COMMON STOCK
UNDERWRITING AGREEMENT
NORTHWESTERN CORPORATION
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
November 4, 1998
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 Representatives (as defined below) of
the Underwriters (as defined below), understand that Northwestern
Corporation, a Delaware corporation (the "Company"), proposes to issue and
sell to the Underwriters 5,000,000 shares of its Common Stock, par value
$1.75 per share (together with the purchase rights (the "Rights") attached
thereto, the "Firm Shares"). The Company also proposes to issue and sell to
the several Underwriters not more than an additional 750,000 shares of its
Common Stock, par value $1.75 per share (together with the Rights attached
thereto, the "Additional Shares"), if and to the extent that we, as
Representatives, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of Common Stock granted to
the Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the Shares. The shares of
Common Stock, par value $1.75 per share, of the Company to be outstanding
after giving effect to the sales contemplated hereby, together with the
Rights attached thereto, are hereinafter referred to as the Common Stock.
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 "Representatives," as used herein, shall be deemed to mean the
representative 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
"Representatives," 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 Shares is an "underwriter" of the Shares 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. 333-58491), including a prospectus, relating to
the Shares, 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 Shares 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
Shares). 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 Shares, 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
no proceedings for such purpose are pending before or, to the Company's
knowledge, 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 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.
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(d) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Delaware and
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 this Agreement. 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 or
formed, is validly existing as a corporation or limited partnership, as the
case may be, in good standing under the laws of the jurisdiction of its
incorporation or formation, has the corporate or partnership power and
authority, as the case may be, 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; all of the outstanding shares of capital
stock or partnership interests (as applicable) of the Company's subsidiaries
have been duly authorized and are validly issued, fully paid and
non-assessable and are owned directly by the Company or its subsidiaries,
free and clear of all liens, encumbrances, equities or claims.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of the Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly issued,
fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, the Common Stock
comprising a portion of the Shares will be validly issued, fully paid and
non-assessable and the Rights will have been duly and validly issued, and the
issuance of such Shares will not be subject to any preemptive or similar
rights.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
conflict with, result in a breach of or constitute a default under any
provision of (A) applicable law (except to the extent that the
indemnification provisions hereof 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 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.
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(k) The Federal Energy Regulatory Commission (the "FERC") has
issued an appropriate order or orders with respect to the issuance and sale
of the Shares in accordance with this Agreement; such order or orders are in
full force and effect; the issuance and sale of the Shares 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 Shares as contemplated hereby, except such as
have been obtained under the Securities Act and such as may be required under
the state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(l) 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.
(m) 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.
(n) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner described in
the Prospectus, except to the extent that the failure to obtain or file would
not have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of
the Commission thereunder.
(p) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(q) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive such required
permits, licenses or other approvals or failure to comply with the terms and
conditions
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of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as
a whole.
(r) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review, the Company has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(s) No holder of any security of the Company has any right under
(i) the warrants to purchase Common Stock issued by the Company to former
stockholders of Empire Energy Corporation or (ii) any agreement entered into
in connection with the issuance of such warrants, or otherwise, to require
the Company to (x) register the sale of any security of the Company in
connection with the filing of the Registration Statement (other than the
shares of Common Stock beneficially owned by the Selling Stockholders named
therein as described under the caption "Selling Stockholders") and the
Prospectus or the consummation of the transactions contemplated by this
Agreement or (y) include any security of the Company in the offering
contemplated by this Agreement.
(t) No pro forma financial statements of the Company or its
subsidiaries are required to be included or incorporated by reference in the
Registration Statement or the Prospectus, including in connection with the
proposed acquisition of Propane Continental, Inc. by Cornerstone Propane
Partners, L.P.
