2,000,000 Shares
MINNESOTA POWER, INC.
Common Stock
UNDERWRITING AGREEMENT
September 24, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Minnesota Power, Inc. (the "Company") proposes to issue and sell to you
and to the other underwriters named in Schedule 1 hereto (each an "Underwriter
and, collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 2,000,000 shares of the
Company's Common Stock, without par value (the "Common Stock"), and the
preferred share purchase rights attached thereto (the "Rights") (collectively
referred to as "Firm Shares"). The Company has also agreed to grant to the
Underwriters an option (the "Option") to purchase up to an additional 300,000
shares of Common Stock and the attached Rights (collectively referred to as the
"Option Shares") on the terms and for the purposes set forth in Section 1(b).
The Firm Shares and the Option Shares are collectively referred to as the
"Shares."
The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company and the Representatives, acting on behalf of
the several Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Annex A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Annex A hereto. The offering of the Shares shall be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references
contained herein to "this Agreement" and the phrase "herein" shall be deemed
to include the Price Determination Agreement.
The Company confirms as follows its agreements with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) The Company agrees to issue and sell to each Underwriter, and
each Underwriter, severally and not jointly, agrees to purchase from the Company
at the purchase price per share for the Firm Shares to be agreed upon by the
Representatives and the Company and set forth in the Price Determination
Agreement, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule 1 thereto, plus such additional number of Firm Shares
such Underwriter may become obligated to purchase pursuant to Section 10 hereof.
The obligations of the Underwriters under this Agreement are several and not
joint. The obligations of the Company and the Underwriters under this Agreement
are undertaken on the basis of the representations and are subject to the
conditions of this Agreement.
(b) Subject to all the terms and conditions in this Agreement,
the Company grants the Option to the Underwriters, severally and not jointly, to
purchase up to 300,000 Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
several Underwriters and may be exercised in whole or in part at any time (but
not more than once), upon written or telegraphic notice (the "Option Share
Notice") by the Representatives to the Company on or before the 30th day after
the date of this Agreement setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase (the "Option Closing
Date"), which Option Closing Date may be the same as the Closing Date (as
defined in Section 2) but in no event shall the Option Closing Date be earlier
than the Closing Date nor later than five business days after the giving of the
Option Shares Notice. On the Option Closing Date, the Company shall issue and
sell to the several Underwriters the number of Option Shares set forth in the
Option Shares Notice, and each Underwriter shall purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such Underwriter
is purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c) The initial public offering price per share for the Firm Shares
and the purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement, which shall be dated the date hereof.
2. Payment and Delivery. Delivery of the Firm Shares shall be made to
the Representatives in New York, New York, against payment of the purchase price
by wire transfer of immediately available funds to an account designated in
writing by the Company to the Underwriters at least one business day prior to
the Closing Date (as hereinafter defined). Such payment shall be made at 10:00
a.m., New York City time, on September 30, 1998 or at such time on such other
date
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as may be agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "Closing Date").
To the extent that the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) shall
take place in the manner specified above for the Closing Date at the time and
date (which may be the Closing Date) specified in the Option Shares Notice.
3. Registration Statement and Prospectus; Public Offering. The Company
has filed with the Securities and Exchange Commission (the "Commission"),
pursuant to provisions of the Securities Act of 1933 (the "Act") and the
published rules and regulations adopted by the Commission thereunder (the "Rules
and Regulations"), a registration statement (No. 333-52161) on Form S-3,
relating to the registration of 3,000,000 shares of the Company's Common Stock,
without par value. Such registration statement was declared effective on May 18,
1998. The term "preliminary prospectus" as used herein means any preliminary
prospectus as contemplated by Rule 430 of the Rules and Regulations included at
any time as a part of such registration statement. Copies of such registration
statement and any amendments thereto and of each preliminary prospectus included
as part of such registration statement have been delivered to the
Representatives. Such registration statement, as it may be amended to the date
of this Agreement, including financial statements and all exhibits, and the
prospectus, as supplemented by a final prospectus supplement relating to the
Shares proposed to be filed electronically pursuant to Rule 424 are hereinafter
respectively referred to as the "Registration Statement" and the "Prospectus."
Any reference herein to the Registration Statement, any preliminary prospectus,
preliminary prospectus supplement or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 of the Act (the "Incorporated Documents") which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or before
the Effective Date or the date of such preliminary prospectus or the Prospectus,
as the case may be. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date, or the date of
any preliminary prospectus or the Prospectus, as the case may be, and
incorporated in such document by reference if such filing is made prior to the
Closing Date. Any reference herein to the term "Effective Date" shall be deemed
to refer to the later of the time and date the Registration Statement was
declared effective or the time and date of the filing of the Company's most
recent Annual Report on Form 10-K if such filing is made prior to the Closing
Date.
The Company understands that the Underwriters propose to make a public
offering of the Firm Shares, as described in the Prospectus, as soon after the
date of the Price Determination Agreement as the Underwriters deem advisable.
The Company confirms that the Underwriters and dealers have been authorized to
distribute each preliminary prospectus, if any, and preliminary prospectus
supplement and are authorized to distribute the Prospectus and any amendments or
supplements to it.
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4. Representations of the Company. The Company represents to the
Underwriters as follows:
(a) The Company meets the requirements for use of Form S-3 under
the Act.
