Sales Agency Financing Agreement
EXHIBIT
1
Sales
Agency Financing Agreement (this “Agreement”), dated as of July 27, 2006 between
MDU Resources Group, Inc., a Delaware corporation (the “Company”), and ▇▇▇▇▇
Fargo Securities, LLC (“▇▇▇▇▇ Fargo”).
W
I T N E
S S E T H:
WHEREAS,
the Company has authorized and proposes to issue and sell in the manner
contemplated by this Agreement up to 3,000,000 Common Shares upon the terms
and
subject to the conditions contained herein; and
WHEREAS,
▇▇▇▇▇ Fargo has been appointed by the Company as its agent to sell the Common
Shares and agrees to use its commercially reasonable efforts to sell the Common
Shares offered by the Company upon the terms and subject to the conditions
contained herein.
NOW
THEREFORE, in consideration of the premises, representations, warranties,
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound hereby, the parties hereto agree as
follows:
DEFINITIONS
Section
1.01 Certain
Definitions.
For purposes of this Agreement, capitalized terms used herein and not otherwise
defined shall have the following respective meanings:
“Actual
Sold Amount” means the number of Issuance Shares that ▇▇▇▇▇ Fargo has sold
during the Selling Period.
“Affiliate”
of a Person means another Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, such first- mentioned Person. The term “control” (including the terms
“controlling,” “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction
of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
“Agency
Trigger Event” has the meaning set forth in Section 4.12.
“Closing”
has the meaning set forth in Section 2.02.
“Closing
Date” means the date on which the Closing occurs.
“Comfort
Letter Trigger Event” has the meaning set forth in Section 4.08.
“Commission”
means the United States Securities and Exchange Commission.
“Commitment
Period” means the period commencing on the date of this Agreement and expiring
on the earliest to occur of (x) the date on which ▇▇▇▇▇ Fargo shall have
distributed the Maximum Program Amount pursuant to this Agreement, (y) the
date
this Agreement is terminated pursuant to Article VII and (z) June 30,
2007.
“Common
Shares” shall mean shares of the Company’s Common Stock issued or issuable
pursuant to this Agreement.
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“Common
Stock” shall mean the Company’s Common Stock, $1.00 par value per share,
including the Rights appurtenant thereto.
“Daily
Floor Price” means the prior Trading Day’s closing price on the New York Stock
Exchange, less $1.00, below which ▇▇▇▇▇ Fargo shall not sell Common Shares
during a particular Trading Day.
“▇▇▇▇▇”
shall mean the Commission’s Electronic Data Gathering, Analysis and Retrieval
system.
“Effective
Date” has the meaning set forth in Section 3.03.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exchange
Data” has the meaning set forth in the definition of “Monthly Floor Price
Computation.”
“Issuance”
means each occasion the Company elects to exercise its right to deliver an
Issuance Notice requiring ▇▇▇▇▇ Fargo to use its commercially reasonable efforts
to sell the Common Shares as specified in such Issuance Notice, subject to
the
terms and conditions of this Agreement.
“Issuance
Amount” means the aggregate number of Issuance Shares to be distributed by ▇▇▇▇▇
Fargo with respect to any Issuance, which may not exceed 45,000 Common Shares
during any Trading Day during any Selling Period, without the prior written
consent of ▇▇▇▇▇ Fargo, which may be withheld in its sole
discretion.
“Issuance
Date” means any Trading Day during the Commitment Period that an Issuance Notice
is deemed delivered pursuant to Section 2.03(b) hereof.
“Issuance
Notice” means a written notice to ▇▇▇▇▇ Fargo delivered in accordance with this
Agreement in the form attached hereto as Exhibit A.
“Issuance
Price” means the Sales Price less the Selling Commission.
“Issuance
Shares” means all shares of Common Stock issued or issuable pursuant to an
Issuance that has occurred or may occur in accordance with the terms and
conditions of this Agreement.
“Issuance
Supplement” has the meaning set forth in Section 3.01.
“Material
Adverse Effect” means a material adverse effect on the business, earnings,
assets, operations, properties, or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole, or any material adverse effect
on the Company’s ability to consummate the transactions contemplated by, or to
execute, deliver and perform its obligations under, this Agreement.
“Material
Subsidiary” has the meaning set forth in Section 3.05.
“Maximum
Program Amount” means 3,000,000 Common Shares (or, if less, the aggregate number
of Common Shares registered for sale at the applicable Sales Price or Prices
under the Registration Statement).
“Monthly
Floor Price” means the price computed by the Company pursuant to the Monthly
Floor Price Computation and specified in the Issuance Notice (and if the
applicable Selling Period extends into
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a
second
calendar month, updated in an amendment to the Issuance Notice to be delivered
by the Company to ▇▇▇▇▇ Fargo before the Principal Market opens for trading
on
the first Trading Day of such calendar month), below which ▇▇▇▇▇ Fargo shall
not
sell Common Shares on any Trading Day during the Selling Period in such calendar
month.
“Monthly
Floor Price Computation” means a price, calculated by the Company (from New York
Stock Exchange data furnished by ▇▇▇▇▇ Fargo (the “Exchange Data”)) before the
New York Stock Exchange opens for trading on the first Trading Day of each
calendar month, equal to 90% times the arithmetic average of (i) the last
three-month closing high price for the Common Stock, (ii) the last three-month
closing low price for the Common Stock, (iii) the last three-month average
daily
closing price for the Common Stock, (iv) the 52-week closing high price for
the
Common Stock, (v) the 52-week closing low price for the Common Stock, and (vi)
the most frequently traded price for the Common Stock (mode) during the last
three months.
“Opinion
Trigger Event” has the meaning set forth in Section 4.07.
“Person”
means an individual or a corporation, partnership, limited liability company,
trust, incorporated or unincorporated association, joint venture, joint stock
company, governmental authority or other entity of any kind.
“Principal
Market” means the New York Stock Exchange.
“Prospectus”
has the meaning set forth in Section 3.01.
“Registration
Statement” has the meaning set forth in Section 3.01.
“Representation
Date” has the meaning set forth in the initial paragraph of Article
III.
“Rights”
means the preference share purchase rights issued pursuant to the Rights
Agreement, dated as of November 12, 1998, as amended (including by any
certificate of adjustment), between the Company and ▇▇▇▇▇ Fargo Bank Minnesota,
N.A. (formerly known as Norwest Bank Minnesota, N.A.), as Rights
Agent.
“Sales
Price” means the actual sale execution price of each Common Share (not less than
par value) sold by ▇▇▇▇▇ Fargo on the Principal Market (or, in ▇▇▇▇▇ Fargo’s
sole discretion, any other exchange on which the Common Stock is then listed
or
admitted to trading or to or through a market maker or through an electronic
communications network) hereunder in the case of ordinary brokers’ transactions,
or as otherwise agreed by the parties in other methods of sale.
“Securities
Act” means the Securities Act of 1933, as amended.
“Selling
Commission” means 1.0% of the Sales Price.
“Selling
Period” means the period of one to twenty consecutive Trading Days (as
determined by the Company in its sole discretion and specified in the applicable
Issuance Notice) following the Trading Day on which an Issuance Notice is
delivered or deemed to be delivered pursuant to Section 2.03(b)
hereof.
“Settlement
Date” means the third (3rd)
Trading
Day immediately following the sale of any Issuance Shares pursuant to this
Agreement.
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“Subsidiary”
has the meaning set forth in Section 3.05.
“Trading
Day” means any day which is a trading day on the New York Stock Exchange, other
than a day on which trading is scheduled to close prior to its regular weekday
closing time.
“Utility
Regulatory Agencies” has the meaning set forth in Section 3.08.
“Voting
Stock” of any Person as of any date means the capital stock of such Person that
is at the time entitled to vote in the election of the Board of Directors of
such Person.
ARTICLE
II
SALE
OF
COMMON STOCK
Section
2.01 Issuance.
(a) Upon
the terms and subject to the conditions of this Agreement, the Company may
sell
Common Shares through ▇▇▇▇▇ Fargo and Well Fargo shall use its commercially
reasonable efforts to sell Common Shares, up to the Maximum Program Amount,
based on and in accordance with such number of Issuance Notices as the Company,
in its sole discretion, shall choose to deliver during the Commitment Period
until the aggregate number of Common Shares sold under this Agreement equals
the
Maximum Program Amount or this Agreement is otherwise terminated. Subject to
the
foregoing and the other terms and conditions of this Agreement, upon the
delivery of an Issuance Notice, and unless the sale of the Issuance Shares
described therein has been suspended, cancelled or otherwise terminated in
accordance with the terms of this Agreement, ▇▇▇▇▇ Fargo will use its
commercially reasonable efforts consistent with its normal trading and sales
practices to sell such Issuance Shares up to the Issuance Amount specified
in
such Issuance Notice on the Principal Market (or, in ▇▇▇▇▇ Fargo’s sole
discretion, any other exchange on which the Common Stock is then listed or
admitted for trading or to or through a market maker or through an electronic
communications network), and otherwise in accordance with the terms of such
Issuance Notice. ▇▇▇▇▇ Fargo will provide written confirmation to the Company
no
later than the opening of the Trading Day next following the Trading Day on
which it has made sales of Issuance Shares hereunder setting forth the portion
of the Actual Sold Amount for such Trading Day, the corresponding Sales Price
or
Prices and the Issuance Price or Prices payable to the Company in respect
thereof. ▇▇▇▇▇ Fargo may sell Issuance Shares in the manner described in Section
2.01(b) herein. The Company acknowledges and agrees that (i) there can be no
assurance that ▇▇▇▇▇ Fargo will be successful in selling Issuance Shares and
(ii) ▇▇▇▇▇ Fargo will incur no liability or obligation to the Company or any
other Person if it does not sell Issuance Shares for any reason other than
a
failure by ▇▇▇▇▇ Fargo to use its commercially reasonable efforts consistent
with its normal trading and sales practices to sell such Issuance Shares as
required under this Section 2.01. In acting hereunder, ▇▇▇▇▇ Fargo will be
acting as agent for the Company and not as principal.
