outstanding, the date of Maturity of
such Fixed Rate Note, and with respect to defaulted interest on such
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Fixed Rate Note, the date established by the Company for the payment of such
defaulted interest.
(C) Notwithstanding the foregoing, the first Interest Payment Date for
any Note originally issued between a Record Date and the next Interest Payment
Date shall be the Interest Payment Date following the next succeeding Record
Date.
INTEREST RATE:
(a) The term "Interest Rate" for a particular Floating Rate Note shall
mean (1) from the date of issue of such Floating Rate Note to the first Interest
Reset Date for such Floating Rate Note, the Initial Interest Rate, and (2) each
Interest Accrual Period commencing on or after such First Interest Reset Date,
the Base Rate with reference to the Index Maturity for such Floating Rate Note
as specified in the applicable Company Order plus or minus the Spread, if any,
multiplied by the Spread Multiplier, if any; PROVIDED that in the event no
Spread or Spread Multiplier is provided in such Company Order, the Spread and
Spread Multiplier shall be zero and one, respectively; PROVIDED, FURTHER, in no
event shall the Interest Rate be greater than the Maximum Interest Rate, if any,
or less than the Minimum Interest Rate, if any; PROVIDED, FURTHER, the Interest
Rate in effect for the ten days immediately prior to Maturity will be the
Interest Rate in effect on the tenth day preceding such Maturity; and PROVIDED,
FURTHER, the Interest Rate will in no event be higher than the maximum rate
permitted by New York or other applicable law, as the same may be modified by
United States federal laws of general application.
(b) The term "Interest Rate" for a particular fixed Rate Note shall
mean the interest rate specified in the applicable Company Order.
INTEREST RATE BASIS; BASE RATE:
The term "Interest Rate Basis" or "Base Rate" shall mean with respect
to (a) Commercial Paper Rate Notes, the Commercial Paper Rate, (b) LIBOR Notes,
LIBOR, (c) Prime Rate Notes, the Prime Rate, (d) Treasury Rate Notes, the
Treasury Rate, and (e) any other Floating Rate Note, the interest rate formula
which determines the variable rate at which such Note bears interest.
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INTEREST RESET DATE:
The term "Interest Reset Date" shall mean, in the case of a Floating
Rate Note specified in the applicable Company Order as being reset (a) daily:
each Business Day; (b) weekly: the Wednesday of each week (with the exception
of weekly reset Treasury Rate Notes which reset the Tuesday of each week, except
as specified below); (c) monthly: the third Wednesday of each month; (d)
quarterly: the third Wednesday of March, June, September and December; (e)
semiannually: the third Wednesday of the two months specified in the applicable
Company Order; and (f) annually: the third Wednesday of the month specified in
the applicable Company Order. If any Interest Reset Date for a Floating Rate
Note would otherwise be a day which is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. If, in the case of a Treasury Rate Note, an Interest
Reset Date shall fall on a day on which the Treasury auctions Treasury Bills,
then such Interest Reset Date shall instead be the first Business Day
immediately following such auction.
INTEREST RESET PERIOD:
The term "Interest Reset Period" shall mean for:
(a) each Floating Rate Note on which interest is reset monthly,
quarterly, semiannually or annually, and each Fixed Rate Note, the period:
(1) beginning on and including the Original Issue Date of such
Note or the most recent Interest Payment Date on which interest was
paid on such Note, and
(2) ending on but not including the next Interest Payment Date
or, for the last Interest Reset Period, the Maturity, of such Note;
(b) each Floating Rate Note on which interest is reset daily or
weekly, the period:
(1) beginning on and including the Original Issue Date of such
Floating Rate Note, or beginning on but excluding the most recent
Record Date through which interest was paid on such Note, and
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(2) ending on and including the next Record Date or, for the
last Interest Reset Period, ending on but excluding Maturity, of such
Note;
PROVIDED, HOWEVER, that the first Interest Reset Period for any Note which
has its Original Issue date after a Record Date and prior to its next
Interest Payment Date, shall begin on and include such Original Issue Date
and (i) end on and include the next Record Date for Floating Rate Notes on
which interest is reset daily or weekly, and (ii) end on but not include the
second Interest Payment Date after the Original Issue Date for all other
Notes.
IOWA-ILLINOIS INDENTURE:
The term "Iowa-Illinois Indenture" shall mean the Indenture of Mortgage
and Deed of Trust, dated as of March 1, 1947, from Iowa-Illinois Gas and
Electric Company to Harris Trust and Savings Bank and Lynn Lloyd (C. Potter,
successor individual trustee), as trustees, and indentures supplemental
thereto.
ISSUE PRICE:
The term "Issue Price" shall mean the price expressed as a
percentage of the aggregate principal amount of a Note at which such Note is
issued.
LIBOR:
The term "LIBOR" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect
to any LIBOR Interest Determination Date, the rate determined:
(i) with respect to any LIBOR Interest Determination Date, LIBOR shall
be either: (a) if "LIBOR Reuters" is specified in the applicable Company Order,
the arithmetic mean of the offered rates (unless the specified Designated LIBOR
Page by its terms provides only for a single rate, in which case such single
rate will be used) for deposits in United States dollars having the Index
Maturity specified in the applicable Company Order, commencing on the second
London Business Day immediately following such LIBOR Interest Determination
Date, which appear on the Designated LIBOR Page specified in the applicable
Company Order as of 11:00 A.M., London time, on that LIBOR Interest
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page, or (b)
if "LIBOR Telerate" is specified in the applicable Company Order, the rate for
deposits in United States dollars having the Index Maturity specified in the
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applicable Company Order, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, which appears on
the Designated LIBOR Page specified in the applicable Company Order as of 11:00
A.M., London time, on that LIBOR Interest Determination Date. Notwithstanding
the foregoing, if fewer than two offered rates appear on the Designated LIBOR
Page with respect to LIBOR Reuters (unless the specified Designated LIBOR Page
by its terms provides only for a single rate, in which case such single rate
will be used), or if no rate appears on the Designated LIBOR Page with respect
to LIBOR Telerate, whichever may be applicable, LIBOR with respect to such LIBOR
Interest Determination Date shall be determined as provided in clause (ii)
below.
(ii) With respect to any LIBOR Interest Determination Date on which
fewer than two offered rates appear on the Designated LIBOR Page with respect to
LIBOR Reuters (unless the specified Designated LIBOR Page by its terms provides
only for a single rate, in which case such single rate will be used), or if no
rate appears on the Designated LIBOR Page with respect to LIBOR Telerate, as the
case may be, the Calculation Agent shall request the principal London office of
each of four major banks in the London interbank market selected by the
Calculation Agent to provide the Calculation Agent with its offered rate
quotation for deposits in United States dollars for the period of the applicable
Index Maturity specified in the applicable Company Order, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market as of 11:00
A.M., London time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in United States dollars
in such market at such time. If at least two such quotations are provided, LIBOR
with respect to such LIBOR Interest Determination Date shall be calculated by
the Calculation Agent and shall be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR with respect to such LIBOR
Interest Determination Date shall be the arithmetic mean of the rates quoted as
of 11:00 A.M., New York City Time, on such LIBOR Interest Determination Date by
three major banks in The City of New York selected by the Calculation Agent for
loans in United States Dollars to leading European banks, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date having the Index Maturity specified in the applicable Company
Order in a principal amount that is representative for a single transaction in
such United States dollars in such market at such time; PROVIDED, HOWEVER, that
if the banks so selected by the Calculation Agent are not quoting as mentioned
in this sentence, LIBOR with respect to such LIBOR Interest Determination Date
shall be LIBOR in
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effect immediately prior to such LIBOR Interest Determination Date.
LIBOR INTEREST DETERMINATION DATE:
The term "LIBOR Interest Determination Date" pertaining to an Interest
Reset Date for a LIBOR Note shall mean the second London Business Day
immediately preceding such Interest Reset Date, unless otherwise specified in
the applicable Company Order.
LIBOR NOTES:
The term "LIBOR Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to LIBOR.
LONDON BUSINESS DAY:
The term "London Business Day" shall mean any day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
MATURITY:
The term "Maturity", when used with respect to any Note, shall mean
the date on which the principal of such Note or an installment of principal
becomes due and payable in accordance with its terms and the terms of this
Indenture as therein or herein provided, whether at Stated Maturity, upon
declaration of acceleration, call for redemption, repayment at the option of the
Holder or otherwise.
MAXIMUM INTEREST RATE:
The term "Maximum Interest Rate" shall mean the maximum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
MIDWEST POWER INDENTURE:
The term "Midwest Power Indenture" shall mean the General Mortgage
Indenture and Deed of Trust, dated as of January 1, 1993, between Midwest Power
Systems Inc. and Morgan Guaranty Trust Company of New York, trustee (Harris
Trust and Savings Bank, successor trustee), and indentures supplemental thereto.
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MINIMUM INTEREST RATE:
The term "Minimum Interest Rate" shall mean the minimum rate of
interest, if any, which may be applicable to any Floating Rate Note during any
Interest Accrual Period as specified in the applicable Company Order.
MONEY MARKET YIELD:
The term "Money Market Yield" shall be the yield (expressed as a
percentage) calculated in accordance with the following formula:
D x 360
Money Market Yield = --------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Accrual Period for which interest is being
calculated.
NOTE OR NOTES; OUTSTANDING:
The terms "Note" or "Notes" shall mean any Fixed Rate or Floating
Rate Note or Notes, as the case may be, authenticated and delivered under
this Indenture, including any Global Note.
The term "outstanding," when used with reference to Notes, shall,
subject to Section 10.04, mean, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except
(a) Notes theretofore cancelled by the Company or delivered to
the Company for cancellation;
(b) Notes, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the
Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent);PROVIDED
that if such Notes are to be redeemed prior to the Maturity thereof,
notice of such redemption shall have been given as provided in Article
Three, or provisions satisfactory to the Trustee shall have been made
for giving such notice;
(c) Notes which shall have been Discharged; and
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(d) Notes in lieu of or in substitution for which other Notes
shall have been authenticated and delivered, or which have been paid,
pursuant to Section 2.07;
NOTEHOLDER; HOLDER:
The terms "Noteholder" or "Holder" shall mean any Person in whose name
at the time a particular Note is registered in the register of the Company kept
for that purpose in accordance with the terms hereof.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" when used with respect to the
Company, shall mean a certificate signed by the Chairman of the Board, the
President or any Vice President and by the Secretary or an Assistant Secretary
of the Company. Each such certificate shall include the statements provided for
in Section 15.05 if and to the extent required by such Section.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be an employee of the Company, or such other counsel
who is satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 15.05 if and to the extent required by such
Section. In the event that the Indenture requires the delivery of an Opinion of
Counsel to the Trustee, the text and substance of which has been previously
delivered to the Trustee, the Company may satisfy such requirement by the
delivery by the legal counsel that delivered such previous Opinion of Counsel of
a letter to the Trustee to the effect that the Trustee may rely on such previous
Opinion of Counsel as if such Opinion of Counsel was dated and delivered the
date delivery of such Opinion of Counsel is required.
OPTIONAL INTEREST RESET DATE:
The term "Optional Interest Reset Date" shall mean each date on which
the interest rate on a Fixed Rate Reset Note or the Spread and/or Spread
Multiplier of a Floating Rate Reset Note may be reset at the option of the
Company.
ORIGINAL ISSUE DATE:
The term "Original Issue Date" shall mean for a particular Note, or
portions thereof, the date upon which it, or such portion, was issued by the
Company pursuant to this
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Indenture and authenticated by the Trustee (other than in connection with a
transfer, exchange or substitution).
ORIGINAL ISSUE DISCOUNT NOTE:
The term "Original Issue Discount Note" shall mean (i) a Note that has
a "stated redemption price at maturity" that exceeds its "issue price", each as
defined for United States federal income tax purposes, by at least 0.25% of its
stated redemption price at maturity multiplied by the number of complete years
from the Original Issue Date to the Stated Maturity for such Note (or in the
case of a Note that provides for payment of any amount other than the "qualified
stated interest", as defined for United States federal income tax purposes,
prior to maturity, the weighted average maturity of the Note) and (ii) any other
Note designated by the Company in the applicable Company Order as issued with
original issue discount for United States federal income tax purposes.
PERMITTED ENCUMBRANCES:
The term "Permitted Encumbrances" shall mean:
(a) (i) any mortgage, pledge or other lien or encumbrance on any
property hereafter acquired or constructed by the Company or a Subsidiary,
or on which property so constructed is located, and created prior to,
contemporaneously with or within 360 days after, such acquisition or
construction or the commencement of commercial operation of such property
to secure or provide for the payment of any part of the purchase or
construction price of such property, or (ii) any mortgage, pledge, or other
lien or encumbrance upon such property existing at the time of acquisition
thereof by the Company or any Subsidiary, whether or not assumed by the
Company or such Subsidiary, or (iii) any mortgage, pledge, or other lien or
encumbrance existing on the property, shares of stock or indebtedness of a
corporation at the time such corporation shall become a Subsidiary or any
pledge of the shares of stock of such corporation prior to,
contemporaneously with or within 360 days after such corporation shall
become a Subsidiary to secure or provide for the payment of any part of the
purchase price of such stock, or (iv) any conditional sales agreement or
other title retention agreement with respect to any property hereafter
acquired or constructed; PROVIDED that, in the case of clauses (i) through
(iv), the lien of any such mortgage, pledge or other lien does not spread
to property owned prior to such acquisition or construction or to other
property thereafter acquired or constructed other than additions to such
acquired or
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constructed property and other than property on which property so
constructed is located; and PROVIDED, FURTHER, that if a firm commitment
from a bank, insurance company or other lender or investor (not
including the Company, a Subsidiary or an Affiliate of the Company) for
the financing of the acquisition or construction of property is made
prior to, contemporaneously with or within the 360-day period
hereinabove referred to, the applicable mortgage, pledge, lien or
encumbrance shall be deemed to be permitted by this subsection (a)
whether or not created or assumed within such period;
(b) any mortgage, pledge or other lien or encumbrance created for the
sole purpose of extending, renewing or refunding any mortgage, pledge, lien
or encumbrance permitted by subsection (a) of this definition; PROVIDED,
HOWEVER, that the principal amount of indebtedness secured thereby shall
not exceed the principal amount of indebtedness so secured at the time of
such extension, renewal or refunding and that such extension, renewal or
refunding mortgage, pledge, lien or encumbrance shall be limited to all or
any part of the same property that secured the mortgage, pledge or other
lien or encumbrance extended, renewed or refunded;
(c) liens for taxes or assessments or governmental charges or levies
not then due and delinquent or the validity of which is being contested in
good faith, and against which an adequate reserve has been established;
liens on any property created in connection with pledges or deposits to
secure public or statutory obligations or to secure performance in
connection with bids or contracts; materialmen's, mechanics', carrier's,
workmen's, repairmen's or other like liens; or liens on any property
created in connection with deposits to obtain the release of such liens;
liens on any property created in connection with deposits to secure surety,
stay, appeal or customs bonds; liens created by or resulting from any
litigation or legal proceeding which is currently being contested in good
faith by appropriate proceedings; leases and liens, rights of reverter and
other possessory rights of the lessor thereunder; zoning restrictions,
easements, rights-of-way or other restrictions on the use of real property
or minor irregularities in the title thereto; and any other liens and
encumbrances similar to those described in this subsection (c), the
existence of which does not, in the opinion of the Company, materially
impair the use by the Company or a Subsidiary of the affected property in
the operation of the
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business of the Company or a Subsidiary, or the value of such property
for the purposes of such business;
(d) any mortgage, pledge or other lien or encumbrance created after
the date of this Indenture on any property leased to or purchased by the
Company or a Subsidiary after that date and securing, directly or
indirectly, obligations issued by a State, a territory or a possession of
the United States, or any political subdivision of any of the foregoing, or
the District of Columbia, to finance the cost of acquisition or cost of
construction of such property; PROVIDED that the interest paid on such
obligations is entitled to be excluded from gross income of the recipient
pursuant to Section 103(a)(1) of the Internal Revenue Code of 1986, as
amended (or any successor to such provision), as in effect at the time of
the issuance of such obligations;
(e) any mortgage, pledge or other lien or encumbrance on any property
now owned or hereafter acquired or constructed by the Company or a
Subsidiary, or on which property so owned, acquired or constructed is
located, to secure or provide for the payment of any part of the
construction price or cost of improvements of such property, and created
prior to, contemporaneously with or within 360 days after, such
construction or improvement; PROVIDED that if a firm commitment from a
bank, insurance company or other lender or investor (not including the
Company, a Subsidiary or an Affiliate of the Company) for the financing of
the acquisition or construction of property is made prior to,
contemporaneously with or within the 360-day period hereinabove referred
to, the applicable mortgage, pledge, lien or encumbrance shall be deemed to
be permitted by this subsection (e) whether or not created or assumed
within such period; and
(f) any mortgage, pledge or other lien or encumbrance not otherwise
permitted under this Section; PROVIDED that the aggregate amount of
indebtedness secured by all such mortgages, pledges, liens or encumbrances
does not exceed the greater of $100,000,000 or 10% of Common Shareholders
Equity.
PERSON:
The term "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
PRE-EXERCISE STATED MATURITY DATE:
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The term "Pre-Exercise Stated Maturity Date" shall mean the Stated
Maturity of a Note (including, if such Stated Maturity has previously been
extended, the Stated Maturity as previously extended) in effect immediately
prior to the Company's exercise of an option to extend such Stated Maturity for
an Extension Period or the Holder's exercise of an option to renew such Note
pursuant to provisions included in the applicable Company Order.
PRIME RATE:
The term "Prime Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect
to any Prime Rate Interest Determination Date, the rate on such date as
published in H.15(519) under the heading "Bank Prime Loan." In the event
that such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Rate Interest Determination
Date, then the Prime Rate with respect to such Prime Rate Interest
Determination Date shall be calculated by the Calculation Agent and shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen USPRIME1 as such bank's prime rate or base
lending rate as in effect with respect to such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters
Screen USPRIME1 with respect to such Prime Rate Interest Determination Date,
the Prime Rate with respect to such Prime Rate Interest Determination Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the
year divided by 360 as of the close of business on such Prime Rate Interest
Determination Date by at least two of the three major money center banks in
The City of New York selected by the Calculation Agent. If fewer than two
quotations are provided, the Prime Rate with respect to such Prime Rate
Interest Determination Date shall be determined on the basis of the rates
furnished in The City of New York by the appropriate number of substitute
banks or trust companies organized and doing business under the laws of the
United States, or any state thereof, having total equity capital of at least
$500,000,000 and being subject to supervision or examination by federal or
state authority, selected by the Calculation Agent to provide such rate or
rates; PROVIDED, HOWEVER, that if the appropriate number of substitute banks
or trust companies selected as aforesaid are not quoting as mentioned in this
sentence, the Prime Rate with respect to such Prime Rate Interest
Determination Date shall be the Prime Rate in effect immediately prior to
such Prime Rate Interest Determination Date.
PRIME RATE INTEREST DETERMINATION DATE:
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The term "Prime Rate Interest Determination Date" pertaining to an Interest
Reset Date for a particular Prime Rate Note shall mean the second Business Day
immediately preceding such Interest Reset Date, unless otherwise specified in
the applicable Company Order.
PRIME RATE NOTES:
The term "Prime Rate Notes" shall mean Floating Rate Notes which are
specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Prime Rate.
PRINCIPAL AMOUNT:
The term "principal amount" with respect to any Note shall mean the
principal amount thereof set forth in the applicable Company Order; PROVIDED
that in the case of any Original Issue Discount Note, its principal amount as of
(i) any date that the principal amount of such Note is to be repaid prior to its
Stated Maturity, whether upon declaration of acceleration, call for redemption,
repayment at the option of the Holder or otherwise, or (ii) any date that any
consent, notice, request, direction, waiver or suit by the Noteholders shall be
deemed to be given, made or commenced under this Indenture, such term shall mean
the Amortized Face Amount of such Note as of such date.
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY:
The term "principal executive offices of the Company" shall mean the
place where the main corporate offices of the Company are located, currently 666
Grand Avenue, Des Moines, Iowa 50303, or such other place where the main
corporate offices of the Company are located as designated in an Officers'
Certificate delivered to the Trustee.
PRINCIPAL FACILITY:
The term "Principal Facility" shall mean the real property, fixtures,
machinery and equipment relating to any facility owned by the Company or any
Subsidiary (which may include a network of electric or gas distribution
facilities or a network of electric or gas transmission facilities), except any
facility that, in the opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Subsidiaries, taken
as a whole.
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RECORD DATE:
The term "Record Date" shall mean for the Interest Payment Date for
the payment of interest for an Interest Reset Period for a particular Note,
unless otherwise specified in the applicable Company Order, (a) the day which is
fifteen calendar days prior to such Interest Payment Date, whether or not such
day is a Business Day, (b) the date of Maturity of such Note, unless such date
of Maturity for a Fixed Rate Note is a January 1 or a July 1, in which event the
Record Date will be as provided in clause (a), and (c) a date which is not less
than five Business Days preceding the Interest Payment Date of defaulted
interest on such Note established by notice given by first-class mail by or on
behalf of the Company to the Holder of such Note not less than fifteen days
prior to such Interest Payment Date.
REDEMPTION DATE:
The term "Redemption Date" for a Note shall mean the date fixed for
the redemption of such Note in accordance with the provisions of this Indenture.
REGULATED SUBSIDIARY:
The term "Regulated Subsidiary" shall mean any Subsidiary which owns
or operates facilities used for the generation, transmission or distribution of
electric energy and is subject to the jurisdiction of any governmental authority
of the United States or any state or political subdivision thereof, as to any of
its: rates; services; accounts; issuances of securities; affiliate
transactions; or construction, acquisition or sale of any such facilities,
except that any "exempt wholesale generator", as defined in 15 USC 79z-5a(a)(1),
"qualifying facility", as defined in 18 CFR 29z,101(b)(1), "foreign utility
company", as defined in 15 USC 79z-5b(a)(3) and "power marketer", as defined in
NORTHWEST POWER MARKETING COMPANY, L.L.C., 75 FERC PARA61,281, shall not be a
Regulated Subsidiary.
