Exhibit 1
[FORM OF UNDERWRITING AGREEMENT]
--------------------------------
MDU RESOURCES GROUP, INC.
(a Delaware corporation)
[_________] Shares of Common Stock
(Par Value $1.00 Per Share)
UNDERWRITING AGREEMENT
----------------------
[__________], ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
MDU Resources Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Banc of America Securities LLC (the "Underwriter")
with respect to (i) the sale by the Company and the purchase by the Underwriter
of an aggregate of [_________] shares of Common Stock, par value $1.00 per
share, of the Company ("Common Stock"), including the appurtenant preference
share purchase rights thereto (the "Rights", and together with the Common Stock,
the "Initial Securities") and (ii) the grant by the Company to the Underwriter
of the option described in Section 2(b) hereof to purchase all or any part of [_
___ ] additional shares of Common Stock and the Rights attached thereto to cover
over-allotments, if any (the "Option Securities"). The outstanding Rights have
been issued pursuant to a Rights Agreement (the "Rights Agreement") dated as of
November 12, 1998 between the Company and ▇▇▇▇▇ Fargo Bank Minnesota, N.A.
(formerly known as Norwest Bank Minnesota, N.A.), as Rights Agent. The Initial
Securities and the Option Securities are hereinafter called, collectively, the
"Securities".
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-49472) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act") and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement. Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable, and including any registration statement filed by the Company
pursuant to Rule 462(b) under the ▇▇▇▇ ▇▇▇) is referred to herein as the
"Registration Statement", and the final prospectus and the final prospectus
supplement relating to the offering of the Securities, in the form first
furnished to the Underwriter by the Company for use in connection with the
offering of the Securities, are collectively referred to herein as the
"Prospectus", provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of this Agreement. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424 of the 1933 Act Regulations, that was used after
such effectiveness and prior to the execution and delivery of this Agreement.
For purposes of this Agreement, all references to the Registration Statement,
Prospectus, or preliminary prospectus or to any amendment or supplement to any
of the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
(if any) and other information which is "contained", "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules (if any) and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is incorporated by reference in
the Registration Statement, such preliminary prospectus or the Prospectus, as
the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter, and agrees with the Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the date hereof,
the Closing Time and, if any Option Securities are purchased, each Date of
Delivery, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was first furnished to the Underwriter and at the
date hereof, the Closing Time and, if any Option Securities are purchased,
each Date of Delivery, included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
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order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use in connection with this offering in the
Registration Statement or Prospectus.
Each preliminary prospectus and the Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriter for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the respective times they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was first furnished
to the Underwriter by the Company for use in connection with the offering
of the Securities and at the date hereof, the Closing Time and, if any
Option Securities are purchased, each Date of Delivery, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent Accountants. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who certified the
financial statements and supporting schedules included in the Registration
Statement, were, at the times when such financial statements and supporting
schedules were prepared, certified and filed with the Commission,
independent public accountants as required by the 1933 Act and the 1934
Act. Deloitte & Touche LLP, who have been duly appointed as the Company's
independent auditors, are independent public or certified public
accountants as required by the 1933 Act and the 1934 Act.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States
("GAAP") applied on a consistent basis throughout the periods involved
(except as disclosed therein). The supporting schedules, if any, included
in the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. No other financial statements or
supporting schedules are required to be included in the Registration
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Statement. The selected financial data and the summary financial
information included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.
(v) No Material Adverse Effect in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
results of operations, capital stock, debt, business affairs, properties or
prospects of the Company and its subsidiaries taken as a whole, whether or
not arising in the ordinary course of business or any development that
would reasonably be expected to result in such a material adverse change
(any such change or development is called a "Material Adverse Effect"), (B)
there have been no transactions or agreements entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Common Stock or Preferred Stock in amounts per
share that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) Good Standing of Subsidiaries. The only "significant
subsidiaries" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X under the ▇▇▇▇ ▇▇▇) are Centennial Energy Holdings, Inc.,
WBI Holdings, Inc., WBI Pipeline & Storage Group, Inc., Knife River
Corporation, KRC Holdings, Inc., Fidelity Oil Co., Fidelity Exploration &
Production Company, ▇▇▇▇▇ Bros., Inc., KRC Holdings, Inc. and Williston
Basin Interstate Pipeline Company (the "Subsidiaries", and individually, a
"Subsidiary"). Each Subsidiary of the Company has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
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any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary
was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Company are
(a) the subsidiaries listed on Schedule A hereto and (b) certain other
subsidiaries which, considered in the aggregate as a single entity, do not
constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X.
