Document:

First Supplemental Indenture, dated as of October 6, 2006 - 5.800% Notes due
      2036

     

      
        

      

    

    EXHIBIT
      4.2

     

    Execution
      Copy

     

     

     

     

    MIDAMERICAN
      ENERGY COMPANY

     

    and

     

    THE
      BANK OF NEW YORK TRUST COMPANY, NA,

     

    as
      Trustee

     

    ________________

     

    5.800%
      Notes
      due 2036

     

    ________________

     

    First
      Supplemental Indenture

     

    ________________

     

    Dated
      as
      of October 6, 2006

     

    

     

    

     

    
      
        
          

           

          

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    FIRST
      SUPPLEMENTAL INDENTURE, dated as of October 6, 2006 (herein called the
“First
      Supplemental Indenture”),
      between MIDAMERICAN ENERGY COMPANY, a corporation duly organized and existing
      under the laws of the State of Iowa (herein called the “Company”),
      and
      THE BANK OF NEW YORK TRUST COMPANY, NA, a New York banking association duly
      organized and existing under the laws of the United States of America, as
      Trustee (herein called the “Trustee”),
      under
      the Original Indenture referred to below.

     

    W
      I T N E
      S S E T H :

     

    WHEREAS,
      the Company has heretofore executed and delivered to the Trustee an indenture
      dated as of October 1, 2006 (herein called the “Original
      Indenture”),
      to
      provide for the issuance from time to time of its unsubordinated debentures,
      notes or other evidences of indebtedness, the form and terms of which are to
      be
      established as set forth in Sections 2.01 and 3.01 of the Original
      Indenture;

     

    WHEREAS,
      Section 9.01 of the Original Indenture provides, among other things, that the
      Company and the Trustee may enter into indentures supplemental to the Original
      Indenture for, among other things, (i) the purpose of establishing the form
      and
      terms of the Securities (as defined in the Original Indenture) of any series
      as
      permitted by Sections 2.01 and 3.01 of the Original Indenture, and (ii) to
      add
      to the covenants of the Company for the benefit of the Holders of all or any
      series of Securities (as defined in the Original Indenture);

     

    WHEREAS,
      the Company desires to create one series of securities to be designated the
      “5.800%
      Notes
      due 2036” and all action on the part of the Company necessary to authorize the
      issuance of up to three hundred fifty million dollars ($350,000,000) aggregate
      principal amount of such securities (the “Securities”)
      under
      the Original Indenture and this First Supplemental Indenture has been duly
      taken;

     

    WHEREAS,
      the Company and the Trustee desire to make certain amendments to the Original
      Indenture in conformance with the requirements described above; and

     

    WHEREAS,
      all acts and things necessary to make the Securities, when executed by the
      Company and authenticated and delivered by the Trustee as provided in the
      Original Indenture, the valid and binding obligations of the Company and to
      constitute these presents a valid and binding supplemental indenture and
      agreement according to its terms, have been done and performed.

     

    NOW,
      THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    That
      in
      consideration of the premises and of the acceptance and purchase of the
      Securities by the holders thereof and of the acceptance of this trust by the
      Trustee, the Company covenants and agrees with the Trustee, for the equal
      benefit of holders of the Securities, as follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    Unless
      otherwise defined herein, the use of the terms and expressions herein is in
      accordance with the definitions, uses and constructions contained in the
      Original Indenture and the form of Security attached hereto as Exhibit
      A.

     

    ARTICLE
      II

    TERMS
      AND
      ISSUANCE OF THE SECURITIES

     

    Section
      2.01. Issue
      of Securities.
      One
      series of notes, which shall be designated the “5.800%
      Notes
      due 2036”, shall be executed, authenticated and delivered in accordance with the
      provisions of, and shall in all respects be subject to, the terms, conditions
      and covenants of the Original Indenture and this First Supplemental Indenture
      (including the form of Security set forth in Exhibit
      A).
      

     

    Section
      2.02. Optional
      Redemption.
      The
      Securities may be redeemed, in whole or in part, at the option of the Company
      pursuant to the terms set forth in Annex
      1
      to the
      Securities to be redeemed. The provisions of Article XI of the Original
      Indenture shall also apply to any optional redemption of Securities by the
      Company. 

     

    Section
      2.03. Defeasance
      and Discharge.
      The
      provisions of Section 14.02 of the Original Indenture shall be applicable to
      the
      Securities. 

     

    Section
      2.04. Covenant
      Defeasance.
      The
      provisions of Section 14.03 of the Original Indenture shall be applicable to
      the
      Securities. 

     

    Section
      2.05. Place
      of Payment.
      The
      Place of Payment in respect of the Securities will be initially at the Corporate
      Trust Office of The Bank of New York Trust Company, NA (which as of the date
      hereof is located at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602,
      Attention: Corporate Trust Administration).

     

     

    
      
        
        

      

      
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    Section
      2.06. Form
      of Securities; Incorporation of Terms.
      The
      form of the Securities shall be substantially in the form of Exhibit
      A,
      the
      terms of which are herein incorporated by reference and which are part of this
      First Supplemental Indenture. The Securities shall be issued as one or more
      Global Securities in fully registered form, as determined in accordance with
      Section 2.01 of the Original Indenture. The Global Securities shall be delivered
      by the Trustee to the Depositary, as the Holder thereof, or a nominee or
      custodian therefore, to be held by the Depositary in accordance with the
      Original Indenture.

     

    Section
      2.07. Exchange
      of the Global Securities.
      Each of
      the Global Securities shall be exchangeable for definitive Securities only
      as
      provided in Section 3.05 of the Original Indenture.

     

    Section
      2.08. Regular
      Record Date for the Securities.
      The
      Regular Record Date for the Securities shall be the February 1 or
      August
      1 immediately
      prior to each Interest Payment Date. 

     

    Section
      2.09. Authorized
      Denominations. Beneficial
      interests in Global Securities, as well as definitive Securities, may be held
      only in denominations of $1,000 and integral multiples of $1,000 in excess
      thereof.

     

    Section
      2.10. Additional
      Securities.
      The
      Company may from time to time, without the consent of the Holders of the
      Securities, create and issue further securities having the same terms and
      conditions as the Securities in all respects, except for the original issue
      date
      and offering price. Additional Securities issued in this manner will be
      consolidated with, and form a single series with, the Securities and shall
      thereafter be deemed Securities for all purposes.

     

    ARTICLE
      III

    DEPOSITARY

     

    Section
      3.01. Depositary.
      The
      Depositary Trust Company, its nominees and their respective successors are
      hereby appointed Depositary with respect to the Global Securities.

     

    ARTICLE
      IV

    MISCELLANEOUS

     

    Section
      4.01. Execution
      as Supplemental Indenture.
      This
      First Supplemental Indenture is executed and shall be construed as an indenture
      supplemental to the Original Indenture and, as provided in the Original
      Indenture, this First Supplemental Indenture forms a part thereof.

     

    Section
      4.02. Effect
      of Headings.
      The
      Article and Section headings herein are for convenience only and shall not
      affect the construction hereof.

     

    
      
        
        

      

      
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    Section
      4.03. Successors
      and Assigns.
      All
      covenants and agreements contained in this First Supplemental Indenture made
      by
      the Company shall bind its successors and assigns, whether so expressed or
      not.

     

    Section
      4.04. Separability
      Clause.
      In case
      any provision in this First Supplemental Indenture or in 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
      4.05. Benefits
      of First Supplemental Indenture.
      Nothing
      in this First Supplemental Indenture or in the Securities, express or implied,
      shall give to any person, other than the parties hereto and their successors
      hereunder and the Holders of the Securities, any benefit or any legal or
      equitable right, remedy or claim under this First Supplemental
      Indenture.

     

    Section
      4.06. Execution
      and Counterparts.
      This
      First Supplemental Indenture may be executed in any number of counterparts,
      each
      of which shall be deemed to be an original, but all such counterparts shall
      together constitute but one and the same instrument.

     

    Section
      4.07. Trustee
      Not Responsible for 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 First
      Supplemental Indenture or of the Securities. The Trustee shall not be
      accountable for the use or application by the Company of the Securities or
      the
      proceeds thereof.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereof have caused this First Supplemental
      Indenture to be duly executed by their respective officers or directors duly
      authorized thereto, all as of the day and year first above written.

     

    
      	 	 	 
	 	MIDAMERICAN
              ENERGY
              COMPANY
	 
 	 
 	 
 
	 	By:  	/s/ Brian
              K. Hankel 
	 	Name: Brian K. Hankel
	 	Title:
              Vice President and Treasurer

    

     

    
      	 	 	 
	 	
              THE
                BANK OF NEW YORK TRUST COMPANY, NA,

            
	 
 	 
 	 as
              Trustee
 
	 	By:  	/s/ Roxane
              Ellwanger 
	 	Name: Roxane Ellwanger
	 	Title:
              Assistant Vice President

     

    
      
        
        

      

      
        5Distribution Agreement, dated October 3, 2006 - Medium Term Notes

    
      
        

      

    

    EXHIBIT
      4.3

     

    MIDAMERICAN
      ENERGY COMPANY

     

    Medium-Term
      Notes Due Not Less Than 9 Months from Date of Issue

     

    DISTRIBUTION
      AGREEMENT

     

    October
      3, 2006

    Credit
      Suisse Securities (USA) LLC

    11
      Madison Avenue

    New
      York,
      NY 10010

    

    J.P.
      Morgan Securities Inc.

    270
      Park
      Avenue

    New
      York,
      NY 10017

    

    LaSalle
      Financial Services, Inc.

    55
      East
      52nd
      Street

    6th
      Floor

    New
      York,
      NY 10055

    

    BNP
      Paribas Securities Corp.

    787
      Seventh Avenue

    New
      York,
      NY 10019

    

     

    Dear
      Sirs: 

     

    MidAmerican
      Energy Company, an Iowa corporation (the “Company”), confirms its agreement with
      Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc., LaSalle
      Financial Services, Inc. and BNP Paribas Securities Corp. (each, a “Principal
      Agent” and, together, the “Principal Agents” and collectively with the subagents
      listed in the Prospectus, the “Agents”), with respect to the issue and sale by
      the Company of its Medium-Term Notes described herein (the “Notes”). The Notes
      are to be issued pursuant to an indenture, dated as of October 1, 2006 (the
      “Indenture”), between the Company and The Bank of New York Trust Company, N.A.,
      as trustee (the “Trustee”). As of the date hereof, the Company has authorized
      the issuance and sale of up to $350,000,000 aggregate principal amount of Notes
      through the Agents pursuant to the terms of this Agreement. It is understood,
      however, that the Company from time to time may reduce the maximum principal
      amount of Notes which it may issue and sell or authorize the issuance of
      additional Notes and that such additional Notes may be sold through or to the
      Agents pursuant to the terms of this Agreement, all as though the issuance
      of
      such Notes were authorized as of the date hereof.

    

    This
      Agreement provides both for the sale of Notes by the Company directly to
      purchasers, in which case the Agents will act as agents of the Company in
      soliciting Note purchases, and (as may from time to time be agreed to by the
      Company and the Agents) to the Agents as principal for resale to
      purchasers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      Company has filed with the Securities and Exchange Commission (the “SEC”)
      registration statements on Form S-3 (Nos. 333-110398 and 333-134163) for the
      registration of certain securities, including the Notes, under the Securities
      Act of 1933, as amended (the “1933 Act”) and the offering thereof from time to
      time in accordance with Rule 415 of the rules and regulations of the SEC under
      the 1933 Act (the “1933 Act Regulations”). Such registration statements have
      been declared effective by the SEC and the Indenture has been qualified under
      the Trust Indenture Act of 1939, as amended (the “1939 Act”). Such registration
      statements (and any further registration statements which may be filed by the
      Company for the purpose of registering additional Notes and in connection with
      which this Agreement is included or incorporated by reference as an exhibit)
      and
      the prospectus specifically relating to the Notes constituting a part thereof
      (the “Base Prospectus”), and any prospectus supplements specifically relating to
      the Notes, including all documents incorporated therein by reference, as from
      time to time amended or supplemented by the filing of documents pursuant to
      the
      Securities Exchange Act of 1934, as amended (the “1934 Act”) or the 1933 Act or
      otherwise, are referred to herein as the “Registration Statement” and the
“Prospectus”, respectively, except that if any revised prospectus specifically
      relating to Notes shall be provided to the Agents by the Company for use in
      connection with the offering of Notes which is not required to be filed by
      the
      Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
“Prospectus” shall refer to such revised prospectus from and after the time it
      is first provided to an Agent for such use. A “Preliminary Prospectus” shall be
      deemed to refer to any prospectus and any prospectus supplement furnished by
      the
      Company after the Registration Statement became effective and before the Time
      of
      Sale with respect to a series of Notes which, pursuant to Rule 430B of the
      1933
      Act Regulations, omitted information to be included upon pricing in a form
      of
      prospectus and prospectus supplement filed with the SEC pursuant to Rule 424(b)
      of the 1933 Act Regulations. The term “Free Writing Prospectus” has the meaning
      set forth in Rule 405 of the 1933 Act Regulations. The term “Time of Sale
      Prospectus” means the Base Prospectus, as amended or supplemented from time to
      time prior to the Time of Sale and together with the most recent Preliminary
      Prospectus or preliminary Pricing Supplement relating to the offer and sale
      of
      such series of Notes immediately prior to the Time of Sale, and Pricing
      Supplement relating to the offer and sale of such Series of Notes filed or
      used
      prior to the Time of Sale, and Final Term Sheet relating to the offer and sale
      of such Notes and each Free Writing Prospectus in the form furnished to the
      Agents by the Company or approved or adopted by the Company for use prior to
      the
      Time of Sale. The term “Time of Sale” means the time or date set forth in the
      applicable Terms Agreement. For purposes of this Agreement, all references
      to
      the Registration Statement, Prospectus, Time of Sale Prospectus, Free Writing
      Prospectus, Pricing Supplement or Preliminary Prospectus or to any amendment
      or
      supplement thereto shall be deemed to include any copy filed with the SEC
      pursuant to its Electronic Data Gathering, Analysis and Retrieval system
      (“EDGAR”). 

