Exhibit 1(b)
WSP&R
DRAFT
7/25/95
TRUST PREFERRED CAPITAL SECURITIES
UNDERWRITING AGREEMENT
NWPS CAPITAL FINANCING I
c/o Northwestern Public Service Company
33 Third Street SE
Huron, South Dakota 57350-1318
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 Representative of the Underwriters (as
defined below), understand that NWPS Capital Financing I (the "Trust"), a
statutory business trust organized under the Delaware Business Trust Act of the
State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
Section 3801 ET SEQ.) (the "Delaware Act") and Northwestern Public Service
Company, a Delaware corporation, as holder of the Common Securities (as defined
herein) of the Trust and as guarantor (the "Company"), propose that the Trust
issue and sell [ ] aggregate number of its [ ]% Trust Preferred Capital
Securities (liquidation amount $25 per security), representing preferred
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"). The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and otherwise
(the "Preferred Securities Guarantee") pursuant to, and to the extent set forth
in, the Preferred Securities Guarantee Agreement (the "Preferred Securities
Guarantee Agreement"), dated as of _________ __, 1995, between the Company and
Wilmington Trust Company, as Trustee (the "Guarantee Trustee"). The Preferred
Securities and the related Preferred Securities Guarantee are referred to herein
as the Securities.
The entire proceeds from the sale of the Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its common
securities representing common undivided beneficial interests in the assets of
the Trust (the "Common Securities") guaranteed by the Company, to the extent
set
forth in the Prospectus, with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Common Securities Guarantee" and
together with the Preferred Securities Guarantee, the "Guarantees") pursuant to
the Common Securities Guarantee Agreement (the "Common Securities Guarantee
Agreement" and, together with the Preferred Securities Guarantee Agreement, the
"Guarantee Agreements"), dated as of _______ __, 1995, between the Company and
the Guarantee Trustee, as Trustee, and will be used by the Trust to purchase
subordinated debt securities issued by the Company ("Subordinated Debt
Securities" and, together with the Guarantee Agreements and the Guarantees, the
"Company Securities"). The Preferred Securities and the Common Securities will
be issued pursuant to the amended and restated declaration of trust of the
Trust, dated as of _______ __, 1995 (the "Declaration"), among the Company, as
Sponsor, the trustees named therein (the "Trustees") and the holders from time
to time of undivided beneficial interests in the assets of the Trust. The
Subordinated Debt Securities will be issued pursuant to an indenture, dated as
of _____ __, 1995 (the "Base Indenture"), between the Company and The Chase
Manhattan Bank (N.A.), as trustee (the "Debt Trustee"), and a supplement to the
Base Indenture, dated as of _______ __, 1995 (the "Supplemental Indenture," and
together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Debt Trustee.
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 Securities is an "underwriter" of the Securities as such term
is defined in and used under the Securities Act of 1933, as amended (the
"Securities Act").
1. REPRESENTATIONS AND WARRANTIES. Each of the Trust and the
Company jointly and severally represents and warrants to and agrees with each of
the Underwriters that:
(a) The Trust and the Company have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration Statement No. 33-60423), including a prospectus, relating to the
Securities, 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 Securities
pursuant to Rule 424 under the Securities Act. The term "Registration
Statement"
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means the registration statement, including the exhibits thereto, as amended to
the date of this Agreement (exclusive of any supplement to the prospectus
relating solely to securities other than the Securities). The term "Basic
Prospectus" means the prospectus included in the Registration Statement, as
amended and supplemented to the date of this Agreement. 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 Securities, 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 Trust's and 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 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
Trust or 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
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the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(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, to issue the Company Securities, to enter into and
perform its obligations under the Underwriting Agreement, the Declaration, the
Indenture and the Company Securities and to purchase, own, and hold the Common
Securities issued by the Trust and to consummate the transactions herein and
therein contemplated. 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, 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) The Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, has the power and
authority to own its property and to conduct its business as described in the
Prospectus, to issue and sell the Preferred Securities and the Common
Securities, and to enter into and perform its obligations under this Agreement,
the Preferred Securities, the Common Securities and the Declaration and to
consummate the transactions herein and therein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and 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 do so qualified or be in good standing would not have a material
adverse effect on the Trust; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; the Trust is not a party to or otherwise bound by
any agreement other than those described in the Prospectus, and is not a party
to any action, suit or proceeding of any nature; the Trust is not and will not
be classified as an association taxable as a corporation for United States
federal income tax purposes; and the Trust is and will be treated as a
consolidated subsidiary of the Company.
