EXHIBIT 1
$75,000,000
Black Hills Power, Inc.
First Mortgage Bonds, ___% Series AE Due 2032
UNDERWRITING AGREEMENT
August __, 2002
ABN AMRO Incorporated
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Black Hills Power, Inc., a South Dakota corporation (the "Company"),
proposes to issue and sell to ABN AMRO Incorporated (the "Underwriter")
$75,000,000 principal amount of its First Mortgage Bonds, ___% Series AE Due
2032 (the "Securities") to be issued pursuant to the provisions of the Restated
and Amended Indenture and Deed of Trust, dated as of September 1, 1999, as
supplemented by the First Supplemental Indenture, dated as of August __, 2002
(collectively, the "Indenture"), each between the Company and JPMorgan Chase
Bank, as trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Securities. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement." The prospectus in the form first
used to confirm sales of Securities is hereinafter referred to as the
"Prospectus."
1. Representations and Warranties. The Company represents and warrants to
and agrees with the Underwriter that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the Company's knowledge,
threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this Section 1(b) do not apply (A) to statements or omissions in
the Registration Statement or the Prospectus based upon information relating to
the Underwriter furnished to the Company in writing by the Underwriter expressly
for use therein or (B) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of South Dakota, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of the Company
has been duly authorized and validly issued and is fully paid and nonassessable.
(d) Each subsidiary of the Company has been duly incorporated or organized,
as the case may be, and is an existing corporation, limited partnership, general
partnership or limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each subsidiary of the Company is
duly qualified to do business as a foreign corporation, limited partnership,
general partnership or limited liability company, as the case may be, in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not individually or in the
aggregate have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("Material Adverse Effect"); all of the issued and
outstanding capital stock or partnership or limited liability company interests,
as the case may be, of each subsidiary of the Company has been duly authorized
and validly issued and, in the case of capital stock, is fully paid and
nonassessable; and the capital stock or partnership or limited liability company
interests, as the case may be, of each subsidiary owned by the Company, directly
or through subsidiaries, is owned free from liens, encumbrances and defects,
except (i) for the capital stock or partnership or limited liability company
interests, as the case may be, of those subsidiaries of Black Hills Energy
Capital, Inc. which are not owned free from liens, encumbrances and defects as a
result of the consummation of certain project finance transactions or (ii) as
disclosed in the Prospectus.
(e) This Agreement has been duly authorized, executed and delivered by the
Company.
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(f) The Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(g) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriter in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance with their
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration, if any, and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(h) The execution, delivery and performance of this Agreement, the
Indenture and the Securities, and the issuance and sale of the Securities, will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, any rule, regulation or order of
any governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of their
properties, or (ii) any agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any such subsidiary is subject,
or (iii) the charter or by-laws of the Company or any such subsidiary, except in
the case of clauses (i) and (ii) for such breaches, violations or defaults that
would not individually or in the aggregate have a Material Adverse Effect; and
the Company has full corporate power and authority to authorize, issue and sell
the Securities as contemplated by this Agreement.
(i) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the consummation of the
transactions contemplated by this Agreement and the Indenture, in connection
with the issuance and sale of the Securities by the Company, except such as have
been obtained and such as may be required under state securities laws.
(j) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(k) Except as disclosed in the Prospectus, there are no pending actions,
suits or proceedings against or affecting the Company, any of its subsidiaries
or any of their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect, or would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement, or which are
otherwise material in the context of the sale of the Securities; and no such
actions, suits or proceedings are, to the Company's knowledge, threatened or
contemplated.
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(l) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(m) The Company is not and, after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended.
(n) Except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries is in violation of any statute, any rule, regulation, decision
or order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, "Environmental Laws"), owns or
operates any real property contaminated with any substance that is subject to
any Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation which might lead to such a claim.
