WSP&R
DRAFT
6/17/95
MORTGAGE BONDS
UNDERWRITING AGREEMENT
NORTHWESTERN PUBLIC SERVICE COMPANY
33 Third Street SE
Huron, South Dakota 57350-1318
______ __, 1995
Ladies and Gentlemen:
On the basis of the representations and warranties, and subject to
the terms and conditions, set forth in this agreement ("this Agreement" or the
"Underwriting Agreement"), we, the Underwriters (as defined below), understand
that Northwestern Public Service Company, a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters $__________ aggregate
principal amount of its New Mortgage Bonds, _% Series due ____________ (the
"Bonds"). The Bonds will be issued pursuant to the provisions of the General
Mortgage Indenture and Deed of Trust dated as of August 1, 1993 between the
Company and The Chase Manhattan Bank (National Association), as Trustee (the
"Trustee"), as it will be supplemented by a supplemental indenture (the
"Supplemental Indenture") relating to the Bonds (said Mortgage Indenture and
Deed of Trust as so supplemented is hereinafter referred to as the "Indenture").
The Bonds will be a portion of the Company's New Mortgage Bonds issued under the
Indenture (the "New Mortgage Bonds").
The term "Underwriters," as used herein, shall be deemed to mean the
several persons, firms or corporations named in Schedule I hereto, and the term
"Representative," as used herein, shall be deemed to mean the representative or
representatives of such Underwriters by whom or on whose behalf this
Underwriting Agreement is signed. If there shall be one person, firm or
corporation named in Schedule I, the term "Underwriters" and the term
"Representative," as used herein, shall mean that person, firm or corporation.
All obligations of the Underwriters are several and not joint. The use of the
term "Underwriter" herein shall not be deemed to establish or admit that a
purchaser of the Bonds is an "underwriter" of the Bonds as such term is defined
in and used under the Securities Act of 1933, as amended (the "Securities Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Registration
Statement No. 33-_____), including a prospectus, relating to the Bonds, and has
filed with, or transmitted for filing to, or shall promptly hereafter file with
or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Bonds pursuant to Rule 424
under the Securities Act. The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included in
the Registration Statement, as amended and supplemented to the date of this
Agreement (exclusive of any supplement to the prospectus relating solely to
securities other than the New Mortgage Bonds). The term "Prospectus" means the
Basic Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Bonds, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement", "amendment" and "amend" as used herein shall include all documents
deemed to be incorporated by reference in the Prospectus that are filed
subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and, to
the Company's knowledge, after due inquiry, no proceedings for such purpose are
pending before or threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder or pursuant to
said rules and regulations will be deemed to comply therewith; (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any 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) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder or pursuant to said rules and regulations will be deemed
to
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comply therewith; and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section 1(c) do
not apply (A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of Eligibility
(Form T-l) under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), of the Trustee.
(d) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement, the Indenture and the Bonds. The Company is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting Agreement,
the Indenture and the Bonds will not conflict with, result in a breach of or
constitute a default under any provision of (A) applicable law (except for the
indemnification provisions hereof which may be unenforceable as against public
policy under certain circumstances), (B) the certificate of incorporation or
by-laws of the Company, (C) any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries is a
party that is material to the Company and its subsidiaries, taken
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as a whole, or (D) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any subsidiary.
(h) The Federal Energy Regulatory Commission (the FERC") has
issued an appropriate order or orders with respect to the issuance and sale of
the Bonds in accordance with the Underwriting Agreement; such order or orders
are in full force and effect; the issuance and sale of the Bonds are in
conformity with the terms of such order or orders; and no other authorization,
approval or consent of any other governmental body or agency is legally required
for the issuance and sale of the Bonds as contemplated by the Underwriting
Agreement, except such as have been obtained under the Securities Act and the
Trust Indenture Act and such as may be required under the state securities or
Blue Sky laws in connection with the purchase and distribution of the Bonds by
the Underwriters.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described, or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(k) On the basis of the present knowledge of the senior management
of the Company as to the business and affairs of Synergy Group Incorporated, a
Delaware corporation ("Synergy"), and its subsidiaries, the Company has no
reason to believe that the representations contained in subsections (i) and (j)
above would be incorrect in any material respect on the date hereof as a result
of the consummation of the acquisition of such business on the terms described
in the Prospectus (the "Acquisition").