    

    SECTION
      1.  Appointment
      As Agents.

     

    (a)
        Appointment
      of Agents.
      Subject
      to the terms and conditions stated herein and subject to the reservation by
      the
      Company of the right to sell Notes directly on its own behalf, the Company
      hereby appoints each Agent as its agent for the purpose of soliciting purchases
      of Notes from the Company by others and agrees that, except as otherwise
      contemplated herein, whenever the Company determines to sell Notes directly
      to
      an Agent or Agents as principal for resale to others, it will enter into a
      Terms
      Agreement (hereafter defined) relating to such sale in accordance with the
      provisions of Section 3(b) hereof. The Agents are authorized to appoint
      sub-agents or to engage the services of any other broker or dealer in connection
      with the offer or sale of Notes. The Company agrees that, during the period
      any
      Agent is acting as the Company’s Agent hereunder, the Company will not contact
      or solicit potential investors introduced to it by such Agent to purchase Notes.
      The Company may appoint, upon one day prior written notice to the Agents,
      additional persons to serve as Agent hereunder, but only if each such additional
      person agrees to be bound by all of the terms of this Agreement as an
      agent.

     

    
      
        
        

      

      
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    (b)
        Reasonable
      Efforts Solicitations; Right to Reject Offers.
      Upon
      receipt of instructions from the Company, the Agents will use their reasonable
      efforts to solicit purchases of such principal amount of Notes as the Company
      and the Agents shall agree upon from time to time during the term of this
      Agreement, it being understood that the Company shall not approve the
      solicitation of purchases of Notes in excess of the amount which shall be
      authorized by the Company from time to time or in excess of the principal amount
      of Notes registered pursuant to the Registration Statement. The Agents will
      have
      no responsibility for maintaining records with respect to the aggregate
      principal amount of Notes sold, or of otherwise monitoring the availability
      of
      Notes for sale under the Registration Statement. The Agents will communicate
      to
      the Company, orally or in writing, each offer to purchase Notes, other than
      those offers rejected by an Agent. Each Agent shall have the right, in its
      discretion reasonably exercised, to reject any proposed purchase of Notes,
      as a
      whole or in part, and any such rejection shall not be deemed a breach of such
      Agent’s agreement contained herein. The Company may accept or reject any
      proposed purchase of Notes, in whole or in part.

     

    (c)
        Solicitations
      as Agent; Purchases as Principal.
      In
      soliciting purchases of Notes on behalf of the Company, each Agent shall act
      solely as agent for the Company and not as principal. Each Agent shall make
      reasonable efforts to assist the Company in obtaining performance by each
      purchaser whose offer to purchase Notes has been solicited by such Agent and
      accepted by the Company. Such Agent shall not have any liability to the Company
      in the event any such purchase is not consummated for any reason. Such Agent
      shall not have any obligation to purchase Notes from the Company as principal,
      but an Agent may agree from time to time to purchase Notes as principal. Any
      such purchase of Notes by an Agent as principal shall be made pursuant to a
      Terms Agreement in accordance with Section 3(b) hereof.

     

    (d)
        Reliance.
      The
      Company and each Agent agree that any Notes the placement of which such Agent
      arranges shall be placed by such Agent, and any Notes purchased by such Agent
      shall be purchased, in reliance on the representations, warranties, covenants
      and agreements of the Company contained herein and on the terms and conditions
      and in the manner provided herein.

     

    SECTION
      2.  Representations
      and Warranties.

     

    (a)
        The
      Company represents and warrants to each Agent as of the date hereof, as of
      the
      date of each acceptance by the Company of an offer for the purchase of Notes
      (whether through any Agent as agent or to any Agent as principal), as of the
      date of each delivery of Notes (whether through such Agent as agent or to such
      Agent as principal) (the date of each such delivery to such Agent as principal
      being hereafter referred to as a “Settlement Date”), as of the date that the
      Registration Statement became effective (the “Initial Effective Date”), as of
      any time that the Registration Statement or the Prospectus shall be amended
      or
      supplemented (other than by an amendment or supplement providing solely for
      a
      change in the interest rates of the Notes or similar changes) (with respect
      to
      the Registration Statement, a “Subsequent Effective Date”) or there is filed
      with the SEC any document incorporated by reference into the Prospectus (other
      than any Current Report on Form 8-K relating exclusively to the issuance of
      debt
      securities under the Registration Statement, unless the Agents shall otherwise
      specify), as of the relevant new effective date as determined pursuant to Rule
      430B(f)(2) of the 1933 Act Regulations with respect to the applicable series
      of
      Notes (the “Note Effective Date” and together with the Initial Effective Date
      and any Subsequent Effective Date, the “Registration Statement Effective Date”)
      (each of the times referenced above being referred to herein as a
“Representation Date”) as follows:

     

    
      
        
        

      

      
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    (i)
        Due
      Incorporation and Qualification.
      The
      Company has been duly incorporated and is validly existing as a corporation
      in
      good standing under the laws of the state of Iowa with corporate power and
      authority to own, lease and operate its properties and to conduct its business
      as described in the Time of Sale Prospectus; and the Company is duly qualified
      as a foreign corporation to transact business and is in good standing in each
      jurisdiction in which such qualification is required, whether by reason of
      the
      ownership or leasing of property or the conduct of business, except where the
      failure to so qualify and be in good standing would not have a material adverse
      effect on the condition, financial or otherwise, or the earnings, business
      affairs or business prospects of the Company.

     

    (ii)
        Public
      Utility.
      The
      Company has the legal right to function and operate as an electric public
      utility company in the States of Iowa, Illinois and South Dakota, and as a
      gas
      public utility company in the States of Iowa, Illinois, South Dakota and
      Nebraska.

     

    (iii)
        Subsidiaries.  The
      Company has no significant subsidiaries, as “significant subsidiary” is defined
      in Rule 405 of Regulation C of the 1933 Act Regulations.

     

    (iv)
        Ineligible
      Issuer Status.
      At the
      time of initial filing of the Registration Statement and at the earliest time
      thereafter that the Company or another offering participant made a bona fide
      offer (within the meaning of Rule 162(h)(2) of the 1933 Act Regulations) of
      any
      Notes and at each Representation Date at the date of this Agreement, the Company
      was not and is not an “ineligible issuer,” as defined in
      Rule 405.

     

    (v)
        Registration
      Statement, Prospectus, Time of Sale Prospectus and Free Writing
      Prospectus.  At
      the respective times that each part of the Registration Statement became
      effective, the Registration Statement and any applicable amendments complied,
      and as of each Representation Date will comply, in all material respects, with
      the requirements of the 1933 Act and the 1933 Act Regulations and the 1939
      Act
      and the rules and regulations of the SEC promulgated thereunder. The
      Registration Statement, at the time it became effective and at the Initial
      Effective Date, did not, and at each time thereafter at which any amendment
      to
      the Registration Statement becomes effective or any Annual Report on Form 10-K
      is filed by the Company with the SEC and as of each Representation Date, will
      not, contain an untrue statement of a material fact or omit to state a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading. The Prospectus filed as part of the Registration Statement
      complied when so filed in all material respects with the 1933 Act and the 1933
      Act Regulations. At the date of this Agreement, at the date of the Base
      Prospectus and each amendment or supplement thereto and at each Representation
      Date, neither the Base Prospectus nor any amendment or supplement thereto
      included an untrue statement of a material fact or omitted to state a material
      fact necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading. The Time of Sale
      Prospectus does not, and at the Time of Sale and at the applicable Settlement
      Date, the Time of Sale Prospectus, as then amended or supplemented by the
      Company, if applicable, will not, contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements therein,
      in the light of the circumstances under which they were made, not misleading;
      provided, however, that the representations and warranties in this subsection
      shall not apply to statements in or omissions from the Registration Statement
      or
      Prospectus made in reliance upon and in conformity with information furnished
      to
      the Company in writing by the Agents expressly for use in the Registration
      Statement or Prospectus, it being understood and agreed that the only such
      information furnished by any Agent consists of the information described as
      such
      in the applicable Terms Agreement.

     

    
      
        
        

      

      
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    (vi)
        Incorporated
      Documents.  The
      documents incorporated by reference in the Prospectus and the Time of Sale
      Prospectus, at the time they were or hereafter are filed with the SEC, complied
      or when so filed will comply, as the case may be, in all material respects
      with
      the requirements of the 1934 Act and the rules and regulations promulgated
      thereunder (“1934 Act Regulations”), and, when read together with the other
      information in the Prospectus and the Time of Sale Prospectus, did not and
      will
      at all times during the period specified in Section 5(e) hereof not contain
      an
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary in order to make the statements therein, in
      the
      light of the circumstances under which they were or are made, not misleading.
      The Company is in compliance in all material respects with all the applicable
      provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
      promulgated thereunder.

     

    (vii)
        Accountants.  The
      accountants who issued their reports on the financial statements included or
      incorporated by reference in the Registration Statement and the Time of Sale
      Prospectus are an independent registered public accounting firm within the
      meaning of the 1933 Act and the 1933 Act Regulations.

     

    (viii)
        Financial
      Statements.  The
      financial statements and any supporting schedules of the Company included or
      incorporated by reference in the Registration Statement, the Prospectus and
      the
      Time of Sale Prospectus present fairly the financial position of the Company
      as
      of the dates indicated and the results of its operations for the periods
      specified; and, except as stated therein, said financial statements have been
      prepared in conformity with generally accepted accounting principles in the
      United States applied on a consistent basis; and any supporting schedules
      included or incorporated by reference in the Registration Statement, the
      Prospectus and the Time of Sale Prospectus present fairly the information
      required to be stated therein.

     

    
      
        
        

      

      
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    (ix)
        Authorization
      and Validity of this Agreement, any Applicable Terms Agreement, the Indenture
      and the Notes.  Each
      of this Agreement and any applicable Terms Agreement has been duly authorized
      and, upon execution and delivery by the Agents, will be a legal, valid and
      binding agreement of the Company; the Indenture has been duly authorized and
      constitutes a legal, valid and binding obligation of the Company enforceable
      against the Company in accordance with its terms; the Notes have been duly
      and
      validly authorized for issuance, offer and sale pursuant to this Agreement
      and,
      when issued, authenticated and delivered pursuant to the provisions of this
      Agreement and the Indenture against payment of the consideration therefor
      specified in the Prospectus or pursuant to any Terms Agreement, the Notes will
      constitute legal, valid and binding obligations of the Company enforceable
      against the Company in accordance with their terms; except as enforcement of
      the
      Indenture and the Notes may be limited by bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to or
      affecting the enforcement of creditors’ rights generally and general equitable
      principles; the Notes and the Indenture will be substantially in the form
      heretofore delivered to the Agents and conform in all material respects to
      all
      statements relating thereto contained in the Time of Sale Prospectus; and the
      Notes will be entitled to the benefits provided by the Indenture.

     

    (x)
        Material
      Changes or Material Transactions.  Since
      the respective dates as of which information is given in the Registration
      Statement, the Prospectus and the Time of Sale Prospectus, except as may
      otherwise be stated therein or contemplated thereby, (A) there has been no
      material adverse change in the condition, financial or otherwise, or in the
      earnings, business affairs or business prospects of the Company, whether or
      not
      arising in the ordinary course of business, and (B) there have been no material
      transactions entered into by the Company other than those in the ordinary course
      of business.

     

    (xi)
        No
      Defaults.  The
      Company is not in violation of its Restated Articles of Incorporation, as
      amended, or bylaws, or in default in the performance or observance of any
      material obligation, agreement, covenant or condition contained in any contract,
      indenture, mortgage, loan agreement, note, lease or other instrument to which
      it
      is a party or by which it or its properties may be bound; the execution and
      delivery of this Agreement, the Indenture and any applicable Terms Agreement
      and
      the consummation of the transactions contemplated herein and therein have been
      duly authorized by all necessary corporate action and will not conflict with,
      constitute a breach of or default under, or result in the creation or imposition
      of any lien, charge or encumbrance upon any material property or assets of
      the
      Company or any of its subsidiaries pursuant to, any contract, indenture,
      mortgage, loan agreement, note, lease or other instrument to which the Company
      or any of its subsidiaries is a party or by which the Company or any of its
      subsidiaries may be bound or to which any of the material property or assets
      of
      the Company or any such subsidiary is subject, nor will such action result
      in
      any violation of the Restated Articles of Incorporation, as amended, or bylaws
      of the Company or any law, administrative regulation or administrative or court
      order or decree.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (xii)
        Regulatory
      Approvals.
      The
      Company has made all necessary filings and obtained all necessary consents,
      orders or approvals from the Federal Energy Regulatory Commission (“FERC”) and
      the Illinois Commerce Commission (“ICC”) in connection with the issuance and
      sale of the Notes and the application of the proceeds thereof, and no consent,
      approval, authorization, order or decree of any other court or governmental
      agency or body is required for the consummation by the Company of the
      transactions contemplated by this Agreement, except such as may be required
      under state securities (“Blue Sky”) laws.