RESET NOTE:
The term "Reset Note" shall mean a Fixed Rate Note, with respect to
which the Company has the option to reset the interest rate, and a Floating Rate
Note, with respect to which the Company has the option to reset the Spread
and/or Spread Multiplier.
RESET NOTICE:
The term "Reset Notice" shall mean a notice sent by the Trustee by
telegram, telex, facsimile transmission, hand delivery
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or letter (first class, postage prepaid) to the Holder of a Reset Note with
respect to which the Company has exercised its option to reset the interest
rate or the Spread and/or the Spread Multiplier, indicating (i) that the
Company has elected to exercise such option, (ii) such new interest rate or
Spread and/or Spread Multiplier and (iii) any provisions for redemption of
such Note during the Subsequent Interest Period commencing on the applicable
Optional Interest Reset Date.
RESPONSIBLE OFFICER:
The term "responsible officer" or "responsible officers" when used
with respect to the Trustee shall mean one or more of the following: the
chairman of the board of directors, the vice chairman of the board of directors,
the chairman of the executive committee, the vice chairman of the executive
committee, the chairman of the trust committee, the president, any vice
president, the cashier, the secretary, the treasurer, any trust officer, any
second or assistant vice president, any assistant cashier, any assistant
secretary, any assistant treasurer, any assistant trust officer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
REUTERS SCREEN USPRIME1:
The term "Reuters Screen USPRIME1" shall mean the display designated as
page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
which may replace the USPRIME1 page on such service for the purpose of
displaying the prime rate or base lending rate of major banks).
SPREAD:
The term "Spread" applicable to a particular Floating Rate Note shall
mean the number of Basis Points above or below the Base Rate for such Floating
Rate Note as specified in the applicable Company Order, used in the calculation
of the Interest Rate for such Floating Rate Note.
SPREAD MULTIPLIER:
The term "Spread Multiplier" applicable to a particular Floating Rate
Note shall mean the percentage of the Base Rate (plus or minus any applicable
Spread) for such Floating Rate Note as specified in the applicable Company
Order, used in the calculation of the Interest Rate for such Floating Rate Note.
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STATED MATURITY:
The term "Stated Maturity", when used with respect to any Note shall
mean the date specified in such Note as the date on which the principal of such
Note is due and payable, or the date specified as the Stated Maturity (i) in an
Extension Notice or (ii) in accordance with procedures included in the
applicable Company Order pursuant to which the Holder may renew such Note.
SUBSEQUENT INTEREST PERIOD:
The term "Subsequent Interest Period" shall mean a period from an
Optional Interest Reset Date of a Note to the next Optional Interest Reset Date
of such Note or, if there is no such next Optional Interest Reset Date, to the
Stated Maturity of such Note.
SUBSIDIARY:
The term "Subsidiary" shall mean any corporation of which at least a
majority of the outstanding stock having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation, irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency, is at the time, directly or indirectly, owned or controlled by the
Company or by one or more Subsidiaries thereof, or by the Company and one or
more Subsidiaries.
TREASURY:
The term "Treasury" shall mean the United States Department of
Treasury.
TREASURY BILLS:
The term "Treasury Bills" shall mean direct obligations of the United
States.
TREASURY RATE:
The term "Treasury Rate" for a particular Floating Rate Note, unless
otherwise indicated in the applicable Company Order, shall mean, with respect to
any Treasury Rate Interest Determination Date, the rate resulting from the most
recent auction of Treasury Bills having the Index Maturity specified in the
applicable Company Order, as such rate is published in H.15(519) under the
heading "Treasury bills-auction average (investment)" or, if not so published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Treasury Rate Interest Deter-
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mination Date, the average auction rate on such Treasury Rate Determination
Date (expressed as a bond equivalent, on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) as otherwise announced by
the Treasury. In the event that the results of the auction of Treasury Bills
having the specified Index Maturity are not reported as provided above by
3:00 P.M., New York City time, on such Calculation Date pertaining to such
Treasury Rate Determination Date, or if no such auction is held in a
particular week, then the Treasury Rate with respect to such Treasury Rate
Interest Determination Date shall be calculated by the Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent, on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) of
the arithmetic mean of the secondary market bid rates, as of approximately
3:30 P.M., New York City time, on such Treasury Rate Interest Determination
Date, of three leading primary United States government securities dealers
selected by the Calculation Agent, for the issue of Treasury Bills with a
remaining maturity closest to the Index Maturity specified in the applicable
Company Order; PROVIDED, HOWEVER, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as set forth above, the Treasury
Rate with respect to such Treasury Rate Interest Determination Date shall be
the Treasury Rate in effect immediately prior to such Treasury Rate Interest
Determination Date.
TREASURY RATE INTEREST DETERMINATION DATE:
The term "Treasury Rate Interest Determination Date" pertaining to an
Interest Reset Date for a Treasury Rate Note shall mean the day of the week in
which its Interest Reset Date falls on which Treasury Bills normally would be
auctioned; PROVIDED, HOWEVER, that if as a result of a legal holiday an auction
is held on the Friday of the week preceding such Interest Reset Date, the
related Treasury Rate Interest Determination Date shall be such Friday, unless
otherwise specified in the applicable Company Order.
TREASURY RATE NOTES:
The term "Treasury Rate Notes" shall mean Floating Rate Notes which
are specified in the applicable Company Order as bearing interest at an interest
rate calculated with reference to the Treasury Rate.
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TRUSTEE:
The term "Trustee" shall mean The First National Bank of Chicago and,
subject to Article Nine, shall also include any successor Trustee.
U.S. GOVERNMENT OBLIGATIONS:
The term "U.S. Government Obligations" shall mean securities that are
(i) direct obligations of the United States for the payment of which its full
faith and credit is pledged, or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt;
PROVIDED that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
WHOLLY-OWNED SUBSIDIARY:
The term "Wholly-Owned Subsidiary" shall mean a Subsidiary of which
all of the outstanding voting stock (other than directors' qualifying shares) is
at the time, directly or indirectly, owned by the Company, or by one or more
Wholly-Owned Subsidiaries of the Company or by the Company and one or more
Wholly-Owned Subsidiaries.
YIELD TO MATURITY:
The term "Yield to Maturity" shall mean for a particular Note the
yield to maturity of such Note, computed in accordance with generally accepted
United States bond yield computation principles and expressed as a percentage,
specified in the applicable Company Order.
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ZERO COUPON NOTE:
The term "Zero Coupon Note" means a Note issued at a price representing a
discount from the principal amount payable at Maturity and bearing a zero fixed
rate of interest.
ARTICLE TWO
FORM, ISSUE, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01. FORM GENERALLY.
(a) The Notes shall be titled "Medium-Term Notes", and, if such Notes
shall be in the form of (a) a Fixed Rate Note which is a Global Note, shall be
in substantially the form set forth in EXHIBIT A, (b) a Fixed Rate Note which is
not a Global Note, shall be in substantially the form set forth in EXHIBIT B,
(c) a Floating Rate Note which is a Global Note, shall be in substantially the
form set forth in EXHIBIT C, and (d) a Floating Rate Note which is not a Global
Note, shall be in substantially the form set forth in EXHIBIT D, to this
Indenture, or in any such case such other form as shall be established by a
Board Resolution, or an Officers' Certificate pursuant to a Board Resolution, or
in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or with
applicable law or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of such Notes. If the
form of Notes is established by a Board Resolution, or an Officers' Certificate
pursuant to a Board Resolution, a copy of such Board Resolution or Officers'
Certificate shall be delivered to the Trustee at or prior to the delivery to the
Trustee of the Company Order contemplated by Section 2.05 for the authentication
and delivery of such Notes.
(b) The definitive Notes shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Notes shall be in substantially
the following form:
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Trustee's Certificate of Authentication
This is one of the Notes referred to in the within-mentioned
Indenture.
The First National Bank of
Chicago, as Trustee
By
---------------------
Authorized Signatory
SECTION 2.03. AMOUNT UNLIMITED. The aggregate principal amount of
Notes which may be authenticated and delivered under this Indenture is
unlimited.
SECTION 2.04. DENOMINATIONS, DATES, INTEREST PAYMENT AND RECORD
DATES.
(a) The Notes shall be issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof, unless otherwise
specified in the applicable Company Order.
(b) Each Note shall be dated and issued as of the date of its
authentication by the Trustee, and shall bear an Original Issue Date or, as
provided in Section 2.12(e), two or more Original Issue Dates; each Note issued
upon transfer, exchange or substitution of a Note shall bear the Original Issue
Date or Dates of such transferred, exchanged or substituted Note, subject to
Section 2.12(e).
(c) Each Note shall bear interest, if any, at its Interest Rate
during each Interest Reset Period for such Note, from the later of (1) its
Original Issue Date (or, if pursuant to Section 2.12, a Global Note has two or
more Original Issue Dates, interest shall, beginning on each such Original Issue
Date, begin to accrue for that part of the principal amount of such Global Note
to which that Original Issue Date is applicable), or (2) the most recent date to
which any interest has been paid or duly provided for until the principal of
such Note is paid or funds are made available for such payment, and Accrued
Interest on each Note shall be payable for each Interest Reset Period on the
Interest Payment Date immediately subsequent to the Record Date for the payment
of interest for such Interest Reset Period.
(d) All percentages resulting from any calculation of the Interest
Rate for a Floating Rate Note shall be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage
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point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all
dollar amounts used in or resulting from such calculation shall be rounded to
the nearest cent (with one-half cent being rounded upward).
(e) Each Note shall mature on a date specified in such Note not less
than nine months nor more than 30 years after its Original Issue Date, and the
principal amount of each outstanding Note shall be payable on the Maturity date
specified therein.
(f) The Person in whose name any Note is registered at the close of
business on any Record Date with respect to an Interest Payment Date for such
Note shall be entitled to receive the Accrued Interest payable on such Note on
such Interest Payment Date notwithstanding the cancellation of such Note upon
any registration of transfer, exchange or substitution of such Note subsequent
to such Record Date and prior to such Interest Payment Date.
(g) The Company shall cause the Calculation Agent to calculate each
Interest Rate applicable to each Floating Rate Note in accordance with this
Indenture, and the Company shall, or shall cause the Calculation Agent to,
notify the Trustee of each determination of such Interest Rate promptly after
such determination. The Calculation Agent's determination of any Interest Rate
shall be final and binding in the absence of manifest error.
(h) On the fifth Business Day immediately preceding each Interest
Payment Date, the Trustee shall furnish to the Company a notice setting forth
the total amount of the Accrued Interest payments to be made on such Interest
Payment Date, and to the Depositary a notice setting forth the total amount of
Accrued Interest payments to be made on Global Notes on such Interest Payment
Date. The Trustee will provide monthly to the Company a list of the principal
of and any premium and Accrued Interest to be paid on Notes in the next
succeeding month and to the Depositary a list of the principal of and any
premium and Accrued Interest to be paid on Global Notes in the such succeeding
month. Promptly after the first Business Day of each month, the Trustee shall
furnish to the Company a written notice setting forth the aggregate principal
amount of the Global Notes. The Company will provide to the Trustee not later
than the payment date sufficient moneys to pay in full all principal of and any
premium and Accrued Interest payments due on such payment date. The Trustee
shall be responsible for withholding taxes on interest paid as required by law.
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(i) Upon the request of any Noteholder of a Floating Rate Note, the
Trustee shall provide to such Noteholder the Interest Rate then in effect and,
if then determined, the Interest Rate that will become effective on the next
Interest Reset Date, with respect to such Floating Rate Note.
SECTION 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Notes shall be executed on behalf of the Company by the
Chairman of the Board, the President or any Vice President and by the Secretary
or an Assistant Secretary. The signature of any of such officers on any Notes
may be manual or facsimile.
(b) Notes bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by the
Company to the Trustee for authentication, together with one or more Company
Orders for the authentication and delivery of such Notes, and the Trustee in
accordance with any such Company Order shall authenticate such Notes and make
them available for delivery. Prior to authenticating such Notes, and in
accepting the additional responsibilities under this Indenture in relation to
such Notes, the Trustee shall be entitled to receive the following only at or
before the first issuance of Notes, and (subject to Section 9.01) shall be fully
protected in relying upon:
(1) a Board Resolution authorizing this Indenture and the Notes,
and if applicable, an appropriate record of any action taken pursuant
to such Board Resolution, certified by the Secretary or an Assistant
Secretary of the Company;
(2) an Officers' Certificate designating one or more officers of
the Company who are authorized to give Company Orders for the issuance
of, and specifying terms of, Notes and, if appropriate, setting forth
the form of Notes in accordance with Section 2.01;
(3) an Opinion of Counsel stating,
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(A) if the form of Notes has been established by or
pursuant to a Board Resolution, an Officers' Certificate
pursuant to a Board Resolution, or a supplemental indenture
as permitted by Section 2.01, that such form has been
established in conformity with this Indenture;
(B) that the Indenture has been duly authorized,
executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting the
enforcement of creditors' rights and to general equity
principles;
(C) that the Indenture, the Iowa-Illinois Indenture
and the Midwest Power Indenture are qualified under the TIA;
(D) that any supplemental indenture referred to in (A)
above has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding
agreement of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
the enforcement of creditors' rights and to general equity
principles;
(E) that the Notes, when authenticated and delivered
by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of
Counsel consistent with the terms of this Indenture, will
constitute legal, valid and legally binding obligations of
the Company, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
the enforcement of creditors' rights and to general equity
principles;
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(F) that all laws and requirements in respect of the
execution, delivery and sale by the Company of the Notes
have been complied with;
(G) that the Company is not in default in any of its
obligations under this Indenture, the Iowa-Illinois
Indenture or the Midwest Power Indenture, and that the
issuance of the Notes will not result in any such default;
and
(H) such other matters as the Trustee may reasonably
request.
(d) The Trustee shall have the right to decline to authenticate and
deliver any Note:
(1) if the issuance of such Note pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Notes
and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee;
(2) if the Trustee, being advised by counsel, determines that
such action may not lawfully be taken; or
(3) if the Trustee in good faith by its Board of Directors,
executive committee or a trust committee of directors and/or
responsible officers in good faith determines that such action would
expose the Trustee to personal liability to Holders of any outstanding
Notes.
(e) No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture; PROVIDED, HOWEVER, that if any Note shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Note to the Trustee for cancellation as
provided in Section 2.09, for all purposes of this Indenture such Note shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
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SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES.
(a) Subject to Section 2.12, Notes may be exchanged for one or more
new Notes of any authorized denominations and of a like aggregate principal
amount and Stated Maturity and having the same terms and Original Issue Date or
Dates. Notes to be exchanged shall be surrendered at any of the offices or
agencies to be maintained by the Company for such purpose as provided in Section
6.02, and the Company shall execute and register and the Trustee shall
authenticate and deliver in exchange therefor the Note or Notes which the
Noteholder making the exchange shall be entitled to receive.
(b) The Trustee on behalf of the Company shall keep, at one of said
offices or agencies, a register in which, subject to such reasonable regulations
as it or the Company may prescribe, the Trustee shall register or cause to be
registered Notes and shall register or cause to be registered the transfer of
Notes as in this Article Two provided. Such register shall be in written form
or in any other form capable of being converted into written form within a
reasonable time. At all reasonable times such register shall be open for
inspection by the Trustee. Upon due presentment for registration of transfer of
any Note at any such office or agency, the Company shall execute and register or
cause to be registered and the Trustee shall authenticate and make available for
delivery, in the name of the transferee or transferees, one or more new Notes of
any authorized denominations and of a like aggregate principal amount and Stated
Maturity and having the same terms and Original Issue Date or Dates.
(c) All Notes presented for registration of transfer or for
exchange, redemption or payment shall (if so required by the Company) be duly
endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder or the attorney of such Holder duly authorized in writing.
(d) No service charge shall be made for any exchange or registration
of transfer of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
(e) The Company shall not be required to exchange or register a
transfer of any Notes selected, called or being called for redemption except, in
the case of any Note to be redeemed in part, the portion thereof not to be so
redeemed.
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<PAGE> (f) If the principal amount and any applicable premium of
part but not all of a Global Note is paid, then upon surrender to the Trustee
of such Global Note, the Company shall execute, and the Trustee shall
authenticate, and make available for delivery, a Global Note in an authorized
denomination in aggregate principal amount equal to, and having the same
terms and Original Issue Date or Dates as, the unpaid portion of such Global
Note.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) In case any temporary or definitive Note shall become mutilated
or be destroyed, lost or stolen, the Company in its discretion may execute,
and upon its request the Trustee shall authenticate and deliver, a new Note
of like form and principal amount and having the same terms and Original
Issue Date or Dates and bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, the Trustee,
any Authenticating Agent or Note registrar such security or indemnity as may
be required by them to save each of them harmless, and, in every case of
destruction, loss or theft of a Note, the applicant shall also furnish to the
Company and to the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.
(b) The Trustee may authenticate any such substituted Note and
deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about
to mature shall become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substituted Note, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Note)
if the applicant for such payment shall furnish to the Company, the Trustee,
any Authenticating Agent or Note registrar such security or indemnity as may
be required by them to save each of them harmless and, in case of
destruction, loss or theft, evidence satisfactory to the Company and the
Trustee of the destruction, loss or theft of such Note and of the ownership
thereof.
(c) Every substituted Note issued pursuant to this Section 2.07 by
virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual
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obligation of the Company, whether or not such destroyed, lost or stolen Note
shall be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly
issued hereunder. All Notes shall be held and owned upon the express
condition that, to the extent permitted by law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.08. TEMPORARY NOTES. Pending the preparation of
definitive Notes, the Company may execute and the Trustee shall authenticate
and make available for delivery, temporary Notes (printed, lithographed or
otherwise reproduced). Temporary Notes shall be issuable in any authorized
denomination and substantially in the form of the definitive Notes but with
such omissions, insertions and variations as may be appropriate for temporary
Notes, all as may be determined by the Company. Every such temporary Note
shall be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Notes. Without unreasonable delay the Company will execute and register and
will deliver to the Trustee definitive Notes and thereupon any or all
temporary Notes may be surrendered in exchange therefor, at the Corporate
Trust Office of the Trustee, and the Trustee shall authenticate and deliver
in exchange for such temporary Notes an equal aggregate principal amount of
definitive Notes. Such exchange shall be made by the Company at its own
expense and without any charge therefor to the Noteholders. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes authenticated and made
available for delivery hereunder.
SECTION 2.09. CANCELLATION OF NOTES PAID, ETC. All Notes
surrendered for the purpose of payment, redemption, exchange or registration
of transfer shall be surrendered to the Trustee for cancellation and promptly
cancelled by it and no Notes shall be issued in lieu thereof except as
expressly permitted by this Indenture. All Notes so cancelled shall be
retained by the Trustee. If the Company shall acquire any of the Notes,
however, such acquisition shall not operate as a redemption or satisfaction
of the indebtedness represented by such Notes unless and until the same are
cancelled by the Trustee.
SECTION 2.10. INTEREST RIGHTS PRESERVED. Each Note delivered
under this Indenture upon transfer of or in exchange
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for or in lieu of any other Note shall carry all the rights to unpaid Accrued
Interest, and interest to accrue, which were carried by such other Note, and
each such Note shall be so dated that neither gain nor loss of interest shall
result from such transfer, exchange or substitution.
SECTION 2.11. PAYMENT OF NOTES. Unless otherwise specified in the
applicable Company Order, the principal of and any premium and Accrued
Interest on all Notes shall be payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts as follows:
(a) On or before 10:00 a.m., New York City time, of the day on
which any payment of principal, Accrued Interest or premium is due on any
Global Note pursuant to the terms thereof, the Company shall deliver to the
Trustee immediately available funds sufficient to make such payment. On or
before 10:30 a.m., New York City time or such other time as shall be agreed
upon between the Trustee and the Depositary, of the day on which such payment
is due, the Trustee shall deposit with the Depositary such funds by wire
transfer into the account specified by the Depositary. As a condition to the
payment at the Maturity of any part of the principal and any applicable
premium of any Global Note, the Depositary shall surrender, or cause to be
surrendered, such Global Note to the Trustee, whereupon a new Global Note
shall be issued to the Depositary pursuant to Section 3.03(d).
(b) With respect to any Note that is not a Global Note, principal,
any premium and Accrued Interest due at the Maturity of such Note shall be
payable in immediately available funds when due upon presentation and
surrender of such Note at the Corporate Trust Office of the Trustee; PROVIDED
that this Note is presented to the Trustee in time for the Trustee to make
such payment in such funds in accordance with its normal procedures. Accrued
Interest on (and, in the case of Amortizing Notes, installments of principal
of) any Note that is not a Global Note (other than Accrued Interest or such
installments payable at Maturity) shall be paid by a clearinghouse funds
check mailed on the Interest Payment Date; PROVIDED, HOWEVER, that if any
Holder of Notes, the aggregate principal amount of which equals or exceeds
$10,000,000, provides a written request to the Trustee on or before the
applicable Record Date for such Interest Payment Date, Accrued Interest (and
such installments of principal) shall be paid by wire transfer of immediately
available funds to a bank within the continental United States or by direct
deposit into the account of such Holder if such account is maintained with
the Trustee.
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SECTION 2.12. NOTES ISSUABLE IN THE FORM OF A GLOBAL NOTE.
(a) If the Company shall establish pursuant to Section 2.05 that
particular Notes are to be issued in whole or in part in the form of one or
more Global Notes, then the Company shall execute and the Trustee shall, in
accordance with Section 2.05 and the Company Order delivered to the Trustee
thereunder, authenticate and make available for delivery, such Global Note or
Notes, which (1) shall represent, shall be denominated in an amount equal to
the aggregate principal amount of, and shall have the same terms as, the
outstanding Notes to be represented by such Global Note or Notes, (2) shall
be registered in the name of the Depositary or its nominee, (3) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (4) shall bear a legend substantially to the following
effect: "This Note is a Global Note registered in the name of the Depositary
or a nominee thereof and, unless and until it is exchanged in whole or in
part for the individual Notes represented hereby, this Global Note may not be
transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
(b) Notwithstanding any other provision of Section 2.06 or of this
Section 2.12, unless the terms of a Global Note expressly permit such Global
Note to be exchanged in whole or in part for individual Notes, a Global Note
may be transferred, in whole but not in part, only to a nominee of the
Depositary, or by a nominee of the Depositary to the Depositary, or to a
successor Depositary for such Global Note selected or approved by the Company
or to a nominee of such successor Depositary.
