[EXHIBIT 1 - UNDERWRITING AGREEMENT
ENTERED INTO BETWEEN MDU RESOURCES GROUP, INC.
AND UBS SECURITIES LLC.]
EXECUTION COPY
MDU RESOURCES GROUP, INC.
(a Delaware corporation)
5.98% Senior Notes due 2033
UNDERWRITING AGREEMENT
----------------------
December 16, 2003
UBS SECURITIES LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
MDU Resources Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with UBS Securities LLC (the "Underwriter") with respect
to the issue and sale by the Company and the purchase by the Underwriter of
$30.0 million aggregate principal amount of the Company's 5.98% Senior Notes due
2033 (the "Securities"). The Securities will be issued pursuant to the
Indenture, dated as of December 15, 2003, (the "Base Indenture"), between the
Company and The Bank of New York, as Trustee (the "Indenture Trustee"), as
supplemented by the Officer's Certificate, to be dated as of December 23, 2003
(the "Officer's Certificate" and the Base Indenture, as supplemented by the
Officer's Certificate, is hereinafter referred to as the "Indenture").
Until the Release Date (as defined in the Indenture), the Securities
will be primarily secured by, (i) the lien of a series of first mortgage bonds
(the "First Mortgage Bonds") to be issued by the Company under the Indenture of
Mortgage, dated as of May 1, 1939, made by and between the Company and The Bank
of New York, as successor corporate trustee to The New York Trust Company (the
"Mortgage Trustee"), and all indentures supplemental thereto (including the
Forty-Fifth Supplemental Indenture, dated as of April 21, 1992, which contains,
in Part II thereof, a Restatement of Indenture, as supplemented through April
21, 1992) (collectively, the "Mortgage") and delivered by the Company to the
Indenture Trustee and any other Class A Bonds (as defined in the Indenture)
issued by the Company and delivered to the Indenture Trustee and (ii) the lien
of the Indenture on the properties specifically or generally described or
referred to therein as subject to the lien of the Indenture. The Securities, the
Indenture, the First Mortgage Bonds and the Mortgage are hereinafter referred to
collectively as the "Security Documents."
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-104150), including
the related preliminary prospectus, for the registration of certain securities,
including the Securities, 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 Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement. Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable, and including any registration statement filed by the Company
pursuant to Rule 462(b) under the ▇▇▇▇ ▇▇▇) is referred to herein as the
"Registration Statement", and the final prospectus and the final prospectus
supplement relating to the offering of the Securities, in the form first
furnished to the Underwriter by the Company for use in connection with the
offering of the Securities, are collectively referred to herein as the
"Prospectus", provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of this Agreement. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424 of the 1933 Act Regulations, that was used after
such effectiveness and prior to the execution and delivery of this Agreement.
For purposes of this Agreement, all references to the Registration Statement,
Prospectus, or preliminary prospectus or to any amendment or supplement to any
of the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
(if any) and other information which is "contained", "included", "stated" or
"given" in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules (if any) and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to mean
and include the filing of any document under the 1934 Act which is incorporated
by reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter, and agrees with the Underwriter at
the date hereof and at and as of the Closing Time, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
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Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the date hereof
and the Closing Time, the Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was first furnished to the Underwriter and at the
date hereof and the Closing Time, included or will include an untrue
statement of a material fact or omitted or will 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. 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 Underwriter expressly for use in connection with
this offering in the Registration Statement or Prospectus, or to any
statements in or omissions from the Statement of Eligibility on Form T-1,
or amendments thereto, of the Trustee under the Indenture.
Each preliminary prospectus and the Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriter for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the respective times they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was first furnished
to the Underwriter by the Company for use in connection with the offering
of the Securities and at the date hereof and the Closing Time, did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent Accountants. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who certified the
financial statements and supporting schedules for the years ended December
31, 2001 and 2000 included in the Registration Statement and Prospectus,
were, at the times when such financial statements and supporting schedules
were prepared, certified and filed with the Commission, independent public
accountants as, and to the extent then, required by the 1933 Act and the
1934 Act. Deloitte & Touche LLP, who certified the financial statements and
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supporting schedules for the year ended December 31, 2002 included in the
Registration Statement and Prospectus, (A) were, at the times when such
financial statements and supporting schedules were prepared, certified and
filed with the Commission, and currently are independent public accountants
as required by the 1933 Act and the 1934 Act and (B) do not provide the
Company or its subsidiaries any non-audit services which are prohibited by
Section 10A(g) or (h) of the 1934 Act.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States
("GAAP") applied on a consistent basis throughout the periods involved
(except as disclosed therein). The supporting schedules, if any, included
in the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. No other financial statements or
supporting schedules are required to be included in the Registration
Statement. The selected financial data and the summary financial
information included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.
(v) No Material Adverse Effect in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
results of operations, capital stock, debt, business affairs or properties
of the Company and its subsidiaries taken as a whole, whether or not
arising in the ordinary course of business or any development that would
reasonably be expected to result in such a material adverse change (any
such change or development is called a "Material Adverse Effect"), (B)
there have been no transactions or agreements entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the outstanding common stock, par value $1.00 per
share, of the Company (the "Common Stock") and on the outstanding preferred
stock, $100.00 par value, of the Company, in amounts per share that are
consistent with past practice, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other 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 so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
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(vii) Good Standing of Subsidiaries. The only "significant
subsidiaries" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X under the ▇▇▇▇ ▇▇▇) are Centennial Energy Holdings, Inc.,
WBI Holdings, Inc., WBI Pipeline & Storage Group, Inc., Knife River
Corporation, KRC Holdings, Inc., Fidelity Oil Co., Fidelity Exploration &
Production Company and Williston Basin Interstate Pipeline Company (the
"Subsidiaries", and individually, a "Subsidiary"). Each Subsidiary of the
Company has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and 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 so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries
listed on Schedule A hereto and (b) certain other subsidiaries which,
considered in the aggregate as a single entity, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii)Capitalization. The Company has an authorized capitalization as
set forth in the Company's quarterly report on Form 10-Q for the quarter
ended September 30, 2003. The shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock were issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
qualified under the Trust Indenture Act of 1939 and has been duly
authorized by the Company and, when executed and delivered by the Company
and the Indenture Trustee, will constitute a valid and binding obligation
of the Company, enforceable in accordance with its terms, except to the
extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency or other similar laws affecting enforcement of mortgagees' and
other creditors' rights generally and (ii) general principles of equity.