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(g) The Common Securities have been duly authorized and, when issued
and delivered by the Trust to the Company against payment therefor as described
in the Registration Statement and Prospectus, will be validly issued common
undivided beneficial interests in the assets of the Trust; the issuance of the
Common Securities is not subject to preemptive or other similar rights; at the
Closing Date (as defined below), all of the issued and outstanding Common
Securities of the Trust will be, directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity; and
the Common Securities will conform to the descriptions thereof contained in the
Prospectus.
(h) This Agreement has been duly authorized, executed and delivered
by each of the Trust and the Company.
(i) The Declaration has been duly qualified under the Trust Indenture
Act, has been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and each of the Trustees, and
assuming due authorization, execution and delivery of the Declaration by the
Property Trustee (as defined in the Declaration), the Declaration will, on the
Closing Date, be a valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
general principles of equity (whether as considered in a proceeding at law or in
equity) and will conform to the descriptions thereof in the Prospectus.
(j) The Preferred Securities Guarantee Agreement has been duly
qualified under the Trust Indenture Act, and each of the Guarantee Agreements
has been duly authorized by the Company and, when validly executed and delivered
by the Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms; and the Guarantees
and the Guarantee Agreement will conform to the descriptions thereof contained
in the Prospectus.
(k) The Preferred Securities have been duly authorized and, when
issued and delivered against payment therefor in accordance with the provisions
of this Agreement and the Declaration, will be validly issued and (subject to
the terms of the Declaration) fully paid and non-assessable preferred undivided
beneficial interests in the assets of the Trust, and be entitled to the benefits
of the Declaration; the issuance of the Preferred Securities is not subject to
preemptive or other similar rights; holders of Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware (the "GCL"); the Preferred Securities will conform to
the description thereof contained in the Prospectus.
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(l) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized by the Company and, when validly executed and
delivered by the Company, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights generally or by general
principles of equity (whether considered in a proceeding at law or in equity);
the Indenture will conform to the description thereof contained in the
Prospectus.
(m) The Subordinated Debt Securities have been duly authorized and,
on the Closing Date, will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor as described in the Prospectus, will be entitled to the
benefits, of the Indenture, will rank PARI PASSU without any preference among
themselves and subordinated to all Senior Indebtedness (as defined in the
Indenture) and will constitute validly and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency or other similar
laws affecting creditors' rights generally or by general or by general
principles of equity (whether considered in a proceeding at law or in equity).
(n) The Company's obligations under the Guarantees are subordinate
and junior in right of payment to all liabilities of the Company and are pari
passu with the most senior preferred stock issued by the Company.
(o) Merle D. Lewis and Richard R. Hylland, as Trustees (the "Regular
Trustees") of the Trust, are employees of the Company and have been duly
authorized by the Company to execute and deliver the Declaration.
(p) Neither the Trust nor the Company is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(q) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws; the Trust is not in violation of the Declaration or
its Certificate of Trust filed with the State of Delaware on June 19, 1995 (the
"Certificate of Trust"); none of the Company, any of its subsidiaries or the
Trust is in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company, any of its
subsidiaries or the Trust is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company, any of its
subsidiaries or the Trust is subject, except for such
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defaults that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Trust or of the Company and its subsidiaries, taken as a whole; and the
execution, delivery and performance of this Agreement, the Declaration, the
Preferred Securities, the Common Securities, the Indenture, the Subordinated
Debt Securities, the Guarantee Agreements and the Guarantees and the
consummation of the transactions contemplated herein and therein and compliance
by the Trust and the Company with their respective obligations hereunder and
thereunder have been duly authorized by all necessary action (corporate or
otherwise) on the part of the Trust and the Company and do not and will not
result in any violation of the charter or by-laws of the Company or any
subsidiary, or the Declaration or Certificate of Trust and do not and will not
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Trust, the Company or
any subsidiary under (A) any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Trust, the Company or
any subsidiary is a party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Trust or the Company and its subsidiaries, taken as a whole as
one enterprise) or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Trust, the Company, or any
subsidiary or any of their respective properties.
