Exhibit 1(a)
The Montana Power Company
$150,000,000
Medium-Term Notes, Series B
Distribution Agreement
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______________, 1996
[Agents]
Ladies and Gentlemen:
The Montana Power Company, a Montana corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series
B (the "Securities") in an aggregate amount up to $150,000,000. The
Securities are to be issued from time to time under the Company's
Indenture, dated as of December 1, 1989, to Citibank, N.A., as Trustee (the
"Trustee") (the "Indenture"). The Securities shall have the maturities,
interest rates, if any, redemption provisions and other terms set forth in
the Prospectus referred to in Section 1(b), as it may be amended or
supplemented from time to time. The Securities will be issued, and the
terms thereof established, from time to time, by the Company in accordance
with the Indenture and, to the extent consistent therewith, the procedures
referred to below.
The Company represents, warrants, covenants and agrees with each
of you (individually, an "Agent", and collectively, the "Agents") and each
Agent, severally and not jointly, covenants and agrees with the Company as
follows:
1. Representations and Warranties of the Company. The Company
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represents and warrants to each Agent that:
(a) The Company and each of its principal subsidiaries
(currently, Entech, Inc., Western Energy Company, Northwestern
Resources Company, North American Resources Company and Continental
Energy Services, Inc.) (the "Subsidiaries") have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the respective jurisdictions of their incorporation
with full corporate power and authority to own and operate their
properties and to conduct the businesses in which they are now
engaged, as described in the Prospectus; the Company and its
Subsidiaries are duly qualified to do business as foreign corporations
and are in good standing in all other jurisdictions in the United
States and in Canada in which such qualification is required; and all
of the outstanding shares of capital stock of each Subsidiary are
owned beneficially by the Company, subject to no mortgage, pledge,
lien, charge or other encumbrance.
(b) A registration statement on Form S-3 (Registration No. 333-
) with respect to the Securities, including a prospectus, has
been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, has been filed
with the Commission under the Act and has become effective, the
Indenture has been qualified under the Trust Indenture Act, and, to
the knowledge of the Company, no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. Copies of said registration statement have heretofore
been delivered to each Agent. Such registration statement, including
all exhibits thereto, but excluding Form T-1, as amended at the time
it became effective, is hereinafter called the "Registration
Statement" (any preliminary prospectus included in such registration
statement being hereinafter called the "Preliminary Prospectus"); the
prospectus (including each prospectus supplement) relating to the
Securities, in the form in which it most recently has been filed with
the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents filed by the
Company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and incorporated therein by reference (the
"Incorporated Documents") as of the date of such Registration
Statement, Preliminary Prospectus or Prospectus; any reference to any
amendment or supplement to any Preliminary Prospectus or Prospectus,
including any supplement to the Prospectus that sets forth only the
terms of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include the Incorporated
Documents as of the date of such amendment or supplement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to and include the Prospectus as then amended or supplemented
(including the applicable Pricing Supplement) in relation to a
particular issue of Securities, in the form filed with the Commission
pursuant to Rule 424(b) under the Act, including any Incorporated
Documents as of the date of such amendment or supplement.
(c) The Incorporated Documents, when filed with the Commission
or, if later, when they became effective, conformed in all material
respects with the requirements of the Exchange Act, and the applicable
rules and regulations of the Commission thereunder; none of such
Incorporated Documents when so filed or when they became effective, as
the case may be, included 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, in the light of the
circumstances under which they were made, not misleading; any future
Incorporated Documents, or any amendment or supplement thereto, when
filed with the Commission or, if later, when effective, will conform
in all material respects with the applicable requirements of the
Exchange Act, and the rules and regulations of the Commission
thereunder and when such Incorporated Documents are filed or become
effective, as the case may be, 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, in the light of
the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
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warranties as to information contained in or omitted from the
Prospectus as amended or supplemented in reliance upon and in
conformity with information furnished in writing to the Company by any
Agent specifically for use in the preparation thereof.