The Indenture is in a form sufficient to protect and preserve such lien
upon filing thereof for record in the appropriate offices in North Dakota,
South Dakota, Montana and Wyoming, where the property subject to the lien
of the Indenture is located and in Delaware, where the Company is
organized.
(xi) Authorization of the Mortgage. The Mortgage has been duly
authorized, executed and delivered by the Company and constitutes a valid
and legally binding instrument, enforceable in accordance with its terms,
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except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency or other similar laws affecting enforcement of
mortgagees' and other creditors' rights generally and (ii) general
principles of equity. The lien of the Mortgage is perfected upon
substantially all of the Company's real and fixed properties owned and all
franchises held by the Company immediately prior to July 1, 2000 and
intended to be subject thereto, together with improvements, extensions and
additions to, and renewals, replacements and substitutions of or for, any
part or parts of these properties (other than property expressly excepted
or released from the Mortgage), subject to permitted liens as defined
therein and to minor defects and encumbrances customarily found in the case
of properties of like size and character and which would not impair the use
of such properties as set forth in the Mortgage; and the Mortgage
(including the First through Forty-Ninth Supplemental Indentures) has been
recorded in such manner and in such places as to make effective the lien
intended to be created thereby and to protect and preserve such lien; and
the Mortgage is in a form sufficient to protect and preserve such lien upon
filing thereof for record in the appropriate offices in North Dakota, South
Dakota, Montana and Wyoming, where the property subject to the lien of the
Mortgage is located and in Delaware, where the Company is organized. The
Mortgage conforms in all material respects to the description thereof in
the Prospectus.
(xii) Authorization of the First Mortgage Bonds. The First Mortgage
Bonds have been duly authorized by the Company and, when (a) executed by
the Company, authenticated by the Mortgage Trustee and delivered to the
Indenture Trustee and (b) the Securities have been issued, authenticated
and delivered to the Underwriter against payment of the purchase price as
set forth herein, will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy, insolvency or
other similar laws affecting enforcement of mortgagees' and other
creditors' rights generally and (ii) general principles of equity, and
conform in all material respects to the description thereof in the
Prospectus.
(xiii)Authorization of Securities. The Securities have been duly
authorized by the Company and, when executed and delivered by the Company,
authenticated and issued in the manner provided for in the Indenture and
delivered to the Underwriter upon payment of the purchase price as set
forth herein, will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency or other
similar laws affecting enforcement of mortgagees' and other creditors'
rights generally and (ii) general principles of equity, and conform in all
material respects to the description thereof in the Prospectus. The
Securities will be in the form contemplated by the Indenture and each
registered holder thereof will be entitled to the benefits of the
Indenture.
(xiv) Property Subject to Lien of Mortgage and Indenture. The Company
has satisfactory title to any easements and good and sufficient or
insurable title in fee simple (except as the Company's interest is stated
to be otherwise) to all of its properties which are subject to the lien of
the Indenture and the Mortgage, subject to permitted liens as defined
therein and to minor defects and encumbrances customarily found in the case
of properties of like size and character and which would not impair the use
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of such properties as set forth in the Indenture and the Mortgage. The
description of such properties set forth in the Indenture and the Mortgage
is adequate to constitute the Indenture and the Mortgage as a lien thereon.
The Mortgage constitutes a valid, direct and first lien, and the Indenture
constitutes a valid and direct lien, upon said properties, which include
substantially all of the Company's real and fixed properties owned and all
franchises held by the Company immediately prior to July 1, 2000 and
intended to be subject thereto, together with improvements, extensions and
additions to, and renewals, replacements and substitutions of or for, any
part or parts of these properties (other than property expressly excepted
or released from the Mortgage and the Indenture), subject, however, to
permitted liens as defined therein.
(xv) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the Security Documents and the consummation of the
transactions contemplated in this Agreement, the Security Documents and the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations under this Agreement and the Security
Documents have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for (i) the lien of the Mortgage securing the First
Mortgage Bonds and the lien of the Indenture securing the Securities and
(ii) such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations where such violation, in the case of the
application of the proceeds of the sale of the Securities, would have a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary.
(xvi) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
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suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(xvii)Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, (i) against or affecting the Company or any
subsidiary or (ii) which has as a subject thereof any officer or director
of, or property owned or leased by, the Company or any subsidiary, in each
case, (A) which is required to be disclosed in the Registration Statement
(other than as disclosed therein), (B) which (individually or collectively)
might reasonably be expected to result in a Material Adverse Effect or to
materially and adversely affect the properties or assets of the Company or
(C) which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in this Agreement or the
Security Documents or the performance by the Company of its obligations
hereunder or thereunder.
(xviii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xix) Absence of Further Requirements. The Federal Energy Regulatory
Commission (the "FERC"), the Montana Public Service Commission (the "MPSC")
and the Public Service Commission of Wyoming (the "WPSC") have authorized
the issuance and sale of the Securities and the issuance and delivery of
the First Mortgage Bonds in the manner contemplated by this Agreement, and
said authorizations are in full force and effect and no further filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder or under the Security Documents, in connection with
the offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement, except
such as may be required in connection with post-filing requirements with
the FERC due after the date hereof, and except such as have been already
obtained and are in full force and or as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws.
(xx) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, franchises, approvals,
consents and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
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or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxi) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xxii)Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiii) Distribution of Other Offering Material by the Company. The
Company has not distributed and will not distribute, prior to the later of
the Closing Time and the completion of the Underwriter's distribution of
the Securities, any offering material in connection with the offering or
sale of the Securities, if any, other than a preliminary prospectus, the
Prospectus or the Registration Statement.
