Exhibit 1(c)
WSP&R
DRAFT
7/25/95
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. 33-60423), 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, 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.
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(m) 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 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;
(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,
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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 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) 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 clause (a)(i) and (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 the 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.
(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
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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 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 (as that term is defined in the
Indenture, including all supplemental indentures thereto executed and
delivered on or prior to the
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Closing Date) 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 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, have been duly authorized,
executed and delivered by the Company, have been issued in accordance with
the requirements of the applicable Class "A" Mortgage and 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
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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 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 (including, without limitation, in the
jurisdictions of South Dakota, Nebraska, North Dakota and Iowa) 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 (A) an "investment company" or an
entity "controlled" by an "investment
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company," as such terms are defined in the Investment Company Act of 1940,
as amended or (B) a "holding company" as such term is defined in the Public
Utility Holding Company Act of 1935, 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
(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) 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
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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-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 (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. 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.
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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 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 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.
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(i) 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 (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 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.
(e) To endeavor to qualify the Bonds for offer and sale under the
securities or Blue Sky laws of such jurisdictions
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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 this Agreement and
continuing to and including the Closing Date, 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 of the
Company or warrants to purchase debt securities of the Company substantially
similar to the Bonds or any securities convertible into or exercisable or
exchangeable therefor (other than (i) the Bonds, (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 part, the economic risk of ownership of any of the
foregoing, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Bonds or such other securities, in cash or
otherwise.
(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
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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 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
-15-
(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 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
-16-
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 (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
-17-
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 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
-18-
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 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
-19-
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.
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.
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 prior to the date six months
after their date of issue any Bonds, having an original maturity of one year or
greater, 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 circumstances 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 Bonds 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 Bonds 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
NATWEST CAPITAL MARKETS LIMITED
Acting severally on behalf of themselves
and the several Underwriters named
herein
By: MORGAN STANLEY & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, _______________
NORTHWESTERN PUBLIC SERVICE COMPANY
By: _______________________________
Name:
Title:
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SCHEDULE I
Principal Amount
Name of Underwriter of Bonds
- ------------------- ----------------
Morgan Stanley & Co. Incorporated. . . . . . . . $__________
NatWest Capital Markets Limited. . . . . . . . . $__________
________________
Total $
________________
________________
SCHEDULE II
Underwriting Agreement dated ________ __, 1995
Registration Statement No. 33-60423
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: Immediately available funds
Closing Date
and Location: ___________________________, 1995 at the office of
Winthrop, Stimson, Putnam & Roberts,
New York, New York