2. PUBLIC OFFERING. The Company is advised by the
Representatives that the Underwriters propose to make a public offering of
their respective portions of the Firm Shares as soon after this Agreement has
become effective as in the Representatives' judgment is advisable. The
Company is further advised by the Representatives that the Firm Shares are to
be offered to the public initially at $24.00 a share (the public offering
price) and to certain dealers selected by the Underwriters at a price that
represents a concession not in excess of $.50 a share under the public
offering price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of $.10 a share, to any Underwriter or
to certain other dealers.
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 numbers of Firm
Shares set forth in Schedule I hereto opposite their names at $23.16 a share
(the "Purchase Price").
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 750,000
Additional Shares at the Purchase Price (minus, if an Option Closing Date (as
defined below) with respect to the delivery and payment of any Additional
Shares
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occurs after the date fixed for the determination of stockholders entitled to
receive the next dividend payable on the Common Stock, an amount equal to
such dividend per share of such Additional Shares). Additional Shares may be
purchased as provided herein solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If
any Additional Shares are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of
Firm Shares.
Payment for the Firm Shares shall be made by wire transfer of
immediately available funds to a bank account designated by the Company, at
the office of Winthrop, Stimson, Xxxxxx & Xxxxxxx, New York, New York, at
10:00 A.M., local time, on November 9, 1998 or at such other time on the same
or such other date, not later than November 16, 1998, as shall be designated
in writing by you. The time and date of such payment are hereinafter
referred to as the Closing Date.
Payment for any Additional Shares shall be made by wire transfer of
immediately available funds to a bank account designated by the Company, at
the office of Winthrop, Stimson, Xxxxxx & Xxxxxxx, New York, New York, at
10:00 A.M., local time, on such date (which may be the same as the Closing
Date but shall in no event be earlier than the Closing Date nor later than
ten business days after the giving of the notice hereinafter referred to) as
shall be designated in a written notice from the Representatives to the
Company of the Representatives' determination, on behalf of the Underwriters,
to purchase a number, specified in said notice, of Additional Shares, or on
such other date as shall be designated in writing by the Representatives.
The time and date of such payment are hereinafter referred to as the "Option
Closing Date." The notice of the determination to exercise the option to
purchase Additional Shares and of the Option Closing Date may be given at any
time within 30 days after the date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as the
Representatives shall request in writing 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 Firm Shares and Additional Shares shall
be delivered to the Representatives on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer
of the Shares to the Underwriters 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,
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(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of
the possible change, 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, taken as a whole, from that set forth in the Prospectus,
that, in the judgment of the Representatives, is material and adverse and
that makes it, in the judgment of the Representatives, impracticable to
market the Shares on the terms and in the manner contemplated in the
Prospectus; and
(iii) at the Closing Date, the order or orders of the FERC
authorizing the issuance, sale and delivery of the Shares as contemplated
by this Agreement 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 clauses (a)(i) and (a)(iii) above and
(y) that the representations and warranties of the Company contained in the
Underwriting Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the Closing
Date. The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) The Representatives shall have received on the Closing Date an
opinion dated the Closing Date of Xxxxxx Xxxxxx & Xxxxx, 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
or formed and based upon certificates or letters from state or other
appropriate authorities, is validly existing as a corporation or limited
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be, with
corporate or partnership powers (as the case may be) and statutory
authority to carry on the business which it now carries on as stated in
the Prospectus and to own
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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 authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of the Company's Common Stock outstanding prior
to the issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable;
(v) the Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of the Shares will
not be subject to any preemptive or similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement 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 as a whole, or (D) any judgment, order or decree known
to such counsel of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary;
(viii) the FERC has issued an appropriate order or orders
with respect to the issuance and sale of the Shares in accordance with the
Underwriting Agreement; to the knowledge of such counsel, such order or
orders are in full force and effect; the issuance and sale of the Shares
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 Shares as contemplated by the Underwriting
Agreement, except such as have been obtained under the Securities Act and
such as may be required under the state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters;
(ix) the statements (A) in the Prospectus under the captions
"Shares Eligible for Future Sale," "Description of Common Stock,"
"Underwriting" and "Plan of Distribution" and (B) in the Registration
Statement under Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings
8
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;
(x) 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;
(xi) the Company is not (A) an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined
in the Investment Company Act or (B) a "holding company," as such term is
defined in the Public Utility Holding Company Act of 1935, as amended;
(xii) the Registration Statement has become 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
(xiii) 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 any
Form T-l) 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 Representatives shall have received on the Closing Date an
opinion dated the Closing Date of Xxxx X. Xxxxxxxx, Esq., Vice President -
Law of the Company to the effect that (i) the Company (A) is in compliance
with any and all applicable Environmental Laws, (B) has received all permits,
licenses or other approvals required of it under applicable
9
Environmental Laws to conduct its business and (C) is in compliance with all
terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company, (ii) all of the
outstanding shares of capital stock or partnership interests (as applicable)
of the Company's subsidiaries have been duly authorized and are validly
issued, fully paid and non-assessable, and (iii) the statements in "Item 3 -
Legal Proceedings" of the Company's most recent annual report on Form 10-K
incorporated by reference in the Prospectus and 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.