(b) On the Effective Date, and at the Closing Date, the
Registration Statement and, at the date of the filing of the Prospectus, and at
the Closing Date, and, if later, the Option Closing Date, the Prospectus, as
each may be amended or supplemented, fully complied or will fully comply in all
material respects with the applicable provisions of the Act and the Rules and
Regulations, or pursuant to the Rules and Regulations shall be deemed to comply
therewith. On the Effective Date and Closing Date and, if later, the Option
Closing Date, the Registration Statement, as it may be amended or supplemented,
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. On the date of filing of the Prospectus and
the Closing Date, and, if later, the Option Closing Date, the Prospectus, as it
may be amended or supplemented, will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. On the date of filing of the Prospectus and the Closing
Date, and, if later, the Option Closing Date, the Incorporated Documents did or
will fully comply in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations of the Commission under the Exchange
Act (the "Exchange Act Rules and Regulations"), and, when read together with the
Prospectus, as it may be amended or supplemented, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The
foregoing representations do not apply to statements or omissions made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives expressly for use in
the Registration Statement or the Prospectus, as they may be amended or
supplemented. For all purposes of this Agreement, the amounts of the selling
concession and reallowance set forth in the Prospectus and the statements
contained in the first paragraph on page S-2 and under the caption
"Underwriting" on page S-5 of any preliminary prospectus supplement and the
Prospectus regarding stabilization and other transactions constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in any preliminary prospectus,
any preliminary prospectus supplement, the Registration Statement or the
Prospectus.
(c) The Company and its Material Subsidiaries (as defined below)
have good and sufficient title to all real material property and good and
sufficient title to all material personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially interfere with the use
made and proposed to be made of such property by the Company and its Material
Subsidiaries; and any material real property and buildings held under lease by
the Company and its Material Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of
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such property and buildings by the Company and its Material Subsidiaries (as
used in this Agreement, the term "Material Subsidiary" means a significant
subsidiary under Rule 1-02(w) of Regulation S-X of the Commission).
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Minnesota, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and there is no jurisdiction wherein
the character of the properties owned or held under lease by the Company or the
nature of the business transacted by the Company would expose the Company to any
material liability or disability by reason of the failure to qualify the Company
as a foreign corporation in any such jurisdiction; and each Material Subsidiary
of the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, and there is no jurisdiction wherein the character of the
properties owned or held under lease by any Material Subsidiary or the nature of
the business transacted by such Material Subsidiary would expose such Material
Subsidiary to any material liability or disability by reason of the failure to
qualify such Material Subsidiary as a foreign corporation in any such
jurisdiction.
(e) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, as they may be amended or
supplemented, there has not been any material adverse change, or any development
involving, so far as the Company can now reasonably foresee, a prospective
material adverse change, in the management, business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole, and there has not been any transaction entered into by the Company or
its Material Subsidiaries, other than transactions in the ordinary course of
business and transactions set forth in or contemplated by the Registration
Statement and the Prospectus, as they may be amended or supplemented, which is
material to the Company and its subsidiaries, taken as a whole. The Company and
its Material Subsidiaries have no contingent obligation which is not disclosed
in the Registration Statement and the Prospectus, as they may be amended or
supplemented, which is material to the Company and its subsidiaries, taken as a
whole.
(f) Any Incorporated Documents filed and incorporated by reference
prior to the Closing Date will, when they are filed with the Commission, conform
in all material respects with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations.
(g) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the Company
enforceable against it in accordance with its terms.
(h) The performance of this Agreement and the consummation of the
transactions contemplated hereby and the application of the net proceeds from
the offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its Material Subsidiaries pursuant to the terms or provisions
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of, or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the certificate of incorporation or by-laws of the Company or any of its
Material Subsidiaries, any material contract or other agreement to which the
Company or any of its Material Subsidiaries is a party or by which the Company
or any of its Material Subsidiaries or any of its properties is bound or
affected, or violate or conflict in any material respect with any material
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its Material Subsidiaries.
(i) The outstanding shares of Common Stock have been, and the
Shares to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and will not be subject
to any preemptive or similar right; and the Rights will be validly issued.
(j) The description of the Common Stock in the Registration
Statement and the Prospectus, as they may be amended or supplemented, is, and at
the Closing Date and, if later, the Option Closing Date, will be, complete and
accurate in all material respects. Except for shares issuable under the
Company's Automatic Dividend Reinvestment and Stock Purchase Plan, the Minnesota
Power and Affiliated Companies Employee Stock Purchase Plan or any compensation
plan disclosed in the Company's Proxy Statement with respect to the Company's
1998 Annual Meeting of Shareholders (collectively referred to as the "Stock
Purchase and Compensation Plans"), the Company does not have outstanding, and at
the Closing Date and, if later, the Option Closing Date, will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of capital
stock of any subsidiary or any such warrants, convertible securities or
obligations.
(k) The Company has filed a Petition for Certification of Capital
Structure with the Minnesota Public Utilities Commission ("Minnesota
Commission") pursuant to the Minnesota Public Utilities Act with respect to the
issuance and sale by the Company of the Shares. The Minnesota Commission has
entered an authorizing order approving the capital structure including the
issuance and sale of the Shares. Apart from such authorizing order of the
Minnesota Commission, no consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or "Blue Sky"
laws or the by-laws and rules of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by the Company.
(l) The Company is duly registered as a transfer agent within the
meaning of the Exchange Act with respect to the Common Stock and is in
compliance with the Exchange Act Rules and Regulations with respect to its
activities as transfer agent.