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(xxiv)Tax Law Compliance. The Company and each of its subsidiaries
have filed all necessary federal, state and foreign income and franchise
tax returns or have properly requested extensions thereof and have paid all
taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them
except as may be being contested in good faith and by appropriate
proceedings. The Company has made adequate charges, accruals and reserves
in the applicable financial statements referred to in Section 1(a)(iv)
above in respect of all federal, state and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or any
of its subsidiaries has not been finally determined.
(xxv) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have not
been described as required.
(xxvi)Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxvii) No Outstanding Loans or Other Indebtedness. There are no
outstanding loans (except loans pursuant to the existing employees'
computer purchase plan), advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or indebtedness
by the Company to or for the benefit of any of the executive officers or
directors of the Company which, individually or in the aggregate, are
material to the Company and its subsidiaries considered as one enterprise,
except as disclosed in the Prospectus.
(xxviii) Compliance with Laws. The Company and each of its
subsidiaries are in compliance with, and the Company has no reason to
believe that it and each of its subsidiaries are not conducting business in
compliance with, all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including without
limitation the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and any rules and regulations
promulgated thereunder and all applicable rules and regulations of the
FERC, the MPSC and the WPSC, except where failure to be so in compliance
would not result in a Material Adverse Effect.
(xxix)Financial Projections. The forward looking statements and
projections (including the assumptions described therein) included or
incorporated by reference in the Registration Statement and the Prospectus,
including the statements contained in (1) the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2002 and its quarterly
reports on Form 10-Q for the periods ended March 31, 2003, June 30, 2003
and September 30, 2003, in each case, under the caption "Prospective
Information", and (2) the Company's current reports on Form 8-K dated
January 29, 2003, April 22, 2003, July 24, 2003, September 10, 2003 and
October 24, 2003, in each case, under the caption "Outlook", and the
10
Company's current report on Form 8-K dated March 13, 2003, were made by the
Company in good faith and believed by the Company to have a reasonable
basis at the respective times such statements were made.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriter or to
counsel for the Underwriter shall be deemed a representation and warranty by the
Company to the Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
-----------------------------------------
(a) Securities. On the basis of the respective representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, $30.0 million aggregate amount of Securities at a
purchase price of 99.125% of the principal amount thereof, plus accrued interest
from December 15, 2003, payable at the Closing Time.
(b) Payment. Payment of the purchase price, and delivery of
certificates, for the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇ &
Preist LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Underwriter and the Company, at 9:00 A.M. (Eastern
time) on the fifth (sixth, if the pricing occurs after 4:30 P.M. (Eastern time)
on any given day) business day after the date hereof or such other time not
later than ten business days after such date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being
herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Depository on behalf of the Underwriter of certificates for the Securities
to be purchased by the Underwriter. The Company shall deliver the Securities
through the facilities of the Depository by causing the Depository to credit the
Securities to the account of the Underwriter, unless the Underwriter shall
otherwise instruct.
(c) Denominations; Registration. The Securities to be purchased by
the Underwriter hereunder will be represented by one or more definitive
certificates in book-entry form that will be deposited by or on behalf of the
Company with the Depository or its designated custodian. The Company will cause
the certificates representing the Securities to be made available to the
Underwriter for examination not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time at the office of the Depository or its
designated custodian.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will notify the Underwriter immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
11
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Underwriter
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise (i) in all cases during the period when a
prospectus is required to be delivered under the 1933 Act and (ii) thereafter,
as to the prospectus supplement relating to the Securities only, will furnish
the Underwriter with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Underwriter or counsel for the Underwriter
shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
three copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith) and copies of all signed
consents and certificates of experts. The copies of the Registration Statement
and each amendment and supplement thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to the
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as the Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the reasonable opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
12
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriter such number of copies of such amendment or supplement as the
Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriter, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriter may reasonably designate and to maintain such qualifications
in effect for a period of not less than one year from the date of this
Agreement, 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
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(j) Perfecting the Lien of the Indenture. As soon as practicable, but
in any event within 30 days of Closing Time, the Company will use its best
efforts to file for record the Indenture as a mortgage upon real property in
accordance with the laws of the States of Montana, Wyoming, North Dakota and
South Dakota in such manner and in such places as is necessary by law in order
to fully preserve and protect the security of the holders of the Securities and
all rights of the Indenture Trustee and to perfect the lien intended to be
created thereby and, upon completion of such filings, deliver to the Underwriter
and its counsel Shearman & Sterling LLP an opinion of the General Counsel of the
Company, acceptable to the Underwriter, to the following effect: The lien of the
Indenture is perfected upon substantially all of the Company's real and fixed
properties owned and all franchises held by the Company immediately prior to
July 1, 2000 and intended to be subject thereto, together with improvements,
extensions and additions to, and renewals, replacements and substitutions of or
for, any part or parts of these properties (other than property expressly
excepted or released from the Indenture), subject to permitted liens as defined
therein and to minor defects and encumbrances customarily found in the case of
properties of like size and character and which, in my opinion, would not impair
13
the use of such properties as set forth in the Indenture; and the Indenture has
been recorded in such manner and in such places as to perfect the lien intended
to be created thereby and to protect and preserve such lien; and the Indenture
is in a form sufficient to protect and preserve such lien upon filing thereof
for record in the appropriate offices in North Dakota, South Dakota, Montana and
Wyoming, where the property subject to the lien of the Indenture is located and
in Delaware, where the Company is organized.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the printing and delivery to the Underwriter of this
Agreement, the Indenture, any blue sky memorandum and such other documents as
may be required in connection with the offering, purchase, sale, authentication,
issuance or delivery of the Securities, (iii) the preparation, authentication,
issuance and delivery of the certificates for the Securities to the Underwriter
and the First Mortgage Bonds to the Indenture Trustee, and any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the Securities by the Company to the Underwriter or the issuance and
delivery of the First Mortgage Bonds by the Company to the Indenture Trustee,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriter in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriter of copies of each preliminary prospectus, and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriter of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of the Indenture Trustee and the Mortgage
Trustee; and (ix) all fees and expenses (including reasonable fees and expenses
of counsel) of the Company in connection with approval of the Securities by the
Depository for "book-entry" transfer and all other costs and expenses incident
to the performance by the Company of its obligations hereunder.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 (other than as a
result of the failure of the Company to deliver the Officer's Certificate
referred to in clause (d) thereof due to the occurrence of a Material Adverse
Effect), the Company shall reimburse the Underwriter for all of its
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligations
of the Underwriter hereunder are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of any officer of the Company or any subsidiary of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
14
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the Underwriter.