(viii) Capitalization. The authorized, issued and outstanding common
stock of the Company is as set forth in the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 2002 in the row entitled
"Common stockholder's equity: Common stock" in the consolidated balance
sheets of the Company (except for subsequent issuances, if any, (A)
pursuant to this Agreement, (B) pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus, (C) pursuant to the
exercise of convertible securities or options referred to in the
Prospectus, (D) following the date hereof, as may be permitted by Section
3(j) hereof, or (E) as set forth in Schedule B hereto). The shares of
issued and outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock were issued in violation of the preemptive or other
similar rights of any securityholder of the Company. The issued and
outstanding common stock of the Company conform to the description thereof
set forth or incorporated by reference in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by the Underwriter from the Company have been duly authorized for
issuance and sale to the Underwriter pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable; each of the Common Stock and the Rights
conforms to all statements relating thereto contained in the Prospectus; no
holder of the Securities will be subject to personal liability by reason of
being such a holder; and the issuance of the Securities is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
(xi) Authorization of Rights Agreement. The Rights Agreement has been
duly authorized, executed and delivered by the Company; when the Rights
shall have been issued in accordance with the terms of this Agreement such
Rights will have been duly and validly issued.
(xii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
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Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations where such violation, in the case of the
application of the proceeds of the sale of the Securities, would have a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, (i) against or affecting the Company or any
subsidiary or (ii) which has as a subject thereof any officer or director
of, or property owned or leased by, the Company or any subsidiary, in each
case, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which (individually or collectively)
might reasonably be expected to result in a Material Adverse Effect, or
which (individually or collectively) might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder.
(xv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
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exhibits thereto which have not been so described and filed as required.
(xvi) Absence of Further Requirements. The Federal Energy Regulatory
Commission (the "FERC"), the Montana Public Service Commission (the "MPSC")
and the Public Service Commission of Wyoming (the "WPSC") have authorized
the issuance and sale of the Securities in the manner contemplated by this
Agreement, and said authorizations are in full force and effect and no
further filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as may be required
in connection with post-filing requirements with the FERC due after the
date hereof, and except such as have been already obtained and are in full
force and or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except such as may be required in
connection with the exercise of the Rights.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, franchises, approvals,
consents and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
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the continued possession of the leased or subleased premises under any such
lease or sublease.
(xix) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xx) Distribution of Other Offering Material by the Company. The
Company has not distributed and will not distribute, prior to the latest of
the Closing Time, the final Date of Delivery (if any) and the completion of
the Underwriter's distribution of the Securities, any offering material in
connection with the offering or sale of the Initial Securities and the
Option Securities, if any, other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(xxi) Tax Law Compliance. The Company and each of its subsidiaries
have filed all necessary federal, state and foreign income and franchise
tax returns or have properly requested extensions thereof and have paid all
taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them
except as may be being contested in good faith and by appropriate
proceedings. The Company has made adequate charges, accruals and reserves
in the applicable financial statements referred to in Section 1(iv) above
in respect of all federal, state and foreign income and franchise taxes for
all periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined.
(xxii) Related Party Transactions. There are no business relationships
or related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have not
been described as required.
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(xxiii) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxiv) No Outstanding Loans or Other Indebtedness. There are no
outstanding loans (except loans pursuant to the existing employees'
computer purchase plan), advances (except normal advances for business
expenses in the ordinary course of business) or guarantees or indebtedness
by the Company to or for the benefit of any of the executive officers or
directors of the Company which, individually or in the aggregate, are
material to the Company and its subsidiaries considered as one enterprise,
except as disclosed in the Prospectus.
(xxv) Compliance with Laws. The Company and each of its subsidiaries
are in compliance with, and the Company has no reason to believe that it
and each of its subsidiaries are not conducting business in compliance
with, all applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, including without limitation the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and any rules and regulations promulgated
thereunder and all applicable rules and regulations of the FERC, the MPSC
and the WPSC, except where failure to be so in compliance would not result
in a Material Adverse Effect.