(r) There are no legal or governmental proceedings pending or
threatened to which the Company, any of its subsidiaries or the Trust is a party
or to which any of the properties of the Company, any of its subsidiaries or the
Trust 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 as exhibits to the
Registration Statement that are not described or filed as required.
(s) The Federal Energy Regulatory Commission (the "FERC") has issued
an appropriate order or orders with respect to the issuance and sale of the
Company Securities in accordance with, and as contemplated by, this Agreement;
such order or orders are in full force and effect; the issuance and sale of the
Company Securities 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 Common Securities,
the Preferred
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Securities and the Company Securities as contemplated by this 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 Securities by the
Underwriters.
(t) 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) or the Trust from that set forth
in the Prospectus.
(u) 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 (r) and (t)
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").
(v) 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, and the assumptions
on which such pro forma financial statements have been prepared provide a
reasonable basis for presenting the significant effects directly attributable to
the Acquisition described in the notes thereto.
(w) The Company is not aware of any facts or circumstances that would
prevent any 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") from being
satisfied in the ordinary course on or prior to September 30, 1995.
2. PUBLIC OFFERING. The Trust and the Company are advised by the
Representative that the Underwriters propose to make a public offering of their
respective portions of the Preferred Securities as soon after this Agreement has
been entered into as in the judgment of the Representative is advisable. The
terms of the public offering of the Preferred Securities are set forth in the
Prospectus.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions set
forth or incorporated by reference herein, the Trust hereby agrees to sell, and
the Underwriters agree to purchase, severally and not jointly, the respective
number of Preferred Securities set forth below opposite their names in Schedule
I hereto at a purchase price of $[ ] per Preferred Security.
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The Company agrees to issue the Company Securities concurrently with
the issue and sale of the Preferred Securities as contemplated herein. The
Company hereby guarantees the timely performance by the Trust of its obligations
under this Section 3. The Trust agrees to purchase the Subordinated Debt
Securities with the proceeds of, and concurrently with, the issue and sale of
the Securities.
As compensation to the Underwriters for their commitments hereunder,
and because the proceeds of the sale of the Preferred Securities will be loaned
by the Trust to the Company, the Company hereby agrees to pay on the Closing
Date to the Representative, for the accounts of the several Underwriters, an
amount equal to (i) in the case of such number of Preferred Securities as are
reserved by the Underwriters for sale to institutional investors, $ ____ per
Preferred Security and (ii) in the case of such number of Preferred Securities
as are not so reserved, $ _____ per Preferred Security. The Underwriters shall
inform the Company in writing, not later than the business day prior to the
Closing Date, of the number of Preferred Securities reserved for sale to such
institutional investors.
Payment for the Preferred Securities shall be made by certified or
official bank check or checks payable, or by wire transfer, to the order of the
Trust in immediately available funds at the office of Winthrop, Stimson, Putnam
& Roberts, New York, New York, at 10:00 A.M. local time, on _____, 1995, or at
such other time on the same or such other date, not later than _______, 199_, as
shall be designated in writing by the Representative. The time and date of such
payment are hereinafter referred to as the "Closing Date".
Certificates for the Preferred Securities shall be in definitive form
and registered in such names and in such denominations as the Underwriters shall
request not later than two full business days prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the
Preferred Securities shall be delivered to the Representative, through the
facilities of the Depository Trust Company ("DTC") for the account of the
Representative with any transfer taxes payable in connection with the transfer
of the Securities duly paid, against payment of the purchase price therefor.
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
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any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(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, or the Trust, 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 Preferred Securities 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
Company Securities as contemplated by this 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)(i) 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 (x) set forth in clauses (a)(i) and (a)(iii) above; (y)
that the representations and warranties of the Company contained in this
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; and (z) that no
executive officer of the Company has received any notification from the Sellers
(as defined in the Acquisition Agreement) or their counsel that any information
(including without limitation financial information) relating to Synergy
contained or incorporated by reference in the Registration Statement or the
Prospectus contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The officer signing
and delivering such certificate may rely upon the best of his knowledge as to
proceedings threatened.