(c) (1) If at any time the Depositary for a Global Note notifies the
Company that such Depositary is unwilling or unable to continue as Depositary
for such Global Note or if at any time the Depositary for a Global Note shall no
longer be registered as a clearing agency under the Securities Exchange Act of
1934, as amended, or any successor statute or regulation, the Company may
appoint a successor Depositary with respect to such Global Note. If (A) a
successor Depositary for such Global Note is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
ineligibility, or (B) any Notes are represented by a Global Note at a time when
an Event of Default with respect to the Notes shall have occurred and be
continuing, then in each case the Company's election pursuant to the applicable
Company Order shall no longer be effective with respect to such Global Note and
the Company shall
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execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Notes of like tenor and terms in
exchange for such Global Note, shall authenticate and make available for
delivery, individual Notes of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Note
in exchange for such Global Note. The Trustee shall not be charged with
knowledge of notice of the ineligibility of a Depositary unless a responsible
officer assigned to and working in its corporate trust administration
department shall have actual knowledge thereof.
(2) The Company may at any time and in its sole discretion
determine that one or more Notes issued or issuable in the form of one or
more Global Notes shall no longer be represented by such Global Note or
Notes. In such event the Company shall execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of individual
Notes of like tenor and terms in exchange for such Global Note or Notes,
shall authenticate and make available for delivery, individual Notes of like
tenor and terms in definitive form in an aggregate principal amount equal to
the principal amount of such Global Note or Notes in exchange for such Global
Note or Notes.
(3) If agreed upon by the Company and the Depositary with
respect to Notes issued in the form of a Global Note, the Depositary for such
Global Note shall surrender such Global Note in exchange in whole or in part
for individual Notes of like tenor and terms in definitive form on such terms
as are acceptable to the Company and such Depositary. Thereupon the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, without a service charge, (A) to each Person specified by the
Depositary, a new Note or Notes of like tenor and terms, and of any
authorized denominations as requested by such Person in aggregate principal
amount equal to and in exchange for the beneficial interest of such Person in
such Global Note; and (B) to such Depositary a new Global Note of like tenor
and terms and in a denomination equal to the difference, if any, between the
principal amount of the surrendered Global Note and the aggregate principal
amount of Notes delivered to Holders thereof.
(4) In any exchange provided for in Section 2.12(c)(1),(2) or
(3), the Company will execute and the Trustee will authenticate and make
available for delivery, individual Notes in definitive registered form in
authorized denominations. Upon the exchange of a Global Note for individual
Notes, such Global Note shall be cancelled by the Trustee. Notes issued in
exchange for a Global Note pursuant to this Section 2.12 shall be registered
in such names and in such authorized denominations as the Depositary for such
Global Note, pursuant to instructions
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from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Notes to the Depositary for delivery
to the Persons in whose names such Notes are so registered, or if the
Depositary shall refuse or be unable to deliver such Notes, the Trustee shall
deliver such Notes to the Persons in whose names such Notes are registered,
unless otherwise agreed upon by the Trustee and the Company.
(d) Neither the Company, the Trustee or any Authenticating Agent
will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests
in a Global Note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
(e) Pursuant to the provisions of this subsection, at the option of
the Trustee and upon thirty days' written notice to the Depositary, the
Depositary shall be required to surrender any two or more Global Notes which
have identical terms, including, without limitation, identical maturities,
interest rates and redemption provisions (but which may have differing
Original Issue Dates) to the Trustee, and the Company shall execute and the
Trustee shall authenticate and deliver to, or at the direction of, the
Depositary a Global Note in principal amount equal to the aggregate principal
amount of, and with all terms identical to, the Global Notes so surrendered
to the Trustee, and such new Global Note shall indicate each applicable
Original Issue Date and the principal amount applicable to each such Original
Issue Date. The exchange contemplated in this subsection shall be
consummated at least 30 days prior to any Interest Payment Date applicable to
any of the Global Notes so surrendered to the Trustee. Upon any exchange of
any Global Note with two or more Original Issue Dates, whether pursuant to
this Section or pursuant to Section 2.06 or Section 3.03, the aggregate
principal amount of the Notes with a particular Original Issue Date shall be
the same before and after such exchange, giving effect to any retirement of
Notes and the Original Issue Dates applicable to such Notes occurring in
connection with such exchange.
SECTION 2.13. CUSIP NUMBERS. The Company in issuing Notes may use
CUSIP numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as a convenience to Noteholders;
PROVIDED that any such notice may state that no representation is made as to
the correctness of such CUSIP numbers either as printed on the Notes or as
contained in any notice of redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers.
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ARTICLE THREE
REDEMPTION OF NOTES; REPAYMENT PRIOR TO STATED MATURITY
SECTION 3.01. APPLICABILITY OF REDEMPTION PROVISIONS. Unless
otherwise specified in the applicable Company Order, the Notes will not be
subject to any sinking fund. If a Company Order specifies an Initial
Redemption Date for a Note, the Company shall have an option to redeem such
Note prior to its Stated Maturity on the date or dates and at the prices
specified in such Company Order, all as provided for in Sections 3.02 and
3.03.
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF NOTES.
(a) The election of the Company to redeem any Notes shall be
evidenced by a Board Resolution which shall be given with notice of such
redemption to the Trustee at least ten Business Days prior to the giving of
the notice of redemption to Holders of such Notes. The selection of Notes or
portions thereof to be redeemed prior to their Stated Maturity shall be in
the sole discretion of the Company; PROVIDED that the Company shall give
notice thereof to the Trustee in accordance with Section 3.02(b). Each Note
which by its terms is redeemable prior to its Stated Maturity may be redeemed
by the Company in whole or in part without also redeeming any other Note
which is redeemable prior to its Stated Maturity.
(b) Notice of redemption to each Holder of Notes to be redeemed as
a whole or in part shall be given by the Company (or, at the Company's
request, by the Trustee in the name and at the expense of the Company) in the
manner provided in Section 15.10 at least 30 but not more than 60 calendar
days prior to the Redemption Date. Any notice which is given in the manner
herein provided shall be conclusively presumed to have been duly given,
whether or not the Noteholder receives the notice. In any case, failure duly
to give such notice, or any defect in such notice, to the Holder of any Note
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Note.
(c) Each such notice shall specify the Redemption Date, the places of
redemption and the redemption price at which such Notes are to be redeemed, and
shall state that payment of the redemption price of such Notes or portion
thereof to be redeemed will be made on surrender of such Notes at such places of
redemption, that Accrued Interest to the Redemption Date will be paid as
specified in such notice and that from and after such
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date interest thereon will cease to accrue. If less than all the Notes
having the same terms are to be redeemed, the notice shall specify the
particular Notes or portions thereof to be redeemed. In case any Note is to
be redeemed in part only, the notice which relates to such Note shall state
the portion of the principal amount thereof to be redeemed, and shall state
that, upon surrender of such Note, a new Note or Notes having the same terms
in aggregate principal amount equal to the unredeemed portion thereof will be
issued.
(d) If at the time of the mailing of any notice of redemption the
Company shall not have irrevocably directed the Trustee to apply funds
deposited with the Trustee or held by it and available to be used for the
redemption of Notes to redeem all the Notes called for redemption, such
notice may state that it is subject to the receipt of the redemption moneys
by the Trustee before the Redemption Date and that such notice shall be of no
effect unless such moneys are so received before such date.
SECTION 3.03. PAYMENT OF NOTES ON REDEMPTION; DEPOSIT OF REDEMPTION
PRICE.
(a) If notice of redemption shall have been given as provided in
Section 3.02, such Notes or portions of Notes called for redemption shall
become due and payable on the date and at the places stated in such notice at
the applicable redemption price, together with Accrued Interest to the
Redemption Date of such Notes, and on and after the Redemption Date; PROVIDED
that the Company shall have deposited with the Trustee on or prior to the
Redemption Date funds in an amount sufficient to pay the redemption price
together with Accrued Interest to the Redemption Date of such Notes. Interest
on the Notes or portions thereof so called for redemption shall cease to
accrue and such Notes or portions thereof shall be deemed not to be entitled
to any benefit under this Indenture except to receive payment of the
redemption price together with Accrued Interest to the Redemption Date of
such Notes; PROVIDED, HOWEVER, that any payments due with respect to such
Note prior to the Redemption Date shall be payable to the Holders of record
of such Notes at the close of business on the relevant Record Date specified
in the applicable Company Order. On presentation and surrender of such Notes
at such a place of payment in such notice specified, such Notes or the
specified portions thereof shall be paid and redeemed at the applicable
Redemption Price.
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(b) The Company shall not mail any notice of redemption of Notes
during the continuance of any Event of Default, except that (1) where notice
of redemption of any Notes has theretofore been mailed, the Company shall
redeem such Notes; PROVIDED that funds have theretofore been deposited for
such purpose, and (2) notices of redemption of all outstanding Notes may be
given during the continuance of an Event of Default.
(c) If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and any premium on such
Note, shall until paid bear interest from the date fixed for redemption at
the rate borne by such Note.
(d) Upon surrender of any Note redeemed in part only, the Company
shall execute and register, and the Trustee shall authenticate and make
available for delivery, a new Note or Notes of authorized denominations in
aggregate principal amount equal to, and having the same terms and Original
Issue Date or Dates as, the unredeemed portion of the Note so surrendered.
SECTION 3.04. REPAYMENT AT THE OPTION OF THE HOLDER.
(a) Unless otherwise specified in the applicable Company Order,
Notes shall not be repayable prior to Stated Maturity at the option of the
Holder. If so specified, a Note shall be repayable at the option of the
Holder, in whole or in part, on a date or dates prior to Stated Maturity and
at a price or prices specified in the applicable Company Order, plus accrued
and unpaid interest to but excluding the date of repayment.
(b) In order for a Note that is repayable at the option of the
Holder to be repaid prior to Stated Maturity, such Holder shall deliver or
cause to be delivered to the Trustee at least 30 but not more than 45
calendar days prior to the repayment date: (i) the Note with the form
entitled "Option to Elect Repayment" on the reverse of the Note duly
completed, or (ii) a telegram, telex, facsimile transmission, hand delivery
or letter (first class, postage prepaid) from a member of a national
securities exchange or the National Association of Securities Dealers, Inc.
or a commercial bank or trust company in the United States setting forth the
name of the Holder of the Note, the principal amount of the Note, the
principal amount of the Note to be repaid, the certificate number or a
description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note
to be repaid with the form entitled "Option to Elect Repayment" on the
reverse of the Note duly completed shall be received by the Trustee not later
than five Business Days after the date of such telegram, telex, facsimile
transmission, hand
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delivery or letter, if such Note and form duly completed are received by the
Trustee by such fifth Business Day.
(c) Exercise of the repayment option by the Holder of a Note shall
be irrevocable, except that a Holder who has tendered a Note for repayment
may revoke such tender for repayment by written notice to the Trustee
received prior to 5:00 P.M., New York City time, on the tenth calendar day
prior to the repayment date.
(d) Unless otherwise specified in the applicable Company Order, the
repayment option may be exercised by the Holder of a Note for less than the
entire principal amount of the Note; PROVIDED that the principal amount of
the Note remaining outstanding after such repayment is an authorized
denomination. Upon such partial repayment such Note will be cancelled and a
new Note or Notes for the remaining principal amount thereof shall be issued
in the name of the Holder thereof.
(e) While any Note is represented by one or more Global Notes, any
such option for repayment may be exercised by the applicable participant in
the Depositary that has an account for Notes with the Depositary, on behalf
of the beneficial owners of the Note represented by such Global Note or
Notes, by delivering a written notice substantially similar to the
above-mentioned form duly completed to the Trustee at its Corporate Trust
Office (or such other address of which the Company shall from time to time
notify the Holders), at least 30 but not more than 60 calendar days prior to
the date of repayment. Notices of election from such participants on behalf
of beneficial owners of the Global Note or Notes representing such Notes to
exercise their option to have such Notes repaid shall be received by the
Trustee by 5:00 P.M., New York City time, on the last day for giving such
notice. All notices shall be executed by a duly authorized officer of such
participant (with signatures guaranteed) and shall be irrevocable. In
addition, beneficial owners of the Global Note or Notes representing Notes
shall effect delivery to the Depositary at the time such notices of election
are given by causing the applicable participant to transfer such beneficial
owner's interest in the Global Note or Notes representing such Notes, on the
Depositary's records, to the Trustee.
SECTION 3.05. EXTENSION.
(a) If a Company Order specifies an Extension Period or Periods for a
Note, the Company shall have an option to extend the Stated Maturity of such
Note for one or more Extension Periods specified in such Company Order, but not
beyond the Final Maturity Date specified therein. The Company may exercise such
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option by notifying the Trustee of such exercise at least 45 but not more
than 60 calendar days prior to the Pre-Exercise Stated Maturity Date of such
Note, and after receipt of such notification, the Trustee shall send not
later than 40 calendar days prior to such Pre-Exercise Stated Maturity Date
an Extension Notice to the Holder of such Note.
(b) Upon the sending by the Trustee of an Extension Notice to the
Holder of a Note, the Stated Maturity of such Note will be extended
automatically, and, except as modified by the Extension Notice and, subject
to Section 3.05(c) and (d), such Note will have the same terms as prior to
the sending of such Extension Notice.
(c) Notwithstanding Sections 3.05(a) and (b), not later than 20
calendar days prior to the Pre-Exercise Stated Maturity Date, the Company
may, at its option, revoke the interest rate, in the case of a Fixed Rate
Note, or the Spread and/or Spread Multiplier, in the case of a Floating Rate
Note, provided for in the Extension Notice and establish a higher interest
rate, in the case of a Fixed Rate Note, or a Spread and/or Spread Multiplier
resulting in a higher interest rate, in the case of a Floating Rate Note, for
the Extension Period by causing the Trustee to send by telegram, telex,
facsimile transmission, hand delivery or letter (first class, postage
prepaid) notice of such higher interest rate or Spread and/or Spread
Multiplier resulting in a higher interest rate, as the case may be, to the
Holder of such Note, and such notice will be irrevocable. All Notes with
respect to which the Stated Maturity is extended will bear such higher
interest rate, in the case of a Fixed Rate Note, or Spread and/or Spread
Multiplier resulting in a higher interest rate, in the case of a Floating
Rate Note, for the Extension Period, whether or not tendered for repayment as
provided in Section 3.05(d).
(d) If the Company extends the Stated Maturity of a Note
(including, if such Stated Maturity has previously been extended, the Stated
Maturity as previously extended), the Holder of such Note shall have the
option to elect repayment of such Note, in whole but not in part, by the
Company on the Pre-Exercise Stated Maturity Date (including, if such Stated
Maturity has previously been extended, the last day of the then current
Extension Period), at a price equal to the principal amount thereof plus
accrued and unpaid interest to but excluding such date. In order for a Note
to be so repaid on the Pre-Exercise Stated Maturity Date, the Holder thereof
must follow the procedures set forth in Section 3.04 for optional repayment,
except that the period for delivery of such Note or notification to the
Trustee will be at least 25 but not more than 35 calendar days prior to the
Pre-Exercise Stated Maturity Date. A Holder
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who has tendered a Note for repayment following receipt of an Extension
Notice may revoke such tender for repayment by written notice to the Trustee
received prior to 5:00 P.M., New York City time, on the tenth calendar day
prior to the Pre-Exercise Stated Maturity Date.
SECTION 3.06. RESET NOTES.
(a) If a Company Order specifies Optional Interest Reset Dates for a
Note, the Company shall have an option to reset the interest rate of a Fixed
Rate Note or the Spread and/or Spread Multiplier of a Floating Rate Note,
subject to any formula for such resetting specified in such Company Order.
The Company may exercise such option by notifying the Trustee of such
exercise at least 45 but not more than 60 calendar days prior to an Optional
Interest Reset Date for such Note. If the Company so notifies the Trustee of
such exercise, the Trustee shall send not later than 40 calendar days prior
to such Optional Interest Reset Date, by telegram, telex, facsimile
transmission, hand delivery or letter (first class, postage prepaid) to the
Holder of such Note, a Reset Notice, including the date or dates on which or
the period or periods during which and the price or prices at which
redemption of such Note may occur during the Subsequent Interest Period
commencing on such Optional Interest Reset Date.
(b) Notwithstanding Section 3.06(a), not later than 20 calendar
days prior to an Optional Interest Reset Date for a Note, the Company may, at
its option, revoke the interest rate, in the case of a Fixed Rate Note, or
the Spread and/or Spread Multiplier, in the case of a Floating Rate Note,
provided for in a Reset Notice and establish a higher interest rate, in the
case of a Fixed Rate Note, or a Spread and/or Spread Multiplier resulting in
a higher interest rate, in the case of a Floating Rate Note, for the
Subsequent Interest Period commencing on such Optional Interest Reset Date by
causing the Trustee to send by telegram, telex, facsimile transmission, hand
delivery or letter (first class, postage prepaid) notice of such higher
interest rate or Spread and/or Spread Multiplier resulting in a higher
interest rate, as the case may be, to the Holder of such Note, and such
notice will be irrevocable. All Notes with respect to which the interest
rate or Spread and/or Spread Multiplier is reset on an Optional Interest
Reset Date to a higher interest rate or Spread and/or Spread Multiplier
resulting in a higher interest rate will bear such higher interest rate, in
the case of a Fixed Rate Note, or Spread and/or Spread Multiplier resulting
in a higher interest rate, in the case of a Floating Rate Note, whether or
not tendered for repayment as provided in Section 3.06(c).
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(c) If the Company elects prior to an Optional Interest Reset Date
to reset the interest rate or the Spread and/or Spread Multiplier of a Note,
the Holder of such Note shall have the option to elect repayment of such
Note, in whole but not in part, by the Company on such Optional Interest
Reset Date at a price equal to the principal amount thereof plus accrued and
unpaid interest to but excluding such Optional Interest Reset Date. In order
for a Note to be so repaid on an Optional Interest Reset Date, the Holder
thereof must follow the procedures set forth in Section 3.04, except that the
period for delivery of such Note or notification to the Trustee will be at
least 25 but not more than 35 calendar days prior to such Optional Interest
Reset Date. A Holder who has tendered a Note for repayment following receipt
of a Reset Notice may revoke such tender for repayment by written notice to
the Trustee received prior to 5:00 P.M., New York City time, on the tenth
calendar day prior to such Optional Interest Reset Date.
ARTICLE FOUR
FIRST MORTGAGE BONDS
SECTION 4.01. ISSUANCE RESTRICTIONS. So long as any Notes are
outstanding, the Company will not (a) issue additional First Mortgage Bonds
except to replace any mutilated, lost, destroyed or stolen First Mortgage
Bonds or to effect exchanges and transfers of First Mortgage Bonds or (b)
subject to the lien of the Iowa-Illinois Indenture or the Midwest Power
Indenture any property which is (i) excepted and excluded from the
Iowa-Illinois Indenture and the lien and operation thereof by the terms of
the Iowa-Illinois Indenture, or (ii) is "Excepted Property" under the Midwest
Power Indenture, unless (A) concurrently with the issuance of such First
Mortgage Bonds or subjection of any such property to either such lien, the
Company issues, and the trustee under the Bond Indenture under which such
First Mortgage Bonds are issued or under the lien of which such property
becomes subject, authenticates and delivers to the Trustee, a First Mortgage
Bond or Bonds in an aggregate principal amount equal to the aggregate
principal amount of the Notes then outstanding, and (B) concurrently with and
as a condition precedent to the issuance of any Notes thereafter, the Company
issues, and the trustee under the applicable Bond Indenture authenticates and
delivers to the Trustee, a First Mortgage Bond or Bonds in an aggregate
principal amount equal to the aggregate principal amount of the Notes to be
issued, and in each such case such First Mortgage Bonds shall have the same
Stated Maturity, bear interest at the same rates, have redemption and other
terms and provisions which are the same as, the Notes then outstanding or to
be issued, as the case may be.
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SECTION 4.02. FIRST MORTGAGE BONDS HELD BY THE TRUSTEE. First
Mortgage Bonds delivered to the Trustee pursuant to Section 4.01 shall be
fully registered in the name of the Trustee, which shall hold such First
Mortgage Bonds in trust for the benefit of the Holders from time to time of
the Notes, to provide the security of the First Mortgage Bonds for (a) the
full and prompt payment of the principal of each Note when and as the same
shall become due in accordance with the terms and provisions of this
Indenture, either at the Stated Maturity thereof, upon acceleration of the
maturity thereof or upon call for redemption, and (b) the full and prompt
payment of any premium and interest on each Note when and as the same shall
become due in accordance with the terms and provisions of this Indenture.
SECTION 4.03. TRUSTEE TO EXERCISE RIGHTS OF FIRST MORTGAGE
BONDHOLDER. As a holder of First Mortgage Bonds, the Trustee shall have and
exercise all of the rights of a holder of First Mortgage Bonds possessed
under the Bond Indenture under which such First Mortgage Bonds were issued.
SECTION 4.04. NO TRANSFER OF FIRST MORTGAGE BONDS; EXCEPTION.
Except as required to effect an assignment to a successor trustee under this
Indenture, the Trustee shall not sell, assign or transfer any First Mortgage
Bonds held by it pursuant to this Indenture and the Company shall issue stop
transfer instructions to the trustees and any transfer agents under the Bond
Indentures to effect compliance with this Section 4.04.