     

    (xiii)
        Legal
      Proceedings; Contracts.
      Except
      as may be set forth in the Registration Statement and the Time of Sale
      Prospectus, there is no action, suit or proceeding before or by any court or
      governmental agency or body, domestic or foreign, now pending, or, to the
      knowledge of the Company, threatened against or affecting, the Company which
      would be reasonably likely to result in any material adverse change in the
      condition, financial or otherwise, or in the earnings, business affairs or
      business prospects of the Company, or would be reasonably likely to materially
      and adversely affect its properties or assets or would be reasonably likely
      to
      materially and adversely affect the consummation of this Agreement, the
      Indenture or any applicable Terms Agreement; and there are no contracts or
      documents of the Company which are required to be filed as exhibits to the
      Registration Statement by the 1933 Act or by the 1933 Act Regulations which
      have
      not been so filed.

     

    (b)
        Additional
      Certifications.
      Any
      certificate signed by any director or officer of the Company and delivered
      to
      the Agents or to counsel for the Agents in connection with an offering of Notes
      or the sale of Notes to the Agents as principal shall be deemed a representation
      and warranty by the Company to the Agents as to the matters covered thereby
      on
      the date of such certificate and at each Representation Date subsequent
      thereto.

     

    SECTION
      3.  Solicitations
      as Agents; Purchases as Principal.

     

    (a)
        Solicitations
      as Agents.
      On the
      basis of the representations and warranties herein contained, but subject to
      the
      terms and conditions herein set forth, each Agent agrees, as the agent of the
      Company, to use its reasonable efforts to solicit offers to purchase the Notes
      upon the terms and conditions set forth herein and in the
      Prospectus.

     

    The
      Company reserves the right, in its sole discretion, to suspend solicitation
      of
      purchases of Notes through any Agent, as agent, commencing at any time for
      any
      period of time or permanently. Upon receipt of instructions from the Company,
      such Agent will forthwith suspend solicitation of purchases from the Company
      until such time as the Company has advised such Agent that such solicitation
      may
      be resumed.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    The
      Company agrees to pay each Agent a commission, in the form of a discount, equal
      to a percentage of the principal amount of each Note sold by the Company as
      a
      result of a solicitation made by such Agent, such percentage to be as agreed
      upon by the Company and the Agents. The Agents may allow any portion of the
      commission payable pursuant hereto to dealers or purchasers in connection with
      the offer and sale of any Notes.

     

    The
      purchase price, interest rate, maturity date and other terms of the Notes shall
      be agreed upon by the Company and the Agents and set forth in a pricing
      supplement (each, a “Pricing Supplement”) to the Prospectus to be prepared
      following each acceptance by the Company of an offer for the purchase of Notes.
      Except as may be otherwise provided in such supplement to the Prospectus, the
      Notes will be issued in denominations of $1,000 or any larger amount that is
      an
      integral multiple of $1,000. All Notes sold through any Agent as agent will
      be
      sold at 100% of their principal amount unless otherwise agreed to by the Company
      and such Agent.

     

    (b)
        Purchases
      as Principal.
      Each
      sale of Notes to an Agent as principal shall be made in accordance with the
      terms contained herein and (unless the Company and such Agent shall otherwise
      agree) pursuant to a separate agreement which will provide for the sale of
      such
      Notes to, and the purchase and reoffering thereof by, such Agent. Each such
      separate agreement (which may be an oral agreement) between such Agent and
      the
      Company is herein referred to as a “Terms Agreement”. Unless the context
      otherwise requires, each reference contained herein to “this Agreement” shall be
      deemed to include any applicable Terms Agreement between the Company and such
      Agent. Each such Terms Agreement, whether oral or in writing, shall be with
      respect to such information (as applicable) as is specified in the form of
      Terms
      Agreement attached as Exhibit A hereto. Such Agent’s commitment to purchase
      Notes as principal pursuant to any Terms Agreement or otherwise shall be deemed
      to have been made on the basis of the representations and warranties of the
      Company herein contained and shall be subject to the terms and conditions herein
      set forth. Each Terms Agreement shall specify the principal amount of Notes
      to
      be purchased by such Agent pursuant thereto, the price to be paid to the Company
      for such Notes (which, if not so specified in a Terms Agreement, shall be at
      a
      discount equivalent to the applicable commission as agreed upon by the Company
      and the Agents), the time and place of delivery of and payment for such Notes,
      any provisions relating to rights of, and default by, purchasers acting together
      with such Agent in the reoffering of the Notes, and such other provisions
      (including further terms of the Notes) as may be mutually agreed upon. Such
      Agent may utilize a selling or dealer group in connection with the resale of
      the
      Notes purchased. Such Terms Agreement shall also specify the requirements for
      the opinions of counsel, officers’ certificate and comfort letter pursuant to
      Sections 6(c), 6(d), 6(e) and 6(f) hereof.

     

    (c)
        Administrative
      Procedures.
      Administrative procedures with respect to the sale of Notes shall be agreed
      upon
      from time to time by the Agents and the Company (the “Procedures”). The Agents
      and the Company agree to perform the respective duties and obligations
      specifically provided to be performed by them in the Procedures.

     

    SECTION
      4.  Free
      Writing Prospectuses.

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (a)
        Issuer
      Free
      Writing Prospectuses.
      The
      Company represents and agrees that, unless it obtains the prior consent of
      the
      Principal Agents, and each Agent represents and agrees that, unless it obtains
      the prior consent of the Company and the Principal Agents, it has not made
      and
      will not make any offer relating to the Notes that would constitute a free
      writing prospectus, as defined in rule 433, relating to the Notes in the form
      filed as required to be filed with the SEC or, if not required to be filed,
      in
      the form retained in the Company's records pursuant to Rule 433(g) (an “Issuer
      Free Writing Prospectus”), or that would otherwise constitute a Free Writing
      Prospectus, required
      to be filed with the SEC. The Company represents that it has treated and agrees
      that it will treat each Permitted Free Writing Prospectus as an “issuer free
      writing prospectus,” as defined in Rule 433, and
      has
      complied and will comply with the requirements of Rules 164 and 433
      applicable to any Permitted Free Writing Prospectus, including timely SEC filing
      where required, legending and record keeping. 

     

    (b)
        Term
      Sheets.
      The
      Company will prepare a final term sheet relating to the Notes, containing only
      information that describes the final terms of the Notes in a form as attached
      hereto as Exhibit B or otherwise as consented to by the Principal Agents, and
      will file such final term sheet within the period required by
      Rule 433(d)(5)(ii) following the date such final terms have been
      established for all classes of the offering of the Offered Securities. Any
      such
      final term sheet is an Issuer Free Writing Prospectus and a Permitted Free
      Writing Prospectus for purposes of this Agreement. The Company also consents
      to
      the use by any Agent of a free writing prospectus that contains only (i)
      information that describes the final terms of the Notes or their offering and
      that is included in the final term sheet of the Company contemplated in the
      first sentence of this subsection or (ii) other information that is not
“issuer information,” as defined in Rule 433, it being understood that any
      such free writing prospectus referred to in clause (i) or (ii) above
      shall not be an Issuer Free Writing Prospectus for purposes of this
      Agreement.

     

    (c)
        No
      Conflicting Information.
      In
      connection with the offer and sale of the Notes, any Free Writing Prospectus
      (i)
      that is required to be filed pursuant to Rule 433(d) of the 1933 Act Regulations
      (including any Final Term Sheet), (ii) that is or will be a part of the Time
      of
      Sale Prospectus relating to or to be used in connection with such offer and
      sale
      of the Notes or (iii) the use of which has been consented to by the applicable
      Agents pursuant to this Section 4, is referred to herein as a “Permitted Free
      Writing Prospectus”. Each Agent represents, warrants, covenants and agrees that
      it shall not prepare and disseminate any Free Writing Prospectus that contains
      information that conflicts with the information contained in the Registration
      Statement, the applicable Time of Sale Prospectus or the applicable Prospectus;
      provided, however, that no representation, warranty, covenant and agreement is
      made with respect to information in such Free Writing Prospectus that has been
      furnished in writing by the Company to such Agent specifically for the use
      therein.

     

    (d)
        Issuer
      Free Writing Prospectuses.
      Each
      Issuer Free Writing Prospectus, as of its issue date and at all subsequent
      times
      through the completion of the public offer and sale of the Offered Securities
      or
      until any earlier date that the Company notified or notifies the Principal
      Agents as described in the next sentence, did not, does not and will not include
      any information that conflicted, conflicts or will conflict with the information
      then contained in the Registration Statement. If at any time following issuance
      of an Issuer Free Writing Prospectus there occurred or occurs an event or
      development as a result of which such Issuer Free Writing Prospectus conflicted
      or would conflict with the information then contained in the Registration
      Statement or as a result of which such Issuer Free Writing Prospectus, if
      republished immediately following such event or development, would include
      an
      untrue statement of a material fact or omitted or would omit to state a material
      fact necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading, (i) the Company
      has promptly notified or will promptly notify the Principal Agents and
      (ii) the Company has promptly amended or will promptly amend or supplement
      such Issuer Free Writing Prospectus to eliminate or correct such conflict,
      untrue statement or omission. 

     

    
      
        
        

      

      
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    (e)
        Copies.
      The
      Company will deliver to each Agent, without charge, such number of copies of
      each Free Writing Prospectus prepared by or on behalf of or used or referred
      to
      by the Company as each such Agent may reasonably request. To the extent
      applicable, each such document furnished to the Agents will be identical to
      any
      electronically transmitted copies thereof filed with the SEC pursuant to EDGAR,
      except to the extent permitted by Regulation S-T.

     

    SECTION
      5.  Covenants
      of the Company.

     

    The
      Company covenants with the Principal Agents as follows:

     

    (a)
        Rule
      424(b) Filing.
      Promptly following execution of this Agreement, to cause the Prospectus,
      including as part thereof a prospectus supplement relating to the Notes, to
      be
      filed with, or mailed for filing to, the SEC pursuant to Rule 424(b)(2) and
      (3)
      under the 1933 Act and the Company will promptly advise the Principal Agents
      when such filing or mailing has been made. Prior to such filing or mailing,
      the
      Company will cooperate with the Principal Agents in the preparation of such
      supplement to the Prospectus to assure that the Principal Agents have no
      reasonable objection to the form or content thereof when filed or
      mailed.

     

    (b)
        FERC
      or ICC Action.
      To
      advise the Principal Agents promptly of any additional action by the FERC or
      ICC
      pertaining to the Notes.

     

    (c)
        Copies
      of 1933 Act Documents.
      To
      furnish promptly to the Principal Agents and to counsel for the Agents one
      signed copy of the Registration Statement as originally filed and each amendment
      thereto filed prior to the date hereof and relating to the Notes, and a copy
      of
      the Prospectus filed with the SEC, including all documents incorporated therein
      by reference and all consents and exhibits filed therewith.

     

    (d)
        Conformed
      Copies.
      To
      deliver promptly to the Principal Agents such reasonable number of the following
      documents as the Agents may request: (i) conformed copies of the Registration
      Statement (excluding exhibits other than the computation of the ratio of
      earnings to fixed charges, the Indenture, and this Agreement), (ii) the
      Prospectus and the Time of Sale Prospectus and (iii) any documents incorporated
      by reference in the Prospectus.

     

    (e)
        Revisions
      of Prospectus — Material Changes.
      Except
      as otherwise provided in subsection (q) of this Section, if at any time during
      the term of this Agreement any event shall occur or condition exist as a result
      of which it is necessary, in the reasonable opinion of counsel for the Principal
      Agents or counsel for the Company, to further amend or supplement the
      Registration Statement or Prospectus in order that the Registration Statement
      or
      Prospectus will not include an untrue statement of a material fact or omit
      to
      state any material fact necessary in order to make the statements therein not
      misleading in the light of the circumstances existing at the time the
      Registration Statement or Prospectus is delivered to a Note purchaser, or if
      it
      shall be necessary, in the reasonable opinion of either such counsel, to amend
      or supplement the Registration Statement or the Prospectus in order to comply
      with the requirements of the 1933 Act or the 1933 Act Regulations, immediate
      notice shall be given, and confirmed in writing, to the Principal Agents to
      cease the solicitation of offers to purchase the Notes in each Principal Agent’s
      capacity as agent and to cease sales of any Notes any Principal Agent may then
      own as principal pursuant to a Terms Agreement, and the Company will promptly
      prepare and file with the SEC such amendment or supplement, whether by filing
      documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
      necessary to correct such untrue statement or omission or to make the
      Registration Statement and Prospectus comply with such
      requirements.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f)
        Principal
      Agents’ Review.
      Prior
      to filing with the SEC during the term of this Agreement, (i) any amendment
      to
      the Registration Statement, (ii) the Prospectus, the Time of Sale Prospectus
      or
      any supplement thereto or (iii) any document incorporated by reference in any
      of
      the foregoing or any amendment or supplement to such incorporated document,
      to
      furnish a copy thereof to the Principal Agents and to counsel for the Principal
      Agents, and the Company will not file any amendment to the Registration
      Statement or supplement to the Prospectus or Time of Sale Prospectus unless
      the
      Company has furnished to the Principal Agents a copy of such document for review
      prior to filing and will not file any such proposed amendment or supplement
      to
      which the Agents reasonably object.

