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                       MIDAMERICAN REALTY SERVICES COMPANY


                       ----------------------------------

                                SECOND AMENDMENT
                         Dated as of September 15, 1999


                                       to


                             NOTE PURCHASE AGREEMENT
                          Dated as of November 1, 1998

                       ----------------------------------



                       Re: $35,000,000 7.12% Senior Notes
                              Due November 1, 2010


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<PAGE>

                       SECOND AMENDMENT TO NOTE AGREEMENT

          THIS  SECOND  AMENDMENT  dated as of  September  15, 1999 (the or this
"Second  Amendment") to the Note Purchase Agreement dated as of November 1, 1998
is  between  MidAmerican  Realty  Services  Company,  an Iowa  corporation  (the
"Company"),  and each of the  institutions  which is a signatory  to this Second
Amendment (collectively, the "Noteholders").


                                    RECITALS:

          A. The Company and each of the  Noteholders  have  heretofore  entered
into the Note Purchase Agreement dated as of November 1, 1998, as amended by the
Amendment,  Consent  and  Waiver  dated  as  of  August  27,  1999  (the  "First
Amendment") ( as so amended the "Note Agreement"), pursuant to which the Company
issued its $35,000,000 7.12% Senior Notes Due November 1, 2010 (the "Notes").

          B. The Company desires to enter into a Senior Secured Revolving Credit
Agreement (the "Credit  Agreement")  dated as of September 20, 1999 with various
banks or  financial  institutions  from time to time  party  thereto  (the "Bank
Lenders"),  and as a condition  precedent to entering into the Credit Agreement,
the Bank  Lenders  will  require  the  Company  to enter  into a certain  Pledge
Agreement dated as of September 20, 1999 (the "Pledge  Agreement"),  pursuant to
which the  Company  will pledge the capital  stock of its  Subsidiaries  for the
ratable benefit of the Noteholders and the Bank Lenders.

          C. The  Company  and the  Noteholders  now  desire  to amend  the Note
Agreement in the respects, but only in the respects, hereinafter set forth.

          D.  Capitalized  terms used herein shall have the respective  meanings
ascribed  thereto in the Note  Agreement  unless  herein  defined or the context
shall otherwise require.

          E. All requirements of law have been fully complied with and all other
acts and things  necessary  to make this  Second  Amendment  a valid,  legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.

         NOW,  THEREFORE,  upon  the  full  and  complete  satisfaction  of  the
conditions  precedent to the effectiveness of this Second Amendment set forth in
Section 3.1 hereof, and in consideration of good and valuable  consideration the
receipt and  sufficiency  of which is hereby  acknowledged,  the Company and the
Noteholders do hereby agree as follows:

SECTION 1.           AMENDMENTS.

          1.1.  The Note  Agreement  is amended by  amending  and  deleting  all
references to "CM Life  Insurance  Company"  contained in the Note Agreement and
Notes and substituting in lieu thereof "C.M. Life Insurance Company".


<PAGE>

Second Amendment to Note Purchase Agreement

          1.2.  Subparagraph  (f) of Section 10.6 of the Note Agreement shall be
and is hereby amended by deleting the word "and" at the end of such subparagraph
and  subparagraph  (g) of  Section  10.6 of the Note  Agreement  shall be and is
hereby amended in its entirety to read as follows:

               (g) any Lien extending,  renewing or replacing any Lien permitted
          by the immediately preceding subparagraphs (a) through (f), inclusive,
          and the immediately succeeding  subparagraph (h) of this Section 10.6,
          provided  that (i) the aggregate  principal  amount of Debt secured by
          such Lien immediately prior to such extension,  renewal or replacement
          is not increased or the maturity  thereof  reduced,  (ii) such Lien is
          not extended to any other  property,  except for the  substitution  of
          property  of a  similar  nature  and equal or  lesser  value  than the
          property  securing  the  Lien  immediately  prior  to such  extension,
          renewal or replacement,  and (iii) the aggregate  principal  amount of
          Debt being extended, renewed or replaced is permitted by Sections 10.2
          and 10.3; and

          1.3. Section 10.6 of the Note Agreement shall be and is hereby amended
by adding a new subparagraph (h) thereto which shall read as follows:

               (h) the Lien created by the Pledge Agreement.