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(m) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(n) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(o) The Company is not, and after giving effect to the offering and
sale of the Shares will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(p) Except as set forth in the Registration Statement and the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its Material Subsidiaries is a party or to which any property
of the Company or any of its Material Subsidiaries is subject, which, if
determined adversely to the Company or any of its Material Subsidiaries would in
the Company's reasonable judgment individually or in the aggregate have a
material adverse effect on the management, business, properties, financial
condition or results of operations of the Company and its subsidiaries taken as
a whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(q) Except as set forth in the Registration Statement and the
Prospectus, the Company and its Material Subsidiaries (i) are in substantial
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), (ii) have
received all material permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in substantial compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate have a material adverse
effect on the management, business, properties, financial condition or results
of operations of the Company and its subsidiaries taken as a whole. The term
"Hazardous Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (B) any "hazardous waste" as defined by the Resource Conservation and
Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous,
dangerous, or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.
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5. Agreements of the Company.
(a) The Company will not file any amendment or supplement to the
Registration Statement or the Prospectus unless a copy has first been
submitted to the Representatives a reasonable time before its filing and the
Representatives have not reasonably objected to it in writing within a
reasonable time after receiving the copy.
(b) The Company will promptly advise the Representatives (i) of the
initiation or threatening of any proceedings for, or receipt by the Company of
any notice with respect to, the suspension of the qualification of the Shares
for sale in any jurisdiction or the issuance of any order by the Commission
suspending the effectiveness of the Registration Statement and (ii) of receipt
by the Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus, preliminary prospectus supplement or the
Prospectus or to the transactions contemplated by this Agreement. The Company
will make every reasonable effort to prevent the issuance of an order suspending
the effectiveness of the Registration Statement and, if any such order is
issued, to obtain its lifting as soon as possible.
(c) The Company will furnish to the Representatives without charge
one signed copy of the Registration Statement and of any amendments thereto
(including all exhibits filed with any such document) and as many conformed
copies of the Registration Statement as each of the Representatives may
reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by the Underwriters or a dealer, the Company will deliver, without
charge, to the Underwriters and to dealers, at such office or offices as the
Representatives may designate, as many copies of the Prospectus as each of the
Representatives may reasonably request, and, during such period after the
Effective Date if any event occurs as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements in it, in the light
of the circumstances existing when the Prospectus is delivered to a purchaser,
not misleading in any material respect, or if during such period it is necessary
to amend or supplement the Prospectus to comply with the Act or Rules and
Regulations, the Company will promptly prepare, submit to the Representatives,
file, subject to Section 5(a), with the Commission and deliver, without charge,
to each of the Underwriters and to dealers (whose names and addresses the
Representatives will furnish to the Company) to whom Shares may have been sold
by the Underwriters, and to other dealers on request, amendments or supplements
to the Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading in any material respect
and will comply with the Act and the Rules and Regulations. Delivery by the
Underwriters of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 6 of the Underwriting
Agreement.
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(e) The Company will make generally available to the Company's
security holders, as soon as practicable but in no event later than the last day
of the 15th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement satisfying the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(f) The Company will take such actions as the Representatives
reasonably designate in order to qualify the Shares for offer and sale under the
securities or "Blue Sky" laws of such jurisdictions as the Representatives
reasonably designate.
(g) The Company will pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Company under this Agreement,
including costs and expenses relating to (i) the preparation, printing and
filing of the Registration Statement and exhibits thereto, each preliminary
prospectus, each preliminary prospectus supplement, the Prospectus, all
amendments and supplements to the Registration Statement and the Prospectus,
(ii) the preparation and delivery of certificates representing the Shares, (iii)
the registration or qualification of the Shares for offer and sale under the
securities or "Blue Sky" laws of the jurisdictions referred to in Section 5(f)
and the determination of the legality of the Shares for investment, including
the reasonable fees and disbursements of counsel for the Underwriters (not to
exceed $10,000) in that connection, and the preparation and printing of
preliminary and supplemental "Blue Sky" memoranda and legal investment
memoranda, (iv), the furnishing (including costs of shipping and mailing) to the
Underwriters and to dealers of copies of the Registration Statement, each
preliminary prospectus, the Prospectus, and all amendments or supplements to the
Prospectus, and of the other documents required by this Section 5 to be so
furnished, (v) all transfer taxes, if any, with respect to the sale and delivery
of the Shares by the Company to the Underwriters, (vi) the listing of the Shares
on the New York Stock Exchange, (vii) any filings required to be made by the
Underwriters with the NASD, including the reasonable fees and disbursements of
counsel for the Underwriters in that connection, and (viii) the transfer agent
for the Shares.
(h) During the period of two years commencing on the Effective
Date, the Company will furnish to each Underwriter who may so request copies of
such financial statements and other periodic and special reports as the Company
may from time to time distribute generally to the holders of any class of its
capital stock, and will furnish to the Representatives and each Underwriter who
may so request a copy of each annual or other report it will be required to file
with the Commission.
(i) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares of
Common Stock to facilitate the sale or resale of any of the Shares.
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(j) Unless otherwise agreed to in writing by the Company and the
Underwriters, the Company will not for a period of 30 days after the
commencement of the public offering of the Shares sell or otherwise dispose of
any shares of Common Stock, rights to acquire shares of Common Stock or
securities convertible into shares of Common Stock other than to the
Underwriters pursuant to this Agreement and other than in connection with the
Stock Purchase and Compensation Plans.