     

    (g)
        Notices
      to Principal Agents.
      To
      advise the Principal Agents promptly during the term of this Agreement, (i)
      when
      any post-effective amendment to the Registration Statement becomes effective,
      (ii) of any request or proposed request by the SEC for an amendment or
      supplement to the Registration Statement, to the Time of Sale Prospectus, to
      any
      document incorporated by reference in any of the foregoing or for any additional
      information, (iii) of the issuance by the SEC of any stop order suspending
      the
      effectiveness of the Registration Statement or any order directed to the Time
      of
      Sale Prospectus or any document incorporated therein by reference or the
      initiation or threat of any stop order proceeding or of any challenge by the
      SEC
      to the accuracy or adequacy of any document incorporated by reference in the
      Time of Sale Prospectus, (iv) of receipt by the Company of any notification
      with
      respect to the suspension of the qualification of the Notes for sale in any
      jurisdiction or the initiation or threat of any proceeding for that purpose
      and
      (v) of the happening of any event which makes untrue any statement of a material
      fact made in the Registration Statement (insofar as the Registration Statement
      relates to or covers the Notes) or the Time of Sale Prospectus or which requires
      the making of a change in the Registration Statement or the Time of Sale
      Prospectus in order to make any material statement therein not
      misleading.

     

    (h)
        Preparation
      of Pricing Supplements.
      The
      Company will prepare, with respect to any Notes to be sold through or to any
      of
      the Agents pursuant to this Agreement, a Pricing Supplement with respect to
      such
      Notes in a form previously approved by the Agents and will file such Pricing
      Supplement pursuant to Rule 424(b)(3) under the 1933 Act not later than the
      close of business of the SEC on the fifth business day after the date on which
      such Pricing Supplement is first used.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (i)
        Prospectus
      Revisions — Periodic Financial Information.
      Except
      as otherwise provided in subsection (q) of this Section, on or prior to the
      date
      on which there shall be released to the general public interim financial
      statement information related to the Company with respect to each of the first
      three quarters of any fiscal year or preliminary financial statement information
      with respect to any fiscal year, the Company shall furnish such information
      to
      the Principal Agents, confirmed in writing, and shall cause the Prospectus
      to be
      amended or supplemented to include or incorporate by reference financial
      information with respect thereto and corresponding information for the
      comparable period of the preceding fiscal year, as well as such other
      information and explanations as shall be necessary for an understanding thereof
      or as shall be required by the 1933 Act or the 1933 Act
      Regulations.

     

    (j)
        Prospectus
      Revisions — Audited Financial Information.
      Except
      as otherwise provided in subsection (q) of this Section, on or prior to the
      date
      on which there shall be released to the general public financial information
      included in or derived from the audited financial statements of the Company
      for
      the preceding fiscal year, the Company shall cause the Registration Statement
      and the Time of Sale Prospectus to be amended, whether by the filing of
      documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include or
      incorporate by reference such audited financial statements and the report or
      reports, and consent or consents to such inclusion or incorporation by
      reference, of the independent registered public accounting firm with respect
      thereto, as well as such other information and explanations as shall be
      necessary for an understanding of such financial statements or as shall be
      required by the 1933 Act or the 1933 Act Regulations.

     

    (k)
        Stop
      Order.
      If,
      during the term of this Agreement, the SEC shall issue a stop order suspending
      the effectiveness of the Registration Statement, to make every reasonable effort
      to obtain the lifting of that order at the earliest possible time.

     

    (l)
        Earnings
      Statement.
      As soon
      as practicable, to make generally available to its security holders and to
      deliver to the Principal Agents an earnings statement, conforming with the
      requirements of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act
      Regulations, covering a period of at least twelve months beginning after the
      effective date of the Registration Statement as defined in Rule 158(c) of the
      1933 Act Regulations.

     

    (m)
        Shareholder
      and Other Reports.
      During
      the period of five years hereafter, or such lesser period as any of the Notes
      shall be outstanding, to furnish to the Principal Agents, (i) as soon as
      available, a copy of each report of the Company mailed to its shareholders
      or
      report filed by the Company with the SEC and (ii) from time to time such other
      information concerning the Company as the Principal Agents may reasonably
      request.

     

    (n)
        Blue
      Sky Qualifications.
      The
      Company will endeavor, in cooperation with the Agents, to qualify the Notes
      for
      offering and sale under the applicable securities laws of such states and other
      jurisdictions of the United States as the Principal Agents may designate, and
      will maintain such qualifications in effect for as long as may be required
      for
      the distribution of the Notes; provided, however, that the Company shall not
      be
      obligated to file any general consent to service of process or to qualify as
      a
      foreign corporation in any jurisdiction in which it is not so qualified. The
      Company will file such statements and reports as may be required by the laws
      of
      each jurisdiction in which the Notes have been qualified as above provided.
      The
      Company will promptly advise the Principal Agents of the receipt by the Company
      of any notification with respect to the suspension of the qualification of
      the
      Notes for sale in any such state or jurisdiction or the initiating or
      threatening of any proceeding for such purpose.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (o)
        1934
      Act Filings.
      The
      Company, during the period when the Prospectus is required to be delivered
      under
      the 1933 Act, will file promptly all documents required to be filed with the
      SEC
      pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act.

     

    (p)
        Stand-Off
      Agreement.
      If
      required pursuant to the terms of a Terms Agreement, between the date of any
      Terms Agreement and the Settlement Date with respect to such Terms Agreement,
      the Company will not, without the prior consent of the Principal Agents, offer
      or sell, or enter into any agreement to sell, any debt securities of the Company
      (other than the Notes that are to be sold pursuant to such Terms Agreement
      and
      commercial paper in the ordinary course of business).

     

    (q)
        Suspension
      of Certain Obligations.
      The
      Company shall not be required to comply with the provisions of subsections
      (e),
      (i) or (j) of this Section during any period from the time (i) the Agents shall
      have suspended solicitation of purchases of the Notes in their capacity as
      agents pursuant to a request from the Company and (ii) the Agents shall not
      then
      hold any Notes as principal purchased pursuant to a Terms Agreement, to the
      time
      the Company shall determine that solicitation of purchases of the Notes should
      be resumed or shall subsequently enter into a new Terms Agreement with an
      Agent.

     

    (r)
        Condition
      to Agency Transactions.
      Any
      person who has agreed to purchase Notes as the result of an offer to purchase
      solicited by an Agent shall have the right to refuse to purchase and pay for
      such Notes if, on the related settlement date fixed pursuant to the Procedures,
      (i) there shall have occurred, subsequent to the date on which such person
      agreed to purchase the Notes (the “Trade Date”) or subsequent to the respective
      dates as of which information is given in the Registration Statement, (A) any
      material adverse change in the condition, financial or otherwise, or in the
      earnings, business affairs or business prospects of the Company, whether or
      not
      arising in the ordinary course of business, (B) any attack on, or outbreak
      or
      escalation of hostilities or act of terrorism involving, the United States,
      any
      declaration of war by Congress or any other national or international calamity
      or emergency, if in the reasonable judgment of such person the effect of any
      such attack, outbreak, escalation, act of terrorism, declaration of war,
      calamity or emergency makes it impracticable or inadvisable to purchase the
      Notes, (C) any material suspension or material limitation of trading in
      securities generally on the New York Stock Exchange, or any setting of minimum
      prices for trading on such exchange, or any suspension of trading of any
      securities of the Company on any exchange or in the over-the-counter market,
      or
      (D) any banking moratorium declared by U.S. Federal or New York authorities;
      or
      (ii) the rating assigned by any nationally recognized securities rating agency
      to any debt securities of the Company as of the Trade Date shall have been
      lowered since that date or if any such rating agency shall have publicly
      announced that it has under surveillance or review, with possible negative
      implications, its rating of any debt securities of the Company.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (s)
        Costs.
      To pay
      all costs incident to the authorization, issuance, sale and delivery of the
      Notes; the costs incident to the preparation, printing and filing under the
      1933
      Act of the Registration Statement and the Prospectus and any amendments,
      supplements and exhibits thereto; the costs incident to the preparation,
      printing and filing of the documents and any amendments and exhibits thereto
      required to be filed by the Company under the 1934 Act; the costs of
      distributing the Registration Statement as originally filed and each amendment
      and post-effective amendment thereto (including exhibits), any preliminary
      prospectus, the Prospectus and any documents incorporated by reference in any
      of
      the foregoing documents; the costs of printing this Agreement, the Indenture
      and
      any Terms Agreement; the costs of any filings with the National Association
      of
      Securities Dealers, Inc.; fees paid to rating agencies in connection with the
      rating of the Notes; the fees and expenses of qualifying the Notes under the
      securities laws of the several jurisdictions as provided in subsection (n)
      of
      this Section and of preparing and printing a Blue Sky Memorandum (including
      fees
      of counsel to the Agents in such connection not to exceed $10,000 in the
      aggregate); the reasonable fees and expenses of counsel for the Agents; and
      all
      other costs and expenses incident to the performance of the Company’s
      obligations under this Agreement (including fees and expenses of the Company’s
      counsel); provided that, except as provided in this Section 5(s), the Agents
      shall pay their own costs and expenses, any transfer taxes on the Notes which
      they may sell and the expenses of advertising any offering of the Notes made
      by
      the Agents.

     

    SECTION
      6.  Conditions
      of Obligations.

     

    The
      obligations of each Agent to solicit offers to purchase Notes as agent of the
      Company, the obligations of any purchasers of Notes sold through such Agent
      as
      agent, and any obligation of such Agent to purchase Notes pursuant to a Terms
      Agreement or otherwise will be subject to the accuracy of the representations
      and warranties on the part of the Company herein and to the accuracy of the
      statements of the Company’s officers made in any certificate furnished pursuant
      to the provisions hereof, to the performance and observance by the Company
      of
      all of its covenants and agreements herein contained and to each of the
      following additional terms and conditions applicable to the Notes:

     

    (a)
        No
      Stop Order.
      At or
      before the date hereof, no stop order suspending the effectiveness of the
      Registration Statement nor any order directed to any document incorporated
      by
      reference in the Prospectus shall have been issued and prior to that time no
      stop order proceeding shall have been initiated or threatened by the SEC and
      no
      challenge shall have been made by the SEC to the accuracy or adequacy of any
      document incorporated by reference in the Prospectus; any request of the SEC
      for
      inclusion of additional information in the Registration Statement or the
      Prospectus or otherwise shall have been complied with and there shall be no
      material adverse change in the financial condition of the Company.

     

    (b)
        Legal
      Matters.
      All
      corporate proceedings and other legal matters incident to the authorization,
      form and validity of this Agreement, the Indenture, any Terms Agreement, the
      Notes, the form of the Registration Statement, the Prospectus and the Time
      of
      Sale Prospectus (other than financial statements and other financial data)
      and
      all other legal matters relating to this Agreement and the transactions
      contemplated hereby shall be satisfactory in all respects to LeBoeuf, Lamb,
      Greene & MacRae LLP, counsel for the Agents, and the Company shall have
      furnished to such counsel all documents and information that they may reasonably
      request to enable them to pass upon such matters.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (c)
        Opinion
      of Company Counsel.
      Paul J.
      Leighton, Esq., counsel to the Company, shall have furnished to the Principal
      Agents a letter addressed to the Principal Agents and dated the date hereof
      stating his opinion to the effect that:

     

    (i)
        the
      Company is a validly organized and existing corporation in good standing under
      the laws of the State of Iowa; and the Company is an indirect subsidiary of
      MidAmerican Energy Holdings Company, an Iowa corporation;

     

    (ii)
        this
      Agreement and each Terms Agreement, if any, has been duly authorized, executed
      and delivered by the Company and is a valid and binding agreement of the Company
      in accordance with its terms, except as rights to indemnity hereunder may be
      limited by applicable law and except as enforcement hereof may be limited by
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
      other similar laws relating to or affecting enforcement of creditors’ rights
      generally and general principles of equity;

     

    (iii)
        the
      Indenture is in due and proper form, has been duly and validly authorized by
      the
      necessary corporate action, has been duly and validly executed and delivered
      and
      is a valid instrument legally binding on the Company, except as enforcement
      thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium or other similar laws relating to or affecting
      enforcement of creditors’ rights generally or by general equitable
      principles;

     

    (iv)
        the
      Notes
      are in due and proper form; the issue and sale of the Notes by the Company
      in
      accordance with the terms of this Agreement have been duly and validly
      authorized by the necessary corporate action; the Notes, when duly executed
      (which execution may include facsimile signatures of officers of the Company),
      authenticated and delivered to the purchasers or to an Agent pursuant to any
      Terms Agreement, against payment of the agreed consideration therefor, will
      constitute legal, valid and binding obligations of the Company enforceable
      in
      accordance with their terms, except as enforcement thereof may be limited by
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
      other similar laws relating to or affecting enforcement of creditors’ rights
      generally or by general equitable principles; and each holder of Notes will
      be
      entitled to the benefits of the Indenture;