(b) Method
of Offer and Sale.
The
Common Shares may be offered and sold by any method permitted by law deemed
to
be an “at-the-market offering” as defined in Rule 415 under the Securities Act,
including sales made directly on the Principal Market (or, in ▇▇▇▇▇ FARGO’s sole
discretion, any other exchange on which the Common Stock is then listed or
admitted to trading) or sales made to or through a market maker or through
an
electronic communications network.
(c) Issuances.
Upon
the terms and subject to the conditions set forth herein, on any Trading Day
as
provided in Section 2.03(b) hereof during the Commitment Period on which the
conditions set forth in Section 5.01 and 5.02 hereof have been satisfied, the
Company may exercise an Issuance by the delivery of an Issuance Notice, executed
by the Chief Executive Officer, the President, any Vice President or any other
officer of the Company so designated in writing by the Chief Executive Officer
for this
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purpose
(each, an “Authorized Officer”), to ▇▇▇▇▇ Fargo. The number of Issuance Shares
that ▇▇▇▇▇ Fargo shall use its commercially reasonable efforts to sell pursuant
to such Issuance shall not exceed the Issuance Amount. Each sale of Issuance
Shares will be settled on the applicable Settlement Date following such
sale.
Section
2.02 Effectiveness.
The
effectiveness of this Agreement (the “Closing”) shall be deemed to take place
upon the later of the execution and delivery of this Agreement by the parties
hereto and the completion of the closing transactions set forth in the
immediately following sentence. At the Closing, the following closing
transactions shall take place, each of which shall be deemed to occur
simultaneously with the Closing: (i) the Company shall deliver to ▇▇▇▇▇ Fargo
a
certificate executed by the Secretary of the Company, signing in such capacity,
dated the date of the Closing: (A) certifying that attached thereto are true
and
complete copies of the resolutions duly adopted by the Board of Directors of
the
Company authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including, without
limitation, the issuance of the Common Shares pursuant to this Agreement),
which
authorization shall be in full force and effect on and as of the date of such
certificate and (B) certifying and attesting to the office, incumbency, due
authority and specimen signatures of each Person who executed the Agreement
for
or on behalf of the Company; (ii) the Company shall deliver to ▇▇▇▇▇ Fargo
a
certificate executed by the Chief Executive Officer, the President or any Vice
President of the Company and by the Chief Financial Officer of the Company,
signing in such capacity, dated the date of the Closing, confirming that the
representations and warranties of the Company contained in this Agreement are
true and correct in all material respects and that the Company has performed
in
all material respects all of its obligations hereunder to be performed on or
prior to the Closing Date and as to the matters set forth in Section 5.01(a)
hereof; (iii) ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special counsel to the Company,
shall deliver to ▇▇▇▇▇ Fargo an opinion, dated the date of the Closing and
addressed to ▇▇▇▇▇ Fargo, substantially in the form of Exhibit B-1 attached
hereto and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel and Secretary of the Company,
shall deliver to ▇▇▇▇▇ Fargo an opinion, dated the date of the Closing and
addressed to ▇▇▇▇▇ Fargo, substantially in the form of Exhibit B-2 attached
hereto; (iv) Deloitte & Touche LLP shall deliver to ▇▇▇▇▇ Fargo a
letter, dated the Closing Date, in form and substance reasonably satisfactory
to
▇▇▇▇▇ Fargo; and (v) the Company shall pay the expenses set forth in Section
9.02(ii), (iv) and (viii) hereof by wire transfer to the account designated
by
▇▇▇▇▇ Fargo in writing prior to the Closing.
Section
2.03 Mechanics
of Issuances.
(a)
Issuance
Notice.
On any
Trading Day during the Commitment Period, the Company may deliver an Issuance
Notice to ▇▇▇▇▇ Fargo, subject to the satisfaction of the conditions set forth
in Sections 5.01 and 5.02; provided,
however,
that
(1) the Issuance Amount for each Issuance as designated by the Company in the
applicable Issuance Notice shall in no event exceed the product of (x) 45,000
times (y) the number of Trading Days in the Selling Period without the prior
written consent of ▇▇▇▇▇ Fargo, which may be withheld in its sole discretion,
(2) in no event shall ▇▇▇▇▇ Fargo sell more than 1,500 Common Shares in any
one
order during any given Selling Period unless otherwise expressly authorized
by
the Company, and (3) notwithstanding anything in this Agreement to the contrary,
▇▇▇▇▇ Fargo shall have no further obligations with respect to any Issuance
Notice if and to the extent the aggregate number of Issuance Shares sold
pursuant thereto, together with the aggregate number of Common Shares previously
sold under this Agreement, shall exceed the Maximum Program Amount.
(b) Delivery
of Issuance Notice.
An
Issuance Notice shall be deemed delivered on the Trading Day that it is received
by e-mail notice, facsimile or otherwise (and the Company confirms such delivery
by e-mail notice, facsimile or by telephone (including voicemail message))
by
▇▇▇▇▇ Fargo. No Issuance Notice may be delivered other than on a Trading Day
during the Commitment Period.
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(c) Floor
Prices.
▇▇▇▇▇
Fargo shall not sell Common Shares on any particular Trading Day below the
applicable Daily Floor Price, and shall not sell Common Shares during any
Selling Period below the applicable Monthly Floor Price. ▇▇▇▇▇ Fargo shall
furnish the Company with the Exchange Data, and the Company shall provide
written confirmation to ▇▇▇▇▇ Fargo of the applicable Monthly Floor Price,
before the New York Stock Exchange opens for trading on the first Trading Day
of
each calendar month. ▇▇▇▇▇ Fargo makes no representation or warranty as to
the
accuracy or completeness of the Exchange Data, and ▇▇▇▇▇ Fargo will incur no
liability or obligation to the Company or any other Person based on or relating
to the Exchange Data or any inaccuracies therein.
(d) Determination
of Issuance Shares to be Sold.
The
number of Issuance Shares to be sold by ▇▇▇▇▇ Fargo with respect to any Issuance
shall be the Actual Sold Amount during the Selling Period.
(e) Trading
Guidelines.
▇▇▇▇▇
Fargo may, to the extent permitted under the Securities Act and the Exchange
Act, purchase and sell Common Stock for its own account while this Agreement
is
in effect provided that (i) no such purchase or sale shall take place while
an
Issuance Notice is in effect (except to the extent ▇▇▇▇▇ Fargo may engage in
sales of Issuance Shares purchased or deemed purchased from the Company ),
(ii)
in no circumstances shall ▇▇▇▇▇ Fargo have a short position in the Common Stock
for its own account and (iii) the Company shall not be deemed to have authorized
or consented to any such purchases or sales by ▇▇▇▇▇ Fargo. In addition, the
Company hereby acknowledges and agrees that ▇▇▇▇▇ Fargo’s affiliates, subject to
compliance with Regulation M under the Exchange Act, may make markets in the
Common Stock or other securities of the Company, in connection with which they
may buy and sell, as agent or principal, for long or short account, shares
of
Common Stock or other securities of the Company, at the same time ▇▇▇▇▇ Fargo
is
acting as agent pursuant to this Agreement.
Section
2.04 Use
of
Free Writing Prospectuses.
Neither
the Company nor ▇▇▇▇▇ Fargo has prepared, used, referred to or distributed,
or
will prepare, use, refer to or distribute, without the other party’s prior
written consent, any “written communication” which constitutes a “free writing
prospectus” as such terms are defined in Rule 405 under the Securities
Act.
Section
2.05 Settlements.
Subject
to the provisions of Article V, on or before each Settlement Date, the Company
will, or will cause its transfer agent to, electronically transfer the Issuance
Shares being sold by crediting ▇▇▇▇▇ Fargo or its designee’s account at The
Depository Trust Company through its Deposit Withdrawal at Custodian (DWAC)
System, or by such other means of delivery as may be mutually agreed upon by
the
parties hereto and, concurrently with the receipt of such Issuance Shares,
which
in all cases shall be freely tradable, transferable, registered shares in good
deliverable form, ▇▇▇▇▇ Fargo will deliver the related Issuance Price in same
day funds to an account designated by the Company. If the Company defaults
in
its obligation to deliver Issuance Shares on a Settlement Date, the Company
agrees that it will (i) hold ▇▇▇▇▇ Fargo harmless against any loss, claim,
damage or expense (including, without limitation, penalties, interest and
reasonable legal fees and expenses), as incurred, arising out of or in
connection with such default by the Company, and (ii) pay to ▇▇▇▇▇ Fargo any
Selling Commission to which it would otherwise have been entitled absent such
default. The individuals listed on Schedule I hereto shall be the contact
persons for all matters related to the settlement of the transfer of the
Issuance Shares through DWAC for purposes of this Section 2.05.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants to, and agrees with, ▇▇▇▇▇ Fargo that as of
the
Closing Date, as of the date of delivery of each Issuance Notice by the Company,
as of each Settlement Date and as of any time that the Registration Statement
or
the Prospectus shall be amended or supplemented (each
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of
the
times referenced above is referred to herein as a “Representation Date”), except
as may be disclosed in the Prospectus on or before a Representation
Date:
Section
3.01 Registration.
The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
is
currently listed and quoted on the Principal Market under the trading symbol
“MDU”, and the Common Shares have been listed on the Principal Market, subject
to notice of issuance. The Company (i) meets the requirements for the use of
Form S-3 under the Securities Act and the rules and regulations thereunder
for
the registration of the transactions contemplated by this Agreement and (ii)
has
been subject to the requirements of Section 12 of the Exchange Act and has
timely filed all the material required to be filed pursuant to Sections 13
and
14 of the Exchange Act for a period of more than 12 calendar months. The Company
has filed with the Commission a registration statement on Form S-3 (Registration
No. 333-104150), which registration statement, as amended, has been declared
effective by the Commission for the registration of up to $500,000,000 aggregate
amount of Common Shares and other securities under the Securities Act (of which
$76,640,000 in total amount of securities has been issued and sold prior to
the
date of this Agreement) and the offering thereof from time to time pursuant
to
Rule 415 promulgated by the Commission under the Securities Act. Such
registration statement (and any further registration statements that may be
filed by the Company for the purpose of registering additional Common Shares
to
be sold pursuant to this Agreement), as amended, and the prospectus constituting
a part of such registration statement, together with the Prospectus Supplement
(as defined in Section 5.01(k)) and any pricing supplement relating to a
particular issuance of the Issuance Shares (each, an “Issuance Supplement”),
including all documents incorporated or deemed to be incorporated therein by
reference pursuant to Item 12 of Form S-3 under the Securities Act, in each
case, as from time to time amended or supplemented, are referred to herein
as
the “Registration Statement” and the “Prospectus,” respectively, except that if
any revised prospectus is provided to ▇▇▇▇▇ Fargo by the Company for use in
connection with the offering of the Common Shares that is not required to be
filed by the Company pursuant to Rule 424(b) promulgated by the Commission
under
the Securities Act, the term “Prospectus” shall refer to such revised prospectus
from and after the time it is first provided to ▇▇▇▇▇ Fargo for such use.
Promptly after the execution and delivery of this Agreement, the Company will
prepare and file the Prospectus Supplement relating to the Issuance Shares
pursuant to Rule 424(b) promulgated by the Commission under the Securities
Act,
as contemplated by Section 5.01(k) of this Agreement. As used in this Agreement,
the terms “amendment” or “supplement” when applied to the Registration Statement
or the Prospectus shall be deemed to include the filing by the Company with
the
Commission of any document under the Exchange Act after the date hereof that
is
or is deemed to be incorporated therein by reference.
Section
3.02 Incorporated
Documents.
The
documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus pursuant to Item 12 of Form S-3
(collectively, the “Incorporated Documents”), as of the respective dates they
were or hereafter are filed with the Commission under the Exchange Act,
conformed, or will conform, as the case may be, in all material respects to
the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and, when read together with the other information
contained in or incorporated by reference in the Registration Statement and
the
Prospectus, none of such documents contained or will contain at such time an
untrue statement of a material fact or omitted or will omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Section
3.03 The
Registration Statement, Prospectus and Disclosure at Time of
Sale.
No stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission and any request on
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the
part
of the Commission for additional information has been complied with. The
Registration Statement, as of the Effective Date, conformed or will conform
in
all material respects to the requirements of the Securities Act, and the rules
and regulations of the Commission promulgated thereunder and, as of the
Effective Date and as of each deemed effective date with respect to ▇▇▇▇▇ Fargo
pursuant to Rule 430B(f)(2) under the Securities Act and at each Representation
Date, does 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, and the Prospectus, as of its original
issue date, as of the date of any filing of an Issuance Supplement thereto
pursuant to Rule 424(b) promulgated by the Commission under the Securities
Act
and as of the date of any other amendment or supplement thereto, conforms or
will conform in all material respects to the requirements of the Securities
Act
and the rules and regulations of the Commission promulgated thereunder and,
as
of such respective dates, does not and will not contain an untrue statement
of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided,
however,
that
the representations and warranties in this Section 3.03 shall not apply to
any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by ▇▇▇▇▇ Fargo expressly for use in the
Prospectus. As used herein, with respect to the Registration Statement, the
term
“Effective Date” means, as of a specified time, the later of (i) the date that
the Registration Statement or the most recent post-effective amendment thereto
was or is declared effective by the Commission under the Securities Act and
(ii)
the date that the Company’s Annual Report on Form 10-K for its most recently
completed fiscal year is filed with the Commission under the Exchange
Act.
Section
3.04 Changes.
Since
the date of the latest audited financial statements included or incorporated
by
reference in the Prospectus there has been no material adverse change in the
condition (financial or otherwise), earnings, business or properties of the
Company and its Subsidiaries considered as a whole, whether or not arising
from
transactions in the ordinary course of business, except as set forth in or
contemplated by the Prospectus.
Section
3.05 Organizational
Matters.
The
Company has been duly organized and is validly existing as a corporation in
good
standing under the laws of the State of Delaware, with corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement and the Prospectus; the Company is duly qualified
to transact business and is in good standing in each jurisdiction in which
the
failure to so qualify would have a Material Adverse Effect. Each Material
Subsidiary of the Company has been duly organized and validly exists as a
corporation or limited liability company, as applicable, and to the extent
such
concept is applicable, is in good standing under the laws of its jurisdiction
of
incorporation. As used in this Agreement, the term “Subsidiary” means any Person
(other than a natural person), at least a majority of the outstanding Voting
Stock of which is owned by the Company, by one or more Subsidiaries or by the
Company and one or more Subsidiaries. As used in this Agreement, the term
“Material Subsidiary” means each “significant subsidiary” of the Company (as
such term is defined in Rule 1-02 of Regulation S-X under the Securities Act).
As of the date of this Agreement, the only Material Subsidiaries are Centennial
Energy Holdings Inc., Centennial Energy Resources LLC, Knife River Corporation,
WBI Holdings, Inc., Fidelity Exploration & Production Company and Fidelity
Oil Co.
Section
3.06 Authorization;
Enforceability.
The
Company has the corporate power and authority to execute, deliver and perform
the terms and provisions of this Agreement and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of, and the
consummation of the transactions to be performed by it contemplated by, this
Agreement. No other corporate proceeding on the part of the Company is
necessary, and no consent of any
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shareholder
in its capacity as such of the Company is required, for the valid execution
and
delivery by the Company of this Agreement, and the performance and consummation
by the Company of the transactions contemplated by this Agreement to be
performed by the Company. The Company has duly executed and delivered this
Agreement. This Agreement constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and by
limitations imposed by law and public policy on indemnification or
exculpation.
Section
3.07 Capitalization.
The
Company has an authorized capitalization as set forth or incorporated by
reference in the Prospectus, and all of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of
any
security holder of the Company; all of the outstanding shares of capital stock
of each Material Subsidiary have been duly authorized and validly issued and
are
fully paid and non-assessable; and all shares of capital stock or other equity
interests of each Material Subsidiary (other than directors’ qualifying shares)
are owned directly or indirectly by the Company, free and clear of any liens,
encumbrances or security interests, except as described in the Registration
Statement and the Prospectus. The Common Shares (in an amount up to the Maximum
Program Amount) have been duly authorized by all necessary corporate action
on
the part of the Company and when issued and delivered against payment therefor
as provided in this Agreement, the Common Shares will be validly issued, fully
paid and nonassessable, free and clear of all preemptive or similar rights,
claims, liens, charges, encumbrances and security interests of any nature
whatsoever, other than any of the foregoing created by ▇▇▇▇▇ Fargo. The capital
stock of the Company, including the Common Shares, conforms to the description
contained in the Registration Statement. Except as set forth in the Registration
Statement or the Prospectus, there are no outstanding options, warrants,
conversion rights, subscription rights, preemptive rights, rights of first
refusal or other rights or agreements of any nature outstanding to subscribe
for
or to purchase any shares of Common Stock of the Company or any other securities
of the Company of any kind binding on the Company (except pursuant to dividend
reinvestment, stock purchase or ownership, stock option, director or employee
benefit plans or issuances of Common Stock pursuant to purchase price
adjustments in connection with acquisitions, and except for any such agreement
as to which the Company shall have provided ▇▇▇▇▇ Fargo with written notice)
and
there are no outstanding securities or instruments of the Company containing
anti-dilution or similar provisions that will be triggered by the issuance
of
the Common Shares as described in this Agreement. There are no restrictions
upon
the voting or transfer of any shares of the Company’s Common Stock pursuant to
the Company’s certificate of incorporation or bylaws. There are no agreements or
other obligations (contingent or otherwise) that may require the Company to
repurchase or otherwise acquire any shares of its Common Stock. No Person has
the right, contractual or otherwise, to cause the Company to issue to it, or
to
register pursuant to the Securities Act, any shares of capital stock or other
securities of the Company upon the filing of the Registration Statement or
the
issuance or sale of the Common Shares hereunder.
Section
3.08 No
Conflicts.
The
execution and delivery by the Company of, and the performance by the Company
of
its obligations under, this Agreement (including the issuance and sale of the
Common Shares) will not (a) conflict with or result in a breach or violation
of
any of the terms or provisions of, or constitute a default under, or result
in
the imposition of a lien or security interest upon any property or assets used
in the conduct of the business of the Company or any Material Subsidiary
pursuant to any material indenture, mortgage, deed of trust, loan agreement
or
other agreement or instrument to which the Company or any Material Subsidiary
is
a
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party
or
by which the Company or any Material Subsidiary is bound or to which any of
the
property or assets used in the conduct of the business of the Company or any
Material Subsidiary is subject, (b) result in any violation of the provisions
of
the certificate of incorporation or the by-laws of the Company or the
organizational documents of any Material Subsidiary or (c) result in any
violation of any applicable statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any
Material Subsidiary or any of their properties (except in each case for
conflicts, breaches, violations, defaults, liens or security interests that
would not have a Material Adverse Effect). No consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body is required for the performance by the Company of its obligations under
this Agreement, except (1) such as have been, or will have been prior to the
Closing Date, obtained under the Securities Act, (2) for existing authorizations
of the Federal Energy Regulatory Commission, the Montana Public Service
Commission and the Public Service Commission of Wyoming (the “Utility Regulatory
Agencies”) dated October 27, 2004, October 26, 2004 and November 8, 2004,
respectively (which authorizations are, to the best knowledge of the Company,
not the subject of any pending or threatened application for rehearing or
petition for modification), and future authorizations of the Utility Regulatory
Agencies, which will be obtained as required, to permit the issuance and sale
of
the Common Shares hereunder, (3) for such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state
securities or blue sky laws, as the case may be, and except in any case where
the failure to obtain such consent, approval, authorization, order, registration
or qualification would not have a Material Adverse Effect and (4) such as may
be
required in connection with the exercise of the Rights.