6. Conditions of the Underwriters' Obligation. The obligation of each
Underwriter to purchase the Shares is subject to the accuracy, on the date of
this Agreement and on the Closing Date and, with respect to the Option Shares,
is subject to the accuracy on the date of this Agreement and on the Option
Closing Date, of the representations of the Company in this Agreement, to the
accuracy and completeness of all statements made by the Company or any of its
officers in any certificate delivered to the Representatives or their counsel
pursuant to this Agreement, to performance by the Company of its obligations
under this Agreement and to each of the following additional conditions:
(a) All filings required by Rule 424 of the Rules and Regulations
must have been made.
(b) No stop order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or threatened by the Commission and any requests for additional
information on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) must have been complied with and after
the date hereof no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
the Representatives a reasonable time before its filing and the Representatives
did not reasonably object thereto in writing within a reasonable time after
receiving the copy.
(c) Since the respective dates as of which such information is
given in the Registration Statement and the Prospectus, as they may be amended
or supplemented, (i) there must not have been any material change in the capital
stock or long-term debt of the Company and its subsidiaries, taken as a whole,
(ii) since the most recent dates as of which information is given in the
Registration Statement or the Prospectus, there shall not have been any material
adverse change, or any development involving, so far as the Company can now
reasonably foresee, a prospective material adverse change, in the management,
business, properties, financial condition or results of operations of the
Company and its subsidiaries, considered as a whole, whether or not in the
ordinary course of business and, since such dates there shall not have been any
material transaction entered into by the Company, other than transactions in the
ordinary course of business and transactions contemplated in the Registration
Statement or the Prospectus, and (iii) there must not have occurred any event
that makes untrue or incorrect in any material respect any statement or
information contained in the Prospectus or that is not reflected in the
Prospectus but should be reflected in it in order to make the statements or
information in it not misleading in any material respect; and in the judgment of
the Representatives, any such development referred to in clause (i), (ii) or
(iii) makes
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it impracticable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
(d) The Representatives must receive on the Closing Date and, with
respect to the Option Shares, on the Option Closing Date, a certificate, dated
such date, of the chief executive officer, the chief operating officer or the
chief financial officer of the Company certifying that (i) the signer has
carefully examined the Registration Statement and the Prospectus (including any
Incorporated Documents) and this Agreement, (ii) the representations of the
Company in this Agreement are accurate on and as of the date of the certificate,
(iii) since the most recent dates as of which information is given in the
Registration Statement or the Prospectus, there shall not have been any material
adverse change, or any development involving, so far as the Company can now
reasonably foresee, a prospective material adverse change, in the management,
business, properties, financial condition or results of operations of the
Company and its subsidiaries, considered as a whole, whether or not in the
ordinary course of business and, since such dates there shall not have been any
material transaction entered into by the Company, other than transactions in the
ordinary course of business and transactions contemplated in the Registration
Statement or the Prospectus, (iv) to the knowledge of such officer, no order
suspending the effectiveness of the Registration Statement or prohibiting the
sale of the Shares has been issued and no proceedings for such purpose are
pending before or threatened by the Commission, (v) there has been no document
required to be filed under the Exchange Act and the Exchange Act Rules and
Regulations that upon such filing would be deemed to be an Incorporated Document
that has not been so filed, and (vi) the Company has performed all agreements
that this Agreement requires it to perform by the Closing Date.
(e) The Representatives must receive on the Closing Date and, with
respect to the Option Shares, the Option Closing Date, opinions dated the
Closing Date substantially in the form of Annex B-1 and B-2 to this Agreement
from ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel to the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Esq., general counsel of the Company, respectively.
(f) The Representatives must receive on the Closing Date from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP, their counsel, an opinion dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
with respect to the Company, the Shares, the Registration Statement, the
Prospectus, this Agreement and the form and sufficiency of all proceedings taken
in connection with the sale and delivery of the Shares. Such opinion and
proceedings will be satisfactory in all respects to the Representatives. The
Company must have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to render such opinion.
(g) On the date hereof and on the Closing Date and, with respect
to the Option Shares, the Option Closing Date, PricewaterhouseCoopers LLP (the
"Accountants") must furnish to the Representatives a letter, addressed to the
Representatives and in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations and with
respect to the
11
financial and other statistical and numerical information contained in the
Registration Statement or incorporated by reference therein.
(h) Prior to the Closing Date, the Shares must be duly authorized
for listing by the New York Stock Exchange upon official notice of issuance.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement will comply with this Agreement only if they are
in form and scope satisfactory to counsel for the Representatives.
7. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter, and each
person, if any, who controls each Underwriter, within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities, joint or several (including, as and
when incurred, any investigative, legal or other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which they, or any of them, may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based on any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, preliminary prospectus supplement, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus (including any Incorporated Document), or the omission or alleged
omission to state in it a material fact required to be stated in it or necessary
to make the statements in it not misleading; provided, however, that the Company
shall not be liable to the extent that such loss, claim, damage, or liability
arises from the sale of the Shares in the public offering to any person by an
Underwriter and (i) is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information furnished in writing to the Company by or on behalf of such
Underwriter expressly for use in the Registration Statement, any preliminary
prospectus or preliminary prospectus supplement or the Prospectus, as set forth
in the last sentence of Section 4(b), or (ii) results solely from one or more
untrue statements of material facts contained in, or the omission of one or more
material facts from any preliminary prospectus or preliminary prospectus
supplement or the Prospectus, which untrue statement or omission was corrected
in the Prospectus (as then amended or supplemented) if the Underwriters sold
Shares to the person alleging such loss, claim, liability, expense or damage
without sending or giving, at or prior to the written confirmation of such sale,
a copy of the corrected Prospectus (as then amended or supplemented) if the
Company had previously furnished copies thereof to the Representatives within a
reasonable amount of time prior to such sale or such confirmation, and the
Representatives failed to send or give the corrected Prospectus (as then amended
or supplemented), if required by law to have so sent or given it and if sent or
given would have been a complete defense with respect to such untrue statement
or omission against the person asserting such loss, claim, liability, expense
12
or damage. This indemnity agreement shall be in addition to any liability that
the Company might otherwise have.