     

    (v)
        the
      Notes, the Indenture and any Terms Agreement conform in all material respects
      with the statements concerning them made in the Prospectus and Time of Sale
      Prospectus, and such statements accurately set forth the matters respecting
      the
      Notes, the Indenture and the Terms Agreement required to be set forth in the
      Prospectus and Time of Sale Prospectus;

     

    (vi)
        the
      Indenture is qualified under the 1939 Act;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (vii)
        the
      orders of the FERC and the ICC referred to in Section 2(a)(xi) hereof pertaining
      to the Notes have been duly issued and, to the best of the knowledge of such
      counsel, are still in force and effect; and no further approval, authorization,
      consent, certificate or order of any state or federal commission or regulatory
      authority (other than in connection or compliance with the provisions of the
      securities or Blue Sky laws of any jurisdiction) is necessary with respect
      to
      the issue and sale of the Notes as contemplated by this Agreement and any
      applicable Terms Agreement or the application of the proceeds
      thereof;

     

    (viii)
        the
      Registration Statement has become effective under the 1933 Act and, to the
      best
      of the knowledge of such counsel, no stop order suspending the effectiveness
      of
      the Registration Statement has been issued and no proceedings for that purpose
      have been instituted or are pending or threatened under the 1933
      Act;

     

    (ix)
        the
      Registration Statement and the Time of Sale Prospectus and each amendment or
      supplement thereto comply as to form in all material respects with the
      requirements of the 1933 Act, the 1933 Act Regulations and Sections 305(a)(2)
      and 305(c) of the 1939 Act (except that such counsel need express no opinion
      as
      to the financial statements and financial or statistical data contained
      therein);

     

    (x)
        such
      counsel does not know of any legal or governmental proceeding required to be
      described in the Time of Sale Prospectus which is not described as required,
      or
      of any contract or document of a character required to be described or
      incorporated in the Registration Statement or the Time of Sale Prospectus or
      to
      be filed as an exhibit to the Registration Statement which is not described,
      incorporated or filed as required;

     

    (xi)
        neither
      the execution and delivery of this Agreement and the Indenture nor the issuance
      and sale of the Notes in accordance with the terms of this Agreement or Terms
      Agreements nor the consummation of the transactions herein or therein
      contemplated, nor compliance with the terms and provisions hereof or thereof,
      will conflict with, or violate or result in a breach of, any law, any
      administrative regulation or any court decree known to such counsel to be
      applicable to the Company, conflict with or result in a breach of any of the
      terms, conditions or provisions of the Restated Articles of Incorporation,
      as
      amended, or the bylaws of the Company, as amended, or of any material agreement
      or instrument known to such counsel to which the Company or any of its
      subsidiaries is a party or by which the Company or any of its subsidiaries
      is
      bound or constitute a default thereunder, or result in the creation or
      imposition of any lien, charge or encumbrance of any nature whatsoever upon
      any
      of the material properties or assets of the Company or any such
      subsidiary;

     

    (xii)
        the
      documents referred to in Section 2(a)(v) hereof, as of their respective filing
      dates, complied as to form in all material respects with the applicable
      requirements of the 1934 Act and the 1934 Act Regulations (except that such
      counsel does not need to express any opinion as to the financial statements
      and
      financial or statistical data contained therein);

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (xiii)
        the
      statements made in the Prospectus and Time of Sale Prospectus which are stated
      therein to have been made on the authority of such counsel have been reviewed
      by
      him and, as to matters of law and legal conclusion, are correct;

     

    (xiv)
        the
      Company is a public utility authorized by its Restated Articles of
      Incorporation, as amended, to carry on the businesses in which it is engaged,
      as
      set forth in the Prospectus and Time of Sale Prospectus; the Company has the
      legal right to function and operate as an electric public utility company in
      the
      States of Iowa, Illinois and South Dakota, and as a gas public utility company
      in the States of Iowa, Illinois, South Dakota and Nebraska; and the franchises
      and permits of the Company are valid and subsisting and authorize the Company
      to
      carry on the utility businesses in which it is engaged in the communities and
      territory covered by such franchises and permits;

     

    (xv)
        the
      descriptions in the Registration Statement, the Prospectus and the Time of
      Sale
      Prospectus of statutes, legal and governmental proceedings and contracts and
      other documents are accurate and fairly present the information required to
      be
      presented; and

     

    (xvi)
        except
      as
      set forth in the Prospectus and Time of Sale Propectus, (A) there are no pending
      legal proceedings to which the Company is a party or in which any of its
      property is the subject which are material to the Company, other than ordinary
      routine legal proceedings incident to the business in which the Company is
      engaged, and (B) there are no material pending administrative or judicial
      proceedings to which the Company is a party or in which any of its property
      is
      the subject arising under any federal, state or local provisions regulating
      the
      discharge of materials into the environment or otherwise relating to the
      protection of the environment, and, to the best of the knowledge of said
      counsel, no such proceedings are threatened by governmental
      authorities;

     

    and
      such
      letter shall additionally state that nothing has come to the attention of such
      counsel that would lead him to believe that the Registration Statement, at
      the
      time it became effective, and if an amendment to the Registration Statement
      or
      an Annual Report on Form 10-K has been filed by the Company with the SEC
      subsequent to the effectiveness of the Registration Statement, then at the
      time
      such amendment became effective or at the time of the most recent such filing,
      and at the date hereof, or (if such opinion is being delivered in connection
      with a Terms Agreement pursuant to Section 3(b) hereof) at the date of any
      Terms
      Agreement and at the Settlement Date with respect thereto, as the case may
      be,
      contains or contained an untrue statement of a material fact or omitted to
      state
      a material fact required to be stated therein or necessary to make the
      statements therein not misleading or that the Prospectus as of its date or
      as
      amended or supplemented at the date hereof and the Time of Sale Prospectus
      at
      the Time of Sale, or (if such opinion is being delivered in connection with
      a
      Terms Agreement pursuant to Section 3(b) hereof) at the date of any Terms
      Agreement and at the Settlement Date with respect thereto, as the case may
      be,
      contains or contained any untrue statement of a material fact or omitted or
      omits to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (d)
        Officers’
      Certificate.
      The
      Company shall have furnished to the Agents on the date hereof a certificate,
      dated the date hereof, of its Chief Executive Officer, its President or a Vice
      President and its Treasurer or an Assistant Treasurer stating that, to the
      best
      of their knowledge after reasonable investigation, the representations and
      warranties of the Company in Section 2 hereof are true and correct as of the
      date hereof; the Company has complied with all its agreements contained herein;
      and the conditions set forth in Sections 5(a), 5(g) and 5(h) hereof have been
      fulfilled.

     

    (e)
        Comfort
      Letter.
      On the
      date hereof, the Agents shall have received a letter from the Company’s
      independent registered public accounting firm dated as of the date hereof and
      in
      form and substance satisfactory to the Agents, to the effect that:

     

    (i)
        They
      are
      an independent registered public accounting firm with respect to the Company
      within the meaning of the 1933 Act and the 1933 Act Regulations;

     

    (ii)
        In
      their
      opinion, the financial statements and supporting schedule(s) of the Company
      audited by them and included or incorporated by reference in the Registration
      Statement comply as to form in all material respects with the applicable
      accounting requirements of the 1933 Act and the 1933 Act Regulations with
      respect to registration statements on Form S-3 and the 1934 Act and the 1934
      Act
      Regulations;

     

    (iii)
        They
      have
      performed specified procedures, not constituting an audit, including a reading
      of the latest available interim financial statements of the Company, a reading
      of the minute books of the Company since the end of the most recent fiscal
      year
      with respect to which an audit report has been issued, inquiries of and
      discussions with certain officials of the Company responsible for financial
      and
      accounting matters with respect to the unaudited consolidated financial
      statements of the Company included or
      incorporated by reference in the Registration Statement, the Prospectus and
      the
      Time of Sale Prospectus and the latest available interim unaudited financial
      statements of the Company, and such other inquiries and procedures as may be
      specified in such letter, and on the basis of such inquiries and procedures
      nothing came to their attention that caused them to believe that: (A) the
      unaudited consolidated financial statements of the Company included or
      incorporated by reference in the Registration Statement, the Prospectus and
      the
      Time of Sale Prospectus do not comply as to form in all material respects with
      the applicable accounting requirements of the 1934 Act and the 1934 Act
      Regulations or were not fairly presented in conformity with generally accepted
      accounting principles in the United States applied on a basis substantially
      consistent with that of the audited financial statements included or
      incorporated by reference therein, or (B) at a specified date not more than
      three days prior to the date of such letter, there was any change in the capital
      stock or any increase in long-term debt of the Company or any decrease in the
      consolidated total assets or common shareholder’s equity of the Company other
      than for the declaration of regular quarterly dividends, in each case as
      compared with the amounts shown on the most recent balance sheet of the Company
      included or incorporated by reference in the Registration Statement, the
      Prospectus and the Time of Sale Prospectus or, during the period from the date
      of such balance sheet to a specified date not more than three days prior to
      the
      date of such letter, there were any decreases, as compared with the
      corresponding period in the preceding year, in operating revenues or net income
      of the Company, except in each such case as set forth in or contemplated by
      the
      Registration Statement, the Prospectus and the Time of Sale Prospectus or except
      for such exceptions (e.g., inability to determine such decreases because of
      insufficient accounting information available after the date of such most recent
      balance sheet) enumerated in such letter as shall have been agreed to by the
      Agents and the Company; and

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (iv)
        In
      addition to the examination referred to in their report included or incorporated
      by reference in the Registration Statement, the Prospectus and the Time of
      Sale
      Prospectus, and the limited procedures referred to in clause (iii) above, they
      have carried out certain other specified procedures, not constituting an audit,
      with respect to certain amounts, percentages and financial information which
      are
      included or incorporated by reference in the Registration Statement, Prospectus
      and the Time of Sale Prospectus and which are specified by the Agents, and
      have
      found such amounts, percentages and financial information to be in agreement
      with the relevant accounting, financial and other records of the Company
      identified in such letter.

     

    (f)
        Opinion
      of Agents’ Counsel.
      LeBoeuf, Lamb, Greene & MacRae LLP, as counsel for the Agents, shall have
      furnished to the Agents the date hereof such opinions with respect to the
      validity of the Notes and with respect to the Registration Statement, the
      Prospectus, and the Time of Sale Prospectus and other related matters as the
      Agents may reasonably require.

     

    (g)
        FERC
      and ICC Orders.
      The
      orders of the FERC and the ICC referred to in Section 2(a)(xi) hereof shall
      be
      in full force and effect and no proceedings to suspend the effectiveness of
      either such order shall be pending or threatened.

     

    (h)
        Ratings.
      Subsequent to the execution of this Agreement, there shall not have been any
      decrease in the ratings of any of the Company’s debt securities by Standard
& Poor’s Rating Service or Moody’s Investors Service, Inc.

     

    (i)
        No
      Material Adverse Change.
      Subsequent to the date of the most recent financial statements incorporated
      by
      reference in the Registration Statement, Prospectus and the Time of Sale
      Prospectus, there shall have been no material adverse change in the condition
      (financial or otherwise), business or results of operations of the Company,
      except as set forth in the Registration Statement, the Prospectus and the Time
      of Sale Prospectus, including the documents incorporated by reference therein,
      as of the effective date of this Agreement.

     

    (j)
        Other
      Documents.
      On the
      date hereof and on each Settlement Date with respect to any applicable Terms
      Agreement, counsel to the Agents shall have been furnished with such documents
      and opinions as such counsel may reasonably require for the purpose of enabling
      such counsel to pass upon the issuance and sale of Notes as herein contemplated
      and related proceedings, or in order to evidence the accuracy and completeness
      of any of the representations and warranties, or the fulfillment of any of
      the
      conditions, herein contained; and all proceedings taken by the Company in
      connection with the issuance and sale of Notes as herein contemplated shall
      be
      satisfactory in form and substance to the Agents and to counsel to the
      Agents.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    If
      any
      condition specified in this Section 5 shall not have been fulfilled when and
      as
      required to be fulfilled, this Agreement (or, at the option of the Agents,
      any
      applicable Terms Agreement) may be terminated by the Agents by notice to the
      Company at any time and any such termination shall be without liability of
      any
      party to any other party, except that the covenant regarding provision of an
      earnings statement set forth in Section 5(1) hereof, the provisions concerning
      payment of expenses under Section 5(s) hereof, the indemnity and contribution
      agreement set forth in Section 9 hereof, the provisions concerning the
      representations, warranties and agreements to survive delivery in Section 10
      hereof and the provisions set forth under “Parties” of Section 14 hereof shall
      remain in effect.

     

    SECTION
      7.  Conditions
      to the Obligations of the Company.

     

    The
      obligations of the Company to sell and deliver the Notes are subject to the
      following conditions precedent:

     

    (a)
        No
      Stop Order.
      At or
      before the date hereof, no stop order suspending the effectiveness of the
      Registration Statement nor any order directed to any document incorporated
      by
      reference in the Prospectus or the Time of Sale Prospectus shall have been
      issued and prior to that time no stop order proceeding shall have been initiated
      or threatened by the SEC and no challenge shall have been made by the SEC to
      the
      accuracy or adequacy of any document incorporated by reference in the Prospectus
      or the Time of Sale Prospectus; any request of the SEC for inclusion of
      additional information in the Registration Statement, the Prospectus or the
      Time
      of Sale Prospectus or otherwise shall have been complied with.