A prospectus containing information relating to the description of the
Securities, the specific method of distribution and similar matters shall have
been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received the favorable opinions, dated as of Closing Time, of ▇▇▇▇▇▇
▇▇▇▇ & Priest LLP, special counsel for the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇,
general counsel for the Company, in substantially the forms of Exhibit A-1 and
Exhibit A-2 hereto, respectively.
(c) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Shearman & Sterling LLP, counsel for the Underwriter, in a form satisfactory
to the Underwriter. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Underwriter. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(d) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any Material Adverse Effect, and the
Underwriter shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such Material Adverse Effect, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, (iv) 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 are to the knowledge of
the Company contemplated by the Commission and (v) since the date hereof there
shall not have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the ▇▇▇▇ ▇▇▇) or any notice given of
any intended or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the possible change,
other than any notice which states that the Securities may be subject to a
potential downgrade upon the occurrence of the Securities becoming unsecured.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriter shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the Underwriter
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to Underwriter with respect to the financial
statements and certain financial information contained in the Registration
15
Statement and the Prospectus; and the specified date referred to therein shall
be no more than three business days prior to the date of such letter.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriter shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Regulatory Authorizations. At the time of the execution of this
Agreement and at the Closing Time, there shall be in full force and effect the
orders of the FERC, the MPSC and the WPSC, permitting the issuance and sale of
the Securities as contemplated by this Agreement.
(h) First Mortgage Bonds Delivered to the Indenture Trustee. At or
prior to the Closing Time, the First Mortgage Bonds shall have been duly
executed by the Company, authenticated by the Mortgage Trustee and delivered to
the Indenture Trustee to be held for the benefit of the holders of the
Securities.
(i) Documents Required Under the Indenture and the Mortgage. At
Closing Time, the Underwriter shall have received copies of any certificates of
officers or opinions of counsel as are required under the Indenture in
connection with the issuance of the Securities and under the Mortgage in
connection with the issuance of the First Mortgage Bonds.
(i) Additional Documents. At Closing Time counsel for the Underwriter
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or 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 the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriter and counsel for
the Underwriter.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by notice to the Company at any time at or prior to
Closing Time as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriter. The Company agrees to indemnify
and hold harmless the Underwriter, the directors, members, officers, employees
and agents of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth below:
(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
16
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order 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 any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter),
reasonably incurred in investigating, preparing or defending against any
litigation, or any 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 the Underwriter expressly for use in the
Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or to any statements in or omissions
from the Statement of Eligibility on Form T-1, or amendments
thereto, of the Trustee under the Indenture; and provided,
further, however, that the Company shall not be liable to
the Underwriter to the extent that the Company shall sustain
the burden of proof that any such loss, liability, claim,
damage or expense resulted from the fact that the
Underwriter sold Securities to a person to whom the
Underwriter failed to send or give, at or prior to the
Closing Time a copy of the Prospectus if (i) the Company has
previously furnished copies thereof (sufficiently in advance
of the Closing Time, to allow for distribution by the
Closing Time) to the Underwriter and the loss, liability,
claim, damage or expense of the Underwriter resulted from an
untrue statement or alleged untrue statement or omission
contained in or omitted from the preliminary prospectus
which was corrected in the Prospectus and such Prospectus
was required by law to be delivered at or prior to the
written confirmation of sale to such person and (ii) such
failure to give or send the Prospectus by the Closing Time
17
to the party or parties asserting such loss, liability,
claim damage or expense would have constituted the sole
defense to the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, the directors,
officers, employees and agents of the Company, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 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 any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable 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 hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by the Underwriter,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
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 parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
18
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriter on the other hand 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
Underwriter on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, in each case as
set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriter
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
the Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
19
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each director, member, officer, employee and agent of the
Underwriter shall have the same rights to contribution as such Underwriter and
each director, officer, employee and agent of the Company, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
SECTION 8. Representations, Warranties, Agreements and Indemnities to
Survive Delivery. All representations, warranties, agreements and indemnities in
this Agreement and statements in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriter and any termination
of this Agreement.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if in the judgment of the Underwriter there shall have occurred any Material
Adverse Effect; (ii) if there has occurred any change in the United States or
international financial markets, any outbreak of national or international
hostilities or escalation thereof or other calamity or crisis or any substantial
change or development involving a prospective substantial change in national or
international political, financial or economic conditions, in each case, as in
the judgment of the Underwriter, is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Prospectus or to enforce contracts for the sale of securities; (iii) if
trading in any securities of the Company has been suspended or limited by the
Commission or the New York Stock Exchange or Pacific Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority; (iv) if a banking moratorium has been declared by any
federal, New York or California authorities; (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Underwriter may interfere materially
with the conduct of the business and operations of the Company, regardless of
whether or not such loss shall have been insured; or (vi) there shall have
occurred a material disruption in commercial banking or securities settlement or
clearance services in the United States.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
20
SECTION 10. Notices. All notices and other communications shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriter shall be
directed to UBS Securities LLC at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇; (Attention: Fixed Income Syndicate); and notices to
the Company shall be directed to it at MDU Resources Group, Inc., ▇▇▇▇▇▇▇▇▇
Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of the office of
the Treasurer.
SECTION 11. Parties. This Agreement shall each inure to benefit of
and be binding upon the Underwriter 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
Underwriter and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 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 Underwriter and the Company 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 Securities from the Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
If the foregoing is in accordance with your 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
among the Underwriter and the Company in accordance with its terms.