(xxvi) Financial Projections. The forward looking statements and
projections (including the assumptions described therein) included or
incorporated by reference in the Registration Statement and the Prospectus,
including the statements contained in (1) the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2001 and its quarterly
reports on Form 10-Q for the periods ended March 31, 2002, June 30, 2002
and September 30, 2002, in each case, under the caption "Prospective
Information", and (2) the Company's current reports on Form 8-K dated
January 24, 2002, April 23, 2002, July 24, 2002 and October 22, 2002, in
each case, under the caption "Outlook", were made by the Company in good
faith and believed by the Company to have a reasonable basis at the
respective times such statements were made.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriter or to
counsel for the Underwriter shall be deemed a representation and warranty by the
Company to the Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) Initial Securities. On the basis of the respective representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to the Underwriter, and the
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Underwriter agrees to purchase from the Company, the Initial Securities at a
price of $[______] per share.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriter to purchase up
to an additional [_______] shares of Common Stock and related Rights, at the
price per share set forth in Section 2(a) above. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by the Underwriter to the Company setting forth the number of Option
Securities as to which the Underwriter is then exercising the option and the
time and date of payment and delivery for such Option Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by the
Underwriter, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇,
▇▇▇▇ & Priest LLP, 875 Third Avenue, New York, New York, or at such other place
as shall be agreed upon by the Underwriter and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriter, payment of the purchase price for, and delivery of
certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriter and
the Company, on each Date of Delivery as specified in the notice from the
Underwriter to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Underwriter of certificates for the Securities to be purchased by it.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Underwriter may request in writing at least one
full business day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Underwriter immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
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Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Underwriter notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will (i) in all cases during the period when a
prospectus is required to be delivered under the 1933 Act and (ii) thereafter,
as to the prospectus supplement relating to the Securities only, furnish the
Underwriter with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriter or counsel for the Underwriter shall
reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriter and counsel for the Underwriter, without charge,
three copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith) and copies of all signed
consents and certificates of experts. The copies of the Registration Statement
and each amendment and supplement thereto furnished to the Underwriter will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to the
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as the Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriter will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
11
which it is necessary, in the reasonable opinion of counsel for the Underwriter
or for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriter such number of copies of such amendment or supplement as the
Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriter may reasonably designate and to maintain such qualifications
in effect for a period of not less than one year from the date of this
Agreement, provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange and the Pacific
Exchange.
(j) Restriction on Sale of Securities. During a period of 45 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the Underwriter, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
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(A) the Securities to be sold hereunder, (B) any shares of Common Stock issued
or options to purchase Common Stock granted pursuant to existing benefit plans
of the Company referred to in the Prospectus or pursuant to the Rights, (C) any
shares of Common Stock issued pursuant to any non-employee director stock plan
or dividend reinvestment plan or (D) any shares of Common Stock issued in
connection with mergers or acquisitions completed in the ordinary course of
business by the Company or its subsidiaries provided such shares may not be
resold in a public offering until the expiration of the foregoing period.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the printing and delivery to the Underwriter of this
Agreement, and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriter, and any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities by the Company to
the Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriter of copies of each preliminary prospectus, and of the
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriter of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange and
Pacific Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 (other than as a
result of the failure of the Company to deliver the officer's certificate
referred to in clause (d) thereof due to the occurrence of a Material Adverse
Effect), the Company shall reimburse the Underwriter for all of its
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 1 hereof or in certificates of
any officer of the Company or any subsidiary of the Company delivered pursuant
to the provisions hereof, to the performance by the Company of its covenants and
13
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement
has become effective and at Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the Underwriter.
A prospectus containing information relating to the description of the
Securities, the specific method of distribution and similar matters shall have
been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter
shall have received the favorable opinions, dated as of Closing Time, of ▇▇▇▇▇▇
▇▇▇▇ & Priest LLP, special counsel for the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇,
general counsel for the Company, in substantially the forms of Exhibit A-1 and
Exhibit A-2 hereto, respectively.
(c) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing Time,
of Shearman & Sterling, counsel for the Underwriter, in a form satisfactory to
the Underwriter. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the
Underwriter. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Effect, and the Underwriter shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such Material Adverse
Effect, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are to the knowledge of the Company contemplated by
the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriter shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the Underwriter
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to Underwriter with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus; and the specified date referred to therein shall
be no more than three business days prior to the date of such letter.
14
(f) Bring-down Comfort Letter. At Closing Time, the Underwriter shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange and the Pacific Stock
Exchange, subject only to official notice of issuance.