(ii) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an authorized representative
of the Trust to the effect set forth in clause (a)(i) above and to the effect
that the representations and warranties of the Trust contained in the
Underwriting Agreement are true and correct as of the Closing Date and that the
Trust 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 representative signing and delivering such certificate may rely upon
the best of his knowledge as to proceedings threatened.
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(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Schiff Hardin & Waite, counsel to the Company
and the Trust, 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
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 Underwriting Agreement has been duly authorized,
executed and delivered by the Trust and the Company;
(iv) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Company Securities, in accordance
with, or as contemplated by, the Underwriting Agreement; such order or
orders are in full force and effect; the issuance and sale of the Company
Securities 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 (including, without limitation, in the jurisdictions of South
Dakota, Nebraska, North Dakota and Iowa) is legally required for the
issuance and sale of the Common Securities, the Preferred Securities and
the Company Securities 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
Securities by the Underwriters;
(v) the statements (A) in the Prospectus under the captions "Risk
Factors," "NWPS Capital Financing I,"
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"Description of the Preferred Securities," "Description of the Subordinated
Debt Securities," "Effect of Obligations Under the Subordinated Debt
Securities and the Guarantee," "United States Federal Income Taxation,"
"Underwriting, "Pending Acquisition of Synergy Group Incorporated," "The
NWPS Trusts," "Description of the Subordinated Debt Securities,"
"Description of the Guarantees," and "Plan of Distribution," (B) in the
Registration Statement under Item 15, (C) in "Item 3 - Legal Proceedings"
of the Company's most recent annual report on Form 10-K incorporated by
reference in the Prospectus and (D) 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;
(vi) 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, or the Trust, is a party or to which any of the
properties of the Company or any of its subsidiaries, or the Trust, 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;
(vii) neither the Trust nor the Company is (x) an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act, or (y) a "holding company"
as such term is defined in the Public Utility Holding Company Act of 1935,
as amended.
(viii) 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
(ix) 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) each document, if any, filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
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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.
(x) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
formation and valid existence of the Trust as a business trust have been
made; the Trust has all necessary power and authority to own property and
to conduct its business as described in the Prospectus, to issue and sell
the Preferred Securities and the Common Securities, and to enter into and
perform its obligations under this Agreement, the Preferred Securities, the
Common Securities and the Declaration and to consummate the transactions
herein and therein contemplated; the Trust has no subsidiaries and is duly
authorized 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, and is not required to be
authorized to do business in any other jurisdiction; the Trust is not a
party to or otherwise bound by any agreement other than those described in
the Prospectus, and is not a party to any action, suit or proceeding of any
nature; the Trust is not and will not be classified as an association
taxable as a corporation for United States federal income tax purposes.
(xi) The Declaration has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and the Trustees and is a valid and binding obligation of the
Company and each of the Regular Trustees enforceable against the Company
and each of
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the Regular Trustees in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and by general principles of equity (whether
considered in a proceeding, in equity or at law).
(xii) The Common Securities have been duly authorized and are
validly issued common undivided beneficial interests in the assets of the
Trust; and the issuance of the Common Securities is not subject to
preemptive or other similar rights.
(xiii) The Preferred Securities have been duly authorized and
are validly issued and (subject to the terms of the Declaration) when
delivered to and paid for by Underwriters pursuant to this Agreement will
be validly issued, fully paid and non-assessable preferred undivided
beneficial interests in the assets of the Trust; the holders of the
Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the GCL; and the issuance of the Preferred Securities is
not subject to preemptive or other similar rights.
(xiv) The issuance and sale by the Trust of the Preferred
Securities and Common Securities, the execution, delivery and performance
by the Trust of this Agreement, the Guarantee Agreements, and the
consummation of the transactions contemplated hereby and thereby and
compliance by the Trust with its obligations hereunder and thereunder have
been duly authorized by all necessary actions of the Trust and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Trust pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Trust is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Trust is subject, nor will such action result in any
violation of the provisions of the Certificate of Trust or the Declaration,
or any applicable law, administrative regulation or administrative or court
decree to which it is subject.
(xv) The Trust is not in violation of its Certificate of Trust
or the Declaration or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or any other
instrument of which the Trust is a party or by which it may be bound, or to
which any of the property or assets of the Trust is subject.