Very truly yours,
MDU RESOURCES GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Treasurer and Chief
Financial Officer
CONFIRMED AND ACCEPTED BY,
as of the date first above written:
UBS SECURITIES LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Authorized Signatory
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Director
22
SCHEDULE A
LIST OF SUBSIDIARIES
1. Alaska Basic Industries, Inc., an Alaska corporation
2. Anchorage Sand and Gravel Company, Inc., an Alaska corporation
3. ▇▇▇▇▇▇▇ Contracting Company, Inc., a California corporation
4. ▇▇▇▇▇▇▇ Brothers, Inc., a Minnesota corporation
5. ▇▇▇▇ Electrical Contractors, Inc., a Missouri corporation
6. Bitter Creek Pipelines, LLC, a Colorado limited liability company
7. BIV Generation Company, L.L.C., a Delaware limited liability company
8. Brazos Motor Transport, Inc., a Texas corporation
9. Brush Generation Company, L.L.C., a Delaware limited liability company
10. Brush Power, LLC, a Delaware limited liability company
11. Buffalo Bituminous, Inc., a Minnesota corporation
12. Capital Electric Construction Company, Inc., a Kansas corporation
13. Capital Electric Line Builders, Inc., a Kansas corporation
14. Centennial Energy Holdings, Inc., a Delaware corporation
15. Centennial Energy Resources LLC, a Delaware limited liability company
16. Centennial Energy Resources International Inc, a Delaware corporation
17. Centennial Holdings Capital LLC, a Delaware limited liability company
18. Centennial Power, Inc., a Delaware corporation
19. Central Oregon Redi-Mix, L.L.C., an Oregon limited liability company
20. ClearFlame, LLC, a Colorado limited liability company
21. Colorado Power Partners, a Colorado partnership
22. Concrete, Inc., a California corporation
23. ▇▇▇▇▇▇▇▇-Pacific Co., a California corporation
24. DSS Company, a California corporation
25. E.S.I., Inc., an Ohio corporation
26. Fidelity Exploration & Production Company, a Delaware corporation
27. Fidelity Oil Co., a Delaware corporation
28. Frebco, Inc., an Ohio corporation
29. FutureSource Capital Corp., a Delaware corporation
30. Granite City Concrete of ▇▇▇▇▇▇▇, Inc., a Minnesota corporation
31. Granite City Concrete Pumping, LLC, a Minnesota limited liability
company
32. Granite City Ready Mix, Inc., a Minnesota corporation
33. ▇▇▇▇▇▇ Electric Company, a Colorado corporation
34. ▇▇▇ ▇▇▇▇▇▇ & Sons, Inc., an Oregon corporation
35. Harp Engineering, Inc., a Montana corporation
36. Hawaiian Cement, a Hawaii partnership
37. ILB Hawaii, Inc., a Hawaiian corporation
38. Innovative Gas Services, Incorporated, a Kentucky corporation
39. Innovatum, Inc., a Texas corporation
40. International Line Builders, Inc., a Delaware corporation
41. InterSource Insurance Company, a Vermont corporation
42. JTL Group, Inc., a Montana corporation
23
43. JTL Group, Inc., a Wyoming corporation
44. KRC Aggregate, Inc., a Delaware corporation
45. KRC Holdings, Inc., a Delaware corporation
46. Knife River Corporation, a Delaware corporation
47. Knife River Dakota, Inc., a Delaware corporation
48. Knife River Hawaii, Inc., a Delaware corporation
49. Knife River Marine, Inc., a Delaware corporation
50. LTM, Incorporated, an Oregon corporation
51. ▇▇▇ ▇▇▇▇▇ Pipeline Co., an Oregon corporation
52. MDU Brasil Ltda., a Brazil limited liability company
53. MDU Chile Inversiones Ltda., a Chile corporation
54. MDU Resources International LLC, a Delaware limited liability company
55. MDU Resources Luxembourg I LLC S.a.r.l., a Luxembourg limited liability
company
56. MDU Resources Luxembourg II LLC S.a.r.l., a Luxembourg limited liability
company
57. Marcon Energy Corporation, a Kentucky corporation 58. Medford Ready Mix,
Inc., a Delaware corporation
59. ▇▇▇▇▇▇ Generation Company, L.L.C., a Delaware limited liability company
60. ▇▇▇▇▇ Bros., Inc., an Oregon corporation
61. Mountain View Power Partners, LLC, a Delaware limited liability company
62. Netricity LLC, an Alaska limited liability company
63. New Avoca Gas Storage LLC, a Texas limited liability company
64. Newco, Inc., an Ohio corporation
65. Northstar Materials, Inc., a Minnesota corporation
66. Oregon Electric Construction, Inc., an Oregon corporation
67. Pouk & ▇▇▇▇▇▇▇, Inc., a California corporation
68. Prairielands Energy Marketing, Inc., a Delaware corporation
69. Rocky Mountain Contractors, Inc., a Montana corporation
70. Rocky Mountain Power, Inc., a Montana corporation
71. Rogue Aggregates, Inc., an Oregon corporation.
72. Seven Brothers Ranches, Inc., a Wyoming corporation
73. Utility Services, Inc., a Delaware corporation
74. WBI Canadian Pipeline, Ltd., a Canadian corporation
75. WBI Energy Services, Inc., a Delaware corporation
76. WBI Holdings, Inc., a Delaware corporation
77. WBI Pipeline & Storage Group, Inc., a Delaware corporation
78. WHC, Ltd., a Hawaii corporation
79. The ▇▇▇▇▇▇-▇▇▇▇▇ Company, an Ohio corporation
80. ▇▇▇▇▇▇-▇▇▇▇▇ Equipment Co., a Delaware corporation
81. ▇▇▇▇▇▇-▇▇▇▇▇ Pumps & Systems, Inc., an Ohio corporation
82. Williston Basin Interstate Pipeline Company, a Delaware corporation
83. Young Brothers Holdings LLC, a Delaware limited liability company
84. Young Brothers, Inc. Contractors, a Texas corporation
85. Young Contractors, Inc., a Texas corporation
86. Young Materials, Corp., a Texas corporation
24
Exhibit A-1
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP]
New York, New York
______ __, 2003
UBS SECURITIES LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special counsel to MDU Resources Group, Inc., a
Delaware corporation (the "Company"), in connection with the sale by the Company
pursuant to the Underwriting Agreement (the "Agreement"), dated December 16,
2003, between the Company and you, as Underwriter of $30.0 million aggregate
principal amount of the Company's 5.98% Senior Notes due 2033, (the
"Securities") and the preparation and filing of a Registration Statement on Form
S-3 (File No. 333-104150), as amended (the "Registration Statement"), and the
preparation and filing of a prospectus supplement to the Registration Statement
relating to the offering of the Securities. All capitalized terms used herein
without definition shall have the respective meanings set forth in the
Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
We have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Act, incorporate or are deemed to incorporate by
reference, among other documents, (1) the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 2002 (including portions of the
Annual Report to Security Holders submitted on paper on March 6, 2003), (2) the