(b) Each Underwriter shall indemnify and hold harmless the Company,
its officers and directors and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as losses, claims, damages or liabilities arise
from the sale of the Shares in the public offering to any person by an
Underwriter and are based on any untrue statement or omission or alleged untrue
statement or omission made in or in reliance on and in conformity with
information furnished in writing to the Company by or on behalf of such
Underwriter expressly for use in the Registration Statement, any preliminary
prospectus or preliminary prospectus supplement or the Prospectus, as set forth
in the last sentence of Section 4(b). This indemnity agreement shall be in
addition to any liability that each Underwriters might otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 shall, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify in writing each
such indemnifying party of the commencement of such action, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party shall
not relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 7. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party shall be entitled to participate in, and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel reasonably satisfactory to the
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense, the indemnifying party
shall not be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the defense.
The indemnified party shall have the right to employ its counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by the indemnified
party has been authorized in writing by the indemnifying party, (ii) the
indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
13
reasonable fees, disbursements and other charges of more than one separate
counsel admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action 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.
8. Contribution. In order to provide for just and equitable
contribution in the circumstances in which the indemnification provided for
under the foregoing provisions of Section 7 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters shall contribute to the amount
paid or payable as a result of losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which the Company and any one or more of
the Underwriters may be subject in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other, the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative benefits shall be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters in each case as set forth in the table on the cover page of
the Prospectus. Such relative fault shall be determined by reference, among
other things, to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by or on behalf of the Representatives on
behalf of the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 8 were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 8 shall be deemed to include, for purpose of this Section 8, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts
received by it, except that insofar as losses, claims, damages and liabilities
arise from the
14
sale of the Shares in the public offering to any person by an Underwriter and
are based on any untrue statement or omission or alleged untrue statement or
omission made in or in reliance on and in conformity with information furnished
in writing to the Company by or on behalf of such Underwriter expressly for use
in the Registration Statement, any preliminary prospectus or preliminary
prospectus supplement or the Prospectus, as set forth in the last sentence of
Section 4(b), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8 are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 8, any person who controls a party to this
Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 8, will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 8. No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
9. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or before the Closing Date (or, with
respect to the Option Shares, on or before the Option Closing Date) by notice to
the Company from the Representatives, without liability on the part of any
Underwriter to the Company, if, subsequent to the date of this Agreement and
prior to delivery and payment for the Shares (or the Option Shares), as the case
may be, (a) in the judgment of the Representatives, (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission, by
an exchange that lists the Shares or by the Nasdaq Stock Market, (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any outbreak or
material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred, the
effect of any of which is such as to make it, in the judgment of the
Representatives, impracticable to proceed with the public offering of the Shares
the Shares on the terms and in the manner contemplated by the Prospectus, or (b)
any of the conditions specified in Section 6 have not been fulfilled when and as
required by this Agreement.
15
If this Agreement shall be terminated pursuant to Section 10 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 5(g), 7 and 8 hereof; but, if because of any failure or
refusal on the part of the Company to comply with the terms of this Agreement or
because any of the conditions in Section 6 are not satisfied, the Shares are not
delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred by
the Underwriters in making preparations for the purchase, sale and delivery of
the Shares, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 5(g), 7 and 8 hereof.
10. Substitution of Underwriters. If one or more of the Underwriters
shall, for any reason permitted hereunder, cancel its obligation to purchase
hereunder and to take up and pay for the Firm Shares to be purchased by such one
or more Underwriters, the Company shall immediately notify the remaining
Underwriters, and the remaining Underwriters shall have the right, within 24
hours of receipt of such notice, either to take up and pay for (in such
proportion as may be agreed upon among them) or to substitute another
underwriter or underwriters, satisfactory to the Company, to take up and pay for
the number of Firm Shares that such one or more Underwriters did not purchase.
If one or more Underwriters shall, for any reason other than a reason permitted
hereunder, fail to take up and pay for the Firm Shares to be purchased by such
one or more Underwriters, the Company shall immediately notify the remaining
Underwriters, and the remaining Underwriters shall be obligated to take up and
pay for (in addition to the respective number of Firm Shares set forth opposite
their respective names in Schedule 1), the number of Firm Shares that such
defaulting Underwriter or Underwriters failed to take up and pay for, up to a
number thereof equal to, in the case of each such remaining Underwriter, ten
percent (10%) of the number of Firm Shares set forth opposite the name of such
remaining Underwriter in Schedule 1, and such remaining Underwriters shall have
the right, within 24 hours of receipt of such notice, either to take up and pay
for (in such proportion as may be agreed upon among them), or to substitute
another underwriter or underwriters, satisfactory to the Company, to take up and
pay for, the remaining number of the Firm Shares that the defaulting Underwriter
or Underwriters agreed but failed to purchase. If any unpurchased Firm Shares
still remain, then the Company or the Underwriters shall be entitled to an
additional period of 24 hours within which to procure another party or parties,
who are members of the NASD (or if not members of the NASD, who are not eligible
for membership in the NASD and who agree (i) to make no sales within the United
States, its territories or its possessions or to persons who are citizens
thereof or residents therein and (ii) in making sales to comply with the NASD's
Rules of Fair Practice) and satisfactory to the Company, to purchase or agree to
purchase such unpurchased Firm Shares on the terms herein set forth. In any such
case, either the remaining Underwriters or the Company shall have the right to
postpone the Closing Date for a period not to exceed seven full business days
from the date agreed upon in accordance with this Section 10, in order that the
necessary changes in the Registration Statement and Prospectus and any other
documents and arrangements may be effected. If the Underwriters and the Company
shall fail to procure a satisfactory party or parties as above provided to
purchase or agree to purchase such unpurchased Firm Shares, then the Company may
either (i) require the remaining Underwriters to purchase the number of Firm
Shares that they are obligated to purchase hereunder (but no more than
16
such number of Firm Shares) or (ii) terminate this Agreement by giving prompt
notice to the Underwriters. In the event that neither the remaining Underwriters
nor the Company has arranged for the purchase of such unpurchased Firm Shares by
another party or parties as above provided and the Company has not elected to
require the remaining Underwriters to purchase the number of Firm Shares that
they are obligated to purchase hereunder, then this Agreement shall terminate
without any liability on the part of any such Underwriter or the Company for the
purchase or sale of any Shares under this Agreement. Any action taken pursuant
to this Section 10 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriters under this Agreement.