     

    (b)
        FERC
      and ICC Orders.
      The
      orders of the FERC and the ICC referred to in Section (2)(a)(xi) hereof shall
      be
      in full force and effect and no proceeding to suspend the effectiveness of
      either such order shall be pending or threatened.

     

    In
      case
      any of the conditions specified above in this Section 7 shall not have been
      fulfilled on the date hereof, this Agreement may be terminated by the Company
      by
      delivering written notice of termination to the Agents. Any such termination
      shall be without liability of any party to any other party except to the extent
      provided in Section 5(s), and Section 9 hereof.

     

    SECTION
      8.  Delivery
      of and Payment for Notes Sold through the Agents

     

    Delivery
      of Notes sold through any Agent as agent shall be made by the Company to such
      Agent for the account of any purchaser only against payment therefor in
      immediately available funds. In the event that a purchaser shall fail either
      to
      accept delivery of or to make payment for a Note on the date fixed for
      settlement, such Agent shall promptly notify the Company and deliver the Note
      to
      the Company, and, if such Agent has theretofore paid the Company for such Note,
      the Company will promptly return such funds to such Agent. If such failure
      occurred for any reason other than default by such Agent in the performance
      of
      its obligations hereunder, the Company will reimburse such Agent on an equitable
      basis for its loss of the use of the funds for the period such funds were
      credited to the Company’s account.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    SECTION
      9.  Indemnification.

     

    (a)
        Indemnification
      of the Agents.
      The
      Company agrees to indemnify and hold harmless each Agent, its directors and
      officers, and each person, if any, who controls such Agent within the meaning
      of
      Section 15 of the 1933 Act as follows:

     

    (i)
        against
      any and all loss, liability, claim, damage and expense whatsoever, as incurred,
      arising out of any untrue statement or alleged untrue statement of a material
      fact contained in the Registration Statement (or any amendment thereto), or
      the
      omission or alleged omission therefrom of a material fact necessary to make
      the
      statements therein not misleading or arising out of any untrue statement or
      alleged untrue statement of a material fact contained in the Prospectus or
      Time
      of Sale Prospectus (or any amendment or supplement thereto) or the omission
      or
      alleged omission therefrom of a material fact necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading;

     

    (ii)
        against
      any and all loss, liability, claim, damage and expense whatsoever, as incurred,
      to the extent of the aggregate amount paid in settlement of any litigation,
      or
      investigation or proceeding by any governmental agency or body, commenced or
      threatened, or any claim whatsoever based upon any such untrue statement or
      omission, or any such alleged untrue statement or omission, if such settlement
      is effected with the written consent of the Company (which consent shall not
      be
      unreasonably withheld, delayed or conditioned); and

     

    (iii)
        against
      any and all expense whatsoever, as incurred (including, subject to Section
      9(c)
      hereof, the fees and disbursements of counsel), reasonably incurred in
      investigating, preparing or defending against any litigation, or investigation
      or proceeding by any governmental agency or body, commenced or threatened,
      or
      any claim whatsoever based upon any such untrue statement or omission, or any
      such alleged untrue statement or omission, to the extent that any such expense
      is not paid under (i) or (ii) above; provided, however, that this indemnity
      agreement shall not apply to any loss, liability, claim, damage or expense
      to
      the extent arising out of any untrue statement or omission or alleged untrue
      statement or omission made in reliance upon and in conformity with written
      information furnished to the Company by such Agent expressly for use in the
      Registration Statement (or any amendment thereto) or any preliminary prospectus,
      the Prospectus or the Time of Sale Prospectus (or any amendment or supplement
      thereto), it being understood and agreed that the only such information
      furnished by any Agent shall consist of the information described as such in
      the
      applicable Terms Agreement.

     

    (b)
        Indemnification
      of the Company.
      Each
      Agent agrees, severally and not jointly, to indemnify and hold harmless the
      Company, its directors, each of its officers who signed the Registration
      Statement, and each person, if any, who controls the Company within the meaning
      of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
      and expense described in the indemnity contained in subsection (a) of this
      Section, as incurred, but only with respect to untrue statements or omissions,
      or alleged untrue statements or omissions, made in the Registration Statement
      (or any amendment thereto) or any preliminary prospectus or the Prospectus
      or
      the Time of Sale Prospectus (or any amendment or supplement thereto) in reliance
      upon and in conformity with written information furnished to the Company by
      such
      Agent expressly for use in the Registration Statement (or any amendment thereto)
      or such preliminary prospectus or the Prospectus or the Time of Sale Prospectus
      (or any amendment or supplement thereto), it being understood and agreed that
      the only such information furnished by any Agent shall consist of the
      information described as such in the applicable Terms Agreement.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c)
        General.  Each
      indemnified party shall give prompt notice to each indemnifying party of any
      action commenced against it in respect of which indemnity may be sought
      hereunder, but failure to so notify an indemnifying party shall not relieve
      such
      indemnifying party from any liability which it may have otherwise than on
      account of this indemnity agreement. An indemnifying party may participate
      at
      its own expense in the defense of such action. In no event shall the
      indemnifying parties be liable for the fees and expenses of more than one
      counsel (in addition to any local counsel) for all indemnified parties in
      connection with any one action or separate but similar or related actions in
      the
      same jurisdiction arising out of the same general allegations or circumstances.
      No
      indemnifying party shall, without the prior written consent of the indemnified
      party (which consent shall not be unreasonably withheld, delayed or
      conditioned), effect any settlement of any pending or threatened action in
      respect of which any indemnified party is or could have been a party and
      indemnity could have been sought hereunder by such indemnified party unless
      such
      settlement (i) includes an unconditional release of such indemnified party
      from
      all liability on any claims that are the subject matter of such action and
      (ii)
      does not include a statement as to, or an admission of, fault, culpability
      or a
      failure to act by or behalf of such indemnified party.

     

    (d)
        Contribution.
      In
      order
      to provide for just and equitable contribution in circumstances in which
(i) the
      indemnity agreements provided for in this Section 10 are for any reason held
      to
      be unenforceable by the indemnified parties although applicable in accordance
      with their terms or
      (ii)
      such indemnity is insufficient to hold harmless an indemnified party under
      subsection (a) or (b) above,
      the
      Company and each Agent shall contribute to the aggregate losses, liabilities,
      claims, damages or expenses of the nature contemplated by said indemnity
      agreements incurred by the Company and such Agent, as incurred, (x) in
      such
proportion
      as
      is appropriate
      to reflect the relative benefits received
      by the
Company on
      the
      one hand
      and the
      Agents on the other from the offering of the Notes or (y) if the allocation
      provided by clause (x) above is not permitted by applicable law, in such
      proportion as is appropriate to reflect not only the relative benefits referred
      to in clause (x) above but also the relative fault of the Company on the one
      hand and the Agents on the other in connection with the statements or omissions
      which resulted in such losses, liabilities, claims, damages or expenses as
      well
      as any other relevant equitable considerations. The relative benefits received
      by the Company on the one hand and the Agents on the other shall be deemed
      to be
      in the same proportion as the total net proceeds from the offering (before
      deducting expenses) received by the Company bear to the total underwriting
      discounts and
      commissions received
      by the
      Agents. The relative fault shall be determined by reference to, among other
      things, whether the untrue or alleged untrue statement of a material fact or
      the
      omission or alleged omission to state a material fact relates to information
      supplied by the Company or the Agents and the parties' relative intent,
      knowledge, access to information and opportunity to correct or
      prevent
      such
      untrue statement or omission. The amount paid by an indemnified party as a
      result of the losses, claims, damages or liabilities referred to in the first
      sentence of this subsection (d) shall be deemed to include any legal or other
      expenses reasonably incurred by such indemnified party in connection with
      investigating or defending any action or claim which is the subject of this
      subsection (d). Notwithstanding the provisions of this subsection (d),
      no
      Agent shall
      be
      required
      to
      contribute any amount in excess of
      the
      amount
      by which the
      total
      price
at
      which the
      Notes
underwritten
      by it and distributed to the public were offered to the public exceeds the
      amount of any damages which such
      Agent has
      otherwise been required to pay by reason of such untrue or alleged untrue
      statement or omission or alleged omission. No
      person
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the 1933 Act) shall be entitled to contribution from any person who was not
      guilty of such fraudulent misrepresentation. The
      Agents' obligations in this subsection (d) to contribute are several in
      proportion to their respective underwriting obligations and not
      joint. For
      purposes of this Section, (1)
      each
      director and officer of an Agent, and each
      person, if any, who controls an Agent within the meaning of Section 15 of the
      1933 Act,
      shall
      have the same rights to contribution as such Agent,
      and
      (2) each
      director of the Company and each officer of the Company who signed the
      Registration Statement, and each person, if any, who controls the Company within
      the meaning of Section 15 of the 1933 Act, shall have the same rights to
      contribution as the Company.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    SECTION
      10.  Representations,
      Warranties, Indemnities and Agreements to Survive Delivery.

     

    All
      representations, warranties, indemnities and agreements contained in this
      Agreement or in certificates of officers of the Company submitted pursuant
      hereto or thereto, shall remain operative and in full force and effect,
      regardless of any investigation made by or on behalf of any Agent or any
      controlling person of such Agent, or by or on behalf of the Company, and shall
      survive each delivery of and payment for any of the Notes.

     

    SECTION
      11.  Termination.

     

    (a)
        Termination
      of this Agreement.
      This
      Agreement (excluding any Terms Agreement) may be terminated for any reason,
      at
      any time by either the Company or the Agents, upon the giving of 30 days’
written notice of such termination to the other party hereto.

     

    (b)
        Termination
      of a Terms Agreement.
      An
      Agent may terminate any Terms Agreement, immediately upon notice to the Company
      at any time prior to the Settlement Date relating thereto, if (i) there shall
      have occurred, subsequent to the date of such Terms Agreement or subsequent
      to
      the respective dates as of which information is given in the Registration
      Statement, (A) any material adverse change in the condition, financial or
      otherwise, or in the earnings, business affairs or business prospects of the
      Company and its subsidiaries considered as one enterprise, whether or not
      arising in the ordinary course of business, (B) any material adverse change
      in
      the financial markets in the United States, the effect of which is such as
      to
      make it, in the reasonable judgment of such Agent, impracticable to market
      the
      Notes or enforce contracts for the sale of Notes, (C) any attack on, or outbreak
      or escalation of hostilities or act of terrorism involving, the United States,
      any declaration of war by Congress or any other national or international
      calamity or emergency, if in the reasonable judgment of such person the effect
      of any such attack, outbreak, escalation, act of terrorism, declaration of
      war,
      calamity or emergency makes it impracticable or inadvisable to purchase the
      Notes, (D) any material suspension or material limitation of trading in
      securities generally on the New York Stock Exchange, or any setting of minimum
      prices for trading on such exchange, or any suspension of trading of any
      securities of the Company on any exchange or in the over-the-counter market,
      or
      (E) any banking moratorium declared by U.S. Federal or New York authorities;
      (ii) the rating assigned by any nationally recognized securities rating agency
      to any debt securities of the Company as of the date of any applicable Terms
      Agreement shall have been lowered since that date or if any such rating agency
      shall have publicly announced that it has under surveillance or review, with
      possible negative implications, its rating of any debt securities of the
      Company; or (iii) there shall have come to such Agent’s attention any facts that
      would cause such Agent to believe that the Prospectus, at the time it was
      required to be delivered to a purchaser of Notes, contained an untrue statement
      of a material fact or omitted to state a material fact necessary in order to
      make the statements therein, in light of the circumstances existing at the
      time
      of such delivery, not misleading.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (c)
        General.
      In the
      event of any such termination, neither party will have any liability to the
      other party hereto, except that (i) each Agent shall be entitled to any
      commission earned in accordance with the third paragraph of Section 3(a) hereof,
      (ii) if at the time of termination (a) each Agent shall own any Notes purchased
      pursuant to a Terms Agreement with the intention of reselling them or (b) an
      offer to purchase any of the Notes has been accepted by the Company but the
      time
      of delivery to the purchaser or his agent of the Note or Notes relating thereto
      has not occurred, the covenants set forth in Sections 4 and 7 hereof shall
      remain in effect until such Notes are so resold or delivered, as the case may
      be, and (iii) the covenant set forth in Section 5(s) hereof, the indemnity
      and
      contribution agreements set forth in Section 9 hereof, and the provisions of
      Sections 9 and 13 hereof shall remain in effect.

     

    SECTION
      12.  Notices.

     

    Unless
      otherwise provided herein, all notices required under the terms and provisions
      hereof shall be in writing, either delivered by hand, by mail or by telex,
      telecopier or telegram, and any such notice shall be effective when received
      at
      the address specified below.

     

    If
      to the
      Company:

     

    MidAmerican
      Energy Company

    666
      Grand
      Avenue

    Des
      Moines, IA 50309

    Attention:
      Treasurer

    Phone:
      (515) 281-2904

    Fax:
      (515) 242-4261

     

    If
      to the
      Agents:

     

    Credit
      Suisse Securities (USA) LLC

    11
      Madison Avenue

    New
      York,
      NY 10010

    Attention:
      LCD-IBD Group

    Fax:
      (212) 325-4008 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    J.P.
      Morgan Securities Inc.