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2003,
June 30, 2003 and September 30, 2003, (3) the Current Reports on Form 8-K dated
January 29, 2003, March 13, 2003, September 10, 2003 and November 18, 2003, and
(4) the definitive Proxy Statement filed on March 6, 2003 (collectively, the
"Exchange Act Documents"), each as filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). In addition, we have examined, and have
relied as to matters of fact upon, the documents delivered to you at the
closing, and upon originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such other and
further investigations, as we have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
As counsel for the Company, we are familiar with the legal matters
pertaining to, and the corporate proceedings of the Company taken with respect
to, the authorization, issuance and sale of the Securities and the
authorization, issuance and delivery of the First Mortgage Bonds. We have
A-1-1
examined, among other things, the Indenture, the Mortgage, and such other
documents as we have deemed relevant for the purpose of rendering the opinions
enumerated below. We express no opinion on matters regarding titles to
properties of the Company, the lien of the Indenture or the filing or
recordation thereof or the lien of the Mortgage or the filing or recordation
thereof.
We have relied upon (i) a certificate of the Indenture Trustee under
the Indenture as to the due authentication and delivery of the Securities by the
Indenture Trustee and as to the due authorization, execution and delivery of the
Indenture by the Indenture Trustee and (ii) a Certificate of the Mortgage
Trustee under the Mortgage as to the due authentication and delivery of the
First Mortgage Bonds.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota.
(iii) The Agreement has been duly authorized, executed and delivered
by the Company.
(iv) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended, and has been duly authorized, executed and
delivered by the Company and, assuming due authorization and execution by
the Indenture Trustee, will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency or similar laws relating to mortgagees' or other
creditors' rights generally and (ii) general principles of equity.
(v) The Securities are in proper form and have been duly authorized
and executed by the Company and, when authenticated by the Indenture
Trustee and delivered to the Underwriter pursuant to the Agreement against
payment of the consideration set forth therein, will be legal, valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms, except to the extent that enforcement thereof
may be limited by (i) bankruptcy, insolvency or similar laws relating to
mortgagees' or other creditors' rights generally and (ii) general
principles of equity, and entitled to the benefits of the Indenture.
A-1-2
(vi) The Registration Statement has become effective under the Act,
any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission.
(vii) The Registration Statement, the Prospectus and each amendment
and supplement to the Registration Statement and Prospectus as of the time
the Registration Statement became effective, and the Prospectus as of the
date it was filed pursuant to Rule 424(b) under the Act (other than (A) the
financial statements and supporting schedules and other financial data
included therein and (B) the Statement of Eligibility on Form T-1, or
amendments thereto, upon which we express no opinion (collectively, the
"Excepted Information")) complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(viii) The Exchange Act Documents (other than the Excepted
Information, upon which we express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(ix) The information in the Prospectus under the caption "Description
of the Senior Notes," "Description of the Debt Securities" and "Description
of the First Mortgage Bonds" and in Item 15 of the Registration Statement,
to the extent that it constitutes matters of law, summaries of legal
matters, the Company's Restated Certificate of Incorporation and by-laws,
or legal conclusions, has been reviewed by us and is correct in all
material respects.
(x) The Federal Energy Regulatory Commission (the "FERC"), the Montana
Public Service Commission and the Public Service Commission of Wyoming have
authorized the issuance and sale of the Securities and the issuance and
delivery of the First Mortgage Bonds in the manner contemplated by the
Agreement and the Prospectus, and, to the best of our knowledge, said
authorizations are in full force and effect. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, and under the 1933 Act
and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various
jurisdictions, as to which we express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the
Agreement, the offering, issuance, sale or delivery of the Securities or
the issuance and delivery of the First Mortgage Bonds, except (i) such as
may be required in connection with post-filing requirements with the FERC
due after the date hereof and (ii) the filing of the Indenture in the
appropriate offices in the States of Montana, Wyoming, North Dakota and
South Dakota where the properties of the Company that are subject to the
lien of the Indenture are located and in Delaware, where the Company is
organized, in order to perfect the lien of the Indenture as required
thereby.
A-1-3
(xi) The execution, delivery and performance of this Agreement and the
Security Documents and the consummation of the transactions contemplated in
the Agreement, the Security Documents and the Registration Statement and
compliance by the Company with its obligations under the Agreement and the
Security Documents do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach
of, or default or Repayment Event under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, each of a material nature and known to us,
to which the Company is a party or by which it may be bound, or to which
any of the property or assets of the Company is subject (except for (i) the
lien of the Mortgage securing the First Mortgage Bonds and the lien of the
Indenture securing the Securities and (ii) such conflicts, breaches,
defaults or liens, charges or encumbrances or Repayment Events that would
not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the Restated Certificate of Incorporation or
by-laws of the Company or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its properties, assets or operations.