(l) The unaudited pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus have been prepared in good faith by the Company; management's
assumptions provide a reasonable basis for presenting the significant effects
directly attributable to the Acquisition described in the notes to the unaudited
pro forma condensed consolidated financial statements,
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the related pro forma adjustments give appropriate effect to those assumptions,
and the pro forma column reflects the proper application of those adjustments to
the historical financial statement amounts contained in such unaudited pro forma
consolidated statements.
(m) Each of the conditions to the consummation of the Acquisition
contained in the Purchase and Sale Agreement dated as of May 17, 1995, by and
among Synergy and the other parties thereto (the "Acquisition Agreement"), has
been satisfied or, to the best knowledge of the Company, can be satisfied in the
ordinary course on or prior to September 30, 1995.
2. PUBLIC OFFERING. The Company is advised by the Underwriters
that they propose to make a public offering of their respective portions of the
Bonds as soon after the Underwriting Agreement has been entered into as in the
Underwriters' judgment is advisable. The terms of the public offering of the
Bonds are set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions
herein set forth, the Company hereby agrees to sell and the Underwriters agree
to purchase, severally and not jointly, the respective principal amounts of
Bonds set forth opposite the name of such Underwriter in Schedule I hereto at
the purchase price set forth in Schedule II in the type of funds and method of
payment specified in Schedule II.
Delivery of the Bonds and payment of the purchase price shall be
made at the time, date and place indicated in Schedule II. The time and date of
such payment and delivery are hereinafter referred to as the Closing Date.
The Bonds shall be delivered to the Underwriters in such authorized
denominations and registered in such names as the Representative shall request
in writing not less than two full business days prior to the date of delivery.
The Company agrees to make the Bonds available to the Underwriters for checking
not later than 2:30 p.m., New York time, on the last business day preceding the
Closing Date at such place as may be agreed upon between the Representative and
the Company.
4. CONDITIONS TO CLOSING. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading in the
rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
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(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company and
its subsidiaries, taken as a whole, from that set forth in the Prospectus,
that, in the judgment of the Representative, is material and adverse and
that makes it, in the judgment of the Representative, impracticable to
market the Bonds on the terms and in the manner contemplated in the
Prospectus; and
(iii) the Company shall have obtained an appropriate order or
orders of the FERC authorizing the issuance, sale and delivery of the
Bonds as contemplated by the Underwriting Agreement, which order or orders
at the Closing Date shall be in full force and effect and shall not be
contested or the subject of review or appeal.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company to the effect set forth in clause (a)(i), (ii) and (iii) above and to
the effect that the representations and warranties of the Company contained in
the Underwriting Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the Closing
Date. The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Schiff Hardin & Waite, special counsel to the
Company, to the effect that
(i) the Company has been duly incorporated and, based upon
certificates or letters from state or other appropriate authorities, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and is duly qualified and in good standing as a foreign
corporation in the States of Iowa, Nebraska, North Dakota and South
Dakota, with corporate powers and statutory authority to carry on the
business which it now carries on as stated in the Prospectus and to own
and operate the properties used by it in such business;
(ii) each subsidiary of the Company has been duly incorporated
and based upon certificates or letters from state or other appropriate
authorities, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation with corporate powers
and statutory authority to carry on the business which it now carries on
as stated in the Prospectus and to own and operate the properties used by
it in such business and is duly qualified and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
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leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) the Class "A" Bonds (as that term is defined in the
Indenture) which, at the date hereof, have been deposited with the Trustee
under the Indenture have been duly pledged, assigned and transferred to
the Trustee, and the Indenture constitutes a direct and valid first lien
thereupon; no registration, recording or filing of the Indenture (or
notices or financing statements in respect thereof) is required by law to
make effective and to maintain the lien intended to be created by the
Indenture on such Class "A" Bonds;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable
in accordance with its terms, except as limited by bankruptcy, insolvency
or other laws affecting the enforcement of mortgagees' and other
creditors' rights and general equitable principles (whether considered in
a proceeding at law or in equity) and except that no opinion is expressed
with respect to the enforceability of the lien of the Indenture on
chattels as against third parties (other than chattels delivered in pledge
to the Trustee), or with respect to the enforceability of the lien of the
Indenture on after acquired property (in respect of which a supplemental
indenture shall not have been executed, delivered and recorded) as against