(e) The Representatives shall have received on the Closing Date an
opinion dated the Closing Date of Winthrop, Stimson, Xxxxxx & Xxxxxxx,
counsel for the Underwriters, covering such matters as the Representatives
may reasonably request.
With respect to subparagraph (xiii) of paragraph (c) above, Xxxxxx
Xxxxxx & Xxxxx, 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.
The opinions of Xxxxxx Xxxxxx & Xxxxx and Xxxx X. Xxxxxxxx, Esq.
shall be rendered to the Underwriters at the request of the Company and shall
so state therein.
(f) The Representatives shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representatives, from Xxxxxx Xxxxxxxx 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.
(g) The Representatives shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representatives, from Xxxxxx Xxxxxxxx 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 three
business days prior to the Closing Date.
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(h) At the Closing Date, the Firm Shares shall have been approved
for listing on the New York Stock Exchange upon notice of issuance.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction of each of the conditions
specified above (with all references to the Closing Date and the Firm Shares
deemed to refer to the Option Closing Date and the Additional Shares,
respectively) and to the delivery to the Underwriters of such documents as
the Representatives may reasonably request.
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 Representatives, 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 (d)
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 Securities Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by any
Underwriter or dealer, 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 Shares 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 Representatives will furnish to the Company)
to which Shares 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.
11
(e) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Underwriters shall
reasonably request and to maintain such qualification for as long as the
Underwriters shall reasonably request.
(f) To make generally available to the Company's security holders
and to the Representatives 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) Whether or not any sale of Shares 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 Shares, (iii) the
fees and disbursements of the Company's counsel and accountants, (iv) the
qualification of the Shares under state securities or Blue Sky laws in
accordance with the provisions of Section 5(e), 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) the fees and expenses, if any,
incurred with respect to any filing with the National Association of
Securities Dealers, Inc., (vii) the fees and expenses incurred in connection
with the listing of the Shares on any securities exchange and (viii) the
costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of
the Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentation with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show.
(h) During the period ending 90 days after the date of this
Agreement, without the prior written consent of Xxxxxx Xxxxxxx & 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, lend or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock of the Company
or any securities convertible into or exercisable or exchangeable for such
Common Stock or (2) enter into any swap or similar arrangement that
transfers, in whole or in part, the economic consequences of ownership of the
Common Stock of the Company, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, provided that the Company may during such
90 day period issue shares under its dividend reinvestment, direct stock
purchase, stock option and other plans, and upon exercise of warrants
outstanding on the date hereof.