SECTION 4.05. RELEASE OF FIRST MORTGAGE BONDS. When (a) all of the
principal of and any premium and interest on all Notes shall have been paid
or provision therefor duly made in accordance with this Indenture, or (b) all
Notes shall have been delivered to the Trustee for cancellation by or on
behalf of the Company, or (c) no Note is any longer outstanding under this
Indenture and all conditions in Article Five have been satisfied, the Trustee
shall upon request of the Company, within five Business Days thereafter,
deliver to the Company without charge all First Mortgage Bonds held by the
Trustee under this Indenture, together with such appropriate instruments of
release as may be required; the First Mortgage Bonds so acquired by the
Company shall be delivered for cancellation to the trustee under the Bond
Indenture under which they were issued.
SECTION 4.06. VOTING OF FIRST MORTGAGE BONDS.
(a) The Trustee, as a holder of First Mortgage Bonds, shall attend
meetings of Bondholders under the Bond Indenture
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under which they were issued, and either at such meeting, or otherwise when
the consent of such Bondholders is sought without a meeting, the Trustee
shall vote the outstanding principal amount of such First Mortgage Bonds, or
shall consent with respect thereto, proportionally with respect to the
holders all other First Mortgage Bonds then outstanding under such Bond
Indenture and eligible to vote or consent.
(b) Notwithstanding Section 4.06(a), the Trustee shall not vote any
portion of the outstanding principal amount of the First Mortgage Bonds held
by it hereunder in favor of, or give its consent to, any action which, in the
opinion of the Trustee, would materially adversely affect the interests of
the Noteholders, except with the appropriate consent of the Noteholders.
SECTION 4.07. DISCHARGE OF BOND INDENTURE. The Trustee shall
surrender for cancellation to the trustee under a Bond Indenture all First
Mortgage Bonds then held by the Trustee and issued under such Bond Indenture
upon receipt by the Trustee of:
(a) an Officers' Certificate requesting such surrender for
cancellation of such First Mortgage Bonds, and to the effect that no First
Mortgage Bonds are outstanding under such Bond Indenture other than First
Mortgage Bonds held by the Trustee hereunder and that promptly upon such
surrender such Bond Indenture will be satisfied and discharged pursuant to
the terms thereof; and
(b) an Opinion of Counsel to the effect that upon satisfaction and
discharge of such Bond Indenture the property formerly subject to the lien of
such Bond Indenture will be subject to no lien except Permitted Encumbrances.
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ARTICLE FIVE
SATISFACTION AND DISCHARGE; UNCLAIMED MONEYS
SECTION 5.01. SATISFACTION AND DISCHARGE. This Indenture shall,
upon the request of the Company set forth in an Officers' Certificate, cease
to be of further effect and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than (i)
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07, (ii) Notes for which payment
money has theretofore been deposited with or paid to the Trustee and
thereafter repaid to the Company or discharged from such trust, as provided
in Section 5.03) have been delivered to the Trustee for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation,
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) of this subclause (B),
has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in United States dollars,
U.S. Government Obligations maturing as to principal and interest in such
amounts and at such times as will ensure the availability of United States
dollars, or a combination of United States dollars and U.S. Government
Obligations, sufficient to pay and discharge the entire indebtedness on
such Notes for principal (and premium, if any) and interest to the date of
such deposit (in the case of Notes which have become due and payable) or to
the Stated Maturity or Redemption Date, as
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the case may be; PROVIDED, HOWEVER, in the event a petition for relief
under the federal bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, is filed with respect to the Company within 91 days after
the deposit and the Trustee is required to return the deposited money to
the Company, the obligations of the Company under this Indenture with
respect to such Notes shall not be deemed terminated or discharged;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to such Notes have been complied with; and
(4) the Company has delivered to the Trustee an Opinion of Counsel or
a ruling by the Internal Revenue Service to the effect that Holders of the
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge.
Notwithstanding the satisfaction and discharge of this Indenture,
this Indenture shall continue in effect as to (i) rights of registration of
transfer and exchange of Notes, (ii) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and any premium and interest thereon, upon the
original stated due dates therefor (but not upon acceleration of maturity), (iv)
the rights, obligations and immunities of the Trustee hereunder and (v) the
rights of the Holders of Notes as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them), and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel and at the cost and expense of the Company, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture. Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 9.07 shall survive.
SECTION 5.02. DEPOSITED MONEYS TO BE HELD IN TRUST BY TRUSTEE.
Subject to Section 5.03, all moneys and U.S. Government Obligations deposited
with the Trustee pursuant to Section 5.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Company if acting as its own paying agent), to the Holders of the particular
Notes for the payment or redemption of which such moneys and U.S.
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Government Obligations have been deposited with the Trustee, of all sums due
and to become due thereon for principal and premium, if any, and interest.
SECTION 5.03. RETURN OF UNCLAIMED MONEYS. Any moneys deposited with
or paid to the Trustee for payment of the principal of or any premium or
interest on any Notes and not applied but remaining unclaimed by the Holders of
such Notes for two years after the date upon which the principal of or any
premium or interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on written demand and all
liability of the Trustee shall thereupon cease; and any Holder of any of such
Notes shall thereafter look only to the Company for any payment which such
Holder may be entitled to collect; PROVIDED, HOWEVER, that the Trustee before
being required to make any such repayment, may at the expense of the Company
cause to be mailed to such Holder notice that such money remains unclaimed and
that, after a date specified therein which shall not be less than 30 days from
the date of such mailing, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 5.04. REINSTATEMENT. If the Trustee is unable to apply any
money or U.S. Government Obligations in accordance with Section 5.01 by reason
of any legal proceeding or any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture with respect to the Notes to which
such money or U.S. Government Obligations were to have been applied shall be
revived and reinstated as though no deposit had occurred pursuant to Section
5.01 until such time as the Trustee is permitted to apply such money or U.S.
Government Obligations in accordance with Section 5.01; PROVIDED, HOWEVER, that
if the Company has made any payment of principal of or any premium or interest
on any Notes because of the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the money or U.S. Government Obligations held by the Trustee.
ARTICLE SIX
PARTICULAR COVENANTS OF THE COMPANY
SECTION 6.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company covenants and agrees for the benefit of the Holders of the Notes that it
will duly and punctually pay or cause to be paid the principal of and any
premium and interest on each of the Notes at the places, at the respective times
and in the manner provided in such Notes.
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SECTION 6.02. OFFICE FOR NOTICES AND PAYMENTS, ETC. So long as any
of the Notes remain outstanding, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be
presented for registration of transfer and for exchange as in this Indenture
provided, and where, at any time when the Company is obligated to make a
payment upon Notes (other than a payment as to which it is permitted to make
such payment by check), the Notes may be presented for payment, and shall
maintain at any such office or agency and at its principal office an office
or agency where notices and demands to or upon the Company in respect of the
Notes or of this Indenture may be served; PROVIDED that the Company may
maintain at its principal executive offices, one or more other offices or
agencies for any or all of the foregoing purposes; the Company hereby
appoints the Trustee as agent of the Company for the foregoing purposes. The
Company will give to the Trustee written notice of the location of each such
office or agency and of any change of location thereof. In case the Company
shall fail to maintain any such office or agency or shall fail to give such
notice of the location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the
Corporate Trust Office of the Trustee.
SECTION 6.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 9.11, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 6.04. ANNUAL STATEMENT AND NOTICE.
(a) The Company will deliver to the Trustee within 120 days after the
end of each fiscal year of the Company, beginning with the fiscal year ending
December 31, 1996, an Officers' Certificate which complies with TIA Section
314(a)(4) stating that in the course of the performance by the signers of their
duties as officers of the Company they would obtain knowledge of any default by
the Company in the performance of any covenant contained in this Indenture or an
Event of Default stating whether they have obtained knowledge of any such
default or such Event of Default, and, if so, specifying each such default or
such Event of Default of which the signers have knowledge, and the nature and
status thereof.
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(b) The Company shall give to the Trustee written notice of the
occurrence of an Event of Default within five days after the Company becomes
aware of such occurrence.
SECTION 6.05. CORPORATE EXISTENCE. Subject to Article Twelve, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; PROVIDED HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company.
SECTION 6.06. LIMITATION UPON MORTGAGES AND LIENS. The Company will
not at any time directly or indirectly create or assume and will not cause or
permit a Subsidiary directly or indirectly to create or assume, except in favor
of the Company or a Wholly-Owned Subsidiary, any mortgage, pledge or other lien
or encumbrance upon any Principal Facility or any interest it may have therein
or upon any stock of any Regulated Subsidiary or any indebtedness of any
Subsidiary to the Company or any other Subsidiary, whether now owned or
hereafter acquired, without making effective provision (and the Company
covenants that in such case it will make or cause to be made, effective
provision) whereby the outstanding Notes and any other indebtedness of the
Company then entitled thereto shall be secured by such mortgage, pledge, lien or
encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured; PROVIDED, HOWEVER, that the foregoing covenant
shall not be applicable to the lien of the Iowa-Illinois Indenture, the lien of
the Midwest Power Indenture or Permitted Encumbrances.
SECTION 6.07. WAIVER OF CERTAIN COVENANTS. The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in Article Four or Section 6.06 (and if so specified, any other covenant
not set forth herein and specified pursuant to Section 2.05 to be applicable to
any Notes, except as otherwise provided pursuant to Section 2.05), if before the
time for such compliance the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding shall either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no waiver shall extend to or affect such term,
provision or condition except to the extent expressly so waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE SEVEN
NOTEHOLDER LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 7.01. NOTEHOLDER LISTS. The Company will, so long as any
Notes are outstanding under this Indenture, furnish or cause to be furnished to
the Trustee within 15 days prior to each Interest Payment Date on Notes then
outstanding, and at such other times as the Trustee may request in writing, the
information required by TIA Section 312(a), which the Trustee shall preserve as
required by TIA Section 312(a). The Trustee shall also comply with TIA Section
312(b), but the Trustee, the Company and each Person acting on behalf of the
Trustee or the Company shall have the protection of TIA Section 312(c).
SECTION 7.02. SECURITIES AND EXCHANGE COMMISSION REPORTS. The
Company shall (a) file with the Trustee, within 15 days after the Company is
required to file the same with the Securities and Exchange Commission, copies of
the reports, information and documents (or portions thereof) required to be so
filed pursuant to TIA Section 314(a), and (b) comply with the other provisions
of TIA Section 314(a).
SECTION 7.03. REPORTS BY THE TRUSTEE. The Trustee shall (a) transmit
within 60 days after May 15 in each year, beginning with the year 1997, to the
Noteholders specified in TIA Section 3.13(c) and to the Securities and Exchange
Commission, a brief report dated as of such May 15 and complying with the
requirements of TIA Section 313(a), but no report shall be required if no event
described in TIA Section 313(a) shall have occurred within the previous twelve
months ending on such date. The Trustee shall also comply with the other
provisions of TIA Section 313(b)(2).
ARTICLE EIGHT
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON EVENT OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. "Event of Default" wherever used
herein with respect to any Notes means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
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(1) default in the payment of any interest upon any Note when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (and premium, if any,
on) any Note at its Maturity; or
(3) default in the performance or breach of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
8.01 specifically dealt with), and continuance of such default or breach
for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(4) default (i) in the payment of any principal of or interest on any
Indebtedness of the Company or any Subsidiary of the Company (other than
Notes), aggregating more than $10,000,000 in principal amount, when due
after giving effect to any applicable grace period or (ii) in the
performance of any other term or provision of any Indebtedness of the
Company or any Subsidiary of the Company (other than Notes) in excess of
$10,000,000 principal amount that results in such Indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise become due and payable, and such acceleration shall not have been
rescinded or annulled, or such Indebtedness shall not have been discharged,
within a period of 15 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, a written notice specifying such default or
defaults and stating that such notice is a "Notice of Default" hereunder;
or
(5) the entry against the Company or any Subsidiary of the Company of
one or more judgments, decrees or orders by a court having jurisdiction in
the premises from which no appeal may be or is taken for the payment of
money, either individually or in the aggregate, in excess of $10,000,000,
and the continuance of such judgment, decree or order unsatisfied and in
effect for any period of 45 consecutive days after the amount thereof is
due without a stay of execution and there has been given, by registered or
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certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, a written notice specifying such entry and
continuance of such judgment, decree or order and stating that such notice
is a "Notice of Default" hereunder; or
(6) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the federal bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, or a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable federal or state law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case under the
federal bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of its creditors, or the admission by it
in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any such
action; or
(8) any other Event of Default provided with respect to the
particular Note specified in the applicable Company Order.
SECTION 8.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default with respect to the Notes then outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in aggregate principal amount of the Notes then outstanding may declare the
principal amount of all the Notes to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such
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principal amount shall become immediately due and payable. Upon payment of
such amount in United States dollars, all obligations of the Company in
respect of the payment of principal of the Notes shall terminate.
At the time after such a declaration of acceleration with respect to
the Notes has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article provided,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum in
United States dollars sufficient to pay
(A) all overdue installments of interest on all Notes,
(B) the principal of (and premium, if any, on) any Notes which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Notes,
(C) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest on each Note at the rate
borne by such Note, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel;
and
(2) All Events of Default with respect to the Notes, other than the
nonpayment of the principal of Notes which has become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 8.11.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
SECTION 8.03. COLLECTION AND SUITS FOR ENFORCEMENT BY TRUSTEE. The
Company covenants that if
(1) default is made in the payment of any installment of interest on
any Note when such interest becomes due and
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payable and such default continues for a period of 30 days, or
(2) default is made in the payment of principal of (or premium, if
any, on) any Notes as and when the name shall have become due and payable,
the Company shall, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Notes, the amount then due and payable on such Notes for
principal (and premium, if any) and interest, if any, and, to the extent that
payment of such interest shall be legally enforceable, interest upon the
overdue principal (and premium, if any) and upon overdue installments of
interest at the rate borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Company or any other obligor under such
Notes, and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Notes wherever situated.
If an Event of Default with respect to any Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of the Notes by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 8.04. TRUSTEE MAY FILE PROOFS OF CLAIM. In the case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceedings, or any voluntary or involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or
any other obligor upon the Notes or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of such Notes shall then be due and payable as therein expressed or
by declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or
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interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal (or,
if any Notes are Original Issue Discount Securities, the Amortized Face
Amount thereof or such other portion of the principal amount as may be due
and payable with respect to such Original Issue Discount Notes pursuant to
a declaration in accordance with Section 8.02) (and premium, if any) and
interest owning and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders of such Notes allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
such Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to such
Holders, to pay to the Trustee and amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 9.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 8.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
NOTES. All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of
such Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own
name, as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
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SECTION 8.06. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any
moneys collected by the Trustee with respect to any of the Notes shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such moneys, upon presentation of the several Notes, and
stamping thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee pursuant
to Section 9.07;
SECOND: In case the principal of the Notes then outstanding in
respect of which such moneys have been collected shall not have become
due and be unpaid, to the payment of interest on the Notes, in the
order of the maturity of the installments of such interest, with
interest (to the extent allowed by law and to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes, such payments
to be made ratably to the persons entitled thereto;
THIRD: In case the principal of the Notes then outstanding in
respect of which such moneys have been collected shall have become
due, by declaration or otherwise, to the payment of the whole amount
then owing and unpaid upon the Notes for principal and any premium and
interest thereon, with interest on the overdue principal and any
premium and (to the extent allowed by law and to the extent that such
interest has been collected by the Trustee) upon overdue installments
of interest at the rate borne by the Notes; and in case such moneys
shall be insufficient to pay in full the whole amount so due and
unpaid upon the Notes, then to the payment of such principal and any
premium and interest without preference or priority of principal and
any premium over interest, or of interest over principal and any
premium or of any installment of interest over any other installment
of interest, or of any Note over any other Note, ratably to the
aggregate of such principal and any premium and accrued and unpaid
interest; and
FOURTH: To the payment of the remainder, if any, to the Company,
its successors or assigns, or to whomsoever may lawfully be entitled
to the same, or as a court of competent jurisdiction may determine.
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SECTION 8.07. PROCEEDINGS BY NOTEHOLDERS.
(a) No Holder of any Note shall have any right by virtue of or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the
Trustee written notice of default with respect to such Note and of the
continuance thereof, as hereinabove provided, and unless also the Holders of
not less than a majority in aggregate principal amount of the Notes then
outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
any such action, suit or proceeding, it being understood and intended, and
being expressly covenanted by the taker and the Holder of every Note with
every other taker and Holder and the Trustee that no one or more Holders of
Notes shall have any right in any manner whatever by virtue of or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Notes.
(b) Notwithstanding any other provision in this Indenture, however,
the rights of any Holder of any Note to receive payment of the principal of
and any premium and interest on such Note, on or after the respective due
dates expressed in such Note (or, in the case of redemption, on the
Redemption Date), or to institute suit for the enforcement of any such
payment on or after such respective dates shall not be impaired or affected
without the consent of such Holder.
SECTION 8.08. PROCEEDINGS BY TRUSTEE. In case of an Event of
Default hereunder the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or
by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in
aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
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SECTION 8.09. REMEDIES CUMULATIVE AND CONTINUING. All powers and
remedies given by this Article Eight to the Trustee or to the Noteholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any powers and remedies hereof or of any other powers and remedies
available to the Trustee or the Holders of the Notes, by judicial proceedings
or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the
Trustee or of any Holder of any of the Notes in exercising any right or power
accruing upon any default occurring and continuing as aforesaid shall impair
any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to Section 8.07, every power
and remedy given by this Article Eight or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Noteholders.
SECTION 8.10. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee
or any Noteholder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or
to such Noteholder, then and in every such case, subject to any determination
in such proceeding, the Company, the Trustee and the Noteholders shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Company, the Trustee and the
Noteholders shall continue as though no such proceeding had been instituted.
SECTION 8.11. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY NOTEHOLDERS. The Holders of a majority in aggregate principal
amount of the Notes then outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee;
PROVIDED, HOWEVER, that (subject to Section 9.01) the Trustee shall have the
right to decline to follow any such direction if the Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees
or responsible officers shall determine that the action or proceeding so
directed would involve the Trustee in personal liability or would be unduly
prejudicial to the rights of Noteholders not joining in such directions.
Prior to any declaration accelerating the Maturity of the Notes, the Holders
of a majority in aggregate principal amount of the Notes then outstanding may
on behalf of all of the Holders of all of the Notes waive any past default or
Event of Default hereunder and
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its consequences, except a default (i) in the payment of principal of or any
premium or interest on any Note or (ii) in respect of a covenant or provision
hereof which pursuant to Section 13.02 cannot be modified or amended without
the consent of the Holder of each Note then outstanding that would be
affected thereby. Upon any such waiver, such default will cease to exist,
and any Event of Default arising therefrom will be deemed to have been cured,
for every purpose of the Indenture and the Notes, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 8.12. NOTICE OF DEFAULT. The Trustee shall, within 90 days
after the occurrence of a default with respect to the Notes, give to all
Holders of the Notes specified in TIA Section 3.13(c), in the manner provided
in Section 15.10, notice of such default, unless such default shall have been
cured before the giving of such notice, the term "default" for the purpose of
this Section 8.12 being hereby defined to be any event which is or after
notice or lapse of time or both would become an Event of Default; PROVIDED
that, except in the case of default in the payment of the principal of or any
premium or interest on any of the Notes, the Trustee shall be protected in
withholding such notice if and so long as its board of directors or trustees,
executive committee, or a trust committee of directors or trustees or
responsible officers in good faith determines that the withholding of such
notice is in the interests of the Holders of the Notes. The Trustee shall
not be charged with knowledge of any Event of Default unless a responsible
officer of the Trustee assigned to the corporate trust division of the
Trustee shall have actual knowledge of such Event of Default.
SECTION 8.13. UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each Holder of any Note by acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but this Section 8.13 shall
not apply to any suit instituted by the Trustee, or to any suit instituted by
any Noteholder, or group of Noteholders, holding in the aggregate more than
10% in principal amount of the Notes then outstanding, or to any suit
instituted by any Noteholder for the enforcement of the payment of the
principal of or any premium or
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interest on any Note on or after the due date expressed in such Note.
ARTICLE NINE
CONCERNING THE TRUSTEE
SECTION 9.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section 9.01.
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of not less
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than a majority in principal amount of the Notes at the time outstanding,
determined as provided in Section 10.04, relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Notes; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section 9.01.
SECTION 9.02. NOTICE OF DEFAULTS. Within 90 days after the
occurrence of any default hereunder the Trustee shall transmit by mail to all
Holders as their names and addresses appear in the Note register, notice of
such default hereunder known to the Trustee, unless such default shall have
been cured or waived; PROVIDED, HOWEVER, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest
on any Note or in the payment of any sinking fund installment with respect to
any Notes, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust
committee of directors or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Holders of such Notes; and PROVIDED, FURTHER, that in the case of any default
of the character specified in Section 8.01(3), no such notice to Holders
shall be given until at least 30 days after occurrence thereof. For the
purpose of this Section 9.02, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default.
SECTION 9.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions
of Section 9.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by
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it to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval or
other paper or document, or the books and records of the Company, unless
requested in writing to do so by the Holders of a majority in aggregate
principal amount of the Notes then outstanding; PROVIDED, HOWEVER, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is not, in the opinion of the Trustee, reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding; the reasonable expense of every such
investigation shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand; and
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 9.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Notes. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Notes or the proceeds thereof.
SECTION 9.05. MAY HOLD NOTES. The Trustee, any Authenticating
Agent, any Paying Agent, any Note registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes and, subject to Sections 9.08 and 9.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note registrar or such other agent.
SECTION 9.06. MONEY HELD IN TRUST. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 9.07. COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
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(3) to indemnity the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any its powers or duties hereunder.
The provisions of this Section 9.07 shall survive this Indenture.
SECTION 9.08. DISQUALIFICATION; CONFLICTING INTERESTS.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 9.08, with respect to the Notes, it shall, within 90
days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign in the manner and with the
effect hereinafter specified in this Article Nine.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section 9.08, the Trustee shall, within
10 days after the expiration of such 90-day period, transmit by mail to all
Holders as their names and addresses appear in the Note registrar, notice of
such failure.