purchasers for value without notice;
(v) the Bonds have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, in
each case enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other laws affecting the enforcement
of mortgagees' and other creditors' rights and by general equitable
principles (whether considered in a proceeding at law or in equity);
(vi) each Class "A" Mortgage has been duly and validly
authorized by all necessary corporate action, has been duly and validly
executed and delivered, and is a valid and binding instrument, enforceable
in accordance with its terms, except as limited by bankruptcy, insolvency
or other laws affecting the enforcement of mortgagees' and other
creditors' rights and by general equitable principles (whether considered
in a proceeding at law or in equity) and
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except that no opinion is expressed with respect to the enforceability of
the lien of each Class "A" Mortgage on chattels as against third parties
(other than chattels delivered in pledge to the Class A Mortgage Trustee),
or with respect to the enforceability of the lien of the Class A Mortgage
on after acquired property (in respect of which a supplemental indenture
shall not have been executed, delivered and recorded) as against
purchasers for value without notice;
(vii) each Class "A" Mortgage constitutes a valid and direct
first mortgage lien on the properties which are described therein subject
only to excepted encumbrances as defined therein and to minor defects and
encumbrances customarily found on properties of like size and character,
which do not materially impair the use of such properties by the Company;
(viii) the Class "A" Bonds which, at the date hereof, have
been deposited with the Trustee under the Indenture are legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency or other
laws affecting the enforcement of mortgagees' and other creditors' rights
and by general equitable principles (whether considered in a proceeding at
law or in equity), and are entitled to the benefit of the security
afforded by the respective Class "A" Mortgage under which they were
issued;
(ix) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(x) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Indenture and the Bonds will not conflict with, result in a
breach of or constitute a default under any provision of (A) applicable
law (except for the indemnification provisions hereof which may be
unenforceable as against public policy under certain circumstances), (B)
the certificate of incorporation or by-laws of the Company, (C) to the
best of such counsel's knowledge, any indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any of its
subsidiaries is a party that is material to the Company and its
subsidiaries, taken as a whole, or (D) to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any subsidiary;
(xi) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Bonds in accordance with the
Underwriting Agreement; such order or orders are in full force and effect;
the issuance and sale
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of the Bonds are in conformity with the terms of such order or orders; and
no other authorization, approval or consent of any other governmental body
or agency is legally required for the issuance and sale of the Bonds as
contemplated by the Underwriting Agreement, except such as have been
obtained under the Securities Act and the Trust Indenture Act and such as
may be required under the state securities or Blue Sky laws in connection
with the purchase and distribution of the Bonds by the Underwriters;
(xii) the statements (A) in the Prospectus under the captions
"Certain Terms of the Offered Securities," "Description of the Mortgage
Bonds," "Underwriting" and "Plan of Distribution," (B) "Pending
Acquisition of Synergy Group Incorporated," (C) in the Registration
Statement under Item 15, (D) in "Item 3 - Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated by reference
in the Prospectus and (E) in "Item 1 - Legal Proceedings" of Part II of
the Company's quarterly reports on Form 10-Q filed since such annual
report and reviewed by such counsel, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(xiii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or the Prospectus
and are not so described or of any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described, filed or
incorporated as required;
(xiv) 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;
(xv) the Registration Statement has become and is effective
under the Securities Act, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for a stop order with respect thereto are
pending or threatened under Section 8(d) of the Securities Act; and
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(xvi) such counsel (A) is of the opinion that (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion and except for documents filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus that such counsel did not review as to which such counsel need
not express any opinion) each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied when
so filed as to form in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (B)
believes that (except for financial statements and schedules as to which
such counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-l heretofore referred
to) each part of the Registration Statement, when such part became
effective did not, and, as of the date such opinion is delivered, does not
contain any 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, (C) is of the opinion that the
Registration Statement and Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express any
opinion), comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission thereunder
and (D) believes that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of the
date such opinion is delivered does not contain any 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.