(h) Regulatory Authorizations. At the time of the execution of this
Agreement and at the Closing Time, there shall be in full force and effect the
orders of the FERC, the MPSC and the WPSC, permitting the issuance and sale of
the Securities as contemplated by this Agreement.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriter exercises its option provided in Section 2(b) hereof to purchase all
or any portion of the Option Securities, the representations and warranties of
the Company contained herein and the statements in any certificates furnished by
the Company shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Underwriter shall have received:
(1) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(2) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special counsel for the Company, together with
the favorable opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, general counsel for the
Company, each in form and substance satisfactory to counsel for the
Underwriter, dated such Date of Delivery, relating to the Option Securities
to be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for Underwriter. The favorable opinion of
Shearman & Sterling, counsel for the Underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(4) Bring-down Comfort Letter. A letter from Deloitte & Touche
LLP, in form and substance satisfactory to the Underwriter and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Underwriter pursuant to Section 5(f) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to such
Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriter shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
15
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriter and counsel for the Underwriter.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
Underwriter to purchase the relevant Option Securities may be terminated by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriter. The Company agrees to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
16
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, however, that the Company shall not
be liable to the Underwriter to the extent that the Company shall sustain the
burden of proof that any such loss, liability, claim, damage or expense resulted
from the fact that the Underwriter sold Securities to a person to whom the
Underwriter failed to send or give, at or prior to the Closing Time or Date of
Delivery, as the case may be, a copy of the Prospectus if (i) the Company has
previously furnished copies thereof (sufficiently in advance of the Closing Time
or Date of Delivery, as the case may be), to allow for distribution by the
Closing Time or Date of Delivery, as the case may be, to the Underwriter and the
loss, liability, claim, damage or expense of the Underwriter resulted from an
untrue statement or alleged untrue statement or omission contained in or omitted
from the preliminary prospectus which was corrected in the Prospectus and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person and (ii) such failure to give or send the
Prospectus by the Closing Time or the Date of Delivery, as the case may be, to
the party or parties asserting such loss, liability, claim damage or expense
would have constituted the sole defense to the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. The Underwriter
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Underwriter, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
17
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriter on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, in each case as
set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriter
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
18
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, 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 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties, Agreements and Indemnities to
Survive Delivery. All representations, warranties, agreements and indemnities in
this Agreement and statements in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriter and any termination
of this Agreement.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriter may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time or any Date of
Delivery (i) if in the judgment of the Underwriter there shall have occurred any
Material Adverse Effect; (ii) if there has occurred any change in the United
States or international financial markets, any outbreak of national or
international hostilities or escalation thereof or other calamity or crisis or
any substantial change or development involving a prospective substantial change
in national or international political, financial or economic conditions, in
19
each case, as in the judgment of the Underwriter, is material and adverse and
makes it impracticable to market the Securities in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iii) if trading in any securities of the Company has been suspended or limited
by the Commission or the New York Stock Exchange or Pacific Stock Exchange, or
if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority; (iv) if a banking moratorium has been declared
by any federal, New York or California authorities; (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Underwriter may interfere materially
with the conduct of the business and operations of the Company, regardless of
whether or not such loss shall have been insured; or (vi) there shall have
occurred a material disruption in commercial banking or securities settlement or
clearance services in the United States.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Notices. All notices and other communications shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriter shall be
directed to Banc of America Securities LLC at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; Facsimile (▇▇▇) ▇▇▇-▇▇▇▇; (Attention: Energy & Power Group);
and notices to the Company shall be directed to it at MDU Resources Group, Inc.,
▇▇▇▇▇▇▇▇▇ Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of the
office of the Treasurer.
SECTION 11. Parties. This Agreement shall each inure to benefit of and
be binding upon the Underwriter and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriter and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
20
SECTION 13. Effect of Headings. The Article and Section herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
21
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriter and the Company in accordance with its terms.
Very truly yours,
MDU RESOURCES GROUP, INC.