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(xvi) The Common Securities, the Preferred Securities, the
Subordinated Debt Securities, the Guarantees, the Declaration, the
Indenture and the Guarantee Agreements conform to all statements relating
thereto contained in the Prospectus.
(xvii) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xviii) This Agreement has been duly authorized, executed and
delivered by the Trust and the Company.
(xix) Each of the Guarantee Agreements has been duly authorized,
executed and delivered by the Company and, (in the case of the Preferred
Security Guarantee Agreement only) assuming it is duly authorized,
executed, and delivered by the Property Trustee, constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws involving
creditors' rights generally and general principles of equity (whether
considered in a proceeding at law or in equity); and the Preferred
Securities Guarantee Agreement has been duly qualified under the Trust
Indenture Act.
(xx) The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, is a valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that
enforcement thereof may be limited by the bankruptcy, insolvency or other
similar laws involving creditors' rights generally and general principles
of equity (whether considered in a proceeding at law or in equity); and the
Indenture has been duly qualified under the Trust Indenture Act.
(xxi) The Subordinated Debt Securities are in the form
contemplated by the Indenture; the Subordinated Debt Securities have been
duly authorized, executed and delivered by the Company and when
authenticated by the Debt Trustee in the manner provided in the Indenture
and delivered against payment therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws involving
creditors' rights generally and general principles of equity (whether
considered in a proceeding at law or in equity).
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(xxii) The execution, delivery and performance of this
Agreement, the Subordinated Debt Securities, the Guarantee Agreements, the
Indenture and the Guarantees and the consummation of the transactions
contemplated herein and therein and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) and do not and will not result in
any violation of the charter or by-laws of the Company or any subsidiary,
and do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or any other agreement or
instrument known to such counsel, to which the Company or any subsidiary is
a party or by which it may be bound or to which any of its properties may
be subject (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise), (B) any existing applicable law, rule or regulation (other
than the securities or blue sky laws of the various states, as to which
such counsel need express no opinion), or (C) any judgment, order or decree
of any government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Company or any subsidiary or
any of their respective properties.
(d) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of Richards, Layton & Finger, Delaware counsel to
the Company and the Trust, with respect to the matters referred to in
subparagraphs (x), (xi), (xii), (xiii), (xiv), (xv) and (xviii).
(e) The Representative shall have received on the Closing Date,
opinions dated the Closing date of _________________________________, counsel to
Wilmington Trust Company, as Property Trustee under the Declaration, and
Guarantee Trustee under the Guarantee Agreements, in form and substance
satisfactory to counsel for the Underwriters, to the effect that,
(i) Wilmington Trust Company ("WTC") is duly organized, validly
existing and in good standing as a banking corporation with trust powers
under the laws of the State of Delaware.
(ii) WTC, the Property Trustee and the Guarantee Trustee each has all
necessary power and authority to execute and deliver, and to carry out and
perform its
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obligations under the terms of the Declaration and the Guarantee
Agreements.
(iii) The execution, delivery and performance by the Property Trustee
of the Declaration and the Guarantee Agreements have been duly authorized
by all necessary corporate action on the part of the Property Trustee. The
Declaration and the Guarantee Agreements have been duly executed and
delivered by the Property Trustee, and constitutes the legal, valid and
binding obligation of the Property Trustee, enforceable against the
Property Trustee in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and by general principles of equity (whether
considered in a proceeding in equity or at law).
(iv) The execution, delivery and performance of the Declaration and
the Guarantee Agreements by WTC, the Property Trustee or the Guarantee
Trustee, as the case may be, do not conflict with or constitute a breach of
the Articles of Organization or Bylaws of the WTC.
(v) No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware or
United States governing the banking trust powers of WTC is required for the
execution, delivery or performance by the Property Trustee or the Guarantee
Trustee, as the case may be, of the Declaration and the Guarantee
Agreements.
(vi) The Property Trustee is the record holder of the Subordinated
Debt Securities and the Guarantees and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity is noted thereon or on the
register.
(f) 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 such matters as the Underwriters may reasonably
request.
With respect to subparagraph (ix) of paragraph (c) above, Schiff
Hardin & Waite, 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 (excluding
(for purposes of clauses (B) and (D) of such paragraph ) certain of the
documents incorporated by reference therein (to be specified in such opinion))
and review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified.