          1.4. Subparagraph (e) of Section 11 of the Note Agreement shall be and
is hereby amended in its entirety to read as follows:

               (e) any  representation  or  warranty  made in  writing  by or on
          behalf of the  Company  or any  Subsidiary  or by any  officer  of the
          Company or any Subsidiary in this Agreement (or any amendment  hereto)
          or the Pledge  Agreement (or any amendment  thereto) or in any writing
          furnished in connection with the transactions  contemplated  hereby or
          thereby proves to have been false or incorrect in any material respect
          on the date as of which made; or

          1.5.  Section 11 of the Note Agreement  shall be and is hereby amended
by deleting  the "." at the end of  subparagraph  (j) and  substituting  in lieu
thereof "; or" and by adding a new  subparagraph (k) thereto which shall read as
follows:

               (k) any default in the performance of or compliance with any term
          contained  in the Pledge  Agreement  or the Lien created by the Pledge
          Agreement ceases to be or is not a valid first priority perfected Lien
          (other than as a result of the termination of the Pledge  Agreement in
          accordance with the terms and provisions thereof).

                                      -2-
<PAGE>

Second Amendment to Note Purchase Agreement

          1.6.  Schedule B of the Note Agreement  shall be and is hereby amended
by  amending  the  definition  of  "Priority  Debt" in its  entirety  to read as
follows:

               "Priority Debt" means,  without  duplication,  the sum of (a) all
          Debt of the Company  secured by any Lien with  respect to any property
          owned by the Company or any of its  Subsidiaries,  and (b) all Debt of
          Subsidiaries  (except  Debt  owed  to the  Company  or a  Wholly-Owned
          Subsidiary);  provided that Debt secured by the Pledge Agreement shall
          be excluded from the definition of Priority Debt.

          1.7. The following  shall be added as a new definition in alphabetical
order to Schedule B of the Note Agreement:

               "Pledge  Agreement"  means  the  Pledge  Agreement  dated  as  of
          September  20,  1999,  among the  Company,  the  holders  of Notes and
          certain banks or financial  institutions  party  thereto,  pursuant to
          which the capital stock of certain direct and indirect Subsidiaries of
          the Company shall be pledged as  collateral to secure the  obligations
          of the Company under the Notes and this Agreement and the  obligations
          of the Company owing to certain other creditors from time to time.

SECTION 2.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

          2.1. To induce the  Noteholders  to execute  and  deliver  this Second
Amendment  (which  representations  shall  survive the execution and delivery of
this Second  Amendment),  the Company represents and warrants to the Noteholders
that:

               (a) this Second Amendment has been duly authorized,  executed and
          delivered by it and this Second Amendment constitutes the legal, valid
          and  binding  obligation,   contract  and  agreement  of  the  Company
          enforceable  against  it in  accordance  with  its  terms,  except  as
          enforcement may be limited by bankruptcy, insolvency,  reorganization,
          moratorium  or similar  laws or  equitable  principles  relating to or
          limiting creditors' rights generally;

               (b) the Note  Agreement,  as amended by the First  Amendment  and
          this  Second  Amendment,  constitutes  the  legal,  valid and  binding
          obligation,  contract and agreement of the Company enforceable against
          it in accordance with their  respective  terms,  except as enforcement
          may be limited by bankruptcy, insolvency,  reorganization,  moratorium
          or  similar  laws or  equitable  principles  relating  to or  limiting
          creditors' rights generally;

               (c) the Pledge Agreement has been duly  authorized,  executed and
          delivered by it and the Pledge Agreement  constitutes the legal, valid
          and  binding  obligation,   contract  and  agreement  of  the  Company
          enforceable  against  it in  accordance  with  its  terms,  except  as
          enforcement may be limited by bankruptcy, insolvency, reorganization,

                                      -3-
<PAGE>

Second Amendment to Note Purchase Agreement

          moratorium  or similar  laws or  equitable principles  relating to or
          limiting creditors' rights generally;

               (d) the pledge and  assignment of capital  stock  pursuant to the
          terms of the Pledge  Agreement,  together  with the  delivery  of such
          capital  stock  (which  delivery  has been made),  creates a valid and
          perfected  security  interest in such  capital  stock and the proceeds
          thereof;