(c) For the purposes of this Section 9.08, the Trustee shall be
deemed to have a conflicting interest with respect to the Notes if
(1) the Trustee is trustee under another indenture under which any
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture is
a collateral trust indenture under which the only collateral consists of
Notes, PROVIDED that there shall be excluded from the operation of this
paragraph this Indenture with respect to any other indenture or indenture
under which securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the TIA, unless the Securities and Exchange Commission
shall have found and declared by order pursuant to Section 305(b) or
Section 307(c) of the TIA that differences exist between the
provisions of this Indenture and the provisions of such other
indenture or
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indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to such other indenture or
indentures, or
(ii) the Company shall have sustained the burden of proving, on
application to the Securities and Exchange Commission and after
opportunity for hearing thereon, that trusteeship under this Indenture
with respect to such other indenture or indentures is not so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture with respect to such
other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Notes or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or both,
of the Trustee and a director or an executive officer, or both, of the
Company but may not be at the same time an executive officer of both the
Trustee and the Company; (ii) if and so long as the number of directors of
the Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company; and (iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity, or, subject to the provisions
of paragraph (1) of this Subsection, to act as trustee, whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by
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any director, partner or executive officer thereof, or 20% or more of
such voting securities is beneficially owned, collectively, by any two
or more of such persons; or 10% or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for the Company
or by any director, partner or executive officer thereof, or is
beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including the Notes
and securities issued under any other indenture under which the Trustee is
also trustee, or (ii) 10% or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the voting securities
of, or controls directly or indirectly or is under direct or indirect
common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflicting interest under paragraph (6), (7) or (8) of
this Subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator or testamentary trustee
of an estate which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after May 15 in each calendar year, the Trustee shall
make a check of its holdings of such
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securities in any of the above-mentioned capacities as of such May 15.
If the Company fails to make payment in full of the principal of (or
premium, if any) or interest on any of the Notes when and as the same
becomes due and payable, and such failure continues for 30 days
thereafter, the Trustee shall make a prompt check of its holdings of
such securities in any of the above-mentioned capacities as of the date
of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such
securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee for
the purposes of paragraphs (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this Subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
(d) For the purposes of this Section 9.08:
(1) The term "underwriter", when used with reference to the Company,
means every person who, within three years prior to the time as of which
the determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection with, the distribution
of
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any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Notes.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities
specified in this Section 9.08 shall be calculated in accordance with the
following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section 9.08 (each of
whom is referred to as a "person" in this paragraph) means such amount of
the outstanding
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voting securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate votes which
the holders of all the outstanding voting securities of such person are
entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
PROVIDED, HOWEVER, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; PROVIDED, HOWEVER, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and
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PROVIDED, FURTHER, that, in the case of unsecured evidences of
indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities of
different classes, whether or not they are issued under a single
indenture.
SECTION 9.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall
at all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000
subject to supervision or examination by Federal or State authority and having
its Corporate Trust Office in Chicago, Illinois or New York, New York, to the
extent there is such an institution eligible and willing to serve. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section 9.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
9.09, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article Nine.
SECTION 9.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Nine shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 9.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 9.11 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by the Holders of a
majority in aggregate principal amount of the Notes then outstanding, delivered
to the Trustee and to the Company.
(d) If at any time:
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(1) the Trustee shall fail to comply with Section 9.08(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 9.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 8.13, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of such Holder and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees and shall comply with the applicable requirements of Section 9.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by the
Holders of a majority in aggregate principal amount of the Notes then
outstanding delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 9.11, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by Section 9.11, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Note register. Each notice
shall
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include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 9.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) Every successor Trustee shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) of this Section 9.11.
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article Nine.
SECTION 9.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
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SECTION 9.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
(a) Subject to Subsection (b) of this Section 9.13, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within four months prior to a default, as defined in
Subsection (c) of this Section 9.13, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart and
hold in a special account for the benefit of the Trustee individually, the
Holders of the Notes and the holders of other indenture securities, as defined
in Subsection (c) of this Section 9.13:
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four months' period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon the
date of such default; and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four months'
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property
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was so held prior to the beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
Subsection (c) of this Section 9.13, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months' period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective
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claims from all sources other than from such dividends and from the funds and
property so held in such special account. As used in this paragraph, with
respect to any claim, the term "dividends" shall include any distribution
with respect to such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, whether such distribution is made in cash, securities or other property,
but shall not include any such distribution with respect to the secured
portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders
of other indenture securities, in accordance with the provisions of this
paragraph, the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in part, to give
to the provisions of this paragraph due consideration in determining the
fairness of the distributions to be made to the Trustee and the Holders and
the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such special account or
as security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this Subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section 9.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a
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maturity of one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purposes of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section 9.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of
this Section 9.13.
(c) For the purposes of this Section 9.13 only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Notes or upon the other
indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section 9.13, and (iii)
under which a default exists at the time of the apportionment of the funds
and property held in such special account;
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(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the Notes; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
SECTION 9.14. APPOINTMENT OF AUTHENTICATING AGENT. At any time when
any of the Notes remain outstanding the Trustee may appoint an Authenticating
Agent or Agents with respect to the Notes which shall be authorized to act on
behalf of the Trustee to authenticate Notes issued upon exchange, registration
of transfer or partial redemption thereof or pursuant to Section 2.06, and Notes
so authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of
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condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section
9.14, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
9.14, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section 9.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 9.14, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 9.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Note register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 9.14.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 9.14, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 9.07.
If an appointment is made pursuant to this Section 9.07, the Notes may
have endorsed thereon, in addition to the
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Trustee's certificate of authentication, an alternate certificate of
authentication in the following form:
Trustee's Certificate of Authentication
This is one of the Notes referred to in the within-mentioned
Indenture.
The First National Bank
of Chicago, as Trustee
By ________________________________
As Authenticating Agent
By ________________________________
Authorized Officer
ARTICLE TEN
CONCERNING THE NOTEHOLDERS
SECTION 10.01. ACTION BY NOTEHOLDERS. (a) Whenever in this
Indenture it is provided that the Holders of a specified percentage in
aggregate principal amount of the Notes may take any action (the making of
any demand or request, or the giving of any notice, consents or waivers in
lieu of a Noteholders' meeting or the taking of any other action), the fact
that at the time of taking any such action the Holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such Noteholders in person
or by agent or proxy appointed in writing, or (b) by the record of such
Noteholders voting in favor thereof at any meeting of Noteholders duly called
and held in accordance with Article Eleven, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of
Noteholders.
(b) Whenever in this Indenture it is provided that the Holders of a
specified percentage in aggregate principal amount of the Notes may take any
action, any party designated in writing by the Depositary, or by any party so
designated by the Depositary, as the owner of a beneficial interest of a
specified principal amount of any Global Note held by such Depositary shall
be deemed to be a Holder of Notes in such principal amount for such purpose.
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SECTION 10.02. PROOF OF EXECUTION BY NOTEHOLDERS.
(a) Subject to Sections 9.01 and 11.05, proof of the execution of
any instruments by a Noteholder or the agent or proxy for such Noteholder
shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Notes shall be proved by the
Note register of the Company or by a certificate of the Note registrar.
(b) The record of any Noteholders' meeting shall be proven in the
manner provided for in Section 11.06.
SECTION 10.03. WHO DEEMED ABSOLUTE OWNERS. Subject to Sections
2.04(f) and 10.01, the Company, the Trustee, any Authenticating Agent and
Note registrar may deem the person in whose name any Note shall be registered
upon the Note register of the Company to be, and may treat such person as,
the absolute owner of such Note (whether or not such Note shall be overdue)
for the purpose of receiving payment of or on account of the principal of and
any premium and interest on such Note, and for all other purposes; and
neither the Company nor the Trustee nor any Authenticating Agent nor any Note
registrar shall be affected by any notice to the contrary. All such payments
shall be valid and effectual to satisfy and discharge the liability upon any
such Note to the extent of the sum or sums so paid.
SECTION 10.04. COMPANY-OWNED NOTES DISREGARDED. In determining
whether the Holders of the requisite aggregate principal amount of Notes then
outstanding have concurred in any direction, consent or waiver under this
Indenture, Notes which are owned by the Company or any other obligor on the
Notes or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any other obligor
on the Notes shall be disregarded and deemed not to be outstanding for the
purpose of any such determination; PROVIDED that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Notes which the Trustee knows are so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
may be regarded as outstanding for the purposes of this Section 10.04 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Notes and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a dispute
as
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to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.
SECTION 10.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At
any time prior to the taking of any action by the holders of the percentage
in aggregate principal amount of the Notes specified in this Indenture in
connection with such action, any Holder of a Note, which is shown by the
evidence to be included in the Notes the Holders of which have consented to
such action may, by filing written notice with the Trustee at the Corporate
Trust Office of the Trustee and upon proof of ownership as provided in
Section 10.02(a), revoke such action so far as it concerns such Note. Except
as aforesaid any such action taken by the Holder of any Note shall be
conclusive and binding upon such Holder and upon all future Holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether or not any notation thereof is made upon
such Note or such other Notes.
SECTION 10.06. RECORD DATE FOR NOTEHOLDER ACTS. If the Company
shall solicit from the Noteholders any request, demand, authorization,
direction, notice, consent, waiver or other act, the Company may, at its
option, by Board Resolution, fix in advance a record date in compliance with
TIA Section 3.16(c) for the determination of Noteholders entitled to give
such request, demand, authorization, direction, notice, consent, 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, waiver or other act may be given before or after the record date,
but only the Noteholders of record at the close of business on the record
date shall be deemed to be Noteholders for the purpose of determining whether
Holders of the requisite aggregate principal amount of Notes then outstanding
have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other act, and for that
purpose the outstanding Notes shall be computed as of the record date;
PROVIDED, HOWEVER, that no such authorization, agreement or consent by the
Noteholders on the record date shall be deemed effective unless it shall
become effective pursuant to this Indenture not later than six months after
the record date.
ARTICLE ELEVEN
NOTEHOLDERS' MEETING
SECTION 11.01. PURPOSES OF MEETINGS. A meeting of Noteholders may
be called at any time and from time to time
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pursuant to this Article Eleven for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of
any default hereunder and its consequences, or to take any other
action authorized to be taken by Noteholders pursuant to
Article Eight;
(b) to remove the Trustee and nominate a successor Trustee
pursuant to Article Nine;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to Section 13.02; or
(d) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of
the Notes, as the case may be, under any other provision of this
Indenture or under applicable law.
SECTION 11.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any
time call a meeting of Holders of Notes to take any action specified in
Section 11.01, to be held at such time and at such place as the Trustee shall
determine. Notice of every such meeting of Noteholders, setting forth the
time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given to Holders of the Notes that may
be affected by the action proposed to be taken at such meeting in the manner
provided in Section 15.10. Such notice shall be given not less than 20 nor
more than 90 days prior to the date fixed for such meeting.
SECTION 11.03. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case
at any time the Company, pursuant to a Board Resolution, or the Holders of at
least 10% in aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Noteholders, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may
call such meeting to take any action authorized in Section 11.01, by giving
notice thereof as provided in Section 11.02.
SECTION 11.04. QUALIFICATIONS FOR VOTING. To be entitled to vote
at any meetings of Noteholders a Person shall
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(a) be a Holder of one or more Notes affected by the action proposed to be
taken or (b) be a Person appointed by an instrument in writing as proxy by a
Holder of one or more such Notes. The only Persons who shall be entitled to
be present or to speak at any meeting of Noteholders shall be the Persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 11.05. REGULATIONS.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Noteholders, in regard to proof of the holding of Notes and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall think fit.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called
by the Company or by the Noteholders as provided in Section 11.03, in which
case the Company or Noteholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by the Holders of a
majority in aggregate principal amount of the Notes present in person or by
proxy at the meeting.
(c) Subject to Section 10.04, at any meeting each Noteholder or
proxy shall be entitled to one vote for each $1,000 principal amount of Notes
held or represented by such Noteholder; PROVIDED, HOWEVER, that no vote shall
be cast or counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote other than by virtue
of Notes held by such chairman or instruments in writing as aforesaid duly
designating such chairman as the person to vote on behalf of other
Noteholders. At any meeting of Noteholders duly called pursuant to Section
11.02 or 11.03, the presence of persons holding or representing Notes in an
aggregate principal amount sufficient to take action on any business for the
transaction for which such meeting was called shall constitute a quorum. Any
meeting of Noteholders duly called pursuant to Section 11.02 or 11.03 may be
adjourned from time to time by the Holders of a majority in aggregate
principal amount of the Notes present in person or by proxy at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
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SECTION 11.06. VOTING. The vote upon any resolution submitted to
any meeting of Noteholders shall be by written ballots on which shall be
subscribed the signatures of the Holders of Notes or of their representatives
by proxy and the principal amount of Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Noteholders shall be prepared
by the secretary of the meeting and there shall be attached to said record
the original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 11.02. The record shall show the
principal amount of the Notes voting in favor of or against any resolution.
The record shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee. Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
SECTION 11.07. RIGHT OF TRUSTEE OR NOTEHOLDERS NOT DELAYED.
Nothing in this Article Eleven contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders of Notes under any of the
provisions of this Indenture or of the Notes.
ARTICLE TWELVE
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 12.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
TERMS. The Company shall 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:
(1) the corporation formed by such consolidation or into which
the Company is merged (the "successor corporation") or the Person
which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety
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shall be a corporation organized and existing under the laws of the
United States of America or any State or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and
interest on all Notes and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such consolidation,
merger, conveyance, transfer or lease, no Event of Default, and no
event which, after notice or lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing;
(3) if, as a result of such consolidation, merger, conveyance,
transfer or lease, properties or assets of the Company would become subject
to a mortgage, pledge, lien, security interest or other encumbrance which
would not otherwise be permitted by this Indenture without making effective
provision whereby the Notes then outstanding and any other indebtedness of
the Company then entitled thereto will be equally and ratably secured with
any and all indebtedness and obligations secured thereby, the Company or
the successor corporation or Person, as the case may be, will take such
action as will be necessary effectively to secure all Notes equally and
ratably with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article Twelve and that all
conditions precedent herein provided for relating to such
consolidation, merger, conveyance or transfer have been complied with.
SECTION 12.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any
consolidation or merger, or any conveyance, transfer or lease as an entirety
in accordance with Section 12.01, the successor corporation formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor corporation had been
named as the Company herein; PROVIDED, HOWEVER, that no such conveyance or
transfer shall have the effect of releasing the Person named as the "Company"
in the first paragraph of this
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Indenture or any successor corporation which shall theretofore have become
such in the manner prescribed in this Article Twelve from its liability as
obligor and maker on any of the Notes.
ARTICLE THIRTEEN
SUPPLEMENTAL INDENTURES
SECTION 13.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS.
(a) The Company, when authorized by Board Resolution, and the
Trustee may at any time and from time to time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(1) to make such provision in regard to matters or questions
arising under this Indenture as may be necessary or desirable and not
inconsistent with this Indenture or for the purpose of supplying any
omission, curing any ambiguity, or curing, correcting or supplementing
any defective or inconsistent provision; PROVIDED that such provision
shall not adversely affect the interests of Holders of outstanding
Notes created prior to the execution of such supplemental indenture in
any material respect;
(2) to change or eliminate any of the provisions of this Indenture;
PROVIDED that any such change or elimination shall become effective only
when there is no Note outstanding created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision;
(3) to secure the Notes;
(4) to establish the form of Notes as permitted by Section 2.01 or to
establish or reflect any terms of any Note determined pursuant to Section
2.05;
(5) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Notes;
(6) to grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority;
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(7) to permit the Trustee to comply with any duties imposed upon it by
law;
(8) to specify further the duties and responsibilities of, and to
define further the relationships among, the Trustee, any Authenticating
Agent and any paying agent;
(9) to add to the covenants of the Company for the benefit of the
Holders of all or any Notes (and if such covenants are to be for the
benefit of less than all Notes, stating that such covenants are expressly
being included solely for the benefit of such Notes) or to surrender a
right or power conferred on the Company herein; and
(10) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all Notes, stating that such
Events of Default are expressly being included for the benefit of such
Notes).
(b) The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
(c) Any supplemental indenture authorized by this Section 13.01 may
be executed by the Company and the Trustee without the consent of the Holders
of any of the Notes then outstanding, notwithstanding any of the provisions
of Section 13.02.
SECTION 13.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) With the consent (evidenced as provided in Section 10.01) of
the Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding that would be affected by the particular supplemental
indenture, the Company, when authorized by Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
any supplemental indenture or of modifying in any manner the rights of the
Noteholders; PROVIDED, HOWEVER, that no such supplemental indenture shall:
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(1) change the Stated Maturity of any Note; or reduce the rate
of interest on any Note; or change the method of calculating interest,
or any term used in the calculation of interest, or the period for
which interest is payable, on any Floating Rate Note; or reduce the
principal amount of any Note or any premium thereon; reduce the amount
of the principal of an Original Issue Discount Note that would be due
and payable upon a declaration of acceleration of the Maturity
thereof, or adversely affect the right of repayment or renewal, if
any, at the option of the Holder; or change the coin or currency in
which the principal of any Note or any premium or interest thereon is
payable; or change the date on which any Note may be redeemed; or
adversely affect the rights of any Noteholder to institute suit for
the enforcement of any payment of principal of or any premium or
interest on any Note; in each case without the consent of the Holder
of each Note then outstanding that would be affected thereby (for
purposes of this Section 13.02 (a)(1) only, the term "Note" shall
include Notes for which an offer to purchase has been accepted by the
Company); or
(2) reduce the aforesaid percentage of Notes, the Holders of
which are required to consent to any such supplemental indenture, or
the percentage in aggregate principal amount of the Notes then
outstanding the consent of the Holders of which is required for any
waiver of certain past defaults or Events of Default hereunder or the
consequences thereof, in each case without the consent of the Holders
of all of the Notes then outstanding.
(b) Upon the request of the Company, accompanied by a copy of the
Board Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Noteholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
(c) It shall not be necessary for the consent of the Holders of
Notes under this Section 13.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
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(d) Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to this Section 13.02, the Company shall
give notice in the manner provided in Section 15.10, setting forth in general
terms the substance of such supplemental indenture, to all Noteholders. Any
failure of the Company to give such notice, or any defect therein shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 13.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF
SUPPLEMENTAL INDENTURES. Any supplemental indenture executed pursuant to
this Article Thirteen shall comply with the TIA. Upon the execution of any
supplemental indenture pursuant to this Article Thirteen, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the
Noteholders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 13.04. NOTATION ON NOTES. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article Thirteen may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company or
the Trustee shall so determine, new Notes so modified as to conform in the
opinion of the Trustee and the Board of Directors to any modification of this
Indenture contained in any such supplemental indenture may be prepared and
executed by the Company, authenticated by the Trustee and delivered in
exchange for the Notes then outstanding.
SECTION 13.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO
BE FURNISHED TRUSTEE. The Trustee, subject to Section 9.01, may receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with the
requirements of this Article Thirteen.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS.
No recourse for the payment of the principal of or any premium or interest on
any Note, or for any claim based
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thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company, contained in this Indenture
or in any supplemental indenture, or in any Note, or because of the creation
of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 15.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements made by the Company in this
Indenture shall bind its successors and assigns whether so expressed or not.
SECTION 15.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be
done or performed by any board, committee or officer of the Company shall and
may be done and performed with like force and effect by the like board,
committee or officer of any corporation that shall at the time be the lawful
successor of the Company.
SECTION 15.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand
which by any provision of this Indenture is required or permitted to be given
or served by the Trustee or by the Noteholders on the Company may be given or
served by being deposited postage prepaid in a post office letter box
addressed (until another address is filed by the Company with the Trustee) to
MidAmerican Energy Company, 666 Grand Avenue, Des Moines, Iowa 50303, to the
attention of the Corporate Secretary. Any notice, direction, request or
demand by any Noteholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.
SECTION 15.04. GOVERNING LAW. This Indenture and each Note shall
be deemed to be a contract made under the laws of the
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State of New York, and for all purposes shall be construed in accordance with
the laws of said State.
SECTION 15.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
(a) Upon any application or demand by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that each Person
making such certificate or opinion has read such covenant or condition and the
definitions relating thereto; (2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinion
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of each such Person, such Person has made such examination or
investigation as is necessary to enable such Person to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (4) a statement as to whether or not, in the opinion of each such Person,
such condition or covenant has been complied with.
(c) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(d) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
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information with respect to such factual matters is in the possession of the
Company, unless such person knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
(e) Any certificate, statement or opinion of any officer of the
Company, or of counsel, may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or
firm of accountants, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to the
accounting matters upon which the certificate, statement or opinion of such
officer or counsel may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous. Any certificate or
opinion of any firm of independent public accountants filed with the Trustee
shall contain a statement that such firm is independent.
(f) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 15.06. BUSINESS DAYS. Unless otherwise provided herein, in
any case where the date of Maturity of the principal of or any premium or
interest on any Note or the Redemption Date of any Note is not a Business Day,
then payment of such principal or any premium or interest need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of Maturity or the Redemption Date, and,
in the case of payment, no interest shall accrue for the period from and after
such date.
SECTION 15.07. TRUST INDENTURE ACT TO CONTROL. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included in
this Indenture by any of Sections 310 to 317, inclusive, of the TIA, such
required provision shall control.
SECTION 15.08. TABLE OF CONTENTS, HEADINGS, ETC. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
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SECTION 15.09. EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 15.10. MANNER OF MAILING NOTICE TO NOTEHOLDERS. Any notice
or demand which by any provision of this Indenture is required or permitted to
be given or served by the Trustee or the Company to or on the Holders of Notes,
as the case may be, shall be given or served by first-class mail, postage
prepaid, addressed to the Holders of such Notes at their last addresses as the
same appear on the Note register referred to in Section 2.06, and any such
notice shall be deemed to be given or served by being deposited in a post office
letter box in the form and manner provided in this Section 15.10.