Section
3.09 Legal
Proceedings.
Other
than as set forth in the Registration Statement or the Prospectus, there are
no
legal or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any of its
Subsidiaries is the subject which, if determined adversely to the Company or
any
of its Subsidiaries, would, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect and, to the best of the
Company’s knowledge, no such proceedings are threatened by governmental
authorities or others.
Section
3.10 Sale
of Common Shares.
Immediately after any sale of Common Shares by the Company hereunder, the
aggregate amount of Common Stock that has been issued and sold by the Company
hereunder will not exceed the aggregate amount of Common Stock (x) registered
under the Registration Statement and permitted to be sold thereunder or (y)
that
shall be authorized by the Utility Regulatory Agencies from time to time (in
this regard, the Company acknowledges and agrees that ▇▇▇▇▇ Fargo shall have
no
responsibility for maintaining records with respect to the aggregate amount
of
Common Shares sold, or of otherwise monitoring the availability of Common Stock
for sale, under the Registration Statement or applicable Utility Regulatory
Agency authorizations).
Section
3.11 Permits.
Other
than as set forth in the Registration Statement or the Prospectus, (a) each
of
the Company and the Material Subsidiaries has such permits, licenses, franchises
and authorizations of governmental or regulatory authorities (the “permits”) as
are necessary to own its respective properties and to conduct its business
in
the manner described in the Prospectus, except where the failure to obtain
such
permits would not reasonably be expected to have a Material Adverse Effect;
(b)
to the best knowledge of the Company after due inquiry, each of the Company
and
the Material Subsidiaries is in compliance with all terms and conditions of
any
such permits, except where the failure to fulfill or perform any such obligation
would not reasonably be expected to have a Material Adverse Effect; and (c)
no
event has occurred that allows, or after notice or lapse of time would allow,
revocation or termination of any material
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permits
or would result in any other material impairment of the rights of the holder
of
any such material permits.
Section
3.12 Investment
Company.
The
Company is not, and after giving effect to the offering and sale of the Common
Shares, will not be, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “1940 Act”).
Section
3.13 Financial
Condition; No Adverse Changes.
The
financial statements, together with related schedules and notes, included in
the
Registration Statement and the Prospectus, present fairly the consolidated
financial position, results of operations and changes in financial position
of
the Company and the Subsidiaries on the basis stated in the Registration
Statement and the Prospectus at the respective dates or for the respective
periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, subject to normal year
end
adjustments, except as disclosed therein; and the other financial and
statistical information and data included or incorporated by reference in the
Registration Statement and the Prospectus are accurately presented and prepared
on a basis consistent with such financial statements and the books and records
of the Company and the Subsidiaries. No other financial statements are required
to be set forth or to be incorporated by reference in the Registration Statement
or the Prospectus under the Securities Act.
(a) The
Company maintains a system of internal control over financial reporting (as
such
term is defined in Rule 13a-15(f) under the Exchange Act) sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and (v) material
information relating to the Company and its Subsidiaries is made known to the
Company by its officers and employees. The Company’s internal control over
financial reporting was effective as of December 31, 2005, and the Company
is not aware of any material weaknesses therein. Since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, there has been no change that has materially adversely affected,
or
is reasonably likely to materially adversely affect, the Company’s internal
control over financial reporting.
(b) The
accountants who have audited the financial statements of the Company that are
incorporated by reference in the Registration Statement and the Prospectus
are
independent registered public accountants as required by the Securities Act
and
the rules and regulations of the Commission promulgated thereunder.
(c) The
Company maintains disclosure controls and procedures (as such term is defined
in
Rule 13a-15(e) under the Exchange Act) that were effective as of March
31, 2006.
Section
3.14 Use
of
Proceeds.
The
Company will use the net proceeds from the offering of Common Shares in the
manner specified in the Prospectus under “Use of Proceeds.”
Section
3.15 Environmental
Matters.
Other
than as set forth in the Registration Statement and the Prospectus, (a) the
Company and its Subsidiaries are in compliance in all material respects with
all
applicable state and federal environmental laws, except for instances of
noncompliance that, individually or in the aggregate, would not have a Material
Adverse Effect,
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and
(b)
no event or condition has occurred that is reasonably likely to interfere in
any
material respect with the compliance by the Company and its Subsidiaries with
any environmental law or that is reasonably likely to give rise to any liability
under any environmental law, in each case that, individually or in the
aggregate, would have a Material Adverse Effect.
Section
3.16 Insurance.
Each of
the Company and its Subsidiaries is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management
of the Company believes to be prudent.
Section
3.17 Officer’s
Certificate.
Any
certificate signed by any officer of the Company and delivered to ▇▇▇▇▇ Fargo
or
to counsel for ▇▇▇▇▇ Fargo in connection with an Issuance shall be deemed a
representation and warranty by the Company to ▇▇▇▇▇ Fargo as to the matters
covered thereby on the date of such certificate.
Section
3.18 Finder’s
Fees.
The
Company has not incurred (directly or indirectly) nor will it incur, directly
or
indirectly, any liability for any broker’s, finder’s, financial advisor’s or
other similar fee, charge or commission in connection with this Agreement or
the
transactions contemplated hereby.
ARTICLE
IV
COVENANTS
The
Company covenants and agrees during the term of this Agreement with ▇▇▇▇▇ Fargo
as follows:
Section
4.01 Registration
Statement and Prospectus.
(i) To
make no amendment or supplement to the Registration Statement or the Prospectus
after the date of delivery of an Issuance Notice and prior to the related
Settlement Date or Settlement Dates that is reasonably disapproved by ▇▇▇▇▇
Fargo promptly after reasonable notice thereof; (ii) to prepare, with respect
to
any Issuance Shares to be sold pursuant to this Agreement, an Issuance
Supplement with respect to such Common Shares in a form previously approved
by
▇▇▇▇▇ Fargo and to file such Issuance Supplement pursuant to Rule 424(b)
promulgated by the Commission under the Securities Act within the time period
required thereby and to deliver such number of copies of each Issuance
Supplement to each exchange or market on which such sales were effected as
may
be required by the rules or regulations of such exchange or market, in each
case
only if delivery and filing of such an Issuance Supplement is required by
applicable law or by the rules and regulations of the Commission; (iii) to
make
no amendment or supplement to the Registration Statement or the Prospectus
(other than (x) an amendment or supplement relating solely to the issuance
or
offering of securities other than the Common Shares and (y) by means of an
Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or a Current Report
on Form 8-K (or any amendment to any thereof) filed with the Commission under
the Exchange Act and incorporated or deemed to be incorporated by reference
in
the Registration Statement or the Prospectus) at any time prior to having
afforded ▇▇▇▇▇ Fargo a reasonable opportunity to review and comment thereon;
(iv) to file within the time periods required by the Exchange Act all reports
and any definitive proxy or information statements required to be filed by
the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the
Exchange Act for so long as the delivery of a prospectus is required under
the
Securities Act or under the blue sky or securities laws of any jurisdiction
in
connection with the offering or sale of the Common Shares, and during such
same
period to advise ▇▇▇▇▇ Fargo, promptly after the Company receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or has become effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of
S-12
the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Common Shares, of the
suspension of the qualification of the Common Shares for offering or sale in
any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amendment or supplement of
the
Registration Statement or the Prospectus or for additional information, or
the
receipt of any comments from the Commission with respect to the Registration
Statement or the Prospectus (including, without limitation, any Incorporated
Documents); (v) in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any such Prospectus or
suspending any such qualification, to use promptly its reasonable best efforts
to obtain its withdrawal and (vi) to promptly advise ▇▇▇▇▇ Fargo in writing
of
the issuance of any authorization of any Utility Regulatory Agency relating
to
the authority of the Company to issue and sell Common Stock in addition to
the
authorizations referred to in Section 3.08 of this Agreement or any expirations
thereof.
Section
4.02 Blue
Sky.
To use
its reasonable best efforts to cause the Common Shares to be listed on the
Principal Market and promptly from time to time to take such action as ▇▇▇▇▇
Fargo may reasonably request to cooperate with ▇▇▇▇▇ Fargo in the qualification
of the Common Shares for offering and sale under the blue sky or securities
laws
of such jurisdictions within the United States of America and its territories
as
▇▇▇▇▇ Fargo may reasonably request and to use its reasonable best efforts to
comply with such laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the distribution or sale
of
the Common Shares; provided,
however,
that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or as a dealer in securities, to file a general consent to service
of process or to subject itself to taxation in respect of doing business in
any
jurisdiction.
Section
4.03 Copies
of Registration Statement and Prospectus.