(d) The Registration Statement when it became effective
conformed, and the Prospectus on the date hereof conforms, and any
amendment or supplement thereto will conform, in all material
respects, with the provisions of the Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder; and the
Registration Statement when it became effective and at the time of
each amendment thereof, if any, did not and, on the date hereof, does
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; and, the Prospectus does not, and
any amendment or supplement to the Prospectus, as of its date, 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, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes
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no representations or warranties as to information contained in or
omitted from any such document in reliance upon and in conformity with
information furnished in writing to the Company by any Agent
specifically for use in the preparation thereof.
(e) Subsequent to the respective dates as of which information
is given in the Registration Statement, except as contemplated in the
Prospectus as amended or supplemented, (i) neither the Company nor any
of its Subsidiaries has incurred any material liabilities or obliga-
tions, direct or contingent, or entered into any material transactions
not in the ordinary course of business, (ii) there has not been any
material change in the capital stock or long-term debt of the Company
or any of its Subsidiaries, or any material adverse change in the
condition (financial or other) of the Company and its Subsidiaries,
(iii) no material loss or damage (whether or not insured) to the
property of the Company or any of its Subsidiaries has been sustained,
and (iv) no material legal or governmental proceeding, domestic or
foreign, affecting the Company or any of its Subsidiaries or the
transactions contemplated by this Agreement, has been instituted or,
to the knowledge of the Company, threatened. For purposes of
determining materiality under this subparagraph (e), the Company and
its Subsidiaries shall be considered as one enterprise.
(f) Price Waterhouse LLP, which have certified the financial
statements filed with the Commission as a part of the Registration
Statement, are independent public accountants as required by the Act.
(g) The Company has filed with the Public Service Commission of
Montana an application (the "Application") seeking, among other
things, an appropriate order or orders authorizing the issuance from
time to time of the Securities; no other authorization, approval,
consent, registration or qualification or other order of any state or
Federal governmental authority or agency is required for the valid
authorization, issuance or sale of the Securities, except such as have
been obtained under the Act and the Trust Indenture Act or as may be
required under state securities laws in connection with the
solicitation by such Agent of offers to purchase Securities from the
Company and with purchases of Securities by such Agent as principal,
as the case may be, in each case in the manner contemplated hereby.
(h) The Securities have been duly and validly authorized and,
when duly and validly executed, authenticated and delivered as
provided in the Indenture and delivered pursuant to this Agreement and
any Terms Agreement (as hereinafter defined), will constitute legal,
binding and valid obligations of the Company entitled to the benefits
provided by the Indenture, and will conform to the description thereof
contained in the Prospectus as amended or supplemented with respect to
such issuance. The Indenture has been duly authorized and executed by
the Company and is a valid and legally binding instrument enforceable
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, reorganization or other similar laws affecting
creditors' rights generally.
(i) The issuance and sale of the Securities and the performance
of this Agreement and any Terms Agreement and the consummation of the
transactions contemplated herein and therein and compliance by the
Company with all of the terms and provisions of the Indenture will not
result in a breach of any of the terms or provisions of, or constitute
a default under, the Company's charter or by-laws, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is a party, or by which it or any of its property is bound, or
any order, rule or regulation applicable to the Company or any of its
Subsidiaries of any court or of any Federal or state regulatory body
or administrative agency or other governmental body having
jurisdiction over the Company or its property.
(j) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or to which any property
of the Company or any of its Subsidiaries is subject, which, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries as a whole, and, to the
best of the Company's knowledge, no such proceedings are threatened.
2. Obligations of the Agents and the Company.
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(a) Subject to the terms and conditions hereof and to the
reservation by the Company of the right to sell Securities directly on
its own behalf, the Company hereby appoints each Agent as an agent of
the Company for the purpose of soliciting and receiving offers to
purchase Securities from the Company.