(d) The Representative shall have received on the Closing Date
opinions dated the Closing Date (i) of Churchill, Manolis, Freeman, Kludt &
Kaufman, South Dakota counsel to the Company, with respect to franchises and
titles to the properties of the Company, the validity and enforceability of the
lien of the Indenture and of each Class "A" Mortgage with respect thereto and
the non-necessity of authorization by any public body of the State of South
Dakota with respect to the issuance of the Bonds and the Class "A" Bonds, (ii)
of Shamberg, Wolf, McDermott & Depue, Nebraska counsel to the Company, with
respect to franchises and titles to the properties of the Company, the validity
and enforceability of the lien of the Indenture and of each Class "A" Mortgage
with respect thereto and the non-necessity of authorization by any public body
of the State of Nebraska with respect to the issuance of the Bonds and the Class
"A" Bonds, (iii) of Pearce & Durick, North Dakota counsel to the Company, with
respect to titles to the properties of the Company, the validity and
enforceability of the lien of the Indenture and of each Class "A" Mortgage with
respect thereto and the non-
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necessity of authorization by any public body of the State of North Dakota with
respect to the issuance of the Bonds and the Class "A" Bonds, and (iv) of Nymann
& Kohl, Iowa counsel to the Company, with respect to franchises, if any, and
titles to the properties of the Company, the validity and enforceability of the
lien of the Indenture and of each Class "A" Mortgage with respect thereto and
the non-necessity of authorization by any public body of the State of Iowa with
respect to the issuance of the Bonds and the Class "A" Bonds.
(e) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Winthrop, Stimson, Putnam & Roberts, counsel
for the Underwriters, covering the matters referred to in subparagraphs (iv),
(v), (ix), (xii) (but only as to the statements referred to in clause (A)
thereof), (xv) and (xvi) (B), (C) and (D) of paragraph (c) above.
As to matters of South Dakota, Nebraska, North Dakota and Iowa law,
Winthrop, Stimson, Putnam & Roberts and Schiff Hardin & Waite may rely upon the
opinions of even date herewith of Churchill, Manolis, Freeman, Kludt & Kaufman;
Shamberg, Wolf, McDermott & Depue; Pearce & Durick and Nymann & Kohl,
respectively.
With respect to the subparagraph (xvi) of paragraph (c) above,
Schiff Hardin & Waite, special counsel to the Company, may state that its
opinion and belief are based upon its participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and documents incorporated therein by reference and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified. With respect to clauses (B), (C) and (D) of subparagraph (xvi) of
paragraph (C) above, Winthrop, Stimson, Putnam & Roberts may state that their
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(but not including documents incorporated therein by reference) and review and
discussion of the contents thereof (including documents incorporated therein by
reference) but are without independent check or verification, except as
specified.
The opinions of Schiff Hardin & Waite, special counsel to the
Company, Churchill, Manolis, Freeman, Kludt & Kaufman, South Dakota counsel to
the Company, Shamberg, Wolf, McDermott & Depue, Nebraska counsel to the Company,
Pearce & Durick, North Dakota counsel to the Company and Nymann & Kohl, Iowa
counsel to the Company, described in paragraphs (c) and (d) above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(f) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from
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Arthur Andersen LLP, the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference into the
Prospectus. Such letter shall include, without limitation, statements to the
effect that (i) the unaudited pro forma condensed consolidated financial
statements included or incorporated by reference in the Prospectus comply as to
form with the applicable accounting requirements of Rule 11-02 of Regulation S-X
of the Commission, (ii) management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the Acquisition
described in the notes to the unaudited pro forma condensed consolidated
financial statements, (iii) the related pro forma adjustments give appropriate
effect to those assumptions, and (iv) the pro forma column reflects the proper
application of those adjustments to the historical financial statement amounts
contained in such unaudited pro forma consolidated statements.