    270
      Park
      Avenue

    New
      York,
      NY 10017

    Attention:
      High Grade Syndicate Desk, 8th
      Floor

    Phone:
      (212) 834-4533

    Fax:
      (212) 834-6081

    

    LaSalle
      Financial Services, Inc.

    55
      East
      52nd
      Street,
      6th
      Floor

    New
      York,
      NY 10055

    Attention:
      Debt Capital Markets

    Phone:
      (212) 409-7553

    Fax:
      (212) 409-7860

    

    and
      to

    

    BNP
      Paribas Securities Corp.

    787
      7th
      Avenue

    New
      York,
      NY 10019

    Attention:
      Debt Capital Markets

    Phone:
      (212) 471-8294

    Fax:
      (212) 841-3785

    

     

    or
      at
      such other address as such party or parties may designate from time to time
      by
      notice duly given in accordance with the terms of this Section 12.

     

    SECTION
      13.  No
      Fiduciary Duty.
      

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    The
      Company acknowledges and agrees that (i) the purchase and sale of the Notes,
      including the determination of the offering price of such Notes and any related
      discounts and commissions, is an arm’s-length commercial transaction between the
      Company, on the one hand, and each applicable purchasing Agent, on the other
      hand; (ii) each applicable Agent is acting solely in the capacity of an arm’s
      length contractual counterparty to the Company in connection with the offering
      of such Notes and the process leading to such transaction (including in
      connection with determining the terms of the offering) and not as a financial
      advisor or a fiduciary to, or an agent of, the Company; (iii) no Agent has
      assumed or will assume an advisory or fiduciary responsibility in favor of
      the
      Company with respect to the offering of such Notes or the process leading
      thereto (irrespective of whether such Agent has advised or is currently advising
      the Company on other matters) and no Agent has any obligation to the Company
      with respect to the offering of the Notes except the obligations expressly
      set
      forth in this Agreement; and (iv) the Agents are not advising the Company as
      to
      any legal, tax, investment, accounting or regulatory matters in any jurisdiction
      and the Company shall consult with its own advisors concerning such matters
      and
      shall be responsible for making its own independent investigation and appraisal
      of the transactions contemplated by this Agreement, and the Agents shall have
      no
      responsibility or liability to the Company with respect thereto.

     

    SECTION
      14.  Governing
      Law.

     

    This
      Agreement and all the rights and obligations of the parties shall be governed
      by
      and construed in accordance with the laws of the State of New York, without
      regard to principles of conflicts of laws. Any suit, action or proceeding
      brought by the Company against the Agents in connection with or arising under
      this Agreement shall be brought solely in the state or federal court of
      appropriate jurisdiction located in the Borough of Manhattan, The City of New
      York.

     

    SECTION
      15.  Parties.

     

    This
      Agreement shall inure to the benefit of and be binding upon each Agent and
      the
      Company and their respective successors. Nothing expressed or mentioned in
      this
      Agreement is intended or shall be construed to give any person, firm or
      corporation, other than the parties hereto and their respective successors
      and
      the controlling persons and officers and directors referred to in Section 9
      and
      their heirs and legal representatives, any legal or equitable right, remedy
      or
      claim under or in respect of this Agreement or any provision herein contained.
      This Agreement and all conditions and provisions hereof are intended to be
      for
      the sole and exclusive benefit of the parties hereto and respective successors
      and said controlling persons and officers and directors and their heirs and
      legal representatives, and for the benefit of no other person, firm or
      corporation. No purchaser of Notes shall be deemed to be a successor by reason
      merely of such purchase.

     

    SECTION
      16.  Integration.

     

    This
      Agreement represents and contains the entire agreement and understanding among
      the parties hereto with respect to the subject matter covered herein, and
      supercedes any and all prior oral and written agreements and understandings
      among the parties hereto, including, without limitation, the Distribution
      Agreement, dated February 5, 2002, among the Company, Credit Suisse First Boston
      Corporation, Banc One Capital Markets, Inc., BNY Capital Markets, Inc.,
      Commerzbank Capital Markets Corp. and UBS Warburg LLC, the Distribution
      Agreement, dated January 9, 2003, among the Company, Lehman Brothers Inc.,
      Banc
      One Capital Markets, Inc., ABN AMRO Incorporated, BNP Paribas Securities Corp.,
      BNY Capital Markets, Inc., Commerzbank Capital Markets Corp., Credit Suisse
      First Boston Corporation and U.S. Bancorp Piper Jaffrey Inc., the Distribution
      Agreement, dated September 28, 2004, among the Company, ABN AMRO Incorporated,
      BNP Paribas Securities Corp. and J.P. Morgan Securities Inc., and the
      Distribution Agreement, dated October 24, 2005, among the Company, J.P. Morgan
      Securities Inc., LaSalle Financial Services, Inc. and Lehman Brothers Inc.
      (other than with respect to transactions consummated thereunder prior to the
      date hereof).

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    SECTION
      17.  Execution
      in Counterparts.

     

    This
      Agreement may be executed in counterparts, each of which shall be an original
      and all of which shall constitute but one and the same instrument.

     

    [Signatures
      follow]

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    If
      the
      foregoing is in accordance with each Principal Agent’s understanding of our
      agreement, please sign and return to the Company a counterpart hereof, whereupon
      this instrument along with all counterparts will become a binding agreement
      between each Agent and the Company in accordance with its terms.

    

    Very
      truly yours,

     

    MIDAMERICAN
      ENERGY COMPANY

     

    By: 
      /s/
      Brian K. Hankel 

    Name:
      Brian K. Hankel

    Title:
      Vice President and Treasurer 

     

    

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    Accepted:

    

    CREDIT
      SUISSE SECURITIES (USA) LLC 

    J.P.
      MORGAN SECURITIES INC.

    LASALLE
      FINANCIAL SERVICES, INC.

    BNP
      PARIBAS SECURITIES CORP.,

    as
      Principal Agents, on behalf of the Agents

    

    

     

     

    
      	 	 	 
	 	CREDIT
              SUISSE
              SECURITIES (USA) LLC
	 
 	 
 	 
 
	 	By:  	/s/ Gavin
              Wolfe
	 	Name: Gavin Wolfe
	 	Title:
              Managing Director

    

    

      	 	 	 
	 	J.P.
              MORGAN
              SECURITIES INC.
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              Bottamedi 
	 	Name: Robert Bottamedi 
	 	Title:
              Vice President

    

    

    
      	 	 	 
	 	LASALLE
              FINANCIAL
              SERVICES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Vincent
              Murray
	 	Name: Vincent Murray 
	 	Title:
              Managing Director 

    

    
      	 	 	 
	 	BNP
              PARIBAS SECURITIES CORP.
	 
 	 
 	 
 
	 	By:  	/s/ Timothy
              D. McCann
	 	Name: Timothy D. McCann 
	 	Title:
              Director

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    MIDAMERICAN
      ENERGY COMPANY

    

    Notes

    [____]%
      Series
      due 20[__]

    

    FORM
      OF

    TERMS
      AGREEMENT

    

    

    [__________
      ___, 20___]

    

    [Names
      and Addresses of Underwriters]

    

    Dear
      Sirs:

    

    MidAmerican
      Energy Company, an Iowa corporation ("MEC"),
      confirms its agreement with [Name
      of Underwriters]
      (collectively, the "Underwriters")
      with
      respect to the issue and sale by MEC of its Notes, [___]%
      Series
      due 20[__]
      (the
      "Notes").
      The
      Notes are to be issued pursuant to the Indenture, dated as of October 1,
      2006 (the
      "Base
      Indenture"),
      between MEC and The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”),
      and
      the First Supplemental Indenture to be entered into between MEC and the Trustee
      (together with Base Indenture, the “Indenture”).

    

    This
      Terms Agreement is entered into pursuant to, and hereby incorporates by
      reference all of the terms of, the Distribution Agreement, dated October 3,
      2006
      (the "Distribution
      Agreement"),
      among
      MEC and Credit Suisse Securities (USA) LLC, J.P. Morgan Securities Inc., LaSalle
      Financial Services, Inc. and
      BNP
      Paribas Securities Corp., as Agents thereunder. Capitalized terms used in this
      Terms Agreement have the definitions given to them in the Distribution
      Agreement.

    

    SECTION
      1. Representations
      and Warranties.
      MEC
      represents and warrants to the Underwriters as of the date hereof and as of
      the
      Settlement Date for the purchase, sale and delivery of the Notes to the
      Underwriters, that the representations and warranties of MEC in Section
      2
      of the
      Distribution Agreement are true and correct (except to the extent that such
      representations and warranties are specifically limited to a prior date, in
      which case such representations and warranties were true and correct as of
      such
      prior date).

    

    SECTION
      2. Purchase
      and Offering.
      Subject
      to the terms and conditions hereof and incorporated by reference herein and
      in
      reliance upon the representations and warranties herein set forth and
      incorporated by reference herein, MEC agrees to sell to each Underwriter,
      severally and not jointly, and each Underwriter agrees, severally and not
      jointly, to purchase from MEC, at the purchase price and on the other terms
      set
      forth in Schedule
      I
      hereto,
      the principal amount of the Notes set forth opposite its name in Schedule
      I
      hereto,
      and the Notes shall have the terms set forth in Schedule
      I
      hereto,
      which is incorporated by reference in this Terms Agreement.

     

    
      
        
        

      

      
        EXHIBIT
          A-1

        
          

        

      

      
        
        

      

    

     

    SECTION
      3. Conditions
      to the Obligations of the Underwriters.
      The
      respective obligations of the Underwriters under this Terms Agreement with
      respect to the Notes are subject to the accuracy, on the date hereof and on
      the
      Settlement Date, of the representations and warranties of MEC contained, and
      incorporated by reference, herein, to the performance by MEC of its obligations
      contained in the Distribution Agreement and this Terms Agreement, and to the
      satisfaction of the conditions contained in the Distribution
      Agreement.

     

     SECTION
      4.  Stand-Off Agreement.
      Between the date of this Terms Agreement and the Settlement Date, MEC will
      not,
      without the prior consent of the Underwriters, offer or sell, or enter into
      any
      agreement to sell, any debt securities of MEC (other than the Notes and
      commercial paper in the ordinary course of business).

     

    SECTION
      5. Information
      Furnished by Underwriters.
      For
      purposes of Sections
      2(a)(iv),
      9(a)(iii)
      and
9(b)
      of the
      Distribution Agreement, the only information furnished to the Company by any
      Underwriter for use in the Prospectus consists of (i) the following
      information in the Prospectus furnished on behalf of each Underwriter:
[Describe
      Information],
      and
      (ii) the following information in the prospectus supplement furnished on
      behalf of [Name
      of Underwriter]:
      [Describe
      Information].

     

    SECTION
      6. Governing
      Law.
      This
      Terms Agreement and all rights and obligations of the parties hereunder shall
      be
      governed by and construed in accordance with the laws of the State of New York,
      without regard to principles of conflicts of laws. Any suit, action or
      proceeding brought by MEC against the Underwriters in connection with or arising
      under this Terms Agreement shall be brought solely in the state or federal
      court
      of appropriate jurisdiction located in the Borough of Manhattan, The City of
      New
      York.

    

    SECTION
      7. Parties.
      This
      Terms Agreement shall inure to the benefit of and be binding upon the
      Underwriters and MEC and their respective successors. Nothing expressed or
      mentioned in this Terms Agreement is intended or shall be construed to give
      any
      person, firm or corporation, other than the parties hereto and their respective
      successors and the controlling persons and officers and directors referred
      to in
Section
      9
      of the
      Distribution Agreement and their heirs and legal representatives, any legal
      or
      equitable right, remedy or claim under or in respect of this Terms Agreement
      or
      any provision herein contained. This Terms Agreement and all conditions and
      provisions hereof are intended to be for the sole and exclusive benefit of
      the
      parties hereto and their respective successors and said controlling persons
      and
      officers and directors and their heirs and legal representatives, and for the
      benefit of no other person, firm or corporation. No purchaser of Notes shall
      be
      deemed to be a successor by reason merely of such purchase.

    

    SECTION
      8. Several
      Obligations.
      The
      obligations of the Underwriters hereunder are several and not
      joint.

     

    
      
        
        

      

      
        EXHIBIT
          A-2

        
          

        

      

      
        
        

      

    

     

    SECTION
      9. Execution
      in Counterparts.
      This
      Terms Agreement may be executed in counterparts, each of which shall be an
      original and all of which shall constitute but one and the same
      instrument.

     

    
      
        
        

      

      
        EXHIBIT
          A-3

        
          

        

      

      
        
        

      

    

    If
      the
      foregoing is in accordance with the Underwriters' understanding of our
      agreement, please sign and return to MEC a counterpart hereof, whereupon this
      instrument along with all counterparts will become a binding agreement between
      the Underwriters and MEC in accordance with its terms.