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The opinions of Schiff Hardin & Waite, special counsel to the Company
and Richards, Layton & Finger, Delaware counsel to the Company and the Trust
described in paragraphs (c) and (d) above shall be rendered to the Underwriters
at the request of the Company and shall so state therein.
(g) 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 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.
(h) 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(g), except that the
specified date referred to therein shall be a date not more than five business
days prior to the Closing Date.
(i) 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 KPMG 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 of Synergy
contained or incorporated by reference into the Prospectus.
(j) At the Closing Date, a registration statement on Form 8-A under
the Exchange Act with respect to the Preferred Securities shall be effective and
the Preferred Securities shall
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have been approved for listing on the New York Stock Exchange upon notice of
issuance.
(k) On the Closing Date, Standard & Poor's and Moody's Investors
Service, Inc. shall have publicly assigned to the Preferred Securities ratings
of ___ and ___, respectively, which ratings shall be in full force and effect on
the Closing Date.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
at any time at or prior to the Closing Date, and such termination shall be
without liability of any party to any other party except as provided in Section
5(i) hereof.
5. COVENANTS OF THE TRUST AND THE COMPANY. In further consideration
of the agreements of the Underwriters herein contained, the Trust and the
Company covenant 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 (delivery of the Prospectus to be made
in New York, New York no later than 10:00 A.M. on the business day immediately
succeeding the date of this Agreement).
(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 Preferred Securities 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
-19-
Representative will furnish to the Company) to which Preferred Securities 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.
(e) To endeavor to qualify the Preferred Securities and Subordinated
Debt Securities 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 Trust'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 ending [90] days after the date of this
Agreement, without the prior written consent of Morgan Stanley & Co.
Incorporated, not to (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any debt securities or preferred securities of the
Company or the Trust or warrants to purchase debt securities or preferred
securities of the Company or the Trust substantially similar to the Preferred
Securities or any securities convertible into or exercisable or exchangeable
therefor (other than (i) the Preferred Securities, (ii) commercial paper issued
in the ordinary course of business and (iii) other debt securities evidencing
commercial bank loans), or (2) enter into any swap or similar arrangement that
transfers, in whole or in part, the economic risk or ownership of the foregoing,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Preferred Securities or such other securities, in cash or
otherwise.
(h) To use its reasonable efforts to cause each of its current
executive officers and directors to refrain, during the period ending [90] days
after the date of this Agreement, without the prior written consent of Morgan
Stanley & Co. Incorporated, from (1) offering, pledging, selling, contracting to
sell,
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granting any option, right or warrant to purchase, or otherwise transferring or
disposing of, directly or indirectly, any debt securities or preferred
securities of the Company or the Trust substantially similar to the Preferred
Securities or any securities convertible into or exercisable or exchangeable
therefor or (2) entering into any swap or similar arrangement that transfers, in
whole or in part, the economic risk or ownership of the foregoing, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Preferred Securities or such other securities, in cash or otherwise.
(i) Whether or not any sale of Preferred Securities 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 Preferred
Securities, (iii) the fees and disbursements of the Company's counsel and
accountants and of the Trustee and its counsel, (iv) the qualification of the
Preferred Securities 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 Preferred Securities,
(vii) the fees and expenses, if any, incurred with respect to any filing with
the National Association of Securities Dealers, Inc., and (viii) the fees and
expenses, if any, incurred in connection with the listing of the Preferred
Securities on any securities exchange.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Trust
agree to jointly and severally 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 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 or the Trust 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
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by any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the Company or
the Trust in writing by such Underwriter expressly for use therein.
(b) The Company agrees jointly and severally to indemnify the Trust
against all loss, liability, claim, damage and expense whatsoever, as due from
the Trust under Section 6(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the directors, officers or Trustees of the Company or the
Trust who sign the Registration Statement and each person, if any, who controls
the Company or the Trust 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 and the Trust to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company and Trust in writing by such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(d) 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 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
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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.
(e) 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 and the Trust on the one hand and the
Underwriters on the other hand from the offering of the Preferred Securities 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 or the Trust 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 and the Trust on
the one hand and the Underwriters on the other hand in connection with the
offering of the Preferred Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of such Securities
(before deducting expenses) received by the Company and the Trust 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 Preferred Securities. The
relative fault of the Company and the Trust on
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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 the Trust 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
Preferred Securities they have purchased hereunder, and not joint.