12
(i) 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 Xxxxxx
Xxxxxxx & Co. Incorporated, from (1) offering, pledging, selling, contracting
to sell, selling any option or contract to purchase, purchasing any option or
contract to sell, granting any option, right or warrant to purchase, lending
or otherwise transferring or disposing of, directly or indirectly, any shares
of Common Stock of the Company or any securities convertible into or
exercisable or exchangeable for such Common Stock, other than any shares of
such Common Stock sold by such executive officers and directors upon the
exercise of an option or warrant or the conversion of a security outstanding
on the date hereof or (2) entering into any swap or similar arrangement that
transfers, in whole or in part, the economic consequences of ownership of the
Common Stock of such executive officers and directors, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities in cash or otherwise.
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
13
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 Representatives, 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 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 and this
Agreement 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
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Shares (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 Shares. The relative fault of the
Company on
14
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 number of Shares 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
amount of Shares 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 Representatives to the Company, if (a) after the
execution and delivery of the Underwriting Agreement and prior to the Closing
Date or the Option Closing Date, as the case may be, (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 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 Representatives, 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 Representatives, impracticable
to market the Shares 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 or the Option Closing Date, as the case may be, if in the
judgment of the Representatives 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 and its subsidiaries, taken as a whole,
which renders it either inadvisable to proceed with such offering, if any, or
inadvisable to proceed with the delivery of the Shares to be purchased
hereunder.
15
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 Shares that it has or they have agreed
to purchase hereunder on such date, and the aggregate number of Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Shares to be
purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the number of Shares set forth opposite their
respective names in Schedule I to this Agreement bears to the aggregate
number of Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date, PROVIDED
that in no event shall the number of Shares 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 number of Shares 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 the Shares that it has or they have agreed to purchase
and the aggregate amount of Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Shares to be purchased on
such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Shares are not made within 36 hours after
such default, the Underwriting Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case
either the Representatives 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 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 Shares.
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 Shares.
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
16
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 Shares.
10. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. The Underwriting Agreement shall be governed
by and construed in accordance with the internal laws of the State of New
York.
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 this 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 Xxxxxx Xxxxxxx & Co. Incorporated at 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Xx. Xxxxxxx Xxxxxxx, Telecopy No. (000) 000-0000 or, if
sent to the Company, will be mailed, delivered or telecopied and confirmed to
it at 000 X. Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx Xxxxxx, 00000, Attn: Xx.
Xxxxxxx X. Xxxxxxx, President and Chief Operating Officer, Telecopy No: (605)
978-2910.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in
this Agreement with respect to the Company, shall be deemed to refer only to
those direct or indirect subsidiaries of the Company which would qualify
(including on a pro forma basis) as "significant subsidiaries" pursuant to
Rule 405 under the Securities Act (and, regardless of such qualification,
shall be deemed to include Communication Systems USA, Inc. and Blue Dot
Services Inc.).
17
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,
XXXXXX XXXXXXX & CO. INCORPORATED
CIBC XXXXXXXXXXX CORP.
X.X. XXXXXXX & SONS, INC.
PAINEWEBBER INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named herein
By: XXXXXX XXXXXXX & CO. INCORPORATED
By:
------------------------------------------------
Name:
Title:
Accepted, November 4, 1998
NORTHWESTERN CORPORATION
By:
-----------------------------
Name:
Title:
Schedule I
----------
Number
Name of Underwriter of Shares
------------------- ---------
Xxxxxx Xxxxxxx & Co. Incorporated.......... 1,025,000
CIBC Xxxxxxxxxxx Corp...................... 1,025,000
X.X. Xxxxxxx & Sons, Inc................... 1,025,000
PaineWebber Incorporated................... 1,025,000
Xxxxxx X. Xxxxx & Co. Incorporated......... 100,000
BT Alex. Xxxxx Incorporated................ 100,000
Xxxx Xxxxxxxx Xxxxxxx...................... 100,000
First of Michigan Corporation.............. 100,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc................ 100,000
Xxxxxx X. Xxxxx & Co., L.P................. 100,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated....... 100,000
XxXxxxxx & Company Securities, Inc......... 100,000
Xxxxx Xxxxxxx Inc.......................... 100,000
---------
Total...................................... 5,000,000
---------
---------