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED BY,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
By:
----------------------------------
Authorized Signatory
22
SCHEDULE A
LIST OF SUBSIDIARIES
Alaska Basic Industries, Inc., an Alaska corporation
Anchorage Sand and Gravel Company, Inc., an Alaska corporation
▇▇▇▇▇▇▇ Contracting Company, Inc., a California corporation
▇▇▇▇▇▇▇ Brothers, Inc., a Minnesota corporation
▇▇▇▇ Electrical Contractors, Inc., a Missouri corporation
Bitter Creek Pipelines, LLC, a Colorado limited liability company
BIV Generation Company, LLC, a Delaware limited liability company
Brush Generation Company, LLC, a Delaware limited liability company
Brush Power, LLC, a Delaware limited liability company
Buffalo Bituminous, Inc., a Minnesota corporation
Capital Electric Construction Company, Inc., a Kansas corporation
Capital Electric Line Builders, Inc., a Kansas corporation
Centennial Energy Holdings, Inc., a Delaware corporation
Centennial Holdings Capital Corp., a Delaware corporation
Centennial Power Inc., a Delaware corporation
Central Oregon Redi-Mix, L.L.C., an Oregon limited liability company
Concrete, Inc., a California corporation
▇▇▇▇▇▇▇▇-Pacific Co., a California corporation
DSS Company, a California corporation
E.S.I., Inc., an Ohio corporation
▇. ▇. ▇▇▇▇▇▇▇, Inc., a California corporation
Fidelity Exploration & Production Company, a Delaware corporation
Fidelity Oil Co., a Delaware corporation
Frebco, Inc., an Ohio corporation
FutureSource Capital Corp., a Delaware corporation
Granite City Concrete of ▇▇▇▇▇▇▇, Inc., a Minnesota corporation
Granite City Concrete Pumping, LLC, a Minnesota limited liability company
Granite City Ready Mix, Inc., a Minnesota corporation
▇▇▇▇▇▇ Electric Company, a Colorado corporation
▇▇▇ ▇▇▇▇▇▇ & Sons, Inc., an Oregon corporation
Harp Engineering, Inc., a Montana corporation
Hawaiian Cement, a Hawaii partnership
ILB Hawaii, Inc., a Hawaiian corporation
Innovative Gas Services, Incorporated, a Kentucky corporation
Innovatum, Inc., a Texas corporation
International Line Builders, Inc., a Delaware corporation
InterSource Insurance Company, a Vermont corporation
JTL Group, Inc., a Montana corporation
JTL Group, Inc., a Wyoming corporation
KRC Aggregate, Inc., a Delaware corporation
KRC Holdings, Inc., a Delaware corporation
Knife River Corporation, a Delaware corporation
23
Knife River Dakota, Inc., a Delaware corporation
Knife River Hawaii, Inc., a Delaware corporation
Knife River Marine, Inc., a Delaware corporation
LTM, Incorporated, an Oregon corporation
▇▇▇ ▇▇▇▇▇ Pipeline Co., an Oregon corporation
MDU Resources International, Inc., a Delaware corporation
MDU Resources International LLC, a Delaware limited liability company
MDU Resources Luxembourg I LLC S.a.R.L.
MDU Resources Luxembourg II LLC S.a.R.L.
MDU Brasil Ltda.
MDU Chile Inversiones Ltda.
Marcon Energy Corporation, a Kentucky corporation
Medford Ready Mix, Inc., a Delaware corporation
▇▇▇▇▇▇ Generation Company, LLC, a Delaware limited liability company
▇▇▇▇▇ Bros., Inc., an Oregon corporation
Netricity LLC, an Alaska limited liability company
New Avoca Gas Storage LLC, a Texas limited liability company
Newco, Inc., an Ohio corporation
Northstar Materials, Inc., a Minnesota corporation
Oregon Electric Construction, Inc., an Oregon corporation
Pouk & ▇▇▇▇▇▇▇, Inc., a California corporation
Prairielands Energy Marketing, Inc., a Delaware corporation
Rocky Mountain Contractors, Inc., a Montana corporation
Rocky Mountain Power, Inc., a Montana corporation
Rogue Aggregates, Inc., an Oregon corporation
Seven Brothers Ranches, Inc., a Wyoming corporation
Utility Services, Inc., a Delaware corporation
WBI Canadian Pipeline, Ltd., a Canadian corporation
WBI Energy Services, Inc., a Delaware corporation
WBI Holdings, Inc., a Delaware corporation
WBI Pipeline & Storage Group, Inc., a Delaware corporation
WHC, Ltd., a Hawaii corporation
The ▇▇▇▇▇▇-▇▇▇▇▇ Company, an Ohio corporation
▇▇▇▇▇▇-▇▇▇▇▇ Equipment Co., a Delaware corporation
▇▇▇▇▇▇-▇▇▇▇▇ Pumps & Systems, Inc., an Ohio corporation
Wagon Box Partners, LLC, a Colorado limited liability company
Williston Basin Interstate Pipeline Company, a Delaware corporation
24
SCHEDULE B
Issuance of MDU Resources Group, Inc. common stock, $1.00 par value, subsequent
to September 30, 2002: [______] shares.
