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EXHIBIT 99.1
[LETTERHEAD OF PAUL, HASTINGS, JANOFSKY & WALKER LLP]
January 31, 2002
NorthWestern Corporation
125 South Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
NorthWestern Capital Financing III
c/o NorthWestern Corporation
125 South Dakota Avenue, Suite 1100
Sioux Falls, South Dakota 57104
Ladies and Gentlemen:
We have acted as counsel to NorthWestern Corporation, a Delaware
corporation (the "Company"), and NorthWestern Capital Financing III, a Delaware
statutory business trust (the "Trust"), in connection with the registration of
an aggregate of 4,000,000 of 8.10% Trust Preferred Securities of the Trust and
up to an aggregate of 600,000 additional 8.10% Trust Preferred Securities of the
Trust if the Underwriters exercise their overallotment option in full
(collectively, the "Preferred Securities"), pursuant to the Registration
Statement on Form S-3 (Registration No. 333-82707) (the "Registration
Statement") filed by the Company, the Trust and other registrants thereto with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended. In connection with the issue and sale by the Trust of
the Preferred Securities, the Company has entered into an Amended and Restated
Declaration of Trust of the Trust, dated as of January 31, 2002 (including Annex
I and Annex II thereto, the "Declaration"), among the Company, as depositor, the
trustees of the Trust named therein (the "Trustees") and the holders, from time
to time, of beneficial interests in the assets of the Trust, pursuant to which
the Company has agreed to purchase an aggregate of 123,712 8.10% Trust Common
Securities of the Trust and up to an aggregate of 18,557 additional 8.10% Trust
Common Securities of the Trust if the Underwriters exercise their overallotment
option in full (collectively, the "Common Securities"). In connection with the
issue and sale of the Preferred Securities and the Common Securities, the
Company has entered into a Preferred Securities Guarantee Agreement, dated as of
January 31, 2002 (the "Preferred Securities Guarantee Agreement"), between the
Company and Wilmington Trust Company for the benefit of the holders of the
Preferred Securities, and a Common Securities Guarantee Agreement, dated as of
January 31, 2002 (the "Common Securities Guarantee Agreement" and, together with
the Preferred Securities Guarantee Agreement, the "Guarantee Agreements"), for
the benefit of the holders of the Common Securities. The Company has agreed to
borrow the proceeds from the issue and sale of the Preferred Securities and the
Common Securities and in exchange therefor to issue and sell $103,092,800
aggregate principal amount of the Company's 8.10% Junior Subordinated Deferrable
Interest Debentures due January 15, 2032 and up to $15,463,925 additional
aggregate principal amount of the Company's 8.10% Junior Subordinated Deferrable
Interest Debentures due January 15, 2031 if the Underwriters exercise their
overallotment option in full (in each case, the amount being the aggregate
stated liquidation amount of the relevant Preferred Securities and Common
Securities) (collectively, the "Debentures").
In connection herewith, we have examined originals or copies
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(certified or otherwise identified to our satisfaction) of the Registration
Statement, including the exhibits thereto; the Underwriting Agreement (the
"Underwriting Agreement"), dated as of January 24, 2002, among the Company, the
Trust and Morgan Stanley & Co. Incorporated, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc., as
Representatives of the several Underwriters named in Schedule A thereto; the
Restated Certificate of Incorporation of the Company, filed in the office of the
Secretary of State of the State of Delaware on November 9, 2000; the By-Laws of
the Company, as amended to February 7, 2001; the Restated Certificate of Trust
for the Trust, dated as of June 30, 1998; the Declaration; the Guarantee
Agreements; the Preferred Securities; the Common Securities; the Subordinated
Debt Securities Indenture, dated as of August 1, 1995 (the "Indenture"), between
the Company and JPMorgan Chase Bank, as successor to The Chase Manhattan Bank,
N.A., as trustee (the "Indenture Trustee"); the Fourth Supplemental Indenture,
dated as of January 31, 2002 (the "Fourth Supplemental Indenture"), between the
Company and the Indenture Trustee; the Debentures; and such other corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers, representatives and
trustees of the Company and the Trust, and have made such inquiries of such
officers, representatives and trustees, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth. Capitalized terms used but
not defined herein are used as defined in the Registration Statement.
In such examination, we have assumed the genuiness of all
signatures, the legal capacity of all 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, conformed or photostatic copies and
the authenticity of the originals of the originals of such latter documents. As
to all questions of fact material to these opinions that have not been
independently established, we have relied upon certificates or comparable
documents of officers and representatives of the Company and the Trust and upon
the representations and warranties of the Company and the Trust contained in the
Underwriting Agreement.
Based on the foregoing, and upon our examination of such questions of
law as we have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth herein, we
are of the opinion that:
1. The Preferred Securities Guarantee Agreement has been duly
authorized by the Company and (assuming the due authorization, execution and
delivery thereof by the Indenture Trustee), when duly executed and delivered by
the Company as contemplated by the Registration Statement, will constitute the
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2. The Debentures have been duly authorized by the Company and, when
duly executed by the Company, authenticated by the Indenture Trustee in
accordance with the terms of the Indenture and sold and delivered by the Company
as contemplated by the Registration Statement, will constitute the legal, valid
and binding obligations of the company, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to
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general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
We are members of the Bar of the State of New York and our opinions
herein are limited to the laws of the State of New York, the laws of the State
of Delaware and the federal law of the United States, and we do not express any
opinion as to the laws of any other state or jurisdiction. The opinions
expressed herein are rendered solely for your benefit in connection with the
transactions described herein. Those opinions may not be used or relied upon by
any other person, nor may this letter or any copies thereof be furnished to a
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent, except that we hereby consent to
the use of this opinion as an exhibit to the Registration Statement and to any
and all references to our firm under the caption "Legal Matters" in the
prospectus supplement which is a part of the Registration Statement. In giving
this consent, we do not hereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker LLP