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IN WITNESS WHEREOF, MidAmerican Energy Company has caused this
Indenture to be signed and acknowledged by its _______________ and its Secretary
or an Assistant Secretary, and The First National Bank of Chicago has caused
this Indenture to be signed and acknowledged by one of its __________ and its
corporate seal to be affixed hereunto, and the same to be attested by one of its
_____________, as of the day and year first written above.
MIDAMERICAN ENERGY COMPANY
By
----------------------------
Name:
Title:
By
----------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
[Seal] By
----------------------------
Name:
Title:
Attest:
- --------------------------
Name:
Title:
-101-
<PAGE>
STATE OF IOWA )
) ss:
COUNTY OF POLK )
I, ________________________, a Notary Public in and for said County
and State aforesaid, do hereby certify that _________________________ of
MidAmerican Energy Company, an Iowa corporation, and ________________ of said
corporation, who are personally known to me to be the same persons whose names
are subscribed to the foregoing instrument and who are both personally known to
me to be ___________________________ and Secretary of said corporation,
respectively, appeared before me this day in person and severally acknowledged
that they this day signed and delivered the said instrument as their free and
voluntary act as such ___________________________ and Secretary, respectively,
of said corporation and as the free and voluntary act of said corporation, for
the uses and purposes therein set forth, and that the said instrument was signed
and delivered on behalf of said corporation by authority of its Board of
Directors, and acknowledged said instrument to be the free and voluntary act of
said corporation.
GIVEN under my hand and notarial seal this __________ day of ________,
1996.
-------------------------------
Notary Public
My commission expires:
-102-
<PAGE>
STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
I, _____________________________, a Notary Public in and for said
County and State aforesaid, do hereby certify that
_________________________________ of The First National Bank of Chicago, a
national banking association organized and existing under the laws of the United
States of America, and ____________________ of said corporation, who are
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument and who are both personally known to me to be an
________________________ and ___________________ of said corporation, appeared
before me this day in person and severally acknowledged that they this day
signed, sealed and delivered the said instrument as their free and voluntary act
as such an ________________________ and ___________________, respectively, of
said corporation, and as the free and voluntary act of said corporation, for the
uses and purposes therein set forth, and that the seal affixed to said
instrument is the corporate seal of said corporation and that the said
instrument was signed, sealed and delivered on behalf of said corporation by
authority of its By-laws, and acknowledged said instrument to be the free and
voluntary act of said corporation.
GIVEN under my hand and notarial seal this _____ day of ________, 1996.
-----------------------------------
Notary Public
My commission expires:
-103-
<PAGE>
EXHIBIT A
Global Fixed Rate Note
REGISTERED REGISTERED
NO.
MIDAMERICAN ENERGY COMPANY
Fixed Rate
Medium-Term Note
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
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.
The following summary of terms is subject to the provisions set forth
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CUSIP: EXTENSION PERIOD:
ORIGINAL ISSUE DATE(S): NUMBER OF EXTENSION PERIODS:
PRINCIPAL AMOUNT: FINAL MATURITY DATE:
MATURITY DATE: OPTIONAL INTEREST RESET: / / Yes / / No
INTEREST RATE: OPTIONAL INTEREST RESET
DATES:
INTEREST PAYMENT DATES: ORIGINAL ISSUE DISCOUNT
NOTE: / / Yes / / No
RECORD DATES:
OPTIONAL REDEMPTION:
/ / Yes / / No ISSUE PRICE (percentage of principal):
INITIAL REDEMPTION DATE: YIELD TO MATURITY:
AMORTIZING NOTE: / / Yes / / No RENEWABLE AT OPTION OF
HOLDER: / / Yes / / No
OPTION TO ELECT
REPAYMENT: / / Yes / / No ANNEX ATTACHED (and
incorporated by reference
herein): / / Yes / / No
OPTIONAL EXTENSION OF
ORIGINAL MATURITY DATE: / / Yes / / No
</TABLE>
<PAGE>
MidAmerican Energy Company, an Iowa corporation (herein called the
"Company", which term includes any successor Person under the Indenture referred
to on the reverse hereof), for value received, hereby promises to pay to
or registered assigns the principal sum specified above, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above and to pay interest thereon, in such coin or currency, from and including
the Original Issue Date (or if this Global Note has two or more Original Issue
Dates, interest shall, beginning on each such Original Issue Date, begin to
accrue for that part of the principal amount to which such Original Issue Date
is applicable) specified above, or from and including the most recent Interest
Payment Date specified above to which interest has been paid or duly provided
for, as the case may be. Interest shall be paid in arrears semiannually on each
Interest Payment Date in each year commencing on (a) the first such Interest
Payment Date next succeeding the earliest Original Issue Date or Dates, or (b)
if such Original Issue Date is after a Record Date and prior to the first
Interest Payment Date, on the second Interest Payment Date, at the per annum
Interest Rate set forth above until Maturity and the principal hereof is paid or
made available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be
paid to the Person in whose name this Note is registered at the close of
business on the Record Date specified above next preceding such Interest Payment
Date; PROVIDED, HOWEVER, that if an Original Issue Date falls between a Record
Date and the next Interest Payment Date, the first payment of interest with
respect to such Original Issue Date will be paid on the second Interest Payment
Date subsequent to such Original Issue Date to the Person in whose name this
Note is registered at the close of business on the Record Date for such second
Interest Payment Date; and PROVIDED, FURTHER, that interest payable on the
Maturity date or, if applicable, upon redemption, shall be payable to the Person
to whom principal shall be payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and shall be
paid to the Person in whose name this Note is registered at the close of
business on a Record Date for the payment of such defaulted interest to be fixed
by the Company, notice whereof shall be given to Noteholders not less than
fifteen days prior to such Record Date. Payment of the principal of and any
premium and interest on this Note shall be made on or before 10:30 A.M., New
York City time or such other time as shall be agreed upon between the Trustee
and the Depositary, of the day on which such payment is due, by wire
A-2
<PAGE>
transfer into the account specified by the Depositary; PROVIDED, HOWEVER,
that as a condition to the payment at the Maturity date of any part of the
principal and any applicable premium of this Global Note, the Depositary
shall surrender, or cause to be surrendered, this Global Note to the Trustee.
The Company will pay any administrative costs imposed by banks in connection
with making payments by wire transfer, but not any tax, assessment or
governmental charge imposed on the Holder of this Note.
Under certain circumstances, this Global Note is exchangeable in whole
or from time to time in part for a definitive individual Note or Notes, with the
same Original Issue Date or Dates, Maturity date, Interest Rate and redemption
and other provisions as provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL NOTE
SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
MIDAMERICAN ENERGY COMPANY
By
---------------------------------
President
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION By
----------------------------------
This is one of the Notes referred Secretary
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By
-----------------------------------
Authorized Signatory
A-3
<PAGE>
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTE
This Global Note is one of, and a global security which
represents Notes which are part of, the duly authorized Notes of the
Company (herein called the "Notes"), issued and to be issued under an
Indenture dated as of __________, 1996 (herein called the "Indenture")
between the Company and The First National Bank of Chicago, as Trustee
(herein called the "Trustee", which term includes any successor Trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Company, the Trustee and the Noteholders, and of the terms upon which
the Notes are, and are to be, authenticated and delivered.
Each Note shall be dated the date of its authentication by the
Trustee. Each Note shall also bear an Original Issue Date or Dates
which with respect to this Global Note (or any portion thereof) shall
mean the date or dates of the original issue of the Notes represented
hereby as specified on the face hereof, and such Original Issue Date or
Dates shall remain the same for all Notes subsequently issued upon
transfer, exchange or substitution of such original Note (or such
subsequently issued Notes) regardless of their dates of authentication.
The Notes may bear different dates, mature at different times, bear
interest at different rates, be subject to different redemption
provisions, if any, and may otherwise vary, all as provided in the
Indenture.
Interest on this Note will be payable on the Interest Payment
Date or Interest Payment Dates as specified on the face hereof and, in
either case, at Maturity. Unless otherwise specified on the face
hereof, payments on this Note with respect to any particular Interest
Payment Date or the Maturity date will include interest accrued from and
including the applicable Original Issue Date, or from and including the
most recent Interest Payment Date to which interest has been paid or
duly provided for, to but excluding the particular Interest Payment Date
or the Maturity date. Interest on this Note will be computed and paid
on the basis of a 360-day year of twelve 30-day months.
Unless otherwise specified on the face hereof, if this Note is
an Amortizing Note, payments with respect to this Note will be applied
first to interest due and payable hereon and then to the reduction of
the unpaid principal amount hereof. If this Note is an Amortizing Note,
a table setting forth the schedule of dates and amounts of payments of
principal of and interest on
A-4
<PAGE>
this Note or the formula for the amortization of principal and/or
interest is set forth in an annex attached to this Note.
All percentages resulting from any calculation with respect to
this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with five one-millionths of a
percentage point rounded upward) and all dollar amounts used in or
resulting from any such calculation with respect to this Note will be
rounded to the nearest cent (with one-half cent being rounded upward).
"Business Day" means, unless otherwise specified on the face
hereof, any Monday, Tuesday, Wednesday, Thursday or Friday that in The
City of New York is not a day on which banking institutions are
authorized or obligated by law, regulation or executive order to close.
If an Interest Payment Date or Maturity for this Note falls on a day
that is not a Business Day, payment of principal, premium, if any, and
interest to be made on such day with respect to this Note will be made
on the next day that is a Business Day with the same force and effect as
if made on the due date, and no additional interest will be payable on
the date of payment for the period from and after the due date as a
result of such delayed payment.
This Note will be redeemable at the option of the Company prior
to its Stated Maturity only if an Initial Redemption Date is specified
on the face hereof. If so specified, this Note will be subject to
redemption at the option of the Company on any date on and after such
Initial Redemption Date in whole or from time to time in part in
increments of $1,000 or integral multiples thereof, at the redemption
prices specified in an annex attached to this Note, plus accrued and
unpaid interest to but excluding the date of redemption, but payments
due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on
the relevant Record Date specified on the face hereof, all as provided
in the Indenture. The Company may exercise such option by causing the
Trustee to mail a notice of such redemption, at least 30 but not more
than 60 calendar days prior to the date of redemption, in accordance
with the provisions of the Indenture. In the event of redemption of
this Note in part only, this Note will be cancelled and a new Note or
Notes representing the unredeemed portion hereof will be issued in the
name of the Holder hereof. This Note is not subject to a sinking fund
unless otherwise specified in an annex attached hereto.
If so specified on the face of this Note, (i) this Note shall
be subject to repayment, in whole or in part, prior to
A-5
<PAGE>
Stated Maturity at the option of the Holder on a certain date or dates
and at a certain price or prices, plus accrued and unpaid interest to
but excluding the date of payment; (ii) the Stated Maturity of this Note
may be extended at the option of the Company for one or more Extension
Periods of from one to five years, as specified on the face hereof, up
to but not beyond the Final Maturity Date specified on the face hereof;
(iii) the interest rate specified on the face hereof may be reset by the
Company in accordance with a formula or otherwise on the Optional
Interest Reset Date or Dates specified on the face hereof; and/or (iv)
this Note shall be renewable at the option of the Holder, in each case
in accordance with the provisions of the Indenture applicable thereto
and/or as specified in an annex attached to this Note.
Notwithstanding anything herein to the contrary, if this Note
is an Original Issue Discount Note as specified on the face hereof, the
amount payable in the event the principal amount hereof is declared to
be due and payable immediately by reason of an Event of Default or in
the event of redemption or repayment hereof prior to the Stated Maturity
hereof, in lieu of the principal amount due at the Stated Maturity
hereof, shall be the Amortized Face Amount of this Note as of the date
of declaration, redemption or repayment, as the case may be. The
"Amortized Face Amount" of this Note shall be the amount equal to the
principal amount of this Note multiplied by the Issue Price specified on
the face hereof plus (b) the portion of the difference between the
dollar amount thus obtained and the principal amount hereof that has
accreted at the Yield to Maturity specified on the face hereof (computed
in accordance with generally accepted United States bond yield
computation principles) to such date of declaration, redemption or
repayment but in no event shall the Amortized Face Amount of this Note
exceed the principal amount stated on the face hereof.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Noteholders to be
affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding that would be affected
thereby. The Indenture also contains provisions permitting the Holders
of not less than a majority in aggregate principal amount of the Notes
then outstanding, on behalf of the Holders of all Notes, to waive
compliance by the Company with certain covenants in the Indenture. The
Indenture also provides that the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding may waive
certain past defaults and their
A-6
<PAGE>
consequences on behalf of the Holders of all Notes. Any such consent or
waiver by the Holder of this Global Note (if not timely revoked in
accordance with the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders of this Global Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Global Note or such Note.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Notes will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
notice of a continuing default with respect to the Notes, the Holders of
not less than a majority in aggregate principal amount of the Notes then
outstanding shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, and
the Trustee shall have failed to institute such proceeding within 60
days; PROVIDED, HOWEVER, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the
principal of and any premium or interest on this Global Note on or after
the respective due dates expressed herein.
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS
GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
If at any time the Depositary for this Global Note notifies the
Company that it is unwilling or unable to continue as Depositary for
this Global Note or if at any time the Depositary for this Global Note
shall no longer be registered as a clearing agency under the Securities
Exchange Act of 1934, as amended, or any successor statute or
regulation, the Company may appoint a successor Depositary with respect
to this Global Note. If (A) a successor Depositary for this Global Note
is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, or (B) any
Notes are represented by this Global Note at a time when an Event of
Default with respect to the Notes shall have occurred and be continuing,
then in each case the Company's election to issue this Note in global
form shall no longer be effective with
A-7
<PAGE>
respect to this Global Note and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and
delivery of individual Notes in exchange for this Global Note, shall
authenticate and make available for delivery, individual Notes of like
tenor and terms in definitive form in an aggregate principal amount
equal to the principal amount of this Global Note in exchange for this
Global Note.
If agreed by the Company and the Depositary with respect to
Notes issued in the form of this Global Note, the Depositary for such
Global Note shall surrender this Global Note in exchange in whole or in
part for individual Notes of like tenor and terms in definitive form on
such terms as are acceptable to the Company and such Depositary.
Thereupon the Company shall execute, and the Trustee shall authenticate
and make available for delivery, without a service charge, (1) to each
Person specified by such Depositary, a new Note or Notes of like tenor
and terms, and of any authorized denominations as requested by such
Person in aggregate principal amount equal to and in exchange for the
beneficial interest of such Person in this Global Note, and (2) to such
Depositary a new Global Note of like tenor and terms and in a
denomination equal to the difference, if any, between the principal
amount of this Global Note and the aggregate principal amount of Notes
delivered to Holders thereof.
Under certain circumstances specified in the Indenture, the
Depositary may be required to surrender any two or more Global Notes
which have identical terms (but which may have differing Original Issue
Dates) to the Trustee, and the Company shall execute and the Trustee
shall authenticate and deliver to, or at the direction of, the
Depositary a Global Note in principal amount equal to the aggregate
principal amount of, and with all terms identical to, the Global Notes
surrendered to the Trustee, and such new Global Note shall indicate each
applicable Original Issue Date and the principal amount applicable to
each such Original Issue Date.
No reference herein to the Indenture and no provision of this
Global Note or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal
of and any premium and interest on this Global Note at the times, places
and rates, and in the coin or currency, herein prescribed.
The Indenture contains provisions for the satisfaction and
discharge of the Indenture upon compliance by the Company with certain
conditions specified therein, which provisions apply to this Note.
A-8
<PAGE>
Prior to due presentment of this Global Note 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 Global Note is
registered as the owner hereof for all purposes, whether or not this
Global Note is overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the Indenture
but are not defined in this Note shall have the meanings assigned to
them in the Indenture.
A-9
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects to
have the Company repay (i) the principal amount of this Note or portion
hereof below designated at the applicable optional repayment price
indicated on an annex attached hereto plus accrued and unpaid interest
to but excluding the date of repayment, if this election is being made
pursuant to the option referred to under "Option to Elect Repayment" on
the face hereof, or (ii) 100% of the principal amount of this Note plus
accrued and unpaid interest to but excluding the Optional Interest Reset
Date, if this election is being made following an exercise by the
Company of the option referred to under "Optional Interest Reset" on the
face hereof, or to but excluding the Pre-Exercise Stated Maturity Date
(as defined in the Indenture), if this election is being made following
an exercise by the Company of the option referred to under "Optional
Extension of Original Maturity Date" on the face hereof. If a portion
of this Note is not being repaid pursuant to clause (i) above, specify
the principal amount to be repaid and the denomination or denominations
(which will be $1,000 or an integral multiple thereof) of the Note or
Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any specification, one such Note will be
issued for the portion not being repaid):
Dated: ____________________________ ____________________________________
Signature
Sign exactly as name appears on the
front of this Note
Principal amount to be repaid if Indicate address where check is
amount to be repaid is pursuant to be sent:
to clause (i) above and is less than
the entire principal amount of this ____________________________________
Note (principal amount remaining
must be an authorized denomination) ____________________________________
$__________________________________
(Which must be an integral multiple
of $1,000)
Denomination or denominations of the SOCIAL SECURITY OR OTHER TAXPAYER
Note or Notes to be issued for the ID NUMBER:
portion of this Note not being
repaid pursuant to clause (i) above: ____________________________________
___________________________________
___________________________________
A-10
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in the above
list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
______________________
______________________
______________________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
______________________________________________________________________________
the within note and all rights thereunder, hereby irrevocably constituting and
appointing____________________________________________________________________
___________________________ attorney to transfer said note on the books of the
Company, with full power of substitution in the premises.
Dated:____________________
__________________________________________________
NOTICE: The signature(s) to this assignment must
correspond with the name(s) as written upon the
face of the within instrument in every particular,
without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by
an "eligible guarantor institution" that is a
member or participant in the Securities Transfer
Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange,
Inc. Medallion Program.
A-11
<PAGE>
EXHIBIT B
Fixed Rate Note
REGISTERED REGISTERED
NO.
MIDAMERICAN ENERGY COMPANY
Fixed Rate
Medium-Term Note
The following summary of terms is subject to the provisions set forth
below:
CUSIP: EXTENSION PERIOD:
ORIGINAL ISSUE DATE: NUMBER OF EXTENSION PERIODS:
PRINCIPAL AMOUNT: FINAL MATURITY DATE:
MATURITY DATE: OPTIONAL INTEREST RESET:
/ / Yes / / No
INTEREST RATE: OPTIONAL INTEREST RESET
DATES:
INTEREST PAYMENT DATES: ORIGINAL ISSUE DISCOUNT NOTE:
/ / Yes / / No
RECORD DATES: ISSUE PRICE (percentage of
principal):
OPTIONAL REDEMPTION: YIELD TO MATURITY:
/ / Yes / / No
INITIAL REDEMPTION DATE: RENEWABLE AT OPTION OF HOLDER:
/ / Yes / / No
AMORTIZING NOTE: ANNEX ATTACHED (and incorporated
/ / Yes / / No by reference herein):
/ / Yes / / No
OPTION TO ELECT
REPAYMENT:
/ / Yes / / No
OPTIONAL EXTENSION OF
ORIGINAL MATURITY DATE:
/ / Yes / / No
<PAGE>
MidAmerican Energy Company, an Iowa corporation (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to
or registered assigns the principal sum specified above, in such coin to
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date
specified above, and to pay interest thereon, in such coin or currency, from
and including the Original Issue Date specified above, or from the most
recent Interest Payment Date specified above to which interest has been paid
or duly provided for, as the case may be. Interest shall be paid in arrears
semiannually on each Interest Payment Date in each year commencing on (a) the
first such Interest Payment Date next succeeding the Original Issue Date
specified above, or (b) if such Original Issue Date is after a Record Date
and prior to the first Interest Payment Date, on the second Interest Payment
Date, at the per annum Interest Rate set forth above until Maturity and the
principal hereof is paid or made available for payment. The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Note is registered at the close of business on the Record Date specified
above next preceding such Interest Payment Date; PROVIDED, HOWEVER, that if
the Original Issue Date falls between a Record Date and the next Interest
Payment Date, the first payment of interest will be paid on the second
Interest Payment Date subsequent to such Original Issue Date to the Person in
whose name this Note is registered at the close of business on the Record
Date for such second Interest Payment Date; and PROVIDED, FURTHER, that
interest payable on the Maturity date, or, if applicable, upon redemption,
shall be payable to the Person to whom principal shall be payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Record Date and shall be paid to the Person in whose name this Note is
registered at the close of business on a Record Date for the payment of such
defaulted interest to be fixed by the Company, notice whereof shall be given
to Noteholders not less than fifteen days prior to such Record Date. Payment
of the principal of and any premium and interest on this Note due at the
Maturity of this Note shall be payable in immediately available funds when
due upon presentation and surrender of such Note at the Corporate Trust
Office of the Trustee in the Borough of Manhattan, The City of New York;
PROVIDED that this Note is presented to the Trustee in time for the Trustee
to make such payment in such funds in accordance with its normal procedures.
Accrued Interest on (and, if this Note is an Amortizing Note, installments of
principal of) this Note (other than Accrued
B-2
<PAGE>
Interest or such installments payable at Maturity) shall be paid by a
clearinghouse funds check mailed on the Interest Payment Date; PROVIDED,
HOWEVER, that if any Holder of Notes, the aggregate principal amount of which
equals or exceeds $10,000,000, provides a written request to the Trustee on
or before the applicable Record Date for such Interest Payment Date, Accrued
Interest (and such installments of principal) shall be paid by wire transfer
of immediately available funds to a bank within the continental United States
or by direct deposit into the account of such Holder if such account is
maintained with the Trustee. The Company will pay any administration costs
imposed by banks in connection with making payments by wire transfer, but not
any tax, assessment or governmental charge imposed upon the Holder of this
Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated:
MIDAMERICAN ENERGY COMPANY
By
President
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION By
Secretary
This is one of the Notes referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By
Authorized Signatory
B-3
<PAGE>
12Exhibit4l
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTE
This Note is one of the duly authorized Notes of the Company (herein
called the "Notes"), issued and to be issued under an Indenture dated as of
__________, 1996 (herein called the "Indenture") between the Company and The
First National Bank of Chicago, as Trustee (herein called the "Trustee",
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Noteholders, and of
the terms upon which the Notes are, and are to be, authenticated and
delivered.