25
Exhibit A-1
[Letterhead of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP]
New York, New York
_________ __, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as special counsel to MDU Resources Group, Inc., a
Delaware corporation (the "Company"), in connection with the preparation,
execution and delivery of the Underwriting Agreement (the "Agreement"), dated
_____ __, 2002, by and among the Company and you, as Underwriter relating to the
offering of [_______] shares of the Company's Common Stock, par value $1.00 per
share (such shares being hereinafter referred to as the "Common Stock"), and the
appurtenant preference share purchase rights (the "Rights", and together with
the Common Stock, the "Securities") and the preparation and filing of a
prospectus supplement to the Registration Statement on Form S-3 (File No.
333-49472), as amended, and including the registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act") relating to such offering (the "Registration Statement"). All
capitalized terms used herein without definition shall have the respective
meanings set forth in the Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
We have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Act, incorporates or is deemed to incorporate by
reference (1) the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 2001 and the Annual Report to Security Holders submitted on
paper on March 6, 2002, (2) the Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, (3) the
Current Reports on Form 8-K dated January 3, 2002, January 24, 2002, February
20, 2002, March 28, 2002, April 23, 2002, July 24, 2002, October 22, 2002 and
November 1, 2002, and (4) the preliminary and definitive Proxy Statements filed
on February 4, 2002 and March 5, 2002 (collectively, the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In addition, we have examined, and have relied as to
matters of fact upon, the documents delivered to you at the closing (except the
certificates representing the Common Stock, of which we have examined a
specimen), and upon originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such other and
A-1-1
further investigations, as we have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota.
(iii) The Common Stock to be purchased by the Underwriter from the
Company has been duly authorized for issuance and sale to the Underwriters
pursuant to the Agreement and, when issued and delivered by the Company
pursuant to the Agreement against payment of the consideration set forth
therein, will be validly issued and fully paid and non-assessable, and no
holder of the Common Stock is subject to personal liability by reason of
being such a holder.
(iv) The issuance and sale of the Securities by the Company are not
subject to the preemptive or other similar rights of any securityholder of
the Company.
(v) The Agreement has been duly authorized, executed and delivered by
the Company. The Rights Agreement, dated as of November 12, 1998 (the
"Rights Agreement"), between the Company and ▇▇▇▇▇ Fargo Bank Minnesota,
N.A. (formerly known as Norwest Bank Minnesota N.A.), as Rights Agent, has
been duly authorized, executed and delivered by the Company; and when the
Rights shall have been issued in accordance with the Agreement, the Rights
to be purchased by the Underwriters will have been duly and validly issued.
(vi) The Registration Statement has become effective under the Act,
any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission.
(vii) The Registration Statement, the Prospectus, excluding the
Exchange Act Documents, and each amendment and supplement to the
Registration Statement and Prospectus, excluding the Exchange Act
Documents, as of the time the Registration Statement became effective, and
the Prospectus as of the date it was filed pursuant to Rule 424(b) under
the Act (other than the financial statements and supporting schedules and
A-1-2
other financial data included therein, and Exhibits [Change of Control
Contracts] to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2002, upon which we express no opinion (collectively, the
"Excepted Information")) complied as to form in all material respects with
the requirements of the Act and the 1933 Act Regulations.
(viii) The Exchange Act Documents (other than the Excepted
Information, upon which we express no opinion), when they became effective
or were filed with the Commission, as the case may be, complied as to form
in all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder.
(ix) The form of certificate used to evidence the Securities complies
in all material respects with all applicable statutory requirements, with
any applicable requirements of the Restated Certificate of Incorporation
and by-laws of the Company, the General Corporation Law of Delaware and the
requirements of the New York Stock Exchange and the Pacific Exchange.