(f) The Company, the Trust 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 Preferred Securities 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 and the Trust, 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 the
Chicago Board of Trade, (ii) trading of any securities of the Trust or the
Company shall have been suspended on any 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
-24-
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 Preferred Securities 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 and its subsidiaries, taken as a whole, or the Trustee
reflects a material adverse change in the business, properties or financial
condition of the Company or the Trust which renders it either inadvisable to
proceed with such offering, if any, or inadvisable to proceed with the delivery
of the Preferred Securities to be purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase the Preferred Securities that it has or they have agreed
to purchase hereunder on such date, and the aggregate amount of Preferred
Securities 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
Preferred Securities to be purchased on such date, the other Underwriters shall
be obligated severally in the proportions that the amount of Preferred
Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Preferred Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representative may specify, to purchase the Preferred
Securities 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 Preferred Securities 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 Preferred Securities without the written consent of
such Underwriter. If, on the Closing Date or the Option Closing Date, as the
case may be, any Underwriter or Underwriters shall fail or refuse to purchase
Securities that it has or they have agreed to purchase and the aggregate amount
of Preferred Securities with respect to which such default occurs is more than
one-tenth of the aggregate amount of Preferred Securities to be purchased on
such date, and arrangements satisfactory to the Representative and the Company
for the purchase of such Preferred Securities are not made within 36 hours after
such default, the Underwriting Agreement shall terminate without liability on
the part of any non-defaulting Underwriter, the Company or the Trust. In any
such case either the Representative or the Company shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may be, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and
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in the Prospectus or in any other documents or arrangements may be effected.
Any action taken 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 or
the Trust to comply with the terms or to fulfill any of the conditions of the
Underwriting Agreement, or if for any reason the Company or the Trust shall be
unable to perform its obligations under the Underwriting Agreement, the Company
and the Trust 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 Preferred Securities.
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 Preferred Securities.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the officers or Trustees of the Company and the Trust (as
the case may be) 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, the Company or the Trust or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for the
Preferred Securities.
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.
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12. APPLICABLE LAW. The Underwriting Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
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 (i) the Underwriters, will be mailed, delivered or telecopied and
confirmed to Morgan Stanley & Co. Incorporated at 1251 Avenue of the Americas,
New York, New York 10020, Attn: Mr. Jay D. Hatfield, (ii) 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 and (iii) the
Trust, will be mailed, delivered or telecopied and confirmed to it at 33 Third
Street SE, Huron, South Dakota 57350.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in
this Agreement, shall be deemed to refer only to (i) those direct or indirect
subsidiaries of the Company which would qualify as "significant subsidiaries"
pursuant to Rule 405 under the Securities Act, and (ii) SYN Inc.
16. CERTAIN AGREEMENTS AND REPRESENTATIONS OF NATWEST CAPITAL MARKETS
LIMITED. NatWest Capital Markets Limited agrees and represents that (i) it has
not offered or sold and will not offer or sell any Preferred Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstance which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied with and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Preferred Securities in, from or
otherwise involving the United Kingdom and (iii) it has only issued or passed on
and will only issue or pass on in the United Kingdom any document received by it
in connection with the issue of the Preferred Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1995 or is a person to whom such document may
otherwise lawfully be issued or passed on.
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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
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
PIPER JAFFRAY INC.
NATWEST CAPITAL MARKETS LIMITED
Acting severally on behalf of itself and
the several Underwriters named herein
By: MORGAN STANLEY & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, ______ __, 1995
NWPS CAPITAL FINANCING I
By: _______________________________
Name:
Title: Trustee
By: _______________________________
Name:
Title: Trustee
NORTHWESTERN PUBLIC SERVICE COMPANY
By: _______________________________
Name:
Title:
SCHEDULE I
Number of
Name of Underwriter Preferred Securities
- ------------------- --------------------
Morgan Stanley & Co. Incorporated. . . . . . . . __________
Dean Witter Reynolds Inc.. . . . . . . . . . . . __________
PaineWebber Incorporated . . . . . . . . . . . . __________
Piper Jaffray Inc. . . . . . . . . . . . . . . . __________
NatWest Capital Markets Limited. . . . . . . . . __________
________________
Total
________________
________________