To
furnish ▇▇▇▇▇ Fargo with copies (which may be electronic copies) of the
Registration Statement and each amendment thereto, and with copies of the
Prospectus and each amendment or supplement thereto in the form in which it
is
filed with the Commission pursuant to the Securities Act or Rule 424(b)
promulgated by the Commission under the Securities Act, both in such quantities
as ▇▇▇▇▇ Fargo may reasonably request from time to time; and, if the delivery
of
a prospectus is required under the Securities Act or under the blue sky or
securities laws of any jurisdiction at any time on or prior to the applicable
Settlement Date for any Selling Period in connection with the offering or sale
of the Common Shares and if at such time any event has occurred as a result
of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or,
if
for any other reason it is necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify ▇▇▇▇▇ Fargo and request ▇▇▇▇▇
Fargo to suspend offers to sell Common Shares (and, if so notified, ▇▇▇▇▇ Fargo
shall cease such offers as soon as practicable); and if the Company decides
to
amend or supplement the Registration Statement or the Prospectus as then amended
or supplemented, to advise ▇▇▇▇▇ Fargo promptly by telephone (with confirmation
in writing) and to prepare and cause to be filed promptly with the Commission
an
amendment or supplement to the Registration Statement or the Prospectus as
then
amended or supplemented that will correct such statement or omission or effect
such compliance; provided,
however,
that if
during such same period ▇▇▇▇▇ Fargo is required to deliver a prospectus in
respect of transactions in the Common Shares, the Company shall promptly prepare
and file with the Commission such an amendment or supplement.
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Section
4.04 Rule
158.
To make
generally available to its holders of the Common Shares as soon as practicable,
but in any event not later than eighteen months after the effective date of
the
Registration Statement (as defined in Rule 158(c) promulgated by the Commission
under the Securities Act), an earnings statement of the Company and the
Subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations of the Commission promulgated
thereunder (including the option of the Company to file periodic reports in
order to make generally available such earnings statement, to the extent that
it
is required to file such reports under Section 13 or Section 15(d) of the
Exchange Act, pursuant to Rule 158 promulgated by the Commission under the
Securities Act).
Section
4.05 Information.
Except
where such reports, communications, financial statements or other information
is
available on the Commission’s ▇▇▇▇▇ system, to furnish to ▇▇▇▇▇ Fargo (in paper
or electronic format) copies of all publicly available reports or other
communications (financial or other) furnished generally to stockholders and
filed with the Commission pursuant to the Exchange Act, and deliver to ▇▇▇▇▇
Fargo (in paper or electronic format) (i) promptly after they are available,
copies of any publicly available reports and financial statements furnished
to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and (ii) such additional publicly
available information concerning the business and financial condition of the
Company as ▇▇▇▇▇ Fargo may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its Subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission).
Section
4.06 Representations
and Warranties.
That
each delivery of an Issuance Notice and each delivery of Common Shares on a
Settlement Date shall be deemed to be (i) an affirmation to ▇▇▇▇▇ Fargo that
the
representations and warranties of the Company contained in or made pursuant
to
this Agreement are true and correct in all material respects as of the date
of
such Issuance Notice or of such Settlement Date, as the case may be, as though
made at and as of each such date, except as may be disclosed in the Prospectus
(including any documents incorporated by reference therein and any supplements
thereto) or otherwise in writing by the Company to ▇▇▇▇▇ Fargo on or before
such
date of delivery or Settlement Date, as the case may be, and (ii) an undertaking
that the Company will advise ▇▇▇▇▇ Fargo if any of such representations and
warranties will not be true and correct in all material respects as of the
Settlement Date for the Common Shares relating to such Issuance Notice, as
though made at and as of each such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Common
Shares).
Section
4.07 Opinions
of Counsel.
That
each time the Registration Statement or the Prospectus is amended or
supplemented (other than by an Issuance Supplement or a Current Report on Form
8-K, unless reasonably requested by ▇▇▇▇▇ Fargo within 30 days of the filing
thereof with the Commission), including by means of an Annual Report on Form
10-K or a Quarterly Report on Form 10-Q filed with the Commission under the
Exchange Act and incorporated or deemed to be incorporated by reference into
the
Prospectus (each such amendment or supplement, an “Opinion Trigger Event”), the
Company shall at any time selected by the Company on or following the date
of
such Opinion Trigger Event (except that during a Selling Period or any other
period in which a prospectus relating to the Issuance Shares is required to
be
delivered by ▇▇▇▇▇ Fargo under the Securities Act, such time shall be no later
than one Trading Day after each Opinion Trigger Event that occurs during such
period; and provided that in any case delivery shall be a condition to the
delivery of an Issuance Notice) furnish or cause to be furnished forthwith
to
▇▇▇▇▇ Fargo a written opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special counsel
for the Company, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel and Secretary
of
the Company, in
S-14
each
case
dated the date of delivery and in form reasonably satisfactory to ▇▇▇▇▇ Fargo,
(i) if such counsel has previously furnished an opinion to the effect set forth
in Exhibit B-1 or B-2 hereto (as applicable), to the effect that ▇▇▇▇▇ Fargo
may
rely on such previously furnished opinion of such counsel to the same extent
as
though it were dated the date of such letter authorizing reliance (except that
the statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date) or (ii) if such counsel has not previously furnished an opinion to the
effect set forth in Exhibit B-1 or B-2 hereto (as applicable), of the same
tenor as such an opinion of such counsel but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date.
Section
4.08 Comfort
Letters.
That
each time the Registration Statement or the Prospectus is amended or
supplemented, including by means of an Annual Report on Form 10-K, a Quarterly
Report on Form 10-Q or a Current Report on Form 8-K filed with the Commission
under the Exchange Act and incorporated or deemed to be incorporated by
reference into the Prospectus, in any case to set forth financial information
included in or derived from the Company’s financial statements or accounting
records (each such amendment or supplement, a “Comfort Letter Trigger Event”),
the Company shall at any time selected by the Company on or following the date
of such Comfort Letter Trigger Event (except that during a Selling Period or
any
other period in which a prospectus relating to the Issuance Shares is required
to be delivered by ▇▇▇▇▇ Fargo under the Securities Act, such time shall be
no
later than one Trading Day after each Comfort Letter Trigger Event that occurs
during such period; and provided that in any case delivery shall be a condition
to the delivery of an Issuance Notice) cause the independent registered public
accountants who have audited the financial statements of the Company included
or
incorporated by reference in the Registration Statement forthwith to furnish
to
▇▇▇▇▇ Fargo a letter, dated the date of delivery, in form reasonably
satisfactory to ▇▇▇▇▇ FARGO, of the same tenor as the letter referred to in
Section 5.01(g) hereof but modified to relate to the Registration Statement
and
the Prospectus as amended or supplemented to the date of such letter, with
such
changes as may be necessary to reflect changes in the financial statements
and
other information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as of
a
date not more than five business days prior to the date of such letter;
provided,
however,
that,
with respect to any financial information or other matters, such letter may
reconfirm as true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such financial information
or other matters made in the letter referred to in Section 5.01(g) hereof that
was last furnished to ▇▇▇▇▇ Fargo; provided further, that the Company shall
not
be required to furnish such a letter with respect to the financial statements
of
any business acquired that are included in a Current Report on Form
8-K.
Section
4.09 Officer’s
Certificate.
That
each time the Registration Statement or the Prospectus is amended or
supplemented (other than by an Issuance Supplement or a Current Report on Form
8-K, unless reasonably requested by ▇▇▇▇▇ Fargo within 30 days of the filing
thereof with the Commission), including by means of an Annual Report on Form
10-K or a Quarterly Report on Form 10-Q filed with the Commission under the
Exchange Act and incorporated or deemed to be incorporated by reference into
the
Prospectus (each such amendment or supplement, an “Officer’s Certificate Trigger
Event”), the Company shall at any time selected by the Company on or following
the date of such Officer’s Certificate Trigger Event (except that during a
Selling Period or any other period in which a prospectus relating to the
Issuance Shares is required to be delivered by ▇▇▇▇▇ Fargo under the Securities
Act, such time shall be no later than one Trading Day after each Officer’s
Certificate Trigger Event that occurs during such period; and provided that
in
any case delivery shall be a condition to the delivery of an Issuance Notice)
furnish forthwith to ▇▇▇▇▇ Fargo a certificate, dated the date of delivery,
in
such form and executed by such officers of the Company as is reasonably
satisfactory to ▇▇▇▇▇ Fargo, of the same tenor as
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the
certificate referred to in Section 2.02(ii) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date.
Section
4.10 Stand
Off Agreement.
Without
the written consent of ▇▇▇▇▇ Fargo, the Company will not, directly or
indirectly, offer to sell, sell, contract to sell, grant any option to sell
or
otherwise dispose of any shares of Common Stock or securities convertible into
or exchangeable for Common Stock (other than Common Shares hereunder), warrants
or any rights to purchase or acquire, Common Stock (other than Common Shares
hereunder) during the period beginning on the first (1st) Trading Day
immediately prior to the date on which any Issuance Notice is delivered to
▇▇▇▇▇
Fargo hereunder and ending on the first (1st) Trading Day immediately following
the last Settlement Date with respect to Common Shares sold pursuant to such
Issuance Notice; provided,
however,
that
such restriction will not be required in connection with the Company’s issuance
or sale of (i) Common Stock, options to purchase shares of Common Stock or
Common Stock issuable upon the exercise of options or other rights pursuant
to
any employee or director stock option or benefit plan, stock purchase or
ownership plan (whether currently existing or adopted hereafter) or dividend
reinvestment plan (but not shares subject to a waiver to exceed plan limits
in
its stock purchase plan) of the Company, (ii) Common Stock issuable upon
conversion of securities or the exercise of warrants, options or other rights
disclosed in the Company's Commission filings and (iii) Common Stock issuable
as
consideration in connection with acquisitions of business, assets or securities
of other Persons.