(x) The information in the Prospectus under the caption "Description
of Common Stock" and in Item 15 of the Registration Statement, to the
extent that it constitutes matters of law, summaries of legal matters, the
Company's Restated Certificate of Incorporation and by-laws, or legal
proceedings or legal conclusions, has been reviewed by us and is correct in
all material respects.
(xi) The Federal Energy Regulatory Commission (the "FERC"), the
Montana Public Service Commission and the Public Service Commission of
Wyoming have authorized the issuance and sale of the Securities in the
manner contemplated by the Agreement, and, to the best of our knowledge,
said authorizations are still in full force and effect. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, and under the Act and
the 1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as to which we
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Agreement or for the offering,
issuance, sale or delivery of the Securities, except such as may be
required in connection with post-filing requirements with the FERC due
after the date hereof.
(xii) The execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated in the Agreement and in the
Registration Statement (including the issuance and sale of the Securities)
and compliance by the Company with its obligations under the Agreement do
not and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, each of a material nature and known
to us, to which the Company is a party or by which it may be bound, or to
A-1-3
which any of the property or assets of the Company is subject (except for
such conflicts, breaches or defaults or liens, charges or encumbrances or
Repayment Events that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the Restated
Certificate of Incorporation or by-laws of the Company, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to
us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its properties,
assets or operations.
(xiii) The Company is not, and after giving effect to the offer and
sale of the Common Shares and the receipt and application of the proceeds
therefrom in the manner described in the Prospectus under the caption "Use
of Proceeds", will not be, an "investment company" within the meaning of
the Investment Company Act.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (x) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, we
participated in conferences with certain of its officers and employees, with its
General Counsel, with your representatives and with representatives of Deloitte
& Touche LLP, the independent accountants who reviewed the 2002 financial
statements included in the Exchange Act Documents. Based on our examination of
the Registration Statement, the Prospectus and the Exchange Act Documents, our
investigations made in connection with the preparation of the Registration
Statement and the Prospectus and our participation in the conferences referred
to above, nothing has come to our attention that would lead us to believe that
the Registration Statement (except for the Excepted Information, upon which we
make no statement), at the time such Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus (except for the Excepted Information, upon
which we make no statement), as of the date the Prospectus was filed under Rule
424(b) under the Act or on the date hereof, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
This opinion is limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware, and the Federal laws of the
United States of America. We express no opinion as to the laws of any other
jurisdiction.
In rendering this opinion, we have relied as to all matters of Montana,
North Dakota, South Dakota, Wyoming and Minnesota law and, as to the matters
addressed therein, with your consent, upon the opinion addressed to you of even
date herewith of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, Esq., Bismarck, North Dakota, the General
Counsel of the Company, and we believe that we and the Underwriter is justified
in relying upon such opinion.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation other
A-1-4
than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, Esq., the Company's General Counsel, to the extent set
forth in his opinion of even date herewith addressed to you, without our prior
consent.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
A-1-5
Exhibit A-2
[LETTERHEAD OF MDU RESOURCES GROUP, INC.]
_____ __, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am General Counsel of MDU Resources Group, Inc., a Delaware
corporation (the "Company"), and am delivering this opinion in connection with
the Underwriting Agreement (the "Agreement"), dated _____ __, 2002, by and among
the Company and you, as Underwriter, relating to the offering of [_______]
shares of the Company's Common Stock, par value $1.00 per share (such shares
being hereinafter referred to as the "Common Stock"), and the appurtenant
preference share purchase rights (the "Rights", and together with the Common
Stock, the "Securities") and the preparation and filing of a prospectus
supplement to the Registration Statement on Form S-3 (File No. 333-49472), as
amended, and including the registration statement filed by the Company pursuant
to Rule 462(b) under the Securities Act of 1933, as amended (the "Act") relating
to such offering (the "Registration Statement"). All capitalized terms used
herein without definition shall have the respective meanings set forth in the
Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
I have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Act, incorporates or is deemed to incorporate by
reference (1) the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 2001 and the Annual Report to Security Holders submitted on
paper on March 6, 2002, (2) the Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2002, June 30, 2002 and September 30, 2002, (3) the
Current Reports on Form 8-K dated January 3, 2002, January 24, 2002, February
20, 2002, March 28, 2002, April 23, 2002, July 24, 2002, October 22, 2002 and
November 1, 2002, and (4) the preliminary and definitive Proxy Statements filed
on February 4, 2002 and March 5, 2002 (collectively, the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In addition, I have examined, and have relied as to
matters of fact upon, the documents delivered to you at the closing (except the
certificates representing the Common Stock, of which I have examined a
specimen), and upon originals or copies, certified or otherwise identified to my
satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such other and
A-2-1
further investigations, as I have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Agreement. The Company holds valid and subsisting franchises, licenses and
permits authorizing it to carry on the utility business in which it is
engaged, except as may be stated or referred to in the Prospectus.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota and is not required, whether by reason of the
ownership or leasing of property or the conduct of business, to be
qualified in any other jurisdiction, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(iv) The outstanding common stock of the Company is as set forth in
the Prospectus in the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 2002 in the row entitled "Common stockholder's
equity: Common stock" in the consolidated balance sheets of the Company
(except for subsequent issuances, if any, (A) pursuant to the Agreement or
(B) pursuant to reservations, agreements or employee benefit plans referred
to in the Prospectus or (C) pursuant to the exercise of convertible
securities or options referred to in the Prospectus; the shares of issued
and outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, and none of the
outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company.