(o) Except as disclosed in the Prospectus, the Company and its subsidiaries
have good and defensible title to all interests in oil and gas properties owned
by them and good and marketable title to all other real properties and all other
properties and assets owned by them that are material to the Company and it
subsidiaries taken as a whole, in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially interfere
with the use made or to be made thereof by them; and, except as described in the
Prospectus, the Company and its subsidiaries hold any leased real or personal
property that is material to the Company and it subsidiaries taken as a whole
under valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(p) The Company and its subsidiaries possess adequate certificates,
authorities, licenses or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority, license or permit that, if determined adversely
to the Company or any of its subsidiaries, would, singly or in the aggregate,
have a Material Adverse Effect.
(q) No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent that might have a
Material Adverse Effect.
(r) The Company and its subsidiaries own, possess, have the right to use or
can acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "Intellectual Property Rights")
necessary to conduct the business now operated by them, or presently employed by
them, and have not received any notice of infringement of or
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conflict with asserted rights of others with respect to any Intellectual
Property Rights that, if determined adversely to the Company or any of its
subsidiaries, would, singly or in the aggregate, have a Material Adverse Effect.
(s) Xxxxxx Xxxxxxxx LLP, who have certified the financial statements of the
Company and certain subsidiaries of the Company incorporated by reference in the
Registration Statement and Prospectus, are independent public accountants as
required by the Securities Act and the applicable rules and regulations of the
Commission thereunder. The historical financial statements incorporated by
reference in the Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis and the schedules incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
(t) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(u) The Company is subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"). (v) The Company is a
subsidiary of a public utility holding company that is exempt from regulation
under the Public Utility Holding Company Act of 1935 ("PUHCA") (except for
Sections 9(a)(2) and 10 thereof) pursuant to Section 3(a) of PUHCA.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the Underwriter, and the Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Company $75,000,000 principal amount of Securities
at _____% of their principal amount (the "Purchase Price") plus accrued
interest, if any, from August __, 2002 to the date of payment and delivery.
3. Terms of Public Offering. The Company is advised by you that the
Underwriter proposes to make a public offering of the Securities as soon after
the Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Securities
are to be offered to the public initially at ____% of their principal amount
(the "Public Offering Price") plus accrued interest, if any, from August __,
2002 to the date of payment and delivery and to certain dealers selected by you
at a price that represents a concession not in excess of ____% of their
principal amount under the Public Offering Price, and that the Underwriter may
allow, and such dealers may reallow, a concession, not in excess of ____% of
their principal amount, to the Underwriter or to certain other dealers.
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4. Payment and Delivery. Payment for the Securities shall be made by wire
or other immediately available funds to the order of the Company at 10:00 A.M.,
local time, on August __, 2002, or at such other time on the same or such other
date, not later than August __, 2002, as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "Closing
Date."
Payment for the Securities shall be made against delivery to you for your
account of the global certificate representing the Securities registered in the
name of Cede & Co. with any transfer taxes payable in connection with the
transfer of the Securities to the Underwriter duly paid. Such certificate shall
be made available to the Underwriter at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, New York, New York, for inspection and packaging not later
than at least 24 hours prior to the Closing Date.
5. Conditions to the Underwriter's Obligations. The obligations of the
Company to sell the Securities to the Underwriter and the obligations of the
Underwriter to purchase and pay for the Securities are subject to the condition
that the Registration Statement shall have become effective not later than 4:00
p.m. (New York time) on the date hereof.
The obligations of the Underwriter are subject to the following further
conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriter shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect that:
(i) the condition set forth in clause (a)(i) above has been satisfied;
(ii) the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date; and
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(iii) the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriter shall have received on the Closing Date a certificate,
dated the Closing Date and signed by the principal executive officer of the
Company and the principal financial officer of the Company, to the effect that:
(i) such officers have reviewed the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2001 and the Company's
Quarterly Report on Form 10-Q and Amendment No. 1 to the Company's
Quarterly Report on Form 10-Q/A, each for the quarter ended March 31, 2002
(collectively, the "Reports");
(ii) based on such officers' knowledge, the Reports do not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading;
(iii) based on such officers' knowledge, the financial statements, and
other financial information included in the Reports, fairly present in all
material respects the financial condition and results of operations of the
Company as of, and for, the periods presented in the Reports;
(iv) such officers (A) are responsible for establishing and
maintaining internal controls, (B) have designed such internal controls to
ensure that material information relating to the Company and its
consolidated subsidiaries is made known to such officers by others within
those entities, particularly during the period in which the periodic
reports are being prepared and (C) have evaluated the effectiveness of the
Company's internal controls as of a date within 90 days prior to the date
of each Report; and
(v) such officers have disclosed to the Company's auditors and the
audit committee of the board of directors (or persons fulfilling the
equivalent function) (A) all significant deficiencies in the design or
operation of internal controls which could adversely affect the Company's
ability to record, process, summarize, and report financial data and have
identified for the Company's auditors any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal controls.
(d) The Underwriter shall have received on the Closing Date an opinion of
Xxxxxx X. Xxxxxxx, Esq., general counsel of the Company, dated the Closing Date,
to the effect that:
(i) the Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of South Dakota,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the
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Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification; and
all of the issued and outstanding capital stock of the Company has been
duly authorized and validly issued and is fully paid and nonassessable;
(ii) each subsidiary of the Company set forth on Schedule A hereto
(each, a "Subsidiary") has been duly incorporated or ---------- organized,
as the case may be, and is an existing corporation, limited partnership,
general partnership or limited liability company in good standing under the
laws of the jurisdiction of its incorporation or organization, as the case
may be, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and
each Subsidiary of the Company is duly qualified to do business as a
foreign corporation, limited partnership, general partnership or limited
liability company, as the case may be, in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect;
(iii) the Indenture has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability;
(iv) the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriter in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles
of general applicability;
(v) the Company has full corporate power and authority to authorize,
issue and sell the Securities as contemplated by this Agreement;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) except as disclosed in the Prospectus, there are no contracts,
agreements or understandings known to such counsel between the Company and
any person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
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registered pursuant to any other registration statement filed by the
Company under the Securities Act;
(viii) to such counsel's knowledge, the Company and each of its
subsidiaries possess adequate certificates, authorities, licenses or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business as now operated by them as described in the Prospectus
and such counsel is not aware of the receipt of any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit that, if determined adversely to the Company
or any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect;
(ix) no consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required under South Dakota
law, PUHCA or the Federal Power Act, as amended ("FPA"), for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Securities by the Company,
except such as have been obtained and such as may be required under state
securities laws;
(x) the execution, delivery and performance of this Agreement, the
Indenture and the Securities and the issuance and sale of the Securities
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, PUHCA or FPA, any rule, regulation or,
to such counsel's knowledge, order of any governmental agency or body
relating to PUHCA or FPA or any court having jurisdiction over the Company
or any subsidiary of the Company or any of their properties in a proceeding
relating to PUHCA or FPA;
(xi) the descriptions under the headings "Risk Factors" and "Black
Hills Power, Inc." in the Prospectus of statutes, legal and governmental
proceedings and contracts and other documents are accurate in all material
respects and fairly present the information required to be shown;
(xii) to such counsel's knowledge, except as disclosed in the
Prospectus, the Company and each subsidiary of the Company (i) is in
compliance with any and all applicable Environmental Laws, (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not individually or in the aggregate have a Material Adverse Effect;
and
(xiii) the Company is a subsidiary of a public utility holding company
that is exempt from regulation under PUHCA (except for Sections 9(a)(2) and
10 thereof) pursuant to Section 3(a) of PUHCA.
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In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the State of South Dakota, PUHCA and
FPA. Such opinion shall be rendered to the Underwriter at the request of the
Company and shall so state therein.
(e) The Underwriter shall have received on the Closing Date an opinion of
Xxxxxx & Xxxxxxx, P.C., special counsel for the Company, dated the Closing Date,
to the effect that:
(i) the Indenture has been duly qualified under the Trust Indenture
Act;
(ii) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended;
(iii) no consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Securities by the Company,
except such as have been obtained and made under the Securities Act and the
Trust Indenture Act and such as may be required under state securities
laws;
(iv) the execution, delivery and performance of this Agreement, the
Indenture and the Securities and the issuance and sale of the Securities
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (A) any statute, any rule, regulation
or, to such counsel's knowledge, order of any governmental agency or body
or any court having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, (B) to such counsel's knowledge, any
agreement or instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
(C) the charter or by-laws of the Company, except in the case of clauses
(A) and (B) for such breaches, violations or defaults that would not
individually or in the aggregate have a Material Adverse Effect;
(v) the Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion (based
solely upon a telephonic confirmation from a representative of the
Commission), the additional Registration Statement (if any) filed pursuant
to Rule 462(b) under the Securities Act was filed and became effective
under the Act as of the date and time (if determinable) specified in such
opinion, the Prospectus either was filed with the Commission pursuant to
the subparagraph of Rule 424(b) specified in such opinion on the date
specified therein or was included in the Registration Statement, and, to
the knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, and the Registration Statement and
the Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the
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Securities Act and the applicable rules and regulations of the Commission
thereunder; and
(vi) the descriptions (A) under the headings "Description of the Bonds
and Mortgage" and "Underwriting" in the Prospectus and (B) in the
Registration Statement in Item 15, in each case, of statutes, legal and
governmental proceedings and contracts and other documents are accurate in
all material respects and fairly present the information required to be
shown; and such counsel do not know of any legal or governmental
proceedings required to be described in the Registration Statement or the
Prospectus which are not described as required or of any contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Prospectus or that part
of the Registration Statement that constitutes the Form T-1 heretofore
referred to.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company, and
representatives of the Underwriter at which the contents of the Registration
Statement and Prospectus were discussed, and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus (except and to the extent stated in subparagraph (vi) of this Section
5(e)), on the basis of the foregoing, nothing has come to the attention of such
counsel that cause them to believe that any part of the Registration Statement
or any amendment thereto, as of its effective date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that such counsel need
express no opinion as to the financial statements or other financial data
contained in the Registration Statement or the Prospectus or that part of the
Registration Statement that constitutes the Form T-1 heretofore referred to.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the federal laws of the United States of America
(other than PUHCA and FPA) and the laws of the State of Oklahoma. Such opinion
shall be rendered to the Underwriter at the request of the Company and shall so
state therein.
(f) The Underwriter shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriter, dated the
Closing Date, in form and substance satisfactory to the Underwriter.
(g) The Underwriter shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Underwriter, from Deloitte &
Touche LLP, independent public accountants, containing statements and
information of the type ordinarily included in
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accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriter herein contained, the Company covenants with the Underwriter as
follows:
(a) To furnish to you, without charge, two signed copies of the
Registration Statement (including exhibits thereto) and, during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object.
(c) If, during such period after the first date of the public offering of
the Securities as in the opinion of counsel for the Underwriter the Prospectus
is required by law to be delivered in connection with sales by the Underwriter
or a dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the Underwriter,
it is necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriter and to the dealers (whose names and addresses you
will furnish to the Company) to which Securities may have been sold by you and
to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to a general consent to service of process in any such jurisdiction.
(e) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement covering the twelve-month period
ending September 30, 2003 that satisfies the provisions of Section 11(a) of the
Securities Act and the applicable rules and regulations of the Commission
thereunder.
(f) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company or warrants to purchase debt
securities of the Company substantially similar to the Securities (other than
(i) the Securities and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Underwriter.
(g) To pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and supplements
thereto; (ii) the preparation, issuance and
12
delivery of the Securities; (iii) the fees and disbursements of the Company's
counsel and accountants, the Underwriter's counsel and of the Trustee and its
counsel; (iv) the qualification of the Securities under state securities or Blue
Sky laws in accordance with the provisions of Section 6(d), including filing
fees and the fees and disbursements of counsel for the Underwriter in connection
therewith and in connection with the preparation of any Blue Sky or Legal
Investment Memoranda; (v) the printing and delivery to the Underwriter in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of each preliminary prospectus and the Prospectus and any
amendments or supplements thereto; (vi) the printing and delivery to the
Underwriter of copies of any Blue Sky or Legal Investment Memoranda; (vii) any
fees charged by rating agencies for the rating of the Securities; (viii) the
filing fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc. made in connection with the
offering of the Securities; and (ix) any expenses incurred by the Company in
connection with a "road show" presentation to potential investors.
7. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by the Underwriter
or any such controlling person in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use
therein, provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of the Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling the Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of the Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or liabilities,
unless such failure is the result of noncompliance by the Company with section
7(a) hereof.
(b) The Underwriter agrees to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to the Underwriter, but only with reference
to information relating to the Underwriter furnished to the
13
Company in writing by the Underwriter expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either paragraph (a) or (b) of this Section 7, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Underwriter, in the case of parties indemnified
pursuant to paragraph (a) above and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other hand from the offering of the Securities or (ii) if the
14
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriter on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter on
the other hand in connection with the offering of the Securities shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriter, in
each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Securities. The relative fault of the
Company on the one hand and the Underwriter on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The Company and the Underwriter agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriter shall not 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 that the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of any termination of this Agreement, any investigation made by or on
behalf of the Underwriter or any person controlling the Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and acceptance of and payment for any of the Securities.
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, trading of any securities of
the Company
15
shall have been suspended on any exchange or in any over-the-counter market, a
general moratorium on commercial banking activities in New York or in Chicago
shall have been declared by either Federal, New York or Illinois State
authorities or there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and, in any such case, such event,
singly or together with any other such event, makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus. Notice of such cancellation shall be given to
the Company by telecopy or telephone but shall be subsequently confirmed by
letter.
9. Effectiveness. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Underwriter because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Underwriter for all out-of-pocket expenses (including
the fees and disbursements of its counsel) reasonably incurred by the
Underwriter in connection with this Agreement or the offering contemplated
hereunder.
Any notice under this Section 9 may be made by telecopy or telephone but
shall be subsequently confirmed by letter.
10. Notices. Except as otherwise provided in Sections 8 and 9 hereof,
notice given pursuant to any of the provisions of this Agreement shall be in
writing and shall be delivered (a) if to the Company, at the office of the
Company at 000 Xxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxxx 00000, Attention: Xxxxxx
X. Xxxxxxx, Esq. (fax: 000-000-0000), with a copy to Xxxxxx & Xxxxxxx, P.C.,
0000 Xxxxx Xxxxx Tower, 00 Xxxx 0xx Xxxxxx, Xxxxx, Xxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxxx, Esq. (fax: 000-000-0000) or (b) if to the Underwriter, at
the offices of ABN AMRO Incorporated, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Legal Department (fax: 000-000-0000), with a copy to Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxxx, Esq. (fax: 000-000-0000), or in any case to such
other address as the person to be notified may have requested in writing.
11. Successors. The Agreement is made solely for the benefit of the
Underwriter, the Company, their directors and officers and other controlling
persons referred to in Section 7 hereof, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser from the Underwriter of any of the Securities in
his status as such purchaser.
12. Partial Unenforceability. In any section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
section, paragraph or provision hereof.
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13. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
BLACK HILLS POWER, INC.
By:_____________________________________
Name:
Title:
Accepted as of the date hereof:
ABN AMRO INCORPORATED
By:_______________________________
Name:
Title:
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SCHEDULE A
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Certain Subsidiaries
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19