Section
4.11 Market
Activities.
The
Company will not, directly or indirectly, (i) take any action designed to cause
or result in, or that constitutes or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company
to
facilitate the sale or resale of the Common Shares or (ii) sell, bid for or
purchase the Common Shares, or pay anyone any compensation for soliciting
purchases of the Common Shares other than ▇▇▇▇▇ Fargo.
Section
4.12 Subsequent
Delivery of Utility Regulatory Agency Authorizations.
Each
time that the Company gives to ▇▇▇▇▇ Fargo the written notification required
by
Section 4.01(vi) (an “Agency Trigger Event”), the Company shall concurrently
deliver to ▇▇▇▇▇ Fargo and counsel to ▇▇▇▇▇ Fargo (i) a copy of each such
authorization and (ii) at any time selected by the Company on or following
the
date of such Agency Trigger Event (except that during a Selling Period, such
time shall be concurrently with each Agency Trigger Event that occurs during
such period; and provided that in any case delivery shall be a condition to
the
delivery of an Issuance Notice), written opinions of ▇▇▇▇▇▇ ▇▇▇▇ & Priest
LLP, special counsel to the Company and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel
and Secretary of the Company, to the effect set forth in paragraph 9 of Exhibit
B-1 and paragraph 8 of Exhibit B-2 of this Agreement, respectively modified
to
reflect such authorizations.
ARTICLE
V
CONDITIONS
TO DELIVERY OF ISSUANCE
NOTICES
AND TO SETTLEMENT
Section
5.01 Conditions
Precedent to the Right of the Company to Deliver an Issuance Notice and the
Obligation of ▇▇▇▇▇ Fargo to Sell Common Shares.
The
right of the Company to deliver an Issuance Notice hereunder is subject to
the
satisfaction, on the date of delivery of such Issuance Notice, and the
obligation of ▇▇▇▇▇ Fargo to sell Common Shares during the
applicable
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Selling
Period is subject to the satisfaction, on the applicable date, of each of the
following conditions:
(a) Effective
Registration Statement and Authorizations.
The
Registration Statement shall remain effective, and sales of all of the Common
Shares (including all of the Issuance Shares issued with respect to all prior
Issuances and all of the Issuance Shares expected to be issued in connection
with the Issuance specified by the current Issuance Notice) may be made by
▇▇▇▇▇
Fargo thereunder; and (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; (ii) no other
suspension of the use or withdrawal of the effectiveness of the Registration
Statement or Prospectus shall exist; (iii) all requests for additional
information on the part of the Commission shall have been complied with to
the
reasonable satisfaction of ▇▇▇▇▇ Fargo; and (iv) no event specified in Section
4.03 hereof shall have occurred and be continuing without the Company amending
or supplementing the Registration Statement or the Prospectus as provided in
Section 4.03. The authorizations of the Utility Regulatory Agencies referred
to
in Section 3.08 of this Agreement are in full force and effect, and to the
knowledge of the Company, are not the subject of any pending or threatened
application for rehearing or petition for modification and are sufficient to
authorize the issuance and sale of the Common Shares.
(b) Accuracy
of the Company’s Representations and Warranties.
The
representations and warranties of the Company shall be true and correct in
all
material respects as of each Representation Date as though made at such
time.
(c) Performance
by the Company.
The
Company shall have performed, satisfied and complied with in all material
respects all covenants, agreements and conditions required by this Agreement
to
be performed, satisfied or complied with by the Company at or prior to such
date.
(d) No
Injunction.
No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby that prohibits or directly and
materially adversely affects any of the transactions contemplated by this
Agreement, and no proceeding shall have been commenced that may have the effect
of prohibiting or materially adversely affecting any of the transactions
contemplated by this Agreement.
(e) Material
Adverse Changes.
Since
the date of this Agreement, no event that had or is reasonably likely to have
a
Material Adverse Effect shall have occurred that has not been disclosed in
the
Registration Statement or the Prospectus (including the documents incorporated
by reference therein and any supplements thereto).
(f) No
Suspension of Trading In or Delisting of Common Stock; Other
Events.
The
trading of the Common Stock (including without limitation the Issuance Shares)
shall not have been suspended by the Commission, the Principal Market or the
National Association of Securities Dealers, Inc. since the immediately preceding
Settlement Date or, if there has been no Settlement Date, the Closing Date,
and
the Common Shares (including without limitation the Issuance Shares) shall
have
been approved for listing or quotation on (subject only to notice of issuance)
and shall not have been delisted from the Principal Market. There shall not
have
occurred (and be continuing in the case of occurrences under clause (i) and
(ii)
below) any of the following: (i) if trading generally on the American Stock
Exchange, the New York Stock Exchange or The Nasdaq Stock Market has been
suspended or materially limited, or minimum and 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
or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States; (ii) a
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general
moratorium on commercial banking activities in New York declared by either
federal or New York state authorities; or (iii) any material adverse change
in
the financial markets in the United States or in the international financial
markets, any outbreak or escalation of hostilities or other calamity or crisis
involving the United States or the declaration by the United States of a
national emergency or war or any substantial change in national or international
political, financial or economic conditions, if the effect of any such event
specified in this clause (iii) in the reasonable judgment of ▇▇▇▇▇ Fargo makes
it impractical or inadvisable to proceed with the sale of Common Shares on
behalf of the Company.
(g) Comfort
Letter.
The
independent registered public accountants who have audited the financial
statements of the Company included or incorporated by reference in the
Registration Statement shall have furnished to ▇▇▇▇▇ Fargo the letters required
to be delivered by Section 4.08 on or before the date on which satisfaction
of
this condition is determined.
(h) No
Defaults.
Immediately after consummation of the proposed sale of the Issuance Shares
by
▇▇▇▇▇ Fargo, none of the Company nor any of the Material Subsidiaries shall
be
in default under (whether upon the passage of time, the giving of notice or
both) its organizational or other governing documents, or any provision of
any
security issued by the Company or any of its Material Subsidiaries, or of any
agreement, instrument or other undertaking to which the Company or any of its
Material Subsidiaries is a party or by which it or any of its property or assets
is bound, or the applicable provisions of any law, statute, rule, regulation,
order, writ, injunction, judgment or decree of any court or governmental
authority to or by which the Company, any of its Material Subsidiaries or any
of
their property or assets is bound, in each case which default, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(i) Trading
Cushion.
The
Selling Period for any previous Issuance Notice shall have expired.
(j) Maximum
Issuance Amount.
In no
event may the Company issue an Issuance Notice to sell an Issuance Amount to
the
extent that (I) the sum of (x) the requested Issuance Amount, plus (y) the
aggregate number of all Common Shares issued under all previous Issuances
effected pursuant to this Agreement, would exceed (A) the Maximum Program Amount
or (B) the amount as shall then be authorized by the Utility Regulatory Agencies
or (II) the requested Issuance Amount exceeds the product of (x) 45,000 times
(y) the number of Trading Days in the Selling Period.
(k) Prospectus
Supplement and Issuance Supplement.
(i) A
supplement to the prospectus included in the Registration Statement (the
“Prospectus Supplement”), in form and substance to be agreed upon by the
parties, setting forth information regarding this Agreement including, without
limitation, the Maximum Program Amount, shall have been filed with the
Commission pursuant to Rule 424(b) promulgated by the Commission under the
Securities Act within the time period required thereby and sufficient copies
thereof delivered to ▇▇▇▇▇ Fargo on or prior to the Issuance Date.
(ii) If
required by Section 4.01(ii), an Issuance Supplement, in form and substance
to
be agreed upon by the parties, shall have been filed with the Commission
pursuant to Rule 424(b) promulgated by the Commission under the Securities
Act
within the time period required thereby and sufficient copies thereof delivered
to ▇▇▇▇▇ Fargo on or prior to the Issuance Date.
(l) Counsel
Letter.
The
counsel specified in Section 4.07, or other counsel selected by the Company
and
reasonably satisfactory to ▇▇▇▇▇ Fargo, shall have furnished to ▇▇▇▇▇ Fargo
their written opinions, dated the Closing Date and each applicable date referred
to in Section 4.07 hereof that is on or prior to such Issuance Date or
Settlement Date, as the case may be, to the effect required by Section
4.07.
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(m) Officer’s
Certificate.
The
Company shall have furnished or caused to be furnished to ▇▇▇▇▇ Fargo an
officer’s certificate executed by one of the Authorized Officers specified in
Section 2.01(c), dated the Closing Date and each applicable date referred to
in
Section 4.09 hereof that is on or prior to such Issuance Date or Settlement
Date, as the case may be, as to the matters specified in Section
2.02(ii).
(n) Other
Documents.
On the
Closing Date and prior to each Issuance Date and Settlement Date, ▇▇▇▇▇ Fargo
and its counsel shall have been furnished with such documents as they may
reasonably require in order to evidence the accuracy and completeness of any
of
the representations or warranties, or the fulfillment of the conditions, herein
contained; and all proceedings taken by the Company in connection with the
issuance and sale of the Common Shares as herein contemplated shall be
satisfactory in form and substance to ▇▇▇▇▇ Fargo and its counsel.
Section
5.02 Documents
Required to be Delivered on each Issuance Date.
▇▇▇▇▇
Fargo’s obligation to sell Common Shares pursuant to an Issuance hereunder shall
additionally be conditioned upon the delivery to ▇▇▇▇▇ Fargo on or before
the
Issuance Date of a certificate in form and substance reasonably satisfactory
to
▇▇▇▇▇ Fargo, executed by the Chief Executive Officer or the Chief Financial
Officer of the Company, to the effect that all conditions to the delivery
of
such Issuance Notice shall have been satisfied as at the date of such
certificate (which certificate shall not be required if the foregoing
representations shall be set forth in the Issuance Notice or in an officer’s
certificate delivered pursuant to Section 4.09 dated the Issuance
Date).