(xii) The Company is not, and after giving effect to the offer and
sale of the Securities and the receipt and application of the proceeds
therefrom in the manner described in the Prospectus under the caption "Use
of Proceeds", will not be, an "investment company" within the meaning of
the Investment Company Act.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (ix) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, we
participated in conferences with certain of its officers and employees, with its
General Counsel and other members of its Legal Department, with your
representatives and with representatives of Deloitte & Touche LLP, the
independent accountants who examined the 2002 financial statements included in
the Exchange Act Documents. Based on our examination of the Registration
Statement, the Prospectus and the Exchange Act Documents, our investigations
made in connection with the preparation of the Registration Statement and the
Prospectus and our participation in the conferences referred to above, nothing
has come to our attention that would lead us to believe that the Registration
Statement (except for the Excepted Information, upon which we make no
statement), at the time such Registration Statement became effective and the
date of the Agreement, 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 (except for
the Excepted Information, upon which we make no statement), as of its date or on
the date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware, and the Federal laws of the
United States of America. We express no opinion as to the laws of any other
jurisdiction.
A-1-4
In rendering this opinion, we have relied as to all matters of
Montana, North Dakota, South Dakota, Wyoming and Minnesota law and, as to the
matters addressed therein, with your consent, upon the opinion addressed to you
of even date herewith of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, Esq., Bismarck, North Dakota, the
General Counsel of the Company, and we believe that we and the Underwriter are
justified in relying upon such opinion.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation other
than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, Esq., the Company's General Counsel, to the extent set
forth in his opinion of even date herewith addressed to you, without our prior
consent.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
A-1-5
Exhibit A-2
[LETTERHEAD OF MDU RESOURCES GROUP, INC.]
_____ __, 2003
UBS SECURITIES LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am General Counsel of MDU Resources Group, Inc., a Delaware
corporation (the "Company"), and am delivering this opinion in connection with
the sale by the Company pursuant to the Underwriting Agreement (the
"Agreement"), dated December 16, 2003, between the Company and you, as
Underwriter, of $30.0 million aggregate principal amount of the Company's 5.98%
Senior Notes due 2033 (the "Securities") and the preparation and filing of a
Registration Statement on Form S-3 (File No. 333-104150), as amended (the
"Registration Statement"), and the preparation and filing of a prospectus
supplement to the Registration Statement relating to the offering of the
Securities. All capitalized terms used herein without definition shall have the
respective meanings set forth in the Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
I have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Act, incorporate or are deemed to incorporate by
reference, among other documents, (1) the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 2002 (including portions of the
Annual Report to Security Holders submitted on paper on March 6, 2003), (2) the
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2003,
June 30, 2003 and September 30, 2003, (3) the Current Reports on Form 8-K dated
January 29, 2003, March 13, 2003, September 10, 2003 and November 18, 2003, and
(4) the definitive Proxy Statement filed on March 6, 2003 (collectively, the
"Exchange Act Documents"), each as filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). In addition, I have examined, and have
relied as to matters of fact upon, certain documents delivered to you at the
closing (including but not limited to, the Indenture and the Mortgage), and upon
originals or copies, certified or otherwise identified to my satisfaction, of
such corporate records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such other and further
investigations, as I have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
I have relied upon (i) a certificate of the Indenture Trustee under
the Indenture as to the due authentication and delivery of the Securities by the
A-2-1
Indenture Trustee and as to the due authentication, execution and delivery of
the Indenture by the Indenture Trustee and (ii) a certificate of the Mortgage
Trustee under the Mortgage as to the due authentication and delivery of the
First Mortgage Bonds.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Agreement and the Security Documents. The Company holds valid and
subsisting franchises, licenses and permits authorizing it to carry on the
utility business in which it is engaged, except as may be stated or
referred to in the Prospectus.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota and is not required, whether by reason of the
ownership or leasing of property or the conduct of business, to be
qualified in any other jurisdiction, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(iv) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus. Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of my knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary.
(v) The Company has satisfactory title to any easements and good and
marketable or insurable title in fee simple (except as the Company's
interest is stated to be otherwise) to all of its properties which are
subject to the lien of the Indenture and the Mortgage, subject to permitted
liens as defined therein and to minor defects and encumbrances customarily
found in the case of properties of like size and character and which, in my
opinion, would not impair the use of such properties as set forth in the
Indenture and the Mortgage. The description of such properties set forth in
the Indenture and the Mortgage is adequate to constitute the Indenture and
A-2-2
the Mortgage as a lien thereon. The Mortgage constitutes a valid, direct
and first lien, and the Indenture constitutes a valid and direct lien, upon
said properties, which include substantially all of the real and fixed
properties owned and all franchises held by the Company immediately prior
to July 1, 2000 and intended to be subject thereto, together with
improvements, extensions and additions to, and renewals, replacements and
substitutions of or for, any part or parts of these properties (other than
property expressly excepted or released from the Mortgage and the
Indenture), subject, however, to permitted liens as defined therein.
(vi) The Mortgage has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency or other
similar laws affecting enforcement of mortgagees' and other creditors'
rights generally and (ii) general principles of equity. The lien of the
Mortgage is perfected upon substantially all of the real and fixed
properties owned and all of the franchises held by the Company immediately
prior to July 1, 2000 and intended to be subject thereto, together with
improvements, extensions and additions to, and renewals, replacements and
substitutions of or for, any part or parts of these properties (other than
property expressly excepted or released from the Mortgage), subject to
permitted liens as defined therein and to minor defects and encumbrances
customarily found in the case of properties of like size and character and
which, in my opinion, would not impair the use of such properties as set
forth in the Mortgage; and the Mortgage (including the First through
Forty-Ninth Supplemental Indentures) has been recorded in such manner and
in such places as to make effective the lien intended to be created thereby
and to protect and preserve such lien; and the Mortgage is in a form
sufficient to protect and preserve such lien upon filing thereof for record
in the appropriate offices in North Dakota, South Dakota, Montana and
Wyoming, where the property subject to the lien of the Mortgage is located
and in Delaware, where the Company is organized.