11. Miscellaneous. The reimbursement, indemnification and contribution
agreements in Sections 5, 7, 8 and 9 and the representations and agreements of
the Company and the Underwriters in this Agreement will remain in full force and
effect regardless of any termination of this Agreement, any investigation made
by or on behalf of the Underwriters, the Company, or any controlling person and
delivery and acceptance of and payment for the Shares.
This Agreement is for the benefit of the several Underwriters,
the Company, and their successors and assigns, and, to the extent expressed in
this Agreement, for the benefit of persons controlling the several Underwriters
or the Company, directors and officers of the Company and directors, officers,
employees and agents of the several Underwriters, and their respective
successors and assigns, and no other persons, partnership, association or
corporation will acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" does not include any purchaser of Shares from
any of the Underwriters merely because of such purchase.
All notices and communications under this Agreement shall be in
writing and mailed or delivered, by messenger, facsimile transmission or
otherwise, if to the Underwriters, to the Representatives at the offices of
PaineWebber Incorporated at c/o PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department, and if to
the Company, at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer. Any such notice or communication shall take effect upon
receipt thereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Underwriters and the Company.
17
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
MINNESOTA POWER, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: VP, General Counsel
& Secretary
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
By: PAINEWEBBER INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇
Title: Senior Vice President
UNDERWRITING AGREEMENT SIGNATURE PAGE
SCHEDULE 1
UNDERWRITERS
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
ABN AMRO Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Son, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
A Division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
EVEREN Securities, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
---------
Total 2,000,000
=========
ANNEX A
FORM OF PRICE DETERMINATION AGREEMENT
September __, 1998
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
September __, 1998 (the "Underwriting Agreement"), among Minnesota Power, Inc.
(the "Company") and the several Underwriters named in Schedule 1 hereto and
thereto (collectively, the "Underwriters") for whom PaineWebber Incorporated,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., Incorporated and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc. are acting
as representatives (the "Representatives"). The Underwriting Agreement provides
for the purchase by the several Underwriters from the Company subject to the
terms and conditions set forth therein, of an aggregate of 2,000,000 shares of
the Company's Common Stock, without par value ("Common Stock"), and the
preferred share purchase rights attached thereto (the "Rights") (collectively
referred to as the "Firm Shares"). Subject to the terms and conditions set forth
in the Underwriting Agreement, the Company has also granted to the Underwriters
an option (the "Option") to purchase up to an additional 300,000 shares of
Common Stock and the Rights attached thereto (collectively referred to as the
"Option Shares"). This Agreement is the Price Determination Agreement referred
to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agrees with the Representatives as follows:
1. The initial public offering price per share for the Firm
Shares and, if the Option is exercised, the Option Shares, shall be $[_______].
2. The purchase price per share for the Firm Shares and, if
the Option is exercised, the Option Shares to be paid to the Company by the
several Underwriters shall be
$[_______], representing an amount equal to the initial public offering price
set forth above, less an underwriting discount and commission of $[_______] per
share.
The Company represents and warrants to each of the
Underwriters that the representations and warranties of the Company set forth in
Section 4 of the Underwriting Agreement are accurate as though expressly made at
and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as
Schedule 1 is a completed list of the several Underwriters, which shall be a
part of this Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
2
If the foregoing is in accordance with your understanding of
the agreement among the Underwriters and the Company, please sign and return to
the Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
MINNESOTA POWER, INC.
By:
-----------------------
Name:
Title:
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
By: PAINEWEBBER INCORPORATED
By:
----------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By:
----------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INC.