               (e) the  execution,  delivery and  performance  by the Company of
          this  Second  Amendment  and the  Pledge  Agreement  (i) has been duly
          authorized  by  all  requisite  corporate  action  and,  if  required,
          shareholder  action,  (ii) does not require the consent or approval of
          any governmental or regulatory body or agency,  and (iii) will not (A)
          violate (1) any provision of law,  statute,  rule or regulation or its
          certificate of incorporation or bylaws,  (2) any order of any court or
          any  rule,  regulation  or order of any  other  agency  or  government
          binding  upon it,  or (3) any  provision  of any  material  indenture,
          agreement or other  instrument  to which it is a party or by which its
          properties or assets are or may be bound, or (B) result in a breach or
          constitute  (alone  or with  due  notice  or  lapse of time or both) a
          default under any indenture, agreement or other instrument referred to
          in clause (iii)(A)(3) of this Section 2.1(e);

               (f) as of the date hereof and after giving  effect to this Second
          Amendment,  no  Default  or Event of  Default  has  occurred  which is
          continuing; and

               (g) all  the  representations  and  warranties  contained  in the
          Pledge Agreement are true and correct and are  incorporated  herein by
          reference with the same force and effect as though they were set forth
          in full herein.

SECTION 3.     CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

          3.1. This Second Amendment shall not become effective until, and shall
become effective when, each and every one of the following conditions shall have
been satisfied:

               (a) executed counterparts of this Second Amendment, duly executed
          by the  Company  and the  holders  of at least 51% of the  outstanding
          principal of the Notes, shall have been delivered to the Noteholders;

               (b) executed counterparts of the Pledge Agreement,  duly executed
          by the Company, the Bank Lenders and the Noteholders,  shall have been
          delivered to the Noteholders;

               (c) the  representations  and warranties of the Company set forth
          in Section 2 hereof and in the Pledge  Agreement  are true and correct
          on and with respect to the date hereof;

                                      -4-
<PAGE>

Second Amendment to Note Purchase Purchase Agreement

               (d) the Noteholders  shall have received the favorable opinion of
          counsel to the Company as to the matters set forth in Sections 2.1(a),
          2.1(b),  2.1(c),  2.1(d) and 2.1(e) hereof,  which opinion shall be in
          form and substance satisfactory to the Noteholders;

               (e) the  reasonable  fees and  expenses  of Chapman  and  Cutler,
          counsel  to the  Noteholders,  in  connection  with  the  negotiation,
          preparation, approval, execution and delivery of this Second Amendment
          and the Pledge Agreement, have been paid in full,

Upon  receipt  of all of the  foregoing,  this  Second  Amendment  shall  become
effective.

SECTION 4.     MISCELLANEOUS.

          4.1. This Second  Amendment  shall be construed in connection with and
as part of the Note Agreement,  and except as modified and expressly  amended by
this Second Amendment, all terms, conditions and covenants contained in the Note
Agreement  and the Notes are  hereby  ratified  and shall be and  remain in full
force and effect.

          4.2. Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second Amendment
may refer to the Note Agreement without making specific reference to this Second
Amendment  but  nevertheless  all such  references  shall  include  this  Second
Amendment unless the context otherwise requires.

          4.3. The descriptive headings of the various Sections or parts of this
Second  Amendment are for  convenience  only and shall not affect the meaning or
construction of any of the provisions hereof.

          4.4.  This Second  Amendment  shall be governed  by and  construed  in
accordance with New York law.

                                      -5-

<PAGE>

Second Amendment to Note Purchase Agreement

          4.5. The execution  hereof by you shall  constitute a contract between
us for the uses and purposes  hereinabove set forth,  and this Second  Amendment
may be  executed  in any  number  of  counterparts,  each  executed  counterpart
constituting an original, but all together only one agreement.


                              MIDAMERICAN REALTY SERVICES COMPANY


                              By   /s/ P. J. Goodman
                                   --------------------------------------------
                              Its  Sr. Vice President & Chief Financial Officer
                                   --------------------------------------------



                                      -6-

<PAGE>



Accepted and Agreed to:

                              MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY


                              By   /s/ Mark A. Ahmed
                                   -------------------
                              Its Managing Director
                                   -----------------


                                      -7-


<PAGE>



Accepted and Agreed to:

                            CM LIFE INSURANCE COMPANY


                              By   /s/ Mark A. Ahmed
                                   -----------------------------
                              Its Managing Director
                                   -----------------------------


                                      -8-



<PAGE>



Accepted and Agreed to:

                              THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA



                              By    /s/ Thomas M. Donohue
                                   -------------------------------
                              Its  Vice President
                                   -------------------------------


                                      -9-