(g) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Arthur Andersen LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the letter
furnished by such accountants pursuant to Section 4(f), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(h) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from Peat Marwick LLP, Synergy's independent
public accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained or incorporated
by reference into the Prospectus.
(i) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from Peat Marwick LLP, Synergy's independent public accountants,
to the effect that such accountants reaffirm, as of the Closing Date, and as
though made on the Closing Date, the statements made in the letter furnished by
such accountants pursuant to Section 4(h), except that the specified date
referred to therein shall be a date not more than five business days prior to
the Closing Date.
(j) The Representative shall have received a certificate of the
Sellers (as defined in the Acquisition Agreement) consenting to the references
made to them and the Acquisition and to the inclusion (by incorporation or
otherwise)
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of descriptions and other information with respect thereto (including, in the
case of Synergy, historical financial statements) in the Registration Statement
and the Prospectus.
(k) On the Closing Date, Standard & Poor's and Moody's Investors
Service, Inc. shall have publicly assigned to the Bonds ratings of ____ and
____, respectively, which ratings shall be in full force and effect on the
Closing Date.
5. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To furnish the Representative, without charge, a signed copy
of the Registration Statement (including exhibits thereto) and to deliver to
each other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto or to the Registration Statement as
the Underwriters may reasonably request.
(b) To cause the Prospectus to be filed with the Commission
pursuant to and in compliance with Rule 424 under the Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to the Underwriters a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object.
(d) If, during such period after the first date of the public
offering of the Bonds as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur or condition exist as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare, file with the Commission and furnish, at
its own expense, to the Underwriters, and to the dealers (whose names and
addresses the Representative will furnish to the Company) to which Bonds may
have been sold by the Underwriters on behalf of the Underwriters and to any
other dealers upon request, either 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 when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with law.
-13-
(e) To endeavor to qualify the Bonds for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriters shall
reasonably request and to maintain such qualification for as long as the
Underwriters shall reasonably request.
(f) To make generally available to the Company's security holders
and to the Representative as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of the Underwriting Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company or
warrants to purchase debt securities of the Company substantially similar to the
Bonds (other than (i) the Bonds, (ii) commercial paper issued in the ordinary
course of business and (iii) other debt securities evidencing commercial bank
loans), without the prior written consent of the Representative.
(h) Whether or not any sale of Bonds is consummated, to pay all
expenses incident to the performance of its obligations under the Underwriting
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Bonds, (iii) the fees and
disbursements of the Company's counsel and accountants and of the Trustee and
its counsel, (iv) the qualification of the Bonds under securities or Blue Sky
laws in accordance with the provisions of Section 5(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of any Blue Sky Memoranda in an
aggregate amount not to exceed $10,000, (v) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the Registration
Statement and all amendments thereto and of the Prospectus and any amendments or
supplements thereto, (vi) any fees charged by rating agencies for the rating of
the Bonds and (vii) the fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20
-14-
of the Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person in
connection with investigating or defending any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be
-15-
liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Bonds or (ii) if the allocation
provided by clause (i) above 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 Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Bonds shall be deemed to be in the same
respective proportions as the net proceeds from the offering of such Bonds
-16-
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus Supplement, bear to the
aggregate public offering price of the Bonds. The relative fault of the Company
on the one hand and of the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective principal amounts of Bonds they have purchased hereunder, and
not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, 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 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. TERMINATION. This Agreement shall be subject to
termination, by notice given by the Representative to the Company, if (a) after
the execution and delivery of the Underwriting Agreement and prior to the