(v) Each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
A-2-2
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best of my
knowledge, is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(vi) To the best of my knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the
Agreement or the performance by the Company of its obligations thereunder.
(vii) The information (i) in the Prospectus under the caption
"Description of Common Stock" and in Item 15 of the Registration Statement;
and (ii) in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2001 under the headings "Electric--General",
"Electric--Regulation and Competition", "Natural Gas
Distribution--General", "Natural Gas Distribution--Regulatory Matters",
"Pipeline and Energy Services--General" and "Pipeline and Energy
Services--Regulatory Matters and Revenue Subject to Refund" each under the
caption "Business and Properties" and under the caption "Legal
Proceedings", to the extent that it constitutes matters of law, summaries
of legal matters, the Company's charter and by-laws, or legal proceedings
or legal conclusions, has been reviewed by me and is correct in all
material respects.
(viii) To the best of my knowledge, there are no material statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
(ix) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects, to the best of my knowledge, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments, each of a material nature, required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(x) To the best of my knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
A-2-3
(xi) The Federal Energy Regulatory Commission (the "FERC"), the
Montana Public Service Commission and the Public Service Commission of
Wyoming have authorized the issuance and sale of the Securities in the
manner contemplated by the Agreement, and, to the best of my knowledge,
said authorizations are still in full force and effect. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, under the Act and the
1933 Act Regulations, which have been obtained, or as may be required under
the securities or blue sky laws of the various states, as to which I
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Agreement or for the offering,
issuance, sale or delivery of the Securities, except such as may be
required in connection with post-filing requirements with the FERC due
after the date hereof.
(xii) The execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated in the Agreement and in the
Registration Statement (including the issuance and sale of the Securities)
and compliance by the Company with its obligations under the Agreement do
not and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, each of a material nature
and known to me, to which the Company or any subsidiary is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances or
Repayment Events that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to me, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
respective properties, assets or operations.
I have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (vii) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, I
participated in conferences with certain of its officers and employees, with
other counsel for the Company, with your representatives and with
representatives of Deloitte & Touche LLP, the independent accountants who
reviewed the 2002 financial statements included in the Exchange Act Documents.
Based on my examination of the Registration Statement, the Prospectus and the
Exchange Act Documents, my investigations made in connection with the
preparation of the Registration Statement and the Prospectus and my
participation in the conferences referred to above, nothing has come to my
attention that would lead me to believe that the Registration Statement (except
for the Excepted Information, upon which I make no statement), at the time such
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
A-2-4
or necessary to make the statements therein not misleading or that the
Prospectus (except for the Excepted Information, upon which I make no
statement), as of the date the Prospectus was filed under Rule 424(b) under the
Act or on the date hereof, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
I am a member of the North Dakota and Montana Bars and do not hold
myself out as an expert on the laws of any other state, but I have made a study
of the laws of such states insofar as such laws are involved in the conclusions
stated in this opinion. As to matters of the General Corporation Law of the
State of Delaware and the Federal laws of the United States of America, I have
relied, with your consent, upon the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel
to the Company, a copy of which has been delivered to you.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation, other
than ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, special counsel to the Company, and Shearman &
Sterling, counsel to the Underwriter, to the extent set forth in their opinions
of even date herewith addressed to you, without my prior written consent.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
General Counsel
and Secretary
A-2-5