(vii) The First Mortgage Bonds have been duly authorized, and when
executed by the Company, authenticated by the Mortgage Trustee and
delivered to the Indenture Trustee and when the Securities have been
issued, authenticated and delivered to the Underwriter against payment of
the purchase price as set forth in the Agreement, will constitute valid and
legally binding obligations of the Company entitled to the benefits and
security provided by the Mortgage and are enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited
by (i) bankruptcy, insolvency or other similar laws affecting enforcement
of mortgagees' and other creditors' rights generally and (ii) general
principles of equity.
(viii) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency or other
similar laws affecting enforcement of mortgagees' and other creditors'
rights generally and (ii) general principles of equity. The Indenture is in
a form sufficient to protect and preserve such lien upon filing thereof for
record in the appropriate offices in North Dakota, South Dakota, Montana
and Wyoming, where the property subject to the lien of the Indenture is
located and in Delaware, where the Company is organized.
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(ix) The Securities have been duly authorized and executed by the
Company, and when authenticated and issued in a manner provided for in the
Indenture and delivered to the Underwriter upon payment of the purchase
price as set forth in the Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits and security
provided by the Indenture and are enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by (i)
bankruptcy, insolvency or other similar laws affecting enforcement of
mortgagees' and other creditors' rights generally and (ii) general
principles of equity.
(x) The Indenture, the Securities, the Mortgage and the First Mortgage
Bonds conform to the descriptions thereof in the Prospectus.
(xi) To the best of my knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, (A) which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), (B) except as described in the Registration Statement, which
might reasonably be expected to result in a Material Adverse Effect or to
materially and adversely affect the properties or assets of the Company, or
(C) which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the Agreement and the
Security Documents or the performance by the Company of its obligations
thereunder.
(xii) The information (i) in the Prospectus under the caption
"Description of the Senior Notes," "Description of the Debt Securities" and
"Description of the First Mortgage Bonds" and in Item 15 of the
Registration Statement; and (ii) in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2002 under the headings
"Electric--General", "Electric--Regulation and Competition", "Natural Gas
Distribution--General", "Natural Gas Distribution--Regulatory Matters",
"Pipeline and Energy Services--General" and "Pipeline and Energy
Services--Regulatory Matters and Revenue Subject to Refund" each under the
caption "Business and Properties" and under the caption "Legal
Proceedings", to the extent that it constitutes matters of law, summaries
of legal matters or the Company's charter and by-laws, or legal proceedings
or legal conclusions, has been reviewed by me and is correct in all
material respects.
(xiii) To the best of my knowledge, there are no material statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
(xiv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects, to the best of my knowledge, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments, each of a material nature, required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
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(xv) To the best of my knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(xvi) The Federal Energy Regulatory Commission (the "FERC"), the
Montana Public Service Commission and the Public Service Commission of
Wyoming have authorized the issuance and sale of the Securities and the
issuance and delivery of the First Mortgage Bonds in the manner
contemplated by the Agreement and the Prospectus, and, to the best of my
knowledge, said authorizations are in full force and effect. No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various jurisdictions, as to
which I express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Agreement, the offering,
issuance, sale or delivery of the Securities or the issuance and delivery
of the First Mortgage Bonds, except (i) such as may be required in
connection with post-filing requirements with the FERC due after the date
hereof and (ii) the filing of the Indenture in the appropriate offices in
the States of Montana, Wyoming, North Dakota and South Dakota where the
properties of the Company that are subject to the lien of the Indenture are
located and in Delaware, where the Company is organized, in order to
perfect the lien of the Indenture, as required thereby.
(xvii) The execution, delivery and performance of the Agreement and
the Security Documents and the consummation of the transactions
contemplated in the Agreement, the Security Documents and the Prospectus
and compliance by the Company with its obligations under the Agreement and
the Security Documents do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, each of a material
nature and known to me, to which the Company or any subsidiary is a party
or by which it or any of them may be bound, or to which any of the property
or assets of the Company or any subsidiary is subject (except for (i) the
lien of the Mortgage securing the First Mortgage Bonds and the lien of the
Indenture securing the Securities and (ii) such conflicts, breaches or
defaults or liens, charges or encumbrances or Repayment Events that would
not have a Material Adverse Effect), nor will such action result in any
violation of the provisions of the Restated Certificate of Incorporation or
by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to me, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
A-2-5
I have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (xii) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, I
participated in conferences with certain of its officers and employees, with
other counsel for the Company, with your representatives and with
representatives of Deloitte & Touche LLP, the independent accountants who
reviewed the 2002 financial statements included in the Exchange Act Documents.
Based on my examination of the Registration Statement, the Prospectus and the
Exchange Act Documents, my investigations made in connection with the
preparation of the Registration Statement and the Prospectus and my
participation in the conferences referred to above, nothing has come to my
attention that would lead me to believe that the Registration Statement (except
for (A) the financial statements and supporting schedules and other financial
data included therein and (B) the Statement of Eligibility on Form T-1, or
amendments thereto, upon which I make no statement (collectively, the "Excepted
Information")), at the time such Registration Statement became effective and the
date of the Agreement, 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 (except for
the Excepted Information, upon which I make no statement), as of its date or on
the date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
I am a member of the North Dakota and Montana Bars and do not hold
myself out as an expert on the laws of any other state, but I have made a study
of the laws of such states insofar as such laws are involved in the conclusions
stated in this opinion. As to matters of the General Corporation Law of the
State of Delaware and the Federal laws of the United States of America, I have
relied, with your consent, upon the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel
to the Company, a copy of which has been delivered to you. As to matters of the
law of the State of Wyoming and South Dakota, I have relied, with your consent,
upon the opinion[s] of _________________, a copy of which has been delivered to
you.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation, other
than ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special counsel to the Company, and Shearman &
Sterling LLP, counsel to the Underwriter, to the extent set forth in their
opinions of even date herewith addressed to you, without my prior written
consent.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
General Counsel
A-2-6