Section
5.03 Suspension
of Sales.
The
Company or ▇▇▇▇▇ Fargo may, upon notice to the other party in writing or by
telephone (confirmed immediately by verifiable facsimile transmission), suspend
any sale of Issuance Shares, and the Selling Period shall immediately terminate;
provided,
however,
that
such suspension and termination shall not affect or impair either party’s
obligations with respect to any Issuance Shares sold hereunder prior to the
receipt of such notice, and, provided,
further,
that
any suspension of sales based upon the Daily Floor Price mechanism described
in
Section 2.03(c) of this Agreement shall not result in the immediate termination
of the Selling Period. The Company agrees that no such notice shall be effective
against ▇▇▇▇▇ Fargo unless it is made to one of the individuals named on
Schedule 1 hereto, as such Schedule may be amended from time to time. ▇▇▇▇▇
Fargo agrees that no such notice shall be effective against the Company unless
it is made to one of the individuals named on Schedule 1 annexed hereto, as
such
Schedule may be amended from time to time.
ARTICLE
VI
INDEMNIFICATION
AND CONTRIBUTION
Section
6.01 Indemnification
by the Company.
The
Company agrees to indemnify and hold harmless ▇▇▇▇▇ Fargo, its officers,
directors, employees and agents, and each Person, if any, who controls ▇▇▇▇▇
Fargo within the meaning of Section 15 of the Securities Act or Section 20
of
the Exchange Act, together with each such Person’s respective officers,
directors, employees and agents (collectively, the “Controlling Persons”), from
and against any and all losses, claims, damages or liabilities, and any action
or proceeding in respect thereof, to which ▇▇▇▇▇ Fargo, its officers, directors,
employees and agents, and any such Controlling Person may become subject under
the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus or any other prospectus relating to the Common Shares, or any
amendment or supplement thereto, or any preliminary prospectus, or arise out
of,
or are based upon, any omission or alleged omission to state therein a material
fact required to be stated therein
S-19
or
necessary to make the statements therein (in the case of the Prospectus or
any
amendment or supplement thereto or any preliminary prospectus, in light of
the
circumstances in which they were made) not misleading, except insofar as the
same are made in reliance upon and in conformity with information related to
▇▇▇▇▇ Fargo or its plan of distribution furnished in writing to the Company
by
▇▇▇▇▇ Fargo expressly for use therein or (b) any breach or violation by the
Company of Section 2.04, and the Company shall reimburse ▇▇▇▇▇ Fargo, its
officers, directors, employees and agents, and each Controlling Person for
any
reasonable legal and other expenses incurred thereby in investigating or
defending or preparing to defend against any such losses, claims, damages or
liabilities, or actions or proceedings in respect thereof, as such expenses
are
incurred.
Section
6.02 Indemnification
by ▇▇▇▇▇ Fargo.
▇▇▇▇▇
Fargo agrees to indemnify and hold harmless the Company, its officers,
directors, employees and agents and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20
of
the Exchange Act, together with each such Person’s respective officers,
directors, employees and agents, from and against any losses, claims, damages
or
liabilities, and any action or proceeding in respect thereof, to which the
Company, its officers, directors, employees or agents, any such controlling
Person and any officer, director, employee or agent of such controlling Person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as losses, claims, damages or liabilities (or action or proceeding
in
respect thereof) arise out of, or are based upon, (a) any untrue statement
or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus or any other prospectus relating to the Common Shares,
or any amendment or supplement thereto, or any preliminary prospectus, or arise
out of, or are based upon, any omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus or any other prospectus relating to
the
Common Shares, or any amendment or supplement thereto or any preliminary
prospectus, in light of the circumstances in which they were made) not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
therein in reliance upon and in conformity with written information related
to
▇▇▇▇▇ Fargo or its plan of distribution furnished to the Company by ▇▇▇▇▇ Fargo
expressly for use therein and ▇▇▇▇▇ Fargo shall reimburse the Company, its
officers, directors, employees and agents, and each Company Controlling Person
for any reasonable legal and other expenses incurred thereby in investigating
or
defending or preparing to defend against any such losses, claims, damages or
liabilities, or actions or proceedings in respect thereof, as such expenses
are
incurred, or (b) any breach or violation by ▇▇▇▇▇ Fargo of Section
2.04.
Section
6.03 Conduct
of Indemnification Proceedings.
As
promptly as reasonably practicable after receipt by any Person (an “Indemnified
Party”) of notice of any claim or the commencement of any action in respect of
which indemnity may be sought pursuant to Section 6.01 or 6.02, the Indemnified
Party shall, if a claim in respect thereof is to be made against the Person
against whom such indemnity may be sought (an “Indemnifying Party”), notify the
Indemnifying Party in writing of the claim or the commencement of such action.
In the event an Indemnified Party shall fail to give such notice as provided
in
this Section 6.03 and the Indemnifying Party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, the indemnification
provided for in Sections 6.01 or 6.02 shall be reduced to the extent of any
actual prejudice resulting from such failure to so notify the Indemnifying
Party; provided, that the failure to notify the Indemnifying Party shall not
relieve it from any liability that it may have to an Indemnified Party otherwise
than under Section 6.01 or 6.02. If any such claim or action shall be brought
against an Indemnified Party, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party.
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After
notice from the Indemnifying Party to the Indemnified Party of its election
to
assume the defense of such claim or action, the Indemnifying Party shall not
be
liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided that the Indemnified Party
shall have the right to employ separate counsel to represent the Indemnified
Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) such
Indemnified Party reasonably concludes that representation of both parties
by
the same counsel would be inappropriate due to actual or potential conflicts
of
interest with the Company, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such claim or action or separate
but
substantially similar or related claims or actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all Indemnified Parties or for fees
and expenses that are not reasonable. No Indemnifying Party shall, without
the
prior written consent of the Indemnified Party, effect any settlement of any
claim or pending or threatened proceeding in respect of which the Indemnified
Party is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Party unless such settlement includes an
unconditional release of each such Indemnified Party from all losses, claims,
damages or liabilities arising out of such claim or proceeding and such
settlement does not admit or constitute an admission of fault, guilt, failure
to
act or culpability on the part of any such Indemnified Party. Whether or not
the
defense of any claim or action is assumed by an Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement
made
without its prior written consent, which consent will not be unreasonably
withheld.
Section
6.04 Contribution.
If for
any reason the indemnification provided for in this Article VI is
unavailable to the Indemnified Parties in respect of any losses, claims, damages
or liabilities referred to herein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages
or
liabilities as between the Company, on the one hand, and ▇▇▇▇▇ Fargo, on the
other hand, in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and ▇▇▇▇▇ Fargo on the other
hand from the offering of the Common Shares to which such losses, claims,
damages or liabilities relate. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
Indemnifying Party shall contribute to such amount paid or payable by such
Indemnifying Party in such proportion as is appropriate to reflect not only
such
relative benefits but also the relative fault of the Company and of ▇▇▇▇▇ Fargo
in connection with such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the
one hand, and by ▇▇▇▇▇ Fargo, on the other, shall be deemed to be in the same
proportion as the total net proceeds from the sale of Common Shares (before
deducting expenses) received by the Company bear to the total commissions
received by ▇▇▇▇▇ Fargo in respect thereof. The relative fault of the Company,
on the one hand, and of ▇▇▇▇▇ Fargo, on the other hand, shall be determined
by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by the Company on one hand or by ▇▇▇▇▇ Fargo
on
the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The
Company and ▇▇▇▇▇ Fargo agree that it would not be just and equitable if
contribution pursuant to this Section 6.04 were determined by pro rata
allocation or by any other method of allocation that does not take account
of
the equitable considerations referred to in the immediately preceding
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paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6.04, ▇▇▇▇▇ Fargo
shall
in no event be required to contribute any amount in excess of the commissions
received by it under this Agreement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6.04 each officer,
director, employee and agent of ▇▇▇▇▇ Fargo, and each Controlling Person, shall
have the same rights to contribution as ▇▇▇▇▇ Fargo, and each director of the
Company, each officer of the Company who signed the Registration Statement,
and
each Person, if any, who controls the Company within the meaning of Section
15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company. The obligations of the Company and ▇▇▇▇▇
Fargo under this Article VI shall be in addition to any liability that the
Company and ▇▇▇▇▇ Fargo may otherwise have.
ARTICLE
VII
TERMINATION
Section
7.01 Term.
Subject
to the provisions of this Article VII, the term of this Agreement shall run
until the end of the Commitment Period.
Section
7.02 Termination
by ▇▇▇▇▇ Fargo.
(a) ▇▇▇▇▇ Fargo may terminate the right of the Company to effect any Issuances
under this Agreement upon one (1) Trading Day’s notice if any of the following
events shall occur:
(i) The
Company or any Material Subsidiary shall make an assignment for the benefit
of
creditors, or apply for or consent to the appointment of a receiver or trustee
for it or for all or substantially all of its property or business; or such
a
receiver or trustee shall otherwise be appointed;
(ii) Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings
for
relief under any bankruptcy law or any law for the relief of debtors shall
be
instituted by or against the Company or any of its Material
Subsidiaries;
(iii) The
Company shall fail to maintain the listing of the Common Stock on the Principal
Market; or
(iv) Since
the
Effective Date, there shall have occurred any event, development or state of
circumstances or facts that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) ▇▇▇▇▇
Fargo shall have the right, by giving ten (10) days’ notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any
time.
Section
7.03 Termination
by the Company.
The
Company shall have the right, by giving ten (10) days’ notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time.