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or thee
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any
-17-
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representative, is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in the judgment of the Representative, impracticable to market the Bonds on
the terms and in the manner contemplated in the Prospectus. This Agreement may
also be terminated at any time prior to the Closing Date if in the judgment of
the Representative the subject matter of any amendment or supplement to the
Registration Statement or Prospectus prepared and furnished by the Company
reflects a material adverse change in the business, properties or financial
condition of the Company which renders it either inadvisable to proceed with
such offering, if any, or inadvisable to proceed with the delivery of the Bonds
to be purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date, any one
or more of the Underwriters shall fail or refuse to purchase the Bonds that it
has or they have agreed to purchase hereunder on such date, and the aggregate
amount of Bonds which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate amount
of the Bonds to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the amount of Bonds set forth
opposite their respective names in the Underwriting Agreement bears to the
aggregate amount of Bonds set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representative
may specify, to purchase the Bonds which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; PROVIDED
that in no event shall the amount of Bonds that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 8 by
an amount in excess of one-ninth of such amount of Bonds without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Bonds that it has or they have
agreed to purchase and the aggregate amount of Bonds with respect to which such
default occurs is more than one-tenth of the aggregate amount of Bonds to be
purchased on such date, and arrangements satisfactory to the Representative and
the Company for the purchase of such Bonds are not made within 36 hours after
such default, the Underwriting Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either the Representative or the Company shall have the right to postpone the
Closing Date but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken
-18-
under this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of the
Underwriting Agreement, or if for any reason the Company shall be unable to
perform its obligations under the Underwriting Agreement, the Company will
reimburse the Underwriters or such Underwriters as have so terminated the
Underwriting Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with the Underwriting
Agreement or the offering of the Bonds.
If the Underwriting Agreement shall be terminated by the Company
because of any failure or refusal on the part of the Underwriters to comply with
the terms or to fulfill any of the conditions of the Underwriting Agreement, or
if for any reason the Underwriters shall be unable to perform their obligations
under the Underwriting Agreement, the Underwriters will reimburse the Company
for all out-of-pocket expenses (including the fees and disbursements of its
counsel) reasonably incurred by the Company in connection with the Underwriting
Agreement or the offering of the Bonds.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the Company, its officers and the Underwriters set forth in
the Underwriting Agreement will remain in full force and effect, regardless of
any termination of the Underwriting Agreement, any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Bonds.
10. SUCCESSORS. This Agreement will enure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. The Underwriting Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York.
-19-
13. HEADINGS. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of the Underwriting Agreement.
14. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telecopied and
confirmed to Morgan Stanley & Co. Incorporated at 1221 Avenue of the Americas,
4th Floor, New York, New York 10020, Attn: Manager - Debt Syndicate, Telecopy
No: (212) 764-7490, or, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 33 Third Street SE, Huron, South Dakota,
57350, Attn: Mr. Richard R. Hylland, Vice President -- Finance & Corporate
Development, Telecopy No: (605) 353-8286.
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
---------------------------------
---------------------------------
Acting severally on behalf of itself and the
several Underwriters named herein
By: MORGAN STANLEY & CO. INCORPORATED
By:
-------------------------------
Name:
Title:
Accepted,
---------------
NORTHWESTERN PUBLIC SERVICE COMPANY
By:
-------------------------------
Name:
Title:
-20-
SCHEDULE I
----------
Principal Amount
Name of Underwriter of Bonds
- ------------------- -----------------
Morgan Stanley & Co. Incorporated. . . . . . . . . . . . . . $
----------
. . . . . . . . . . . . . . . . . . . . . $
- ------------------- ----------
. . . . . . . . . . . . . . . . . . . . . $
- ------------------- ----------
---------------
Total $
----------------
----------------
SCHEDULE II
-----------
Underwriting Agreement dated , 1995
-------- --
Registration Statement No.
--------
Representative and Address:
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, NY 10020
Securities:
Designation:
Principal Amount:
Supplemental Indenture
dated as of:
Date of Maturity:
Interest Rate:
Purchase Price:
Public Offering Price:
Type of Funds/Method
of Payment:
Closing Date
and Location: