[EXHIBIT 1. UNDERWRITING AGREEMENT
ENTERED INTO AMONG MDU RESOURCES GROUP, INC.,
X.X. XXXXXXX & SONS, INC. AND XXXXXX X. XXXXX & CO., L.P.]
Execution Copy
MDU RESOURCES GROUP, INC.
(a Delaware corporation)
2,000,000 Shares of Common Stock
(Par Value $1.00 Per Share)
UNDERWRITING AGREEMENT
----------------------
February 4, 2004
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx X. Xxxxx & Co., L.P.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
MDU Resources Group, Inc., a Delaware corporation (the "Company"),
confirms its agreement with the underwriters named in Schedule A (collectively,
the "Underwriters", which term shall also include any underwriter substituted as
provided in Section 10 of this Agreement) for whom you are acting as
representatives (the "Representatives") with respect to (i) the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of an aggregate of 2,000,000 shares of Common Stock, par value $1.00 per share,
of the Company ("Common Stock"), including the appurtenant preference share
purchase rights thereto (the "Rights", and together with the Common Stock, the
"Initial Securities") and (ii) the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of 300,000 additional shares of Common Stock and the
Rights attached thereto to cover over-allotments, if any (the "Option
Securities"). The outstanding Rights have been issued pursuant to a Rights
Agreement (the "Rights Agreement") dated as of November 12, 1998 between the
Company and Xxxxx Fargo Bank Minnesota, N.A. (formerly known as Norwest Bank
Minnesota, N.A.), as Rights Agent. The Initial Securities and the Option
Securities are hereinafter called, collectively, the "Securities". If the firm
or firms listed in Schedule A hereto include only the firm or firms described
above as Representatives, then the terms "Underwriters" and "Representatives",
as used herein, shall each be deemed to refer to such firm or firms.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-104150), including
the related preliminary prospectus, for the registration of certain securities,
including the Securities, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of this Agreement. Such
registration statement (as so amended, if applicable) has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable, and including any registration statement filed by the Company
pursuant to Rule 462(b) under the 0000 Xxx) is referred to herein as the
"Registration Statement", and the final prospectus and the final prospectus
supplement relating to the offering of the Securities, in the form first
furnished to the Underwriters by the Company for use in connection with the
offering of the Securities, are collectively referred to herein as the
"Prospectus", provided, however, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of this Agreement. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424 of the 1933 Act Regulations, that was used after
such effectiveness and prior to the execution and delivery of this Agreement.
For purposes of this Agreement, all references to the Registration Statement,
Prospectus, or preliminary prospectus or to any amendment or supplement to any
of the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
All references in this Agreement to financial statements and schedules
(if any) and other information which is "contained", "included", "stated" or
"given" in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules (if any) and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to mean
and include the filing of any document under the 1934 Act which is incorporated
by reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriters, and agrees with the Underwriters at
the date hereof and at and as of the Closing Time (as defined in Section 2(c)
below) and, if any Option Securities are purchased, each Date of Delivery (as
defined in Section 2(b) below), as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any pending request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the date hereof,
the Closing Time and, if any Option Securities are purchased, each Date of
Delivery, the Registration Statement and any amendments and supplements
2
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an 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. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was first furnished to the Underwriters and at the
date hereof, the Closing Time and, if any Option Securities are purchased,
each Date of Delivery, included or will include an untrue statement of a
material fact or omitted or will 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. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by an
Underwriter, or by the Representatives on behalf of an Underwriter,
expressly for use in connection with this offering in the Registration
Statement or Prospectus, or to any statements in or omissions from the
Statement of Eligibility on Form T-1, or amendments thereto, filed as
exhibits to the Registration Statement.
Each preliminary prospectus and the 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 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the respective times they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was first furnished
to the Underwriters by the Company for use in connection with the offering
of the Securities and at the date hereof, the Closing Time and, if any
Option Securities are purchased, each Date of Delivery, did not and will
not contain an 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) Independent Accountants. Xxxxxx Xxxxxxxx LLP, who certified the
financial statements and supporting schedules for the years ended December
31, 2001 and 2000 included in the Registration Statement and Prospectus,
were, at the times when such financial statements and supporting schedules
were prepared, certified and filed with the Commission, independent public
accountants as, and to the extent then, required by the 1933 Act and the
1934 Act. Deloitte & Touche LLP, who certified the financial statements and
supporting schedules for the year ended December 31, 2002 included in the
Registration Statement and Prospectus, (A) were, at the time when such
financial statements and supporting schedules were prepared, certified and
3
filed with the Commission, and currently are independent public accountants
as required by the 1933 Act and the 1934 Act and (B) do not provide the
Company or its subsidiaries any non-audit services which are prohibited by
Section 10A(g) or (h) of the 1934 Act.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States
("GAAP") applied on a consistent basis throughout the periods involved
(except as disclosed therein). The supporting schedules, if any, included
in the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. No other financial statements or
supporting schedules are required to be included in the Registration
Statement. The selected financial data and the summary financial
information included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.
(v) No Material Adverse Effect in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
results of operations, capital stock, debt, business affairs or properties
of the Company and its subsidiaries taken as a whole, whether or not
arising in the ordinary course of business or any development that would
reasonably be expected to result in such a material adverse change (any
such change or development is called a "Material Adverse Effect"), (B)
there have been no transactions or agreements entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on the Common Stock or Preferred Stock in amounts per
share that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. The only "significant
subsidiaries" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X under the 0000 Xxx) are Centennial Energy Holdings, Inc.,
4
WBI Holdings, Inc., WBI Pipeline & Storage Group, Inc., Knife River
Corporation, KRC Holdings, Inc., Fidelity Oil Co., Fidelity Exploration &
Production Company and Williston Basin Interstate Pipeline Company (the
"Subsidiaries", and individually, a "Subsidiary"). Each Subsidiary of the
Company has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries
listed on Schedule C hereto and (b) certain other subsidiaries which,
considered in the aggregate as a single entity, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding common
stock of the Company is as set forth in the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 2003 in the row entitled
"Common stockholder's equity: Common stock" in the consolidated balance
sheets of the Company (except for subsequent issuances, if any, (A)
pursuant to this Agreement, (B) pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus, (C) pursuant to the
exercise of convertible securities or options referred to in the
Prospectus, (D) following the date hereof, as may be permitted by Section
3(j) hereof, or (E) as set forth in Schedule D hereto). The shares of
issued and outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock were issued in violation of the preemptive or other
similar rights of any securityholder of the Company. The issued and
outstanding common stock of the Company conforms to the description thereof
set forth or incorporated by reference in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and non-assessable; each of the Common Stock and the Rights
conforms to all statements relating thereto contained in the Prospectus; no
holder of the Securities will be subject to personal liability by reason of
5
being such a holder; and the issuance of the Securities is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
(xi) Authorization of Rights Agreement. The Rights Agreement has been
duly authorized, executed and delivered by the Company; when the Rights
shall have been issued in accordance with the terms of this Agreement such
Rights will have been duly and validly issued.
(xii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations where such violation, in the case of the
application of the proceeds of the sale of the Securities, would have a
Material Adverse Effect. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the employees
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
6
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, (i) against or affecting the Company or any
subsidiary or (ii) which has as a subject thereof any officer or director
of, or property owned or leased by, the Company or any subsidiary, in each
case, (A) which is required to be disclosed in the Registration Statement
(other than as disclosed therein), (B) which (individually or collectively)
might reasonably be expected to result in a Material Adverse Effect or to
materially and adversely affect the properties or assets of the Company or
(C) which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder.
(xv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xvi) Absence of Further Requirements. The Federal Energy Regulatory
Commission (the "FERC"), the Montana Public Service Commission (the "MPSC")
and the Public Service Commission of Wyoming (the "WPSC") have authorized
the issuance and sale of the Securities in the manner contemplated by this
Agreement, and said authorizations are in full force and effect and no
further filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as may be required
in connection with post-filing requirements with the FERC due after the
date hereof, and except such as have been already obtained and are in full
force and or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except such as may be required in
connection with the exercise of the Rights.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, franchises, approvals,
consents and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them,
except where the failure to possess any such Governmental License would
not, singly or in the aggregate, have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
7
(xviii) Title to Property. The Company and its subsidiaries have good
and sufficient title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xix) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xx) Distribution of Other Offering Material by the Company. The
Company has not distributed and will not distribute, prior to the latest of
the Closing Time, the final Date of Delivery (if any) and the completion of
the Underwriters' distribution of the Securities, any offering material in
connection with the offering or sale of the Initial Securities and the
Option Securities, if any, other than a preliminary prospectus, the
Prospectus or the Registration Statement.
8
(xxi) Tax Law Compliance. The Company and each of its subsidiaries
have filed all necessary federal, state and foreign income and franchise
tax returns or have properly requested extensions thereof and have paid all
taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them
except as may be being contested in good faith and by appropriate
proceedings and except where the failure to so file would not, singly or in
the aggregate, have a Material Adverse Effect. The Company has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(a)(iv) above in respect of all federal,
state and foreign income and franchise taxes for all periods as to which
the tax liability of the Company or any of its subsidiaries has not been
finally determined.
(xxii) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Prospectus
which have not been described as required.
(xxiii) Company's Accounting System. The Company maintains a system
of accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(xxiv) No Outstanding Loans or Other Indebtedness. There are no
outstanding loans (except loans pursuant to the existing employees'
computer purchase plan), advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of indebtedness
by the Company to or for the benefit of any of the executive officers or
directors of the Company which, individually or in the aggregate, are
material to the Company and its subsidiaries considered as one enterprise,
except as disclosed in the Prospectus.
(xxv) Compliance with Laws. The Company and each of its subsidiaries
are in compliance with, and the Company has no reason to believe that it
and each of its subsidiaries are not conducting business in compliance
with, all applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, including without limitation the
Xxxxxxxx-Xxxxx Act of 2002 and any rules and regulations promulgated
thereunder and all applicable rules and regulations of the FERC, the MPSC
and the WPSC, except where failure to be so in compliance would not result
in a Material Adverse Effect.
(xxvi) Financial Projections. The forward looking statements and
projections (including the assumptions described therein) included or
incorporated by reference in the Registration Statement and the Prospectus,
including the statements contained in (1) the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2002 and its quarterly
reports on Form 10-Q for the periods ended March 31, 2003, June 30, 2003
9
and September 30, 2003, in each case, under the caption "Prospective
Information", and (2) the Company's current reports on Form 8-K dated
January 29, 2003, September 10, 2003 and January 22, 2004, in each case,
under the caption "Outlook", and the Company's current report on Form 8-K
dated March 13, 2003, were made by the Company in good faith and believed
by the Company to have a reasonable basis at the respective times such
statements were made.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the respective representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the public
offering price and upon the terms and conditions set forth in Schedule B hereto,
the number of Initial Securities set forth opposite such Underwriter's name in
Schedule A hereto.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters to purchase up to an additional 300,000 shares of Common Stock and
related Rights, at the price per share set forth in Schedule B. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, shall purchase the proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth opposite such Underwriter's name in Schedule A
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx,
Xxxx & Priest LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 or at such other place
as shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriters and the Company (such time and date of payment and
10
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriters and
the Company, on each Date of Delivery as specified in the notice from the
Underwriters to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company, against delivery to
the Underwriters of certificates for the Securities to be purchased by them.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Underwriters may request in writing at least one
full business day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriters in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriters as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Representatives immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will (i) in all cases during the period when a
prospectus is required to be delivered under the 1933 Act and (ii) thereafter,
as to the prospectus supplement relating to the Securities only, furnish the
11
Underwriters with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriters or counsel for the Underwriters shall
reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, three copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith) and copies of all
signed consents and certificates of experts. The copies of the Registration
Statement and each amendment and supplement thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as each Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the reasonable opinion of counsel for the Underwriters
or for the Company, to amend the Registration Statement or amend or supplement
the Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to each
Underwriter such number of copies of such amendment or supplement as each
Underwriter may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
as the Underwriters may reasonably designate and to maintain such qualifications
in effect for a period of not less than one year from the date of this
Agreement, provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
12
jurisdiction in which it is not otherwise so subject. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange and the Pacific
Exchange.
(j) Restriction on Sale of Securities. During a period of 45 days from
the date of the Prospectus, the Company will not, without the prior written
consent of the X.X. Xxxxxxx & Sons, Inc., (i) directly or indirectly, 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 any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing benefit plans of the Company or pursuant to the Rights, (C)
any shares of Common Stock issued pursuant to any non-employee director stock
plan or dividend reinvestment plan or (D) any shares of Common Stock issued in
connection with mergers or acquisitions completed in the ordinary course of
business by the Company or its subsidiaries provided such shares may not be
resold in a public offering until the expiration of the foregoing period.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the printing and delivery to the Underwriters of this
13
Agreement, any blue sky memorandum and such other documents as may be required
in connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, and any stock or other transfer taxes and
any stamp or other duties payable upon the sale, issuance or delivery of the
Securities by the Company to the Underwriters, (iv) the fees and disbursements
of the Company's counsel, accountants and other advisors, (v) the qualification
of the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, and (ix) the
fees and expenses incurred in connection with the listing of the Securities on
the New York Stock Exchange and Pacific Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 (other than as a
result of the failure of the Company to deliver the Officer's Certificate
referred to in clause (d) thereof due to the occurrence of a Material Adverse
Effect), the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of any officer of the Company or any subsidiary of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the description of
the Securities, the specific method of distribution and similar matters shall
have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinions, dated as of Closing Time, of Xxxxxx
Xxxx & Priest LLP, special counsel for the Company, and Xxxxxxx X. Xxxxxxx,
acting general counsel for the Company, in substantially the forms of Exhibit
A-1 and Exhibit A-2 hereto, respectively.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Shearman & Sterling LLP, counsel for the Underwriters, in a form
satisfactory to the Underwriters. In giving such opinion such counsel may rely,
14
as to all matters governed by the laws of jurisdictions other than the law of
the State of New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Effect, and the Underwriters shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such Material Adverse
Effect, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are to the knowledge of the Company contemplated by
the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriters shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the Underwriters
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 the Registration
Statement and the Prospectus; and the specified date referred to therein shall
be no more than three business days prior to the date of such letter.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange and the Pacific Stock
Exchange, subject only to official notice of issuance.
(h) Regulatory Authorizations. At the time of the execution of this
Agreement and at the Closing Time, there shall be in full force and effect the
orders of the FERC, the MPSC and the WPSC, permitting the issuance and sale of
the Securities as contemplated by this Agreement.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
15
by the Company shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Underwriters shall have received:
(1) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of the
chief financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(2) Opinion of Counsel for Company. The favorable opinion of
Xxxxxx Xxxx & Priest LLP, special counsel for the Company, together with
the favorable opinion of Xxxxxxx X. Xxxxxxx, acting general counsel for the
Company, each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
Shearman & Sterling LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(4) Bring-down Comfort Letter. A letter from Deloitte & Touche
LLP, in form and substance satisfactory to the Underwriters and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Underwriters pursuant to Section 5(f) hereof,
except that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to such
Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or in order
to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
Underwriters to purchase the relevant Option Securities may be terminated by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
---------------
16
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, the directors, members, officers, employees
and agents of each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth below:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representatives),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by an
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or to any statements in or
omissions from the Statement of Eligibility on Form T-1, or amendments thereto,
filed as exhibits to the Registration Statement; and provided, further, however,
that the Company shall not be liable to the Underwriters to the extent that the
Company shall sustain the burden of proof that any such loss, liability, claim,
damage or expense resulted from the fact that the Underwriters sold Securities
to a person to whom the Underwriters failed to send or give, at or prior to the
Closing Time or Date of Delivery, as the case may be, a copy of the Prospectus
if (i) the Company has previously furnished copies thereof (sufficiently in
advance of the Closing Time or Date of Delivery, as the case may be), to allow
for distribution by the Closing Time or Date of Delivery, as the case may be, to
the Underwriters and the loss, liability, claim, damage or expense of the
17
Underwriters resulted from an untrue statement or alleged untrue statement or
omission contained in or omitted from the preliminary prospectus which was
corrected in the Prospectus and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person and
(ii) such failure to give or send the Prospectus by the Closing Time or the Date
of Delivery, as the case may be, to the party or parties asserting such loss,
liability, claim damage or expense would have constituted the sole defense to
the claim asserted by such person.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, the
directors, officers, employees and agents of the Company, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by the Representatives,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
18
(d) Settlement Without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (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 Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 which resulted in such
losses, liabilities, claims, damages or expenses, 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 Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
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 Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
19
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each director, member, officer, employee and agent of such
Underwriter shall have the same rights to contribution as such Underwriter, and
each director, officer, employee and agent of the Company, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Initial Securities set
forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties, Agreements and Indemnities to
Survive Delivery. All representations, warranties, agreements and indemnities in
this Agreement and statements in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters and any termination
of this Agreement.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time or
any Date of Delivery (i) if in the judgment of the Underwriters there shall have
occurred any Material Adverse Effect; (ii) if there has occurred any change in
the United States or international financial markets, any outbreak of national
or international hostilities or escalation thereof or other calamity or crisis
or any substantial change or development involving a prospective substantial
change in national or international political, financial or economic conditions,
in each case, as in the judgment of the Representatives, is material and adverse
and makes it impracticable to market the Securities in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; (iii) if trading in any securities of the Company has been suspended
or limited by the Commission or the New York Stock Exchange or Pacific Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority; (iv) if a banking moratorium has been declared
by any federal, New York or California authorities; (v) the Company shall have
20
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Underwriters may interfere
materially with the conduct of the business and operations of the Company,
regardless of whether or not such loss shall have been insured; or (vi) there
shall have occurred a material disruption in commercial banking or securities
settlement or clearance services in the United States.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Initial Securities
(other than for some reason to justify, in accordance with the provisions
hereof, the cancellation or termination of its or their obligations hereunder)
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters satisfactory to the Company, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth. If, within 24 hours after
such default by one or more of the Underwriters, the Representatives do not make
arrangements for the purchase of the Defaulted Securities, then the Company
shall be entitled to a further period of 24 hours within which to procure
another party or parties to purchase the Defaulted Securities upon the terms
herein set forth. If, however, the Representatives or the Company shall not have
completed such arrangements within the applicable 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without liability
on the part of any non-defaulting Underwriter, except that Sections 6 and 7
shall survive such termination and remain in full force and effect.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, or, in the case of a Date of Delivery which is after Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery for a period
21
not exceeding seven days in order to effect any required changes in the
Registration Statement or Final Prospectus or in any other documents or
arrangements.
In the computation of any 24 hours referred to in this Section, there
shall be excluded a period of 24 hours in respect of each Saturday, Sunday or
legal holiday that would otherwise be included in such period of time.
SECTION 11. Notices. All notices and other communications shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx,
XX 00000; Facsimile 000-000-0000; (Attention: Equity Syndicate Manager); and
notices to the Company shall be directed to it at MDU Resources Group, Inc.,
Xxxxxxxxx Building, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxx, XX 00000, attention of the
office of the Treasurer.
SECTION 12. Parties. This Agreement shall each inure to benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from the Underwriters
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
MDU RESOURCES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President
and Chief Financial Officer
CONFIRMED AND ACCEPTED BY,
as of the date first above written:
X.X. XXXXXXX & SONS, INC.
XXXXXX X. XXXXX & CO., L.P.
Acting on behalf of themselves and the several underwriters
By: X.X. XXXXXXX & SONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Authorized Signatory
Xxxxxxx X. Xxxxx
Vice President
23
SCHEDULE A
COMMON STOCK
Name of Underwriters No. of Shares
-------------------- -------------
X.X. Xxxxxxx & Sons, Inc. 1,200,000
Xxxxxx X. Xxxxx & Co., L.P. 800,000
==========
Total 2,000,000
24
SCHEDULE B
COMMON STOCK
Underwriting Agreement dated February 4, 2004
Public Offering Price:
Per Share: $23.320
Total: $46,640,000
Underwriting Commission:
Per Share: $0.793
Total: $1,586,000
25
SCHEDULE C
LIST OF SUBSIDIARIES
1. Alaska Basic Industries, Inc., an Alaska corporation
2. Anchorage Sand and Gravel Company, Inc., an Alaska corporation
3. Xxxxxxx Contracting Company, Inc., a California corporation
4. Xxxxxxx Brothers, Inc., a Minnesota corporation
5. Xxxx Electrical Contractors, Inc., a Missouri corporation
6. Bitter Creek Pipelines, LLC, a Colorado limited liability company
7. BIV Generation Company, L.L.C., a Delaware limited liability company
8. Brush Generation Company, L.L.C., a Delaware limited liability company
9. Brush Power, LLC, a Delaware limited liability company
10. Buffalo Bituminous, Inc., a Minnesota corporation
11. Capital Electric Construction Company, Inc., a Kansas corporation
12. Capital Electric Line Builders, Inc., a Kansas corporation
13. Centennial Energy Holdings, Inc., a Delaware corporation
14. Centennial Energy Holdings Trinidad LLC, a Delaware limited liability
company
15. Centennial Energy Resources LLC, a Delaware limited liability company
16. Centennial Energy Resources International Inc, a Delaware corporation
17. Centennial Holdings Capital LLC, a Delaware limited liability company
18. Centennial Power, Inc., a Delaware corporation
19. Central Oregon Redi-Mix, L.L.C., an Oregon limited liability company
20. ClearFlame, LLC, a Colorado limited liability company
21. Colorado Power Partners, a Colorado partnership
22. Concrete, Inc., a California corporation
23. Xxxxxxxx-Pacific Co., a California corporation
24. DSS Company, a California corporation
25. E.S.I., Inc., an Ohio corporation
26. Fidelity Exploration & Production Company, a Delaware corporation
27. Fidelity Oil Co., a Delaware corporation
28. Frebco, Inc., an Ohio corporation
29. FutureSource Capital Corp., a Delaware corporation
30. Granite City Concrete of Xxxxxxx, Inc., a Minnesota corporation
31. Granite City Concrete Pumping, LLC, a Minnesota limited liability company
32. Granite City Ready Mix, Inc., a Minnesota corporation
33. Xxxxxx Electric Company, a Colorado corporation
34. Xxx Xxxxxx & Sons, Inc., an Oregon corporation
35. Harp Engineering, Inc., a Montana corporation
36. Hawaiian Cement, a Hawaii partnership
37. ILB Hawaii, Inc., a Hawaiian corporation
38. Innovative Gas Services, Incorporated, a Kentucky corporation
39. Innovatum, Inc., a Texas corporation
40. International Line Builders, Inc., a Delaware corporation
41. InterSource Insurance Company, a Vermont corporation
42. JTL Group, Inc., a Montana corporation
43. JTL Group, Inc., a Wyoming corporation
26
44. KRC Aggregate, Inc., a Delaware corporation
45. KRC Holdings, Inc., a Delaware corporation
46. Knife River Corporation, a Delaware corporation
47. Knife River Dakota, Inc., a Delaware corporation
48. Knife River Hawaii, Inc., a Delaware corporation
49. Knife River Marine, Inc., a Delaware corporation
50. LTM, Incorporated, an Oregon corporation
51. Xxx Xxxxx Pipeline Co., an Oregon corporation
52. MDU Brasil Ltda., a Brazil limited liability company
53. MDU Chile Inversiones Ltda., a Chile corporation
54. MDU Resources International LLC, a Delaware limited liability company
55. MDU Resources Luxembourg I LLC S.a.r.l., a Luxembourg limited liability
company
56. MDU Resources Luxembourg II LLC S.a.r.l., a Luxembourg limited liability
company
57. Marcon Energy Corporation, a Kentucky corporation
58. Medford Ready Mix, Inc., a Delaware corporation
59. Xxxxxx Generation Company, L.L.C., a Delaware limited liability company
60. Xxxxx Bros., Inc., an Oregon corporation
61. Mountain View Power Partners, LLC, a Delaware limited liability company
62. Netricity LLC, an Alaska limited liability company
63. New Avoca Gas Storage LLC, a Texas limited liability company
64. Newco, Inc., an Ohio corporation
65. Northstar Materials, Inc., a Minnesota corporation
66. Oregon Electric Construction, Inc., an Oregon corporation
67. Pouk & Xxxxxxx, Inc., a California corporation
68. Prairielands Energy Marketing, Inc., a Delaware corporation
69. Rocky Mountain Contractors, Inc., a Montana corporation
70. Rocky Mountain Power, Inc., a Montana corporation
71. Rogue Aggregates, Inc., an Oregon corporation.
72. Seven Brothers Ranches, Inc., a Wyoming corporation
73. Utility Services, Inc., a Delaware corporation
74. WBI Canadian Pipeline, Ltd., a Canadian corporation
75. WBI Energy Services, Inc., a Delaware corporation
76. WBI Holdings, Inc., a Delaware corporation
77. WBI Pipeline & Storage Group, Inc., a Delaware corporation
78. WHC, Ltd., a Hawaii corporation
79. The Xxxxxx-Xxxxx Company, an Ohio corporation
80. Xxxxxx-Xxxxx Equipment Co., a Delaware corporation
81. Xxxxxx-Xxxxx Pumps & Systems, Inc., an Ohio corporation
82. Williston Basin Interstate Pipeline Company, a Delaware corporation
83. Young Contractors, Inc., a Texas corporation
27
SCHEDULE D
Issuance of MDU Resources Group, Inc. common stock, $1.00 par value, subsequent
to September 30, 2003: 136,020 shares.
28
Exhibit A-1
[Letterhead of Xxxxxx Xxxx & Priest LLP]
New York, New York
______ __, 2004
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx X. Xxxxx & Co., L.P.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xx. Xxxxx, XX 00000
As Representatives of the several Underwriters named in the
Underwriting Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to MDU Resources Group, Inc., a
Delaware corporation (the "Company"), in connection with the preparation,
execution and delivery of the Underwriting Agreement (the "Agreement"), dated
February 4, 2004, by and among the Company and the Underwriters relating to the
offering of 2,000,000 shares of the Company's Common Stock, par value $1.00 per
share (such shares being hereinafter referred to as the "Common Stock"), and the
appurtenant preference share purchase rights (the "Rights", and together with
the Common Stock, the "Securities") and the preparation and filing of a
prospectus supplement to the Registration Statement on Form S-3 (File No.
333-104150), as amended, relating to the offering of the Securities (the
"Registration Statement"). All capitalized terms used herein without definition
shall have the respective meanings set forth in the Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
We have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Securities Act of 1933, as amended (the "Act"),
incorporate or are deemed to incorporate by reference, among other documents,
(1) the Annual Report on Form 10-K of the Company for the fiscal year ended
December 31, 2002 (including portions of the Annual Report to Security Holders
submitted on paper on March 6, 2003), (2) the Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 2003, June 30, 2003 and September 30, 2003,
(3) the Current Reports on Form 8-K dated January 29, 2003, March 13, 2003,
September 10, 2003, November 18, 2003, December 17, 2003, January 22, 2004 and
February 5, 2004 and (4) the definitive Proxy Statement filed on March 6, 2003
(collectively, the "Exchange Act Documents"), each as filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In addition, we have
examined, and have relied as to matters of fact upon, the documents delivered to
you at the closing (except the certificates representing the Common Stock, of
which we have examined a specimen), and upon originals or copies, certified or
A-1-1
otherwise identified to our satisfaction, of such corporate records, agreements,
documents and other instruments and such certificates or comparable documents of
public officials and of officers and representatives of the Company, and have
made such other and further investigations, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota.
(iii) The Common Stock to be purchased by the Underwriters from the
Company has been duly authorized for issuance and sale to the Underwriters
pursuant to the Agreement and, when issued and delivered by the Company
pursuant to the Agreement against payment of the consideration set forth
therein, will be validly issued and fully paid and non-assessable, and no
holder of the Common Stock is subject to personal liability by reason of
being such a holder.
(iv) The issuance and sale of the Securities by the Company are not
subject to the preemptive or other similar rights of any securityholder of
the Company.
(v) The Agreement has been duly authorized, executed and delivered by
the Company. The Rights Agreement, dated as of November 12, 1998 (the
"Rights Agreement"), between the Company and Xxxxx Fargo Bank Minnesota,
N.A. (formerly known as Norwest Bank Minnesota N.A.), as Rights Agent, has
been duly authorized, executed and delivered by the Company; and when the
Rights shall have been issued in accordance with the Agreement, the Rights
to be purchased by the Underwriters will have been duly and validly issued.
(vi) The Registration Statement has become effective under the Act,
any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and, to
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no proceedings
for that purpose have been instituted or are pending or threatened by the
Commission.
(vii) The Registration Statement, the Prospectus and each amendment
and supplement to the Registration Statement and Prospectus as of the time
the Registration Statement became effective, and the Prospectus as of the
A-1-2
date it was filed pursuant to Rule 424(b) under the Act (other than (A) the
financial statements and supporting schedules and other financial data
included therein, and (B) the Statement of Eligibility on Form T-1, or
amendments thereto, upon which we express no opinion (collectively the
"Excepted Information")) complied as to form in all material respects with
the requirements of the Act and the 1933 Act Regulations.
(viii) The Exchange Act Documents (other than the Excepted
Information, upon which we express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(ix) The form of certificate used to evidence the Securities complies
in all material respects with all applicable statutory requirements, with
any applicable requirements of the Restated Certificate of Incorporation
and by-laws of the Company, the General Corporation Law of Delaware and the
requirements of the New York Stock Exchange and the Pacific Exchange.
(x) The information in the Prospectus under the caption "Description
of the Common Stock" and in Item 15 of the Registration Statement, to the
extent that it constitutes matters of law, summaries of legal matters, the
Company's Restated Certificate of Incorporation and by-laws, or legal
proceedings or legal conclusions, has been reviewed by us and is correct in
all material respects.
(xi) The Federal Energy Regulatory Commission (the "FERC"), the
Montana Public Service Commission and the Public Service Commission of
Wyoming have authorized the issuance and sale of the Securities in the
manner contemplated by the Agreement and the Prospectus, and, to the best
of our knowledge, said authorizations are in full force and effect. No
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than as described above,
and under the Act and the 1933 Act Regulations, which have been obtained,
or as may be required under the securities or blue sky laws of the various
jurisdictions, as to which we express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the
Agreement or for the offering, issuance, sale or delivery of the
Securities, except such as may be required in connection with post-filing
requirements with the FERC due after the date hereof.
(xii) The execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated in the Agreement and in the
Prospectus (including the issuance and sale of the Securities) and
compliance by the Company with its obligations under the Agreement do not
and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, each of a
material nature and known to us, to which the Company is a party or by
A-1-3
which it may be bound, or to which any of the property or assets of the
Company is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances or Repayment Events that would not have a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the Restated Certificate of Incorporation or by-laws of
the Company, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its properties, assets or operations.
(xiii) The Company is not, and after giving effect to the offer and
sale of the Securities and the receipt and application of the proceeds
therefrom in the manner described in the Prospectus under the caption "Use
of Proceeds", will not be, an "investment company" within the meaning of
the Investment Company Act.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (x) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, we
participated in conferences with certain of its officers and employees, with its
Acting General Counsel and other members of its Legal Department, with your
representatives and with representatives of Deloitte & Touche LLP, the
independent accountants who examined the 2002 financial statements included in
the Exchange Act Documents. Based on our examination of the Registration
Statement, the Prospectus and the Exchange Act Documents, our investigations
made in connection with the preparation of the Registration Statement and the
Prospectus and our participation in the conferences referred to above, nothing
has come to our attention that would lead us to believe that the Registration
Statement (except for the Excepted Information, upon which we make no
statement), at the time such Registration Statement became effective and the
date of the Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (except for
the Excepted Information, upon which we make no statement), as of its date or on
the date hereof, included or includes an untrue statement of a material fact or
omitted 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.
This opinion is limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware, and the Federal laws of the
United States of America. We express no opinion as to the laws of any other
jurisdiction.
In rendering this opinion, we have relied as to all matters of Montana,
North Dakota, South Dakota, Wyoming and Minnesota law and, as to the matters
addressed therein, with your consent, upon the opinion addressed to you of even
date herewith of Xxxxxxx X. Xxxxxxx, Esq., Bismarck, North Dakota, the Acting
General Counsel of the Company, and we believe that we and the Underwriters are
justified in relying upon such opinion.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation other
A-1-4
than Xxxxxxx X. Xxxxxxx, Esq., the Company's Acting General Counsel, to the
extent set forth in her opinion of even date herewith addressed to you, without
our prior consent.
Very truly yours,
XXXXXX XXXX & PRIEST LLP
A-1-5
Exhibit A-2
[LETTERHEAD OF MDU RESOURCES GROUP, INC.]
_____ __, 2004
X.X. Xxxxxxx & Sons, Inc.
Xxxxxx X. Xxxxx & Co., L.P.
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xx. Xxxxx, XX 00000
As Representatives of the several Underwriters named in the
Underwriting Agreement referred to below
Ladies and Gentlemen:
I am Acting General Counsel of MDU Resources Group, Inc., a Delaware
corporation (the "Company"), and am delivering this opinion in connection with
the Underwriting Agreement (the "Agreement"), dated February 4, 2004, by and
among the Company and the Underwriters, relating to the offering of 2,000,000
shares of the Company's Common Stock, par value $1.00 per share (such shares
being hereinafter referred to as the "Common Stock"), and the appurtenant
preference share purchase rights (the "Rights", and together with the Common
Stock, the "Securities") and the preparation and filing of a prospectus
supplement to the Registration Statement on Form S-3 (File No. 333-104150), as
amended, relating to the offering of the Securities (the "Registration
Statement"). All capitalized terms used herein without definition shall have the
respective meanings set forth in the Agreement.
This opinion is rendered to you in accordance with Section 5(b) of the
Agreement.
I have examined the Registration Statement and the Prospectus, which
pursuant to Form S-3 under the Securities Act of 1933, as amended (the "Act"),
incorporate or are deemed to incorporate by reference, among other documents,
(1) the Annual Report on Form 10-K of the Company for the fiscal year ended
December 31, 2002 (including portions of the Annual Report to Security Holders
submitted on paper on March 6, 2003), (2) the Quarterly Reports on Form 10-Q for
the fiscal quarters ended March 31, 2003, June 30, 2003 and September 30, 2003,
(3) the Current Reports on Form 8-K dated January 29, 2003, March 13, 2003,
September 10, 2003, November 18, 2003, December 17, 2003, January 22, 2004 and
February 5, 2004 and (4) the definitive Proxy Statement filed on March 6, 2003
(collectively, the "Exchange Act Documents"), each as filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In addition, I have
examined, and have relied as to matters of fact upon, certain documents
delivered to you at the closing (except the certificates representing the Common
A-2-1
Stock, of which I have examined a specimen), and upon originals or copies,
certified or otherwise identified to my satisfaction, of such corporate records,
agreements, documents and other instruments and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such other and further investigations, as I have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I am of the opinion that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Agreement. The Company holds valid and subsisting franchises, licenses and
permits authorizing it to carry on the utility business in which it is
engaged, except as may be stated or referred to in the Prospectus.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in Montana, North Dakota, South
Dakota, Wyoming and Minnesota and is not required, whether by reason of the
ownership or leasing of property or the conduct of business, to be
qualified in any other jurisdiction, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(iv) The outstanding common stock of the Company is as set forth in
the Prospectus in the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 2003 in the row entitled "Common stockholder's
equity: Common stock" in the consolidated balance sheets of the Company
(except for subsequent issuances, if any, (A) pursuant to the Agreement,
(B) pursuant to reservations, agreements or employee benefit plans referred
to in the Prospectus, (C) pursuant to the exercise of convertible
securities or options referred to in the Prospectus, (D) following the date
of the Agreement, as may be permitted by Section 3(j) of the Agreement, or
(E) as set forth in Schedule D to the Agreement; the shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable, and none of the
outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company.
(v) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate
A-2-2
its properties and to conduct its business as described in the Prospectus.
Except as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to the
best of my knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary.
(vi) To the best of my knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, (A) which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), (B) except as described in the Registration Statement, which
might reasonably be expected to result in a Material Adverse Effect or to
materially and adversely affect the properties or assets of the Company, or
(C) which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the Agreement or the
performance by the Company of its obligations thereunder.
(vii) The information (i) in the Prospectus under the caption
"Description of the Common Stock" and in Item 15 of the Registration
Statement; and (ii) in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 under the headings "Electric--General",
"Electric--Regulation and Competition", "Natural Gas
Distribution--General", "Natural Gas Distribution--Regulatory Matters",
"Pipeline and Energy Services--General" and "Pipeline and Energy
Services--Regulatory Matters and Revenue Subject to Refund" each under the
caption "Business and Properties" and under the caption "Legal
Proceedings", to the extent that it constitutes matters of law, summaries
of legal matters or the Company's charter and by-laws, or legal proceedings
or legal conclusions, has been reviewed by me and is correct in all
material respects.
(viii) To the best of my knowledge, there are no material statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
(ix) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects, to the best of my knowledge, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments, each of a material nature, required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(x) To the best of my knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
A-2-3
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(xi) The Federal Energy Regulatory Commission (the "FERC"), the
Montana Public Service Commission and the Public Service Commission of
Wyoming have authorized the issuance and sale of the Securities in the
manner contemplated by the Agreement and the Prospectus, and, to the best
of my knowledge, said authorizations are still in full force and effect. No
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than as described above,
under the Act and the 1933 Act Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of the various
jurisdictions, as to which I express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the
Agreement or for the offering, issuance, sale or delivery of the
Securities, except such as may be required in connection with post-filing
requirements with the FERC due after the date hereof.
(xii) The execution, delivery and performance of the Agreement and
the consummation of the transactions contemplated in the Agreement and the
Prospectus (including the issuance and sale of the Securities) and
compliance by the Company with its obligations under the Agreement do not
and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xii) of the Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
each of a material nature and known to me, to which the Company or any
subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances or Repayment Events that would not have a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the Restated Certificate of Incorporation or by-laws of the Company or any
subsidiary, or any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.
I have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except to the extent set forth in paragraph (vii) above. In the course of
preparation by the Company of the Registration Statement and the Prospectus, I
participated in conferences with certain of its officers and employees, with
other counsel for the Company, with your representatives and with
representatives of Deloitte & Touche LLP, the independent accountants who
reviewed the 2002 financial statements included in the Exchange Act Documents.
Based on my examination of the Registration Statement, the Prospectus and the
Exchange Act Documents, my investigations made in connection with the
preparation of the Registration Statement and the Prospectus and my
participation in the conferences referred to above, nothing has come to my
A-2-4
attention that would lead me to believe that the Registration Statement (except
for (A) the financial statements and supporting schedules and other financial
data included therein and (B) the Statement of Eligibility on Form T-1, or
amendments thereto), upon which I make no statement (collectively the "Excepted
Information")), at the time such Registration Statement became effective and the
date of the Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus (except for
the Excepted Information, upon which I make no statement), as of its date or on
the date hereof, included or includes an untrue statement of a material fact or
omitted 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.
I am a member of the North Dakota Bar and do not hold myself out as an
expert on the laws of any other state, but I have made a study of the laws of
such states insofar as such laws are involved in the conclusions stated in this
opinion. As to matters of the General Corporation Law of the State of Delaware
and the Federal laws of the United States of America, I have relied, with your
consent, upon the opinion of Xxxxxx Xxxx & Priest LLP, counsel to the Company, a
copy of which has been delivered to you.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person, firm or corporation, other
than Xxxxxx Xxxx & Priest LLP, special counsel to the Company, and Shearman &
Sterling LLP, counsel to the Underwriters, to the extent set forth in their
opinions of even date herewith addressed to you, without my prior written
consent.
Very truly yours,
Xxxxxxx X. Xxxxxxx
Acting General Counsel
A-2-5