    

    Very
      truly yours,

    

    MIDAMERICAN
      ENERGY COMPANY

    

    By: ___________________________

    Name:

    Title:

    

    Accepted:

    

    [SIGNATURE
      BLOCKS FOR UNDERWRITERS]

     

     

    
      
        
        

      

      
        EXHIBIT
          A-4

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

    

    This
      is
      Schedule I to the Terms Agreement, dated [_________
      ___, 20__],
      entered
      into pursuant to the Distribution Agreement, dated October 3, 2006, among
      MidAmerican Energy Company and Credit Suisse Securities (USA) LLC, J.P. Morgan
      Securities Inc., LaSalle Financial Services, Inc.
      and
      BNP
      Paribas Securities Corp., as Agents thereunder. Capitalized terms used but
      not
      defined in this Schedule have the meanings given to such terms in the
      Distribution Agreement.

    

    Agents: 

    [Names
      of Agents]

    

    SEC
      Registration Number: 333-110398 and 333-134163

    

    Designation
      of Notes: [___]%
      Series
      due 20[__]

    

    Terms
      of Notes:

    Principal
      Amount: $[___________]

    Issue
      Price: ƒ
      100%
ƒ
      Other:

    Authorized
      Denominations: ƒ
      $1,000
      and integral multiples of $1,000 ƒ
      Other:

    Original
      Issue Date: [_________
      ___, 20__] 

    Stated
      Maturity: [_________
      ___, 20__]

    

    Extension
      of Stated Maturity:  
      MEC does
      not have the option to extend the stated maturity.

    MEC
      does
      have the option to extend the stated maturity.

    Extension
      Period(s): _____ period(s) of [one] [two] [three] [four] [five]
      year(s)

    Final
      Maturity Date:

    

    
      	
              Form:

            	
              The
                notes are book-entry notes.

            

    

    
      	 	
              The
                notes are certificated notes.

            

    

     

     

    
      	 Fixed Rate Notes	 	 	 
	
               Interest
                Rate: 

            	 	 	 
	
               Interest
                Payment Dates: 

            	 January 15 and July 15 	 Other:	 
	
               Interest
                Rate Reset: 

            	 MEC does not have the option to reset
              the interest rate.	 	 
	 	 MEC does have the option to reset the
              interest rate.	 	 
	 	
               Reset
                Date(s): 

            	 	 
	 	
               Reset
                Formula: 

            	 	 
	
               Record
                Dates: 

            	 January 1 and July 1 	 Other:	 
	 	 	 	 
	 Floating Rate Notes	 	 	 
	
               Initial
                Interest Rate: 

            	 	 	 
	
               Interest
                Rate Basis: 

            	 	 	 
	
               Commercial
                Paper Rate

            	 	 	 
	
               LIBOR

            	 	 	 
	
               Designated
                LIBOR Page: 

            	
               LIBOR
                Reuters, page ____ 

            	
               LIBOR
                Telerate, page ____

            	 
	
               Prime
                Rate

            	 	 	 
	
               Treasury
                Rate

            	 	 	 
	
               Other:

            	 	 	 
	
               Interest
                Reset Period:

            	 Daily     Weekly    Monthly     Quarterly
              	 	 
	 	 Semiannual beginning in ________ and
              ________ 	
               Annual
                beginning in ________

            	 
	
               Interest
                Reset Dates:

            	 As specified in the Prospectus
              	
               Other:

            	 
	
               Interest
                Payment Period: 

            	 Monthly    Quarterly     Semiannual     Annual
              	 	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               Interest
                Payment Dates:

            	 	 	 
	
               Third
                Wednesday of each month

            	
              Third
                Wednesday of each March, June, September and December

            	 
	 Third Wednesday of each ______
              	 and ________ 	 Third Wednesday of each
              _________	 
	 Other:	 	 	 
	 Interest Determination Date: 	 As specified in the
              Prospectus	 Other:	 
	 Calculation Date:	 As specified in the
              Prospectus	 Other:	 
	 Index Maturity: 	 	 	 
	 Spread: 	 None	 _____ basis points	 
	 Spread Reset:	 MEC does not have the option to reset
              the spread.	 	 
	 	 MEC does have the option to reset the
              spread.	 	 
	 	
               Reset
                Date(s):

            	 	 
	 	
               Reset
                Formula:

            	 	 
	 	 	 	 
	 Spread Multiplier: 	 None	 	 
	 Spread Multiplier Reset:	 MEC does not have the option to reset
              the spread multiplier.	 	 
	 	 MEC does have the option to reset the
              spread multiplier.	 	 
	 	 Reset Date(s): 	 	 
	 	 Reset Formula: 	 	 
	 	 	 	 
	 Maximum Interest Rate: 	  None	 	 
	 Minimum Interest Rate: 	  None	 	 
	 Calculation Agent: 	  The Bank of New York Trust Company,
              N.A.	 Other:	 
	 	 	 	 
	 Original Issue Discount Notes	 	 	 
	
               Yield-to-Maturity:

            	 	 	 
	 Amortizing Notes. 	 An amortization schedule
              is
              attached to this Schedule and is incorporated in this Schedule by
              reference.	 
	 	 	 
	 Redemption: 	 The notes may not be redeemed
              prior to maturity at the option of MEC.	 
	 	
               The notes may be redeemed prior to maturity at
                the
                option of MEC. 

            	 
	 	 The redemption provisions
              are
              attached to this Schedule as Annex 1.	 
	 Repayment: 	 The notes may not be repaid
              prior to maturity at the option of the holders.	 
	 	 The notes may be repaid
              prior
              to maturity at the option of the holders.	 

    

     

    
      	 	 Repayment Date(s): 	 At any time	 On the following dates:
	 	 Repayment Price:	 	 
	 	 	 	 

    

     

    
      	 Sinking Fund:	 The notes do not have the benefit of
              sinking fund provisions.	 	 
	 	 The notes do have the benefit of
              sinking fund provisions. 	 	 
	 	 A schedule of mandatory
              sinking fund payments is attached to this Schedule and is incorporated
              in
              this Schedule by reference.
	 	 
	 Renewal:	 The notes are not renewable
              at the option of the holders.
	 	 The notes are renewable
              at
              the option of the holders

    

     

     

    
      	 Principal
              amount of Notes to be severally purchased by each Agent:	 	 
	 	 	 
	 	 Agent 	  Amount	 
	 	 [_______________] 	  $[___________]	 
	 	 [_______________] 	  
              [___________]	 
	 	 Total Principal Amount of
              Notes	  $[___________]	 
	 	 	 	 
	 Agents' Discount: [___]%	 	 	 
	 Time of Sale: [    
              ]	  [A.M.] [P.M.] on [ , 20
              ]	 	 
	 	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    Settlement
      Date: [__________
      ___, 20__]

    

    Settlement
      Time: At or about [_____] [A.M.]
      [P.M.]

    

    Location
      of Closing: New York, New York

    

    Payment
      Instructions: MidAmerican Energy Company, Account No. [_________],
      [Name
      of Bank],
      ABA No.
[________]

     

    [Stand-Off
      Period: As stated in Section 5 of the foregoing Terms
      Agreement.]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    [INCLUDE
      IF APPLICABLE]

    

    ANNEX
      1

    

    REDEMPTION
      PROVISIONS

    

    The
      notes
      will be redeemable as a whole at any time or in part, from time to time, at
      the
      option of MidAmerican Energy Company, at a redemption price equal to the sum
      of
      (a) the greater of (i) 100% of the principal amount of the notes being redeemed
      and (ii) the sum of the present values of the remaining scheduled payments
      of
      principal and interest thereon from the redemption date to the maturity date,
      computed by discounting such payments, in each case, to the redemption date
      on a
      semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
      at the Treasury Rate plus [___]
      basis
      points, plus (b) accrued interest on the principal amount thereof to the date
      of
      redemption.

    

    ‘‘Treasury
      Rate’’ means, with respect to any redemption date, the rate per annum equal to
      the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
      assuming a price for the Comparable Treasury Issue (expressed as a percentage
      of
      its principal amount) equal to the Comparable Treasury Price for such redemption
      date.

    

    ‘‘Comparable
      Treasury Issue’’ means the United States Treasury security selected by an
      Independent Investment Banker as having a maturity comparable to the remaining
      term of the notes to be redeemed that would be utilized, at the time of
      selection and in accordance with customary financial practice, in pricing new
      issues of corporate debt securities of comparable maturity to the remaining
      term
      of such notes. ‘‘Independent Investment Banker’’ means one of the Reference
      Treasury Dealers appointed by the trustee after consultation with MidAmerican
      Energy Company.

    

    ‘‘Comparable
      Treasury Price’’ means, with respect to any redemption date, (i) the average of
      the bid and asked prices for the Comparable Treasury Issue (expressed in each
      case as a percentage of its principal amount) on the third Business Day
      preceding such redemption date, as set forth in the daily statistical release
      (or any successor release) published by the Federal Reserve Bank of New York
      and
      designated ‘‘Composite 3:30 p.m. Quotations for U.S. Government Securities’’, or
      (ii) if such release (or any successor release) is not published or does not
      contain such prices on such Business Day, the average of the Reference Treasury
      Dealer Quotations actually obtained by the trustee for such redemption date.
      ‘‘Reference Treasury Dealer Quotations’’ means, with respect to each Reference
      Treasury Dealer and any redemption date, the average, as determined by the
      trustee, of the bid and asked prices for the Comparable Treasury Issue
      (expressed in each case as a percentage of its principal amount) quoted in
      writing to the trustee by such Reference Treasury Dealer at 5:00 p.m. on the
      third Business Day preceding such redemption date.

    

    ‘‘Reference
      Treasury Dealer’’ means each of [Names
      of Underwriters],
      and
      their respective successors; provided,
      however, that
      if
      any of the foregoing shall cease to be a primary U.S. Government securities
      dealer in New York City (a ‘‘Primary Treasury Dealer’’), MidAmerican Energy
      Company shall substitute therefor another Primary Treasury Dealer.

    

    Notice
      of
      any redemption will be mailed at least 30 days but not more than 60 days before
      the redemption date to each holder of the notes to be redeemed. If, at the
      time
      notice of redemption is given, the redemption moneys are not held by the
      trustee, the redemption may be made subject to their receipt on or before the
      date fixed for redemption and such notice shall be of no effect unless such
      moneys are so received. Upon payment of the redemption price, on and after
      the
      redemption date interest will cease to accrue on notes or portions thereof
      called for redemption.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Capitalized
      terms used but not defined in this annex have the meanings given to such terms
      in the Indenture as supplemented from time to time.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    MIDAMERICAN
      ENERGY COMPANY

    

    FORM
      OF

    TERM
      SHEET

    

    

    Filed
      Pursuant to Rule 433

    Registration
      No. 333-110398 and 333-134163

    Free
      Writing Prospectus dated October 3, 2006

     

    MIDAMERICAN
      ENERGY COMPANY

    5.800%
      Notes due 2036

    

    
      	
               

              Issuer:

               

            	
               

              MidAmerican
                Energy Company

               

            
	
               

              Ratings:

               

            	
               

              A2
                / A- / A (stable / stable /stable)

               

            
	
               

              Note
                type:

               

            	
               

              Senior
                Notes

               

            
	
               

              Trade
                date:

               

            	
               

              October
                3, 2006

               

            
	
               

              Settlement
                date:

               

            	
               

              October
                6, 2006

               

            
	
               

              Maturity
                date:

               

            	
               

              October
                15, 2036

               

            
	
               

              Principal
                amount:

               

            	
               

              $350,000,000

               

            
	
               

              Benchmark:

               

            	
               

              UST
                4.500% due February 15, 2036

               

            
	
               

              Re-offer
                spread:

               

            	
               

              +105
                basis points

               

            
	
               

              Re-offer
                yield to maturity:

               

            	
               

              5.812%

               

            
	
               

              Coupon:

               

            	
               

              5.800%

               

            
	
               

              Public
                offering price:

               

            	
               

              Variable

               

            
	
               

              Make-whole
                spread:

               

            	
               

              T
                +
                20 basis points

               

            
	
               

              Interest
                payment dates:

               

            	
               

              February
                15 and August 15, commencing February 15, 2007

               

            
	
               

              CUSIP:

               

            	
               

              59562EAH8

               

            
	
               

              ISIN:

               

            	
               

              US59562EAH80

               

            
	
               

              Active
                Bookrunners:

               

            	
               

              Credit
                Suisse Securities (USA) LLC

              J.P.
                Morgan Securities Inc.

               

            
	
               

              Passive
                Bookrunners:

               

            	
               

              BNP
                Paribas Securities Corp.

              LaSalle
                Financial Services, Inc.

               

            
	
               

              Co-Managers:

               

            	
               

              Calyon
                Securities (USA)

              Citigroup
                Global Markets Inc.

              Wedbush
                Morgan Securities Inc.

              Wells
                Fargo Securities, LLC

            

    

     

     

    
      
        
        

      

      
        EXHIBIT
          B-1

        
          

        

      

      
        
        

      

    

     

     

    ************************

    The
      issuer has filed a registration statement (including a prospectus) with the
      SEC
      to which this communication relates. Before you invest, you should read the
      prospectus in that registration statement and other documents the issuer has
      filed with the SEC for more complete information about the issuer and this
      offering. You may get these documents for free by visiting EDGAR on the SEC
      web
      site at www.sec.gov.
      Alternatively, the issuer, any underwriter or any dealer participating in this
      offering will arrange to send you the prospectus if you request it by calling
      Credit Suisse Securities (USA) LLC toll-free at (800) 221-1037 or J.P. Morgan
      Securities Inc. collect at (212) 834-4533.

     

    
      
        
        

      

      
        EXHIBIT
          B-2

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