Each Note shall be dated the date of its authentication by the
Trustee. Each Note shall also bear an Original Issue Date which with respect
to this Global Note (or any portion thereof) shall mean the date of its
original issue as specified on the face hereof, and such Original Issue Date
shall remain the same for all Notes subsequently issued upon transfer,
exchange or substitution of such original Note (or such subsequently issued
Notes) regardless of their dates of authentication. The Notes may bear
different dates, mature at different times, bear interest at different rates,
be subject to different redemption provisions, if any, and may otherwise
vary, all as provided in the Indenture.
Interest on this Note will be payable on the Interest Payment Date
or Interest Payment Dates as specified on the face hereof and, in either
case, at Maturity. Unless otherwise specified on the face hereof, payments
on this Note with respect to any particular Interest Payment Date or the
Maturity date will include interest accrued from and including the Original
Issue Date, or from and including the most recent Interest Payment Date to
which interest has been paid or duly provided for, to but excluding the
particular Interest Payment Date or the Maturity date. Interest on this Note
will be computed and paid on the basis of a 360-day year of twelve 30-day
months.
Unless otherwise specified on the face hereof, if this Note is an
Amortizing Note, payments with respect to this Note will be applied first to
interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and
interest on this Note or the formula for the amortization of principal and/or
interest is set forth in an annex attached to this Note.
B-4
<PAGE>
All percentages resulting from any calculation with respect to this
Note will be rounded, if necessary, to the nearest one hundred-thousandth of
a percentage point (with five one-millionths of a percentage point rounded
upward) and all dollar amounts used in or resulting from any such calculation
with respect to this Note will be rounded to the nearest cent (with one-half
cent being rounded upward).
"Business Day" means, unless otherwise specified on the face hereof,
any Monday, Tuesday, Wednesday, Thursday or Friday that in The City of New
York is not a day on which banking institutions are authorized or obligated
by law, regulation or executive order to close. If an Interest Payment Date
or Maturity for this Note falls on a day that is not a Business Day, payment
of principal, premium, if any, and interest to be made on such day with
respect to this Note will be made on the next day that is a Business Day with
the same force and effect as if made on the due date, and no additional
interest will be payable on the date of payment for the period from and after
the due date as a result of such delayed payment.
This Note will be redeemable at the option of the Company prior to
its Stated Maturity only if an Initial Redemption Date is specified on the
face hereof. If so specified, this Note will be subject to redemption at the
option of the Company on any date on and after such Initial Redemption Date
in whole or from time to time in part in increments of $1,000 or integral
multiples thereof, at the redemption prices specified in an annex attached to
this Note, plus accrued and unpaid interest to but excluding the date of
redemption, but payments due with respect to this Note prior to the date of
redemption will be payable to the Holder of this Note of record at the close
of business on the relevant Record Date specified on the face hereof, all as
provided in the Indenture. The Company may exercise such option by causing
the Trustee to mail a notice of such redemption, at least 30 but not more
than 60 calendar days prior to the date of redemption, in accordance with the
provisions of the Indenture. In the event of redemption of this Note in part
only, this Note will be cancelled and a new Note or Notes representing the
unredeemed portion hereof will be issued in the name of the Holder hereof.
This Note is not subject to a sinking fund unless otherwise specified in an
annex attached hereto.
If so specified on the face of this Note, (i) this Note shall be
subject to repayment, in whole or in part, prior to Stated Maturity at the
option of the Holder on a certain date or
B-5
<PAGE>
dates and at a certain price or prices, plus accrued and unpaid interest to
but excluding the date of payment; (ii) the Stated Maturity of this Note may
be extended at the option of the Company for one or more Extension Periods of
from one to five years, as specified on the face hereof, up to but not beyond
the Final Maturity Date specified on the face hereof; (iii) the interest rate
specified on the face hereof may be reset by the Company in accordance with a
formula or otherwise on the Optional Interest Reset Date or Dates specified
on the face hereof; and/or (iv) this Note shall be renewable at the option of
the Holder, in each case in accordance with the provisions of the Indenture
applicable thereto and/or as specified in an annex attached to this Note.
Notwithstanding anything herein to the contrary, if this Note is an
Original Issue Discount Note as specified on the face hereof, the amount
payable in the event the principal amount hereof is declared to be due and
payable immediately by reason of an Event of Default or in the event of
redemption or repayment hereof prior to the Stated Maturity hereof, in lieu
of the principal amount due at the Stated Maturity hereof, shall be the
Amortized Face Amount of this Note as of the date of declaration, redemption
or repayment, as the case may be. The "Amortized Face Amount" of this Note
shall be the amount equal to the principal amount of this Note multiplied by
the Issue Price specified on the face hereof plus (b) the portion of the
difference between the dollar amount thus obtained and the principal amount
hereof that has accreted at the Yield to Maturity specified on the face
hereof (computed in accordance with generally accepted United States bond
yield computation principles) to such date of declaration, redemption or
repayment but in no event shall the Amortized Face Amount of this Note exceed
the principal amount stated on the face hereof.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Noteholders to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding that would be affected thereby. The Indenture also
contains provisions permitting the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding, on behalf of the
Holders of all Notes, to waive compliance by the Company with certain
covenants in the Indenture. The Indenture also provides that the Holders of
not less than a majority in aggregate principal amount of the Notes then
outstanding may waive certain past defaults and their consequences on behalf
of the Holders of all Notes. Any such consent or waiver by the Holder of
this Global Note (if not
B-6
<PAGE>
timely revoked in accordance with the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon this Note or such Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing
default with respect to the Notes, the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding shall have made
written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as Trustee, and the Trustee shall have failed to
institute such proceeding within 60 days; PROVIDED, HOWEVER, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and any premium or interest on
this Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any premium
and interest on this Note at the times, places and rates, and in the
coin or currency, herein prescribed.
The Indenture contains provisions for the satisfaction and discharge
of the Indenture upon compliance by the Company with certain conditions
specified therein, which provisions apply to this Note.
Unless otherwise specified in an annex attached hereto, the Notes
are issuable only in registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. As provided in the Indenture and
subject to certain limitations specified therein, this Note may be exchanged
for one or more new Notes, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity and having the same terms and
Original Issue Date, as requested by the Holder surrendering this Note.
As provided in the Indenture and subject to the limitations
specified therein, upon due presentment of this Note for registration of
transfer at an office or agency of the Trustee in the Borough of Manhattan,
The City of New York, maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
B-7
<PAGE>
Company and the note registrar duly executed by, the Holder hereof or the
attorney of such Holder duly authorized in writing, the Company shall execute
and register or cause to be registered and the Trustee shall authenticate and
make available for delivery, in the name of the transferee or transferees one
or more new Notes of any authorized denominations and of a like aggregate
principal amount and Stated Maturity and having the same terms and Original
Issue Date.
No service charge will be made for any such exchange or registration
of transfer, but the Company may required payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note 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 Note is registered as the owner hereof
for all purposes, whether or not this Note is overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the Indenture but
are not defined in this Note shall have the meanings assigned to them in the
Indenture.
B-8
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects to have
the Company repay (i) the principal amount of this Note or portion hereof
below designated at the applicable optional repayment price indicated on an
annex attached hereto plus accrued and unpaid interest to but excluding the
date of repayment, if this election is being made pursuant to the option
referred to under "Option to Elect Repayment" on the face hereof, or (ii)
100% of the principal amount of this Note plus accrued and unpaid interest to
but excluding the Optional Interest Reset Date, if this election is being
made following an exercise by the Company of the option referred to under
"Optional Interest Reset" on the face hereof, or to but excluding the
Pre-Exercise Stated Maturity Date (as defined in the Indenture), if this
election is being made following an exercise by the Company of an option
referred to under "Optional Extension of Original Maturity Date" on the face
hereof. If a portion of this Note is not being repaid pursuant to clause (i)
above, specify the principal amount to be repaid and the denomination or
denominations (which will be $1,000 or an integral multiple thereof) of the
Note or Notes to be issued to the Holder for the portion of this Note not
being repaid (in the absence of any specification, one such Note will be
issued for the portion not being repaid):
Dated:
------------------------------- ------------------------------------
Signature
Sign exactly as name appears on the
front of this Note
Principal amount to be repaid if Indicate address where check is
amount to be repaid is pursuant to be sent:
to clause (i) above and is less than
the entire principal amount of this ------------------------------------
Note (principal amount remaining
must be an authorized denomination) ------------------------------------
$
-------------------------------------
(Which must be an integral multiple
of $1,000)
Denomination or denominations of the SOCIAL SECURITY OR OTHER TAXPAYER
Note or Notes to be issued for the ID NUMBER:
portion of this Note not being
repaid pursuant to clause (i) above: ------------------------------------
- --------------------------------------
- --------------------------------------
B-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____ Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in the above
list.
----------------------
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address
including postal zip code of assignee
- -------------------------------------------------------------------------------
the within note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________ attorney to transfer said
note on the books of the Company, with full power of substitution in the
premises.
Dated:
--------------------------
-------------------------------------
NOTICE: The signature(s) to this
assignment must correspond with the
name(s) as written upon the face of the
within instrument in every particular,
without alteration or enlargement or
any change whatever. The signature(s)
must be guaranteed by an "eligible
guarantor institution" that is a member
or participant in the Securities
Transfer Agents Medallion Program, the
Stock Exchange Medallion Program or the
New York Stock Exchange, Inc. Medallion
Program.
B-10
<PAGE>
EXHIBIT B
Global Fixed Rate Note
REGISTERED REGISTERED
NO.
MIDAMERICAN ENERGY COMPANY
Fixed Rate
Medium-Term Note
Unless this certificate is presented by an authorized representative
for The Depository Trust Company, a New York corporation ("DTC"), to the
Company 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 if 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.
The following summary of terms is subject to the provisions set
forth below:
<TABLE>
<CAPTION>
<S> <C> <C>
CUSIP: INITIAL REDEMPTION DATE:
ORIGINAL ISSUE DATES AMORTIZING NOTE: / / Yes / / No
PRINCIPAL AMOUNT: OPTION TO ELECT
REPAYMENT: / / Yes / / No
MATURITY DATE:
OPTIONAL EXTENSION OF
INITIAL INTEREST RATE: ORIGINAL MATURITY DATE: / / Yes / / No
INTEREST RATE BASIS OR BASE RATE EXTENSION PERIOD:
(including any Designated LIBOR Page):
NUMBER OF EXTENSION PERIODS:
INDEX MATURITY:
FINAL MATURITY DATE:
INTEREST DETERMINATION DATES:
OPTIONAL INTEREST RESET: / / Yes / / No
INTEREST RESET PERIOD:
OPTIONAL INTEREST RESET
INTEREST RESET DATES: DATES:
SPREAD: ORIGINAL ISSUE DISCOUNT
NOTE: / / Yes / / No
SPREAD MULTIPLIER:
ISSUE PRICE (percentage of principal):
MAXIMUM INTEREST RATE:
YIELD TO MATURITY:
MINIMUM INTEREST RATE:
RENEWABLE AT OPTION OF
INTEREST PAYMENT DATES: HOLDER: / / Yes / / No
RECORD DATES ANNEX ATTACHED (and
incorporated by reference
OPTIONAL REDEMPTION: / / Yes / / No herein): / / Yes / / No
</TABLE>
<PAGE>
MidAmerican Energy Company, an Iowa corporation (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to
or registered assigns the principal sum specified above, in such coin to
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date
specified above, and to pay interest thereon, in such coin or currency, from
and including the Original Issue Date (or, if this Global Note has two or
more Original Issue Dates, interest shall, beginning on each such Original
Issue Date, begin to accrue for that part of the principal amount to which
such Original Issue Date is applicable) specified above, or from and
including the most recent Interest Payment Date specified above to which
interest has been paid or duly provided for, as the case may be. Interest
shall be paid in arrears monthly, quarterly, semiannually annually as
specified above under Inerest Payment Dates, on each Interest Payment Date in
each year and at Maturity commencing on (a) the first such Interest Payment
Date next succeeding the earliest Original Issue Date or Dates, or (b) if
such Original Issue Date is after a Record Date and prior to the first
Interest Payment Date, on the second Interest Payment Date, at a rate per
annum equal to the Initial Interest Rate until the initial Interest Reset
Date specified above, and thereafter at a rate per annum determined in
accordance with the provisions in the Indenture for calculating the Interest
Rate for Notes having the Interest Rate Basis specified above, until Maturity
and the principal hereof is paid or made available for payment. The interest
so payable and punctually paid or duly provided for on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Note is registered at the close of business on the Record Date specified
above next preceding such Interest Payment Date; PROVIDED, HOWEVER, that if
an Original Issue Date falls between a Record Date and the next Interest
Payment Date, the first payment of interest with respect to such Original
Issue Date will be paid on the second Interest Payment Date subsequent to
such Original Issue Date to the Person in whose name this Note is registered
at the close of business on the Record Date for such second Interest Payment
Date; and PROVIDED, FURTHER, that interest payable on the Maturity date, or,
if applicable, upon redemption, shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in the Indenture,
any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Record Date and shall be paid to
the Person in whose name this Note is registered at the close of business on
a Record Date for the payment of such defaulted interest to be fixed by the
Company, notice whereof shall be given to Noteholders not less than fifteen
days prior to such Record Date. Payment of the principal
C-2
<PAGE>
of and any premium and interest on this Note shall be made on or before 10:30
A.M., New York City time or such other time as shall be agreed upon between
the Trustee and the Depositary, of the day on which such payment is due, by
wire transfer into the account specified by the Depositary; PROVIDED,
HOWEVER, that as a condition to the payment at the Maturity date of any part
of the principal and any applicable premium of this Global Note, the
Depositary shall surrender, or cause to be surrendered, this Global Note to
the Trustee. The Company will pay any administrative costs imposed by banks
in connection with making payments by wire transfer, but not any tax,
assessment or governmental charge imposed on the Holder of this Note.
Under certain circumstances, this Global Note is exchangeable in
whole or from time to time in part for a definitive individual Note or Notes,
with the same Original Issue Date or Dates, Maturity date, Interest Rate and
redemption and other provisions as provided herein or in the Indenture.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL
NOTE SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
MIDAMERICAN ENERGY COMPANY
By
President
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION By
This is one of the Notes referred Secretary
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By
Authorized Signatory
C-3
<PAGE>
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTE
This Global Note is one of, and a global security which represents
Notes which are part of, the duly authorized Notes of the Company (herein
called the "Notes"), issued and to be issued under an Indenture dated as of
__________, 1996 (herein called the "Indenture") between the Company and The
First National Bank of Chicago, as Trustee (herein called the "Trustee",
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Noteholders, and of
the terms upon which the Notes are, and are to be, authenticated and
delivered.
Each Note shall be dated the date of its authentication by the
Trustee. Each Note shall also bear an Original Issue Date or Dates which with
respect to this Global Note (or any portion thereof) shall mean the date or
dates of the original issue of the Notes represented hereby as specified on the
face hereof, and such Original Issue Date or Dates shall remain the same for all
Notes subsequently issued upon transfer, exchange or substitution of such
original Note (or such subsequently issued Notes) regardless of their dates of
authentication. The Notes may bear different dates, mature at different times,
bear interest at different rates, be subject to different redemption provisions,
if any, and may otherwise vary, all as provided in the Indenture.
Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the applicable Original Issue Date,
or from and including the most recent Interest Payment Date to which interest
has been paid or duly provided for, to but excluding the particular Interest
Payment Date or the Maturity date. Interest on this Note shall be calculated
for each day during such period by dividing the interest rate applicable to such
day by 360, if the Interest Rate Basis specified on the face hereof is the
Commercial Paper Rate, LIBOR or Prime Rate, or by the actual number of days in
the year, if the Interest Rate Basis specified on the face hereof is the
Treasury Rate. Unless otherwise provided in an annex attached hereto, the
Trustee, acting in the capacity of Calculation Agent, will calculate the
Interest Rate on this Note. Upon the request of any Holder of this Note, the
Trustee shall provide to such Holder the Interest Rate then in effect and, if
then determined, the interest rate that will become effective on the next
Interest
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<PAGE>
Reset Date with respect to this Note. Each such determination of an Interest
Rate will be final and binding in the absence of manifest error.
Unless otherwise specified in an annex attached hereto, if this Note
is an Amortizing Note, payments with respect to this Note will be applied first
to interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and interest
on this Note or the formula for the amortization of principal and/or interest is
set forth in an annex attached to this Note.
All percentages resulting from any calculation with respect to this
Note will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with five one-millionths of a percentage point rounded upward)
and all dollar amounts used in or resulting from any such calculation with
respect to this Note will be rounded to the nearest cent (with one-half cent
being rounded upward).
"Business Day" means, unless otherwise specified on the face hereof,
any Monday, Tuesday, Wednesday, Thursday or Friday that in The City of New York
is not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If an Interest Payment Date or Maturity
for this Note falls on a day that is not a Business Day, payment of principal,
premium, if any, and interest to be made on such day with respect to this Note
will be made on the next day that is a Business Day with the same force and
effect as if made on the due date, and no additional interest will be payable on
the date of payment for the period from and after the due date as a result of
such delayed payment.
This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole or
from time to time in part in increments of $1,000 or integral multiples thereof,
at the redemption prices specified in an annex attached to this Note, plus
accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on the face hereof, all as provided in the
Indenture. The Company may exercise such option by causing the Trustee to mail
a notice of such redemption, at least 30 but not more than 60 calendar days
prior to the date of redemption, in accordance with the
C-5
<PAGE>
provisions of the Indenture. In the event of redemption of this Note in part
only, this Note will be cancelled and a new Note or Notes representing the
unredeemed portion hereof will be issued in the name of the Holder hereof.
This Note is not subject to a sinking fund unless otherwise specified in an
annex attached hereto.
If so specified on the face of this Note, (i) this Note shall be
subject to repayment, in whole or in part, prior to Stated Maturity at the
option of the Holder on a certain date or dates and at a certain price or
prices, plus accrued and unpaid interest to but excluding the date of payment;
(ii) the Stated Maturity of this Note may be extended at the option of the
Company for one or more Extension Periods of from one to five years, as
specified on the face hereof, up to but not beyond the Final Maturity Date
specified on the face hereof; (iii) the interest rate specified on the face
hereof may be reset by the Company in accordance with a formula or otherwise on
the Optional Interest Reset Date or Dates specified on the face hereof; and/or
(iv) this Note shall be renewable at the option of the Holder, in each case in
accordance with the provisions of the Indenture applicable thereto and/or as
specified in an annex attached to this Note.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then outstanding
that would be affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding, on behalf of the Holders of all Notes, to waive
compliance by the Company with certain covenants in the Indenture. The
Indenture also provides that the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding may waive certain past
defaults and their consequences on behalf of the Holders of all Notes. Any such
consent or waiver by the Holder of this Global Note (if not timely revoked in
accordance with the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders of this Global Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Global Note
or such Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless such Holder shall have
previously given
C-6
<PAGE>
to the Trustee written notice of a continuing default with respect to the
Notes, the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as Trustee,
and the Trustee shall have failed to institute such proceeding within 60
days; PROVIDED, HOWEVER, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the
principal of and any premium or interest on this Global Note on or after the
respective due dates expressed herein.
THIS NOTE IS A GLOBAL NOTE REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.
If at any time the Depositary for this Global Note notifies the
Company that it is unwilling or unable to continue as Depositary for this
Global Note or if at any time the Depositary for this Global Note shall no
longer be registered as a clearing agency under the Securities Exchange Act
of 1934, as amended, or any successor statute or regulation, the Company may
appoint a successor Depositary with respect to this Global Note. If (A) a
successor Depositary for this Global Note is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of
such ineligibility, or (B) any Notes are represented by this Global Note at a
time when an Event of Default with respect to the Notes shall have occurred
and be continuing, then in each case the Company's election to issue this
Note in global form shall no longer be effective with respect to this Global
Note and the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of individual Notes in exchange for
this Global Note, shall authenticate and make available for delivery,
individual Notes of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of this Global Note in
exchange for this Global Note.
If agreed by the Company and the Depositary with respect to Notes
issued in the form of this Global Note, the Depositary for such Global Note
shall surrender this Global Note in exchange in whole or in part for individual
Notes of like tenor and terms in definitive form on such terms as are acceptable
to the Company and such Depositary. Thereupon the Company shall execute, and
the Trustee shall authenticate and
C-7
<PAGE>
make available for delivery, without a service charge, (1) to each Person
specified by such Depositary, a new Note or Notes of like tenor and terms,
and of any authorized denominations as requested by such Person in aggregate
principal amount equal to and in exchange for the beneficial interest of such
Person in this Global Note, and (2) to such Depositary a new Global Note of
like tenor and terms and in a denomination equal to the difference, if any,
between the principal amount of this Global Note and the aggregate principal
amount of Notes delivered to Holders thereof.
Under certain circumstances specified in the Indenture, the Depositary
may be required to surrender any two or more Global Notes which have identical
terms (but which may have differing Original Issue Dates) to the Trustee, and
the Company shall execute and the Trustee shall authenticate and deliver to, or
at the direction of, the Depositary a Global Note in principal amount equal to
the aggregate principal amount of, and with all terms identical to, the Global
Notes surrendered to the Trustee, and such new Global Note shall indicate each
applicable Original Issue Date and the principal amount applicable to each such
Original Issue Date.
No reference herein to the Indenture and no provision of this Global
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any premium and
interest on this Global Note at the times, places and rates, and in the coin or
currency, herein prescribed.
The Indenture contains provisions for the satisfaction and discharge
of the Indenture upon compliance by the Company with certain conditions
specified therein, which provisions apply to this Note.
Prior to due presentment of this Global Note 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 Global Note is registered as the owner
hereof for all purposes, whether or not this Global Note is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the Indenture but are
not defined in this Note shall have the meanings assigned to them in the
Indenture.