By:
----------------------------
Name:
Title:
PRICE DETERMINATION AGREEMENT SIGNATURE PAGE
SCHEDULE 1
UNDERWRITERS
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
ABN AMRO Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Son, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
A Division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
EVEREN Securities, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
---------
Total 2,000,000
=========
ANNEX B-1
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
September __, 1998
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the sale by Minnesota Power, Inc. (the
"Company") of an aggregate of 2,000,000 shares of its Common Stock, without par
value (the "Common Stock"), and the preferred share purchase rights attached
thereto (the "Rights") (the Common Stock and the Rights being collectively
referred to as the "Shares"). We advise you that we have acted as counsel to the
Company in connection with such issuance and sale and have participated in the
preparation of (a) Registration Statement No. 333-52161, as filed by the Company
with the Securities and Exchange Commission for the registration of the Shares
under the Securities Act of 1933, as amended (the "Act") (such registration
statement, as amended at the Effective Date (as such term is defined in the
Agreement referred to below), being hereinafter referred to as the "Registration
Statement"); (b) the prospectus constituting part of the Registration Statement,
as amended and supplemented by a prospectus supplement dated September __, 1998,
relating to the Shares (such prospectus, as so amended and supplemented, being
hereinafter referred to as the "Prospectus"); and (c) the Underwriting Agreement
dated September __, 1998, between the Company and you (the"Agreement"). All
references in this opinion to the Agreement shall include the Price
Determination Agreement referred to therein. In addition, we have reviewed the
petition filed by the Company with the Minnesota Public Utilities Commission
seeking authorization to issue the Shares, and the order issued by said
Commission in response to said petition.
We have reviewed all corporate proceedings taken by the
Company in respect of the issuance and sale of the Shares.
Upon the basis of our familiarity with these transactions, we
are of the opinion that:
1. The Shares when paid for by the Underwriters in accordance
with the terms of the Agreement will be, duly authorized, validly issued, fully
paid and non-assessable and will not be subject to any preemptive or similar
right; and the Rights will be validly issued.
2. An authorizing order has been issued by the Minnesota
Public Utilities Commission certifying the Company's capital structure and
authorizing the issuance and sale of the Shares, and, to the best of our
knowledge, said order is still in full force and effect; and no further
approval, authorization, consent or order of any public board or body (other
than in connection or in compliance with the provisions of the securities or
"Blue Sky" laws of any jurisdiction) is legally required for the authorization
of the issuance and sale of the Shares.
3. The Registration Statement and the Prospectus (except as to
the financial statements, statement of income and other financial or statistical
data contained therein, upon which we do not pass) comply as to form in all
material respects with the requirements of the Act and the applicable
instructions, rules and regulations of the Securities and Exchange Commission
thereunder; the Registration Statement has become, and at the date hereof the
Registration Statement is, effective under the Act, and, to the best of our
knowledge, no proceedings for a stop order with respect thereto are pending or
threatened under Section 8 of the Act.
4. The statements set forth in the Prospectus under the
captions "Description of Common Stock" and "Description of Preferred Share
Purchase Rights," insofar as they purport to constitute a summary of the
securities, documents and instruments therein described, are accurate and fairly
present the information contained therein in all material respects.
5. The Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and legally binding
obligation of the Company.
6. The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
In passing upon the forms of the Registration Statement and
the Prospectus, we necessarily assume the correctness and completeness of the
statements made or included therein by the Company and take no responsibility
therefor, except insofar as such statements relate to us and as set forth in the
Prospectus under the heading "Legal Opinions" and in paragraph 4 above. In the
course of the preparation by the Company of the Registration Statement and the
Prospectus, we have had conferences with certain of its officers and
representatives, with other counsel for the Company and with
PricewaterhouseCoopers LLP, the independent certified public accountants who
examined certain of the Company's financial statements incorporated by reference
in the Registration Statement. Our examination of the Registration Statement and
the Prospectus, and our discussions in the above-mentioned conferences did not
disclose to us any information which gives us reason to believe that, at the
Effective Date, the Registration Statement 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
2
statements therein not misleading or that the Prospectus at the time it was
filed electronically with the Commission pursuant to Rule 424, and the
Prospectus, as amended or supplemented at the date hereof, contained or contains
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. We do not express any
opinion or belief as to the financial statements, statement of income or other
financial or statistical data contained in the Registration Statement or in the
Prospectus.
We are members of the New York Bar and do not hold ourselves
out as experts on the laws of Minnesota. As to all matters of Minnesota law (and
as to the incorporation of the Company, titles to property and franchises, upon
which we do not pass), we have relied with your consent upon the opinion of even
date herewith addressed to you by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Vice President,
General Counsel and Corporate Secretary for the Company.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇ & PRIEST LLP
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ANNEX B-2
FORM OF OPINION OF
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ESQ.
VICE PRESIDENT, GENERAL COUNSEL
AND CORPORATE SECRETARY OF
MINNESOTA POWER, INC.
September __, 1998
PaineWebber Incorporated
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Reference is made to the sale by Minnesota Power, Inc. (the
"Company") of an aggregate of 2,000,000 shares of its Common Stock, without par
value (the "Common Stock"), and the preferred share purchase rights attached
thereto (the "Rights") (the Common Stock and the Rights being collectively
referred to as the "Shares"). I advise you that I have acted as counsel to the
Company in connection with such issuance and sale and have participated in the
preparation of (a) Registration Statement No. 333-52161, as filed by the Company
with the Securities and Exchange Commission for the registration of the Shares
under the Securities Act of 1933, as amended (the "Act") (such registration
statement, as amended at the Effective Date (as such term is defined in the
Agreement referred to below), being hereinafter referred to as the "Registration
Statement"); (b) the prospectus constituting part of the Registration Statement,
as amended and supplemented by a prospectus supplement dated September __, 1998,
relating to the Shares (such prospectus, as so amended and supplemented, being
hereinafter referred to as the "Prospectus"); and (c) the Underwriting Agreement
dated September __, 1998, between the Company and you (the"Agreement"). All
references in this opinion to the Agreement shall include the Price
Determination Agreement referred to therein. In addition, I have reviewed the
petition filed by the Company with the Minnesota Public Utilities Commission
seeking authorization to issue the Shares, and the order issued by said
Commission in response to said petition.