After
delivery of such notice, the Company shall no longer have any right to deliver
any Issuance Notices hereunder.
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Section
7.04 Liability;
Provisions that Survive Termination.
If this
Agreement is terminated pursuant to this Article VII, such termination shall
be
without liability of any party to any other party except as provided in Section
9.02 and for the Company’s obligations in respect of all prior Issuance Notices,
and provided further that in any case the provisions of Article VI, Article
VIII
and Article IX shall survive termination of this Agreement without
limitation.
ARTICLE
VIII
REPRESENTATIONS
AND WARRANTIES TO SURVIVE DELIVERY
All
representations and warranties of the Company herein or in certificates
delivered pursuant hereto shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of ▇▇▇▇▇ Fargo and
its
officers, directors, employees and agents and any Controlling Persons,
(ii) delivery and acceptance of the Common Shares and payment therefor or
(iii) any termination of this Agreement.
ARTICLE
IX
MISCELLANEOUS
Section
9.01 Press
Releases and Disclosure.
The
Company may issue a press release describing the material terms of the
transactions contemplated hereby as soon as practicable following the Closing
Date, and may file with the Commission a Current Report on Form 8-K describing
the material terms of the transactions contemplated hereby, and the Company
shall consult with ▇▇▇▇▇ Fargo prior to making such disclosures, and the parties
shall use all reasonable efforts, acting in good faith, to agree upon a text
for
such disclosures that is reasonably satisfactory to all parties. No party hereto
shall issue thereafter any press release or like public statement (including,
without limitation, any disclosure required in reports filed with the Commission
pursuant to the Exchange Act) related to this Agreement or any of the
transactions contemplated hereby not substantially similar to previously
approved disclosure without the prior written approval of the other party
hereto, except as may be necessary or appropriate in the opinion of the party
seeking to make disclosure to comply with the requirements of applicable law
or
stock exchange rules. If any such press release or like public statement is
so
required, the party making such disclosure shall consult with the other party
prior to making such disclosure, and the parties shall use all reasonable
efforts, acting in good faith, to agree upon a text for such disclosure that
is
reasonably satisfactory to all parties.
Section
9.02 Expenses.
The
Company covenants and agrees with ▇▇▇▇▇ Fargo that the Company shall pay or
cause to be paid the following: (i) the fees, disbursements and expenses of
the
Company’s counsel and accountants in connection with the preparation, printing
and filing of the Registration Statement, the Prospectus and any Issuance
Supplements and all other amendments and supplements thereto and the mailing
and
delivering of copies thereof to ▇▇▇▇▇ Fargo and the Principal Exchange;
(ii) ▇▇▇▇▇ Fargo’s reasonable documented out-of-pocket expenses, up to a
maximum of $75,000 in the aggregate, including the reasonable fees,
disbursements and expenses of counsel for ▇▇▇▇▇ Fargo (including in connection
with the qualification of the Common Shares for offering and sale under state
securities laws as provided in Section 4.02 hereof and in connection with
preparing any blue sky survey) in connection with this Agreement and the
Registration Statement and ongoing services in connection with the transactions
contemplated hereunder; (iii) the cost (other than those expenses described
in
clause (ii) above) of printing, preparing or reproducing this Agreement and
any
other documents in connection with the offering, purchase, sale and delivery
of
the Common Shares; (iv) all filing fees and expenses (other than those expenses
described in clause (ii) above) in connection with the qualification of the
Common Shares for offering and sale under state securities laws as provided
in
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Section
4.02 hereof; (v) the cost of preparing the Common Shares; (vi) the fees and
expenses of any transfer agent of the Company; (vii) the cost of providing
any
CUSIP or other identification numbers for the Common Shares; (viii) the fees
and
expenses incurred in connection with the listing or qualification of the Common
Shares on the Principal Market and any filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the terms
of
the sale of the Common Shares in connection with this Agreement and the
Registration Statement (including the reasonable fees, disbursements and
expenses of counsel for ▇▇▇▇▇ Fargo), and (ix) all other costs and expenses
incident to the performance of the Company’s obligations hereunder that are not
otherwise specifically provided for in this Section. The Company will not bear
any costs or expenses of ▇▇▇▇▇ Fargo with respect to ▇▇▇▇▇ Fargo’s obligation to
deliver shares of Common Stock to any Person.
Section
9.03 Notices.
All
notices, demands, requests, consents, approvals or other communications required
or permitted to be given hereunder or that are given with respect to this
Agreement shall be in writing and shall be personally served or deposited in
the
mail, registered or certified, return receipt requested, postage prepaid or
delivered by reputable air courier service with charges prepaid, or transmitted
by hand delivery, telegram, telex, e-mail (other than to the Company) or
facsimile, addressed as set forth below, or to such other address as such party
shall have specified most recently by written notice: (i) if to the Company
to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President, Treasurer and Chief Financial
Officer, MDU Resources Group, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Phone: ▇▇▇.▇▇▇.▇▇▇▇ and Fax: ▇▇▇.▇▇▇.▇▇▇▇,
with a copy (which shall not constitute notice) to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III,
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Phone:
▇▇▇.▇▇▇.▇▇▇▇, Fax: ▇▇▇.▇▇▇.▇▇▇▇ and e-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇; and
(ii)
if to ▇▇▇▇▇ Fargo to: (a) ▇. ▇▇▇▇ Genatowski, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Phone: ▇▇▇.▇▇▇.▇▇▇▇, Fax: ▇▇▇.▇▇▇.▇▇▇▇, and e-mail:
▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇,
(b)
▇▇▇▇▇▇
▇▇▇▇▇▇, Phone: ▇▇▇-▇▇▇-▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇ and e-mail: ▇▇▇▇▇▇.▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
and (c)
▇▇▇▇ ▇▇▇▇▇▇▇, Phone: ▇▇▇-▇▇▇-▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇ and e-mail: ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇,
with
a
copy
(which shall not constitute notice)
to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Phone: ▇▇▇.▇▇▇.▇▇▇▇, Fax: ▇▇▇.▇▇▇.▇▇▇▇ and e-mail:
▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. Except as set forth in Section 5.03, notice shall
be deemed given on the date of service or transmission if personally served
or
transmitted by telegram, telex, e-mail or confirmed facsimile. Notice otherwise
sent as provided herein shall be deemed given on the third business day
following the date mailed or on the next business day following delivery of
such
notice to a reputable air courier service for next day delivery.
Section
9.04 Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written, with respect to the subject matter
hereof.
Section
9.05 Amendment
and Waiver.
This
Agreement may not be amended, modified, supplemented, restated or waived except
by a writing executed by the party against which such amendment, modification,
supplement, restatement or waiver is sought to be enforced. Waivers may be
made
in advance or after the right waived has arisen or the breach or default waived
has occurred. Any waiver may be conditional. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
preceding or succeeding breach thereof nor of any other agreement or provision
herein contained. No waiver or extension of time for performance of any
obligations or acts shall be deemed a waiver or extension of the time for
performance of any other obligations or acts.
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Section
9.06 No
Assignment; No Third Party Beneficiaries.
This
Agreement and the rights, duties and obligations hereunder may not be assigned
or delegated by the Company or ▇▇▇▇▇ Fargo. Any purported assignment or
delegation of rights, duties or obligations hereunder shall be void and of
no
effect. This Agreement and the provisions hereof shall be binding upon and
shall
inure to the benefit of each of the parties and their respective successors
and,
to the extent provided in Article VI, the controlling persons, officers,
directors, employees and agents referred to in Article VI. This Agreement is
not
intended to confer any rights or benefits on any Persons other than as set
forth
in Article VI or elsewhere in this Agreement.
Section
9.07 Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
Section
9.08 Further
Assurances.
Each
party hereto, upon the request of any other party hereto, shall do all such
further acts and execute, acknowledge and deliver all such further instruments
and documents as may be necessary or desirable to carry out the transactions
contemplated by this Agreement.
Section
9.09 Titles
and Headings.
Titles,
captions and headings of the sections of this Agreement are for convenience
of
reference only and shall not affect the construction of any provision of this
Agreement.
Section
9.10 Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, INTERPRETED UNDER AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF. Any
action, suit or proceeding to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in any federal court located in the
Southern District of the State of New York or any New York state court located
in the Borough of Manhattan, and the Company agrees to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
and each party waives (to the full extent permitted by law) any objection it
may
have to the laying of venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding has been brought in an
inconvenient forum.
Section
9.11 Waiver
of Jury Trial.
The
Company and ▇▇▇▇▇ Fargo each hereby irrevocably waives any right it may have
to
a trial by jury in respect of any claim based upon or arising out of this
Agreement or any transaction contemplated hereby.
Section
9.12 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, and all of which taken together shall constitute one and
the
same instrument. Delivery of an executed Agreement by one party to the other
may
be made by facsimile transmission.
Section
9.13 Adjustments
for Stock Splits, etc.
The
parties acknowledge and agree that share related numbers contained in or
contemplated by this Agreement (including within the definitions of Monthly
Floor Price, the Issuance Amount and the Maximum Program Amount) shall be
equitably adjusted to reflect stock splits, stock dividends, reverse stock
splits,
S-25
combinations
and similar events provided,
however,
that
the “$1.00” referred to in the definition of “Daily Floor Price” shall not be
adjusted as the result of any such event.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
the undersigned, thereunto duly authorized, as of the date first set forth
above.
|
MDU
RESOURCES GROUP, INC.
|
||
| By: |
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President, Treasurer and Chief Financial Officer |
||
|
▇▇▇▇▇
FARGO SECURITIES, LLC
|
||
| By: |
/s/
▇. ▇▇▇▇ Genatowski
|
|
|
Name:
▇. ▇▇▇▇ Genatowski
Title: Manging Director |
||
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