C-8
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects to have
the Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under "Option to Elect Repayment" on the face hereof, or (ii) 100% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under "Optional Interest
Reset" on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date (as defined in the Indenture), if this election is being made following an
exercise by the Company of the option referred to under "Optional Extension of
Original Maturity Date" on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):
Dated:__________________________ _________________________________________
Signature
Sign exactly as name appears on the
front of this Note
Principal amount to be repaid if Indicate address where check is
amount to be repaid is pursuant to be sent:
to clause (i) above and is less than
the entire principal amount of this _________________________________________
Note (principal amount remaining
must be an authorized denomination)
_________________________________________
$___________________________________
(Which must be an integral multiple
of $1,000)
Denomination or denominations of the SOCIAL SECURITY OR OTHER TAXPAYER
Note or Notes to be issued for the ID NUMBER:
portion of this Note not being
repaid pursuant to clause (i) above: _________________________________________
____________________________________
____________________________________
C-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in the above
list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________
________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
_______________________ attorney to transfer said note on the books of the
Company, with full power of substitution in the premises.
Dated:____________________
___________________________________
NOTICE: The signature(s) to this assignment must
correspond with the name(s) as written upon the
face of the within instrument in every particular,
without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by
an "eligible guarantor institution" that is a
member or participant in the Securities Transfer
Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange,
Inc. Medallion Program.
C-10
<PAGE>
EXHIBIT D
Floating Rate Note
REGISTERED REGISTERED
NO.
MIDAMERICAN ENERGY COMPANY
Floating Rate
Medium-Term Note
The following summary of terms is subject to the provisions set forth
below:
<TABLE>
<S> <C> <C>
CUSIP: INITIAL REDEMPTION DATE:
ORIGINAL ISSUE DATE: AMORTIZING NOTE: / / Yes / / No
PRINCIPAL AMOUNT: OPTION TO ELECT
REPAYMENT: / / Yes / / No
MATURITY DATE:
INITIAL INTEREST RATE: OPTIONAL EXTENSION OF
ORIGINAL MATURITY DATE: / / Yes / / No
INTEREST RATE BASIS OR BASE RATE EXTENSION PERIOD:
(including any Designated LIBOR Page):
NUMBER OF EXTENSION PERIOD
INDEX MATURITY:
FINAL MATURITY DATE:
INTEREST DETERMINATION DATES:
OPTIONAL INTEREST RESET: / / Yes / / No
INTEREST RESET PERIOD:
OPTIONAL INTEREST RESET
INTEREST RESET DATES: DATES:
SPREAD: ORIGINAL ISSUE DISCOUNT
NOTE: / / Yes / / No
SPREAD MULTIPLIER:
ISSUE PRICE (percentage of principal):
MAXIMUM INTEREST RATE:
YIELD TO MATURITY:
MINIMUM INTEREST RATE:
RENEWABLE AT OPTION OF
INTEREST PAYMENT DATES: HOLDER
RECORD DATES: ANNEX ATTACHED (and
incorporated by reference
OPTIONAL REDEMPTION: / / Yes / / No herein): / / Yes / / No
</TABLE>
<PAGE>
MidAmerican Energy Company, an Iowa corporation (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to
or registered assigns the principal sum specified above, in such coin to
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, on the Maturity date specified
above, and to pay interest thereon, in such coin or currency, from and including
the Original Issue Date specified above, or from the most recent Interest
Payment Date specified above to which interest has been paid or duly provided
for, as the case may be. Interest shall be paid in arrears monthly, quarterly,
semiannually or annually as specified above under Interest Payment Dates, on
each Interest Payment Date in each year and at Maturity, commencing on (a) the
first such Interest Payment Date next succeeding the Original Issue Date
specified above, or (b) if such Original Issue Date is after a Record Date and
prior to the first Interest Payment Date, on the second Interest Payment Date,
at a rate per annum equal to the Initial Interest Rate specified above until the
initial Interest Reset Date specified above, and thereafter at a rate per annum
determined in accordance with the provisions in the Indenture for calculating
the Interest Rate for Notes having the Interest Rate Basis specified above,
until Maturity and the principal hereof is paid or made available for payment.
The interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note is registered at the close of business on the Record Date
specified above next preceding such Interest Payment Date; PROVIDED, HOWEVER,
that if the Original Issue Date falls between a Record Date and the next
Interest Payment Date, the first payment of interest will be paid on the second
Interest Payment Date subsequent to such Original Issue Date to the Person in
whose name this Note is registered at the close of business on the Record Date
for such second Interest Payment Date; and PROVIDED, FURTHER, that interest
payable on the Maturity date, or, if applicable, upon redemption, shall be
payable to the Person to whom principal shall be payable. Except as otherwise
provided in the Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and shall be paid to the Person in whose name this Note is registered at
the close of business on a Record Date for the payment of such defaulted
interest to be fixed by the Company, notice whereof shall be given to
Noteholders not less than fifteen days prior to such Record Date. Payment of
the principal of and any premium and interest on this Note due at the Maturity
of this Note shall be payable in immediately available funds when due upon
presentation and surrender of such Note at the Corporate Trust Office of the
D-2
<PAGE>
Trustee in the Borough of Manhattan, The City of New York; PROVIDED that this
Note is presented to the Trustee in time for the Trustee to make such payment in
such funds in accordance with its normal procedures. Accrued Interest on (and,
if this Note is an Amortizing Note, installments of principal of) this Note
(other than Accrued Interest or such installments payable at Maturity) shall be
paid by a clearinghouse funds check mailed on the Interest Payment Date;
PROVIDED, HOWEVER, that if any Holder of Notes, the aggregate principal amount
of which equals or exceeds $10,000,000, provides a written request to the
Trustee on or before the applicable Record Date for such Interest Payment Date,
Accrued Interest (and such installments of principal) shall be paid by wire
transfer of immediately available funds to a bank within the continental United
States or by direct deposit into the account of such Holder if such account is
maintained with the Trustee. The Company will pay any administration costs
imposed by banks in connection with making payments by wire transfer, but not
any tax, assessment or governmental charge imposed upon the Holder of this Note.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
MIDAMERICAN ENERGY COMPANY
By
President
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION By
Secretary
This is one of the Notes referred
to in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
OF CHICAGO, as Trustee
By
Authorized Signatory
D-3
<PAGE>
MIDAMERICAN ENERGY COMPANY
MEDIUM-TERM NOTE
This Note is one of the duly authorized Notes of the Company (herein
called the "Notes"), issued and to be issued under an Indenture dated as of
__________, 1996 (herein called the "Indenture") between the Company and The
First National Bank of Chicago, as Trustee (herein called the "Trustee", which
term includes any successor Trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Noteholders, and of the terms upon which the
Notes are, and are to be, authenticated and delivered.
Each Note shall be dated the date of its authentication by the
Trustee. Each Note shall also bear an Original Issue Date which with respect to
this Note (or any portion thereof) shall mean the date of its original issue as
specified on the face hereof, and such Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer, exchange or substitution of
such original Note (or such subsequently issued Notes) regardless of their dates
of authentication. The Notes may bear different dates, mature at different
times, bear interest at different rates, be subject to different redemption
provisions, if any, and may otherwise vary, all as provided in the Indenture.
Interest on this Note will be payable on the Interest Payment Date or
Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity. Unless otherwise specified on the face hereof, payments on this Note
with respect to any particular Interest Payment Date or the Maturity date will
include interest accrued from and including the Original Issue Date, or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, to but excluding such Interest Payment Date or the
Maturity date. Interest on this Note shall be calculated for each day during
such period by dividing the interest rate applicable to such day by 360, if the
Interest Rate Basis specified on the face hereof is the Commercial Paper Rate,
LIBOR or Prime Rate, or by the actual number of days in the year, if the
Interest Rate Basis specified on the face hereof is the Treasury Rate. Unless
otherwise provided in an annex attached hereto, the Trustee, acting in the
capacity of Calculation Agent, will calculate the Interest Rate on this Note.
Upon the request of any Holder of
D-4
<PAGE>
this Note, the Trustee shall provide to such Holder the Interest Rate then in
effect and, if then determined, the interest rate that will become effective
on the next Interest Reset Date with respect to this Note. Each such
determination of an Interest Rate will be final and binding in the absence of
manifest error.
Unless otherwise specified in an annex attached hereto, if this Note
is an Amortizing Note, payments with respect to this Note will be applied first
to interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof. If this Note is an Amortizing Note, a table setting
forth the schedule of dates and amounts of payments of principal of and interest
on this Note or the formula for the amortization of principal and/or interest is
set forth in an annex attached to this Note.
All percentages resulting from any calculation with respect to this
Note will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with five one-millionths of a percentage point rounded upward)
and all dollar amounts used in or resulting from any such calculation with
respect to this Note will be rounded to the nearest cent (with one-half cent
being rounded upward).
"Business Day" means, unless otherwise specified on the face hereof,
any Monday, Tuesday, Wednesday, Thursday or Friday that in The City of New York
is not a day on which banking institutions are authorized or obligated by law,
regulation or executive order to close. If an Interest Payment Date or Maturity
for this Note falls on a day that is not a Business Day, payment of principal,
premium, if any, and interest to be made on such day with respect to this Note
will be made on the next day that is a Business Day with the same force and
effect as if made on the due date, and no additional interest will be payable on
the date of payment for the period from and after the due date as a result of
such delayed payment.
This Note will be redeemable at the option of the Company prior to its
Stated Maturity only if an Initial Redemption Date is specified on the face
hereof. If so specified, this Note will be subject to redemption at the option
of the Company on any date on and after such Initial Redemption Date in whole or
from time to time in part in increments of $1,000 or integral multiples thereof,
at the redemption prices specified in an annex attached to this Note, plus
accrued and unpaid interest to but excluding the date of redemption, but
payments due with respect to this Note prior to the date of redemption will be
payable to the Holder of this Note of record at the close of business on the
relevant Record Date specified on
D-5
<PAGE>
the face hereof, all as provided in the Indenture. The Company may exercise
such option by causing the Trustee to mail a notice of such redemption, at
least 30 but not more than 60 calendar days prior to the date of redemption,
in accordance with the provisions of the Indenture. In the event of
redemption of this Note in part only, this Note will be cancelled and a new
Note or Notes representing the unredeemed portion hereof will be issued in
the name of the Holder hereof. This Note is not subject to a sinking fund
unless otherwise specified in an annex attached hereto.
If so specified on the face of this Note, (i) this Note shall be
subject to repayment, in whole or in part, prior to Stated Maturity at the
option of the Holder on a certain date or dates and at a certain price or
prices, plus accrued and unpaid interest to but excluding the date of payment;
(ii) the Stated Maturity of this Note may be extended at the option of the
Company for one or more Extension Periods of from one to five years, as
specified on the face hereof, up to but not beyond the Final Maturity Date
specified on the face hereof; (iii) the interest rate specified on the face
hereof may be reset by the Company in accordance with a formula or otherwise on
the Optional Interest Reset Date or Dates specified on the face hereof; and/or
(iv) this Note shall be renewable at the option of the Holder, in each case in
accordance with the provisions of the Indenture applicable thereto and/or as
specified in an annex attached to this Note.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Noteholders to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Notes then outstanding
that would be affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding, on behalf of the Holders of all Notes, to waive
compliance by the Company with certain covenants in the Indenture. The
Indenture also provides that the Holders of not less than a majority in
aggregate principal amount of the Notes then outstanding may waive certain past
defaults and their consequences on behalf of the Holders of all Notes. Any such
consent or waiver by the Holder of this Global Note (if not timely revoked in
accordance with the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note or such
Note.
D-6
<PAGE>
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Notes will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing default with
respect to the Notes, the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
Trustee, and the Trustee shall have failed to institute such proceeding within
60 days; PROVIDED, HOWEVER, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of and any premium or interest on this Note on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the times, places and rates, and in the coin or currency, herein
prescribed.
The Indenture contains provisions for the satisfaction and discharge
of the Indenture upon compliance by the Company with certain conditions
specified therein, which provisions apply to this Note.
Unless otherwise specified in an annex attached hereto, the Notes are
issuable only in registered form, without coupons, in denominations of $1,000
and integral multiples thereof. As provided in the Indenture and subject to
certain limitations specified therein, this Note may be exchanged for one or
more new Notes, of any authorized denominations and of a like aggregate
principal amount and Stated Maturity and having the same terms and Original
Issue Date, as requested by the Holder surrendering this Note.
As provided in the Indenture and subject to the limitations specified
therein, upon due presentment of this Note for registration of transfer at an
office or agency of the Trustee in the Borough of Manhattan, The City of New
York, maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the note
registrar duly executed by, the Holder hereof or the attorney of such Holder
duly authorized in writing, the Company shall execute and register or cause to
be registered and the Trustee shall authenticate and make available for
delivery, in the name of the transferee or transferees one or more new Notes of
any authorized denominations and of a like
D-7
<PAGE>
aggregate principal amount and Stated Maturity and having the same terms and
Original Issue Date.
No service charge will be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.
All terms used in the Note which are defined in the Indenture but are
not defined in this Note shall have the meanings assigned to them in the
Indenture.
D-8
<PAGE>
OPTION TO ELECT REPAYMENT
[To be completed only if this Note is repayable at the option
of the Holder and the Holder elects to exercise such rights]
The undersigned owner of this Note hereby irrevocably elects to have
the Company repay (i) the principal amount of this Note or portion hereof below
designated at the applicable optional repayment price indicated on an annex
attached hereto plus accrued and unpaid interest to but excluding the date of
repayment, if this election is being made pursuant to the option referred to
under "Option to Elect Repayment" on the face hereof, or (ii) 100% of the
principal amount of this Note plus accrued and unpaid interest to but excluding
the Optional Interest Reset Date, if this election is being made following an
exercise by the Company of the option referred to under "Optional Interest
Reset" on the face hereof, or to but excluding the Pre-Exercise Stated Maturity
Date (as defined in the Indenture), if this election is being made following an
exercise by the Company of an option referred to under "Optional Extension of
Original Maturity Date" on the face hereof. If a portion of this Note is not
being repaid pursuant to clause (i) above, specify the principal amount to be
repaid and the denomination or denominations (which will be $1,000 or an
integral multiple thereof) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification,
one such Note will be issued for the portion not being repaid):
Dated: _____________________ ___________________________________
Signature
Sign exactly as name appears on the
front of this Note
Principal amount to be repaid if Indicate address where check is
amount to be repaid is pursuant to be sent:
to clause (i) above and is less than
the entire principal amount of this _______________________________
Note (principal amount remaining
must be an authorized denomination) _______________________________
$___________________________________
(Which must be an integral multiple
of $1,000)
Denomination or denominations of the SOCIAL SECURITY OR OTHER TAXPAYER
Note or Notes to be issued for the ID NUMBER:
portion of this Note not being __________________________________
repaid pursuant to clause (i) above:
___________________________________
___________________________________
D-9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIT GIFT
MIN ACT - _____Custodian_____
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common ___________________
State
Additional abbreviations may also be used though not in the above
list.
______________________
FOR VALUE RECEIVED the undersigned hereby sell(s)
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
_______________________________________
_________________________________________________________________
Please print or typewrite name and address
including postal zip code of assignee
_________________________________________________________________
the within note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
_______________________ attorney to transfer said note on the books of the
Company, with full power of substitution in the premises.
Dated:____________________
___________________________________
NOTICE: The signature(s) to this assignment must
correspond with the name(s) as written upon the
face of the within instrument in every particular,
without alteration or enlargement or any change
whatever. The signature(s) must be guaranteed by
an "eligible guarantor institution" that is a
member or participant in the Securities Transfer
Agents Medallion Program, the Stock Exchange
Medallion Program or the New York Stock Exchange,
Inc. Medallion Program.
D-10
<PAGE>
Exhibit 23(a)
[LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Amendment #1 to Form S-3 Registration Statement of our report
dated January 26, 1996 included in MidAmerican Energy Company's Form 10-K for
the year ended December 31, 1995 and to all references to our Firm included in
this Amendment #1 to Form S-3 Registration Statement.
/s/ Arthur Andersen LLP
----------------------------------
ARTHUR ANDERSEN LLP
Chicago, Illinois
December 6, 1996
<PAGE>
Exhibit 23(b)
[LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-15387 of Form S-3 of our reports dated January
25, 1995, covering the consolidated balance sheet and statement of
capitalization of Iowa-Illinois Gas and Electric Company and subsidiary as of
December 31, 1994, and the related consolidated statements of income,
retained earnings and cash flows for the years ended December 31, 1994 and
1993, and the schedule listed in Item 14(a)(2) as of December 31, 1994 and
1993 and for each of the two years in the period ended December 31, 1994,
appearing in MidAmerican Energy Company's Form 10-K for the year ended December
31, 1995. It should be noted that we have not audited any financial statements
of Iowa-Illinois Gas and Electric Company and subsidiary subsequent to December
31, 1994, or performed any audit procedures subsequent to the date of our
reports.
DELOITTE & TOUCHE LLP
Davenport, Iowa
December 6, 1996
<PAGE>
Exhibit 24
POWER OF ATTORNEY
Each of the undersigned does hereby appoint Paul J. Leighton, John A.
Rasmussen, Jr. and J. Sue Rozema, and each of them severally, his true or her
true and lawful attorneys, with full power of substitution in his or her
name, place and stead, to execute on his or her behalf a Registration
Statement on Form S-3 of MidAmerican Energy Company relating to the issuance
and sale of up to $500,000,000 principal amount of bonds, notes, debentures
or other evidences of indebtedness and other aspects of the financing
transactions related to such issuance and sale, to be filed pursuant to the
Securities Act of 1933, as amended, and any and all amendments thereto
(including post-effective amendments), and other documents relating thereto,
including exhibits, and to file the same with the Securities and Exchange
Commission. Each of such attorneys shall have full power and authority to do
and perform each and every act with or without the others.
IN WITNESS WHEREOF, the undersigned have duly executed this instrument as
of December 5, 1996.
MIDAMERICAN ENERGY COMPANY
- -------------------------- --------------------------
(Russell E. Christiansen) (Stanley J. Bright) President,
Chairman and Director Chief Executive Officer and Director
/s/ Philip G. Lindner /s/ John A. Rasmussen, Jr.
- -------------------------- --------------------------
Philip G. Lindner John A. Rasmussen, Jr.
/s/ Stephen E. Shelton /s/ Ronald W. Stepien
- -------------------------- --------------------------
Stephen E. Shelton Ronald W. Stepien
/s/ Beverly A. Wharton
- --------------------------
Beverly A. Wharton
<PAGE>
POWER OF ATTORNEY
Each of the undersigned does hereby appoint Paul J. Leighton, John A.
Rasmussen, Jr. and J. Sue Rozema, and each of them severally, his true or her
true and lawful attorneys, with full power of substitution in his or her name,
place and stead, to execute on his or her behalf a Registration Statement on
Form S-3 of MidAmerican Energy Company relating to the issuance and sale of up
to $500,000,000 principal amount of bonds, notes, debentures or other evidences
of indebtedness and other aspects of the financing transactions related to such
issuance and sale, to be filed pursuant to the Securities Act of 1933, as
amended, and any and all amendments thereto (including post-effective
amendments), and other documents relating thereto, including exhibits, and to
file the same with the Securities and Exchange Commission. Each of such
attorneys shall have full power and authority to do and perform each and every
act with or without the others.
IN WITNESS WHEREOF, the undersigned have duly executed this instrument as
of October 31, 1996.
MIDAMERICAN ENERGY COMPANY
/s/ Russell E. Christiansen
- ----------------------------------- ----------------------------------------
(Russell E. Christiansen) Chairman (Stanley J. Bright) President,
and Director Chief Executive Officer and Director
- ----------------------------------- ----------------------------------------
(John W. Aalfs) Director (Robert A. Burnett) Director
- ----------------------------------- ----------------------------------------
(Ross D. Christensen) Director (John W. Colloton) Director
- ----------------------------------- ----------------------------------------
(Frank S. Cottrell) Director (Jack W. Eugster) Director
- ----------------------------------- ----------------------------------------
(Mel Foster, Jr.) Director (Nolden Gentry) Director
- ----------------------------------- ----------------------------------------
(James M. Hoak, Jr.) Director (Richard L. Lawson) Director
- ----------------------------------- ----------------------------------------
(Robert L. Peterson) Director (Nancy L. Seifert) Director
- ----------------------------------- ----------------------------------------
(W. Scott Tinsman) Director (Leonard L. Woodruff) Director
<PAGE>
POWER OF ATTORNEY
Each of the undersigned does hereby appoint Paul J. Leighton, John A.
Rasmussen, Jr. and J. Sue Rozema, and each of them severally, his true or her
true and lawful attorneys, with full power of substitution in his or her name,
place and stead, to execute on his or her behalf a Registration Statement on
Form S-3 of MidAmerican Energy Company relating to the issuance and sale of up
to $500,000,000 principal amount of bonds, notes, debentures or other evidences
of indebtedness and other aspects of the financing transactions related to such
issuance and sale, to be filed pursuant to the Securities Act of 1933, as
amended, and any and all amendments thereto (including post-effective
amendments), and other documents relating thereto, including exhibits, and to
file the same with the Securities and Exchange Commission. Each of such
attorneys shall have full power and authority to do and perform each and every
act with or without the others.
IN WITNESS WHEREOF, the undersigned have duly executed this instrument as
of October 31, 1996.
MIDAMERICAN ENERGY COMPANY
/s/ Stanley J. Bright
- ----------------------------------- ----------------------------------------
(Russell E. Christiansen) Chairman (Stanley J. Bright) President,
and Director Chief Executive Officer and Director
- ----------------------------------- ----------------------------------------
(John W. Aalfs) Director (Robert A. Burnett) Director
- ----------------------------------- ----------------------------------------
(Ross D. Christensen) Director (John W. Colloton) Director
- ----------------------------------- ----------------------------------------
(Frank S. Cottrell) Director (Jack W. Eugster) Director
- ----------------------------------- ----------------------------------------
(Mel Foster, Jr.) Director (Nolden Gentry) Director
- ----------------------------------- ----------------------------------------
(James M. Hoak, Jr.) Director (Richard L. Lawson) Director
- ----------------------------------- ----------------------------------------
(Robert L. Peterson) Director (Nancy L. Seifert) Director
- ----------------------------------- ----------------------------------------
(W. Scott Tinsman) Director (Leonard L. Woodruff) Director