I have reviewed all corporate proceedings taken by the Company
in respect of the issuance and sale of the Shares.
Upon the basis of my familiarity with these transactions and
with the Company's properties and affairs generally, I am of the opinion that:
1. The Shares, when paid for by the Underwriters in accordance
with the terms of the Agreement, will be duly authorized, validly issued, fully
paid and non-assessable and will not be subject to any preemptive or similar
right; and the Rights will be validly issued. Except for shares issuable under
the Company's Automatic Dividend Reinvestment and Stock Purchase Plan, the
Minnesota Power and Affiliated Companies Employee Stock Purchase Plan or any
compensation plan disclosed in the Company's Proxy Statement with respect to the
Company's 1998 Annual Meeting of Shareholders, to the best of my knowledge,
there is no commitment or arrangement to issue, and there are no outstanding
options, warrants or other rights calling for the issuance of, any share of
capital stock of the Company or any subsidiary to any person or any security or
other instrument that by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company.
2. An authorizing order has been issued by the Minnesota
Public Utilities Commission certifying the Company's capital structure and
authorizing the issuance and sale of the Shares, and, to the best of my
knowledge, said order is still in full force and effect; and no further
approval, authorization, consent or order of any public board or body (other
than in connection or in compliance with the provisions of the securities or
"Blue Sky" laws of any jurisdiction) is legally required for the authorization
of the issuance and sale of the Shares.
3. The Registration Statement and the Prospectus (except as to
the financial statements, statement of income and other financial or statistical
data contained therein, upon which I do not pass) comply as to form in all
material respects with the requirements of the Act and the applicable
instructions, rules and regulations of the Securities and Exchange Commission
thereunder; the Registration Statement has become, and at the date hereof the
Registration Statement is, effective under the Act, and, to the best of my
knowledge, no proceedings for a stop order with respect thereto are pending or
threatened under Section 8 of the Act.
4. The statements set forth in the Prospectus under the
captions "Description of Common Stock" and "Description of Preferred Share
Purchase Rights," insofar as they purport to constitute a summary of the
securities, documents and instruments therein described, are accurate and fairly
present the information contained therein in all material respects.
7. To the best of my knowledge, except as disclosed in the
Registration Statement or the Prospectus, no person or entity has the right to
require the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.
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5. The Company has full corporate power and authority to enter
into this Agreement. The Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and legally binding
obligation of the Company.
6. The Company is a validly organized and existing corporation
under the laws of the State of Minnesota and is duly qualified to do business,
and is doing business, in that State.
7. The Company is a public utility corporation duly authorized
by its Articles of Incorporation to conduct the business which it is now
conducting as set forth in the Prospectus and the Company holds valid and
subsisting franchises, licenses and permits authorizing it to carry on the
utility business in which it is engaged.
8. Each Material Subsidiary of the Company is a validly
organized and existing corporation under the laws of the State of its
incorporation and is duly qualified to do business, and is doing business, in
such State and in each other State in which the failure to qualify as a foreign
corporation would be material to the Company and its subsidiaries, taken as a
whole.
9. Other than as stated in the Registration Statement and the
Prospectus there are no pending legal proceedings to which the Company or any
Material Subsidiary is a party or of which property of the Company or any
Material Subsidiary is the subject, which depart from the ordinary routine
litigation incident to the kind of business conducted by the Company or any such
Material Subsidiary, and which is material to the Company and its subsidiaries,
taken as a whole, and, to the best of my knowledge, no such proceedings are
known to be contemplated by governmental authorities.
10. The portions of the answers to the items of the
Registration Statement and the portions of the information contained in the
Prospectus, which are stated therein to have been made on my authority as
General Counsel of the Company, have been reviewed by me and, as to matters of
law and legal conclusions, are correct.
11. Neither the issue and sale by the Company of the Shares as
contemplated by the Agreement nor the consummation by the Company of the other
transactions contemplated by the Agreement conflicts with, or results in a
breach of, the charter or by-laws of the Company or any Material Subsidiary or
any agreement or instrument known to me to which the Company or any Material
Subsidiary is a party or by which the Company or any Material Subsidiary is
bound, any law or regulation or, so far as is known to me, any order or
regulation of any court, governmental instrumentality or arbitrator.
12. To the best of my knowledge, the Company is not currently
in breach of, or in default under, any material written agreement or instrument
to which it is a party or by which it or its property is bound or affected, and
which breach or default is material to the Company and its subsidiaries, taken
as a whole.
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In passing upon the forms of the Registration Statement and
the Prospectus, I necessarily assume the correctness and completeness of the
statements made or included therein by the Company and take no responsibility
therefor, except insofar as such statements relate to me and as set forth in the
Prospectus under the headings "Experts" and "Legal Opinions" and in paragraphs 4
and 10 above. In the course of the preparation by the Company of the
Registration Statement and the Prospectus, I had conferences with certain of its
officers and representatives, with other counsel for the Company and with
PricewaterhouseCoopers LLP, the independent certified public accountants who
examined certain of the Company's financial statements incorporated by reference
in the Registration Statement. My examination of the Registration Statement and
the Prospectus, and my discussions in the above-mentioned conferences did not
disclose to me any information which gives me reason to believe that, at the
Effective Date, the Registration Statement 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 at the time it was filed electronically with the Commission pursuant
to Rule 424, and the Prospectus, as amended or supplemented at the date hereof,
contained or contains 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 do
not express any opinion or belief as to the financial statements, statement of
income or other financial or statistical data included in the Registration
Statement or in the Prospectus.
Very truly yours,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
4