(b) On the basis of the representations and warranties herein,
and subject to the terms and conditions hereof, each of the Agents, as
agent of the Company, severally and not jointly, agrees to use its
reasonable efforts to solicit and receive offers to purchase
particular issues of the Securities from the Company upon the terms
and conditions set forth in the Prospectus as amended or supplemented
with respect thereto. The Company shall not, without the consent of
each Agent, which consent shall not unreasonably be withheld, solicit
or accept offers to purchase, or sell, any debt securities (other than
the Company's Secured Medium-Term Notes) with a maturity, at the time
of original issuance, of from nine months to 40 years, except (i)
pursuant to this Agreement, (ii) pursuant to a private placement not
constituting a public offering under the Act, or (iii) in connection
with a firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous offering. However,
the Company, subject to Section 5(f) hereof, reserves the right to
sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale not
resulting from a solicitation made by an Agent, no commission will be
payable with respect to such sale.
(c) Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment therefor, unless an Agent and the Company shall otherwise
agree, shall be as set forth in the Administrative Procedure attached
hereto as Annex I as it may be amended from time to time by written
Agreement between the Agents and the Company (the Administrative
Procedure"). The provisions of the Administrative Procedure shall
apply to all transactions contemplated hereunder other than those made
pursuant to a Terms Agreement. Each Agent and the Company shall
perform the respective duties and obligations specifically provided to
be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative
Procedure as from time to time in effect.
(d) The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities.
As soon as practicable, but in any event not later than one business
day in New York City, after receipt of notice from the Company, the
Agents will suspend solicitation of offers to purchase Securities from
the Company until such time as the Company has advised the Agents that
such solicitation may be resumed.
(e) The Company agrees to pay each Agent a commission, at the
time of settlement (each a "Settlement Date") of any sale of a
Security by the Company as a result of a solicitation made by such
Agent, in an amount equal to the following applicable percentage of
the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold)
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From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
Over 30 years as negotiated
3. Sales to Agents as Principal. Each sale of Securities to an
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Agent as principal shall be made in accordance with the terms of this
Agreement and (unless the Company and such Agent shall otherwise agree) a
separate agreement (each a "Terms Agreement") which will provide for the
sale of such Securities to, and the purchase thereof by, such Agent, as
principal. Each Terms Agreement will take the form of either (i) a written
agreement between such Agent and the Company, which may be substantially in
the form of Annex II hereto, or (ii) an oral agreement between such Agent
and the Company confirmed in writing by such Agent to the Company. A Terms
Agreement may also specify certain provisions relating to the reoffering of
such Securities by such Agent. Each Terms Agreement shall specify the
principal amount of Securities to be purchased by an Agent pursuant
thereto, the price to be paid to the Company for such Securities, any
provisions relating to the rights of, and defaults by, any underwriters
acting together with such Agent in the reoffering of the Securities, the
time and date of delivery of and payment for such Securities (each, a "Time
of Delivery") and place of delivery of such Securities, and any
requirements for opinions of counsel, accountants' letters and officers'
certificates pursuant to Section 5 hereof. The commitment of an Agent to
purchase Securities as principal, whether pursuant to a Terms Agreement or
otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and, to the
extent not otherwise agreed upon in a Terms Agreement or otherwise, shall
be subject to the terms and conditions herein set forth; provided, however,
that the commitment of an Agent to purchase Securities as principal
pursuant to a separate underwriting agreement shall be entirely governed by
the terms and conditions of that underwriting agreement and shall not be
governed by any of the provisions of this Agreement. Unless otherwise
specified in a Terms Agreement, if an Agent is purchasing Securities as
principal, such Agent may resell such Securities to other dealers. Any
such sales may be at a discount, which shall not exceed the amount set
forth in the Prospectus Supplement relating to such Securities.
4. Commencement. At 11:00 a.m., New York City time, on the
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date of this Agreement or at such later date and time as may be agreed upon
between the Agents and the Company not later than the day prior to the
earlier of the day on which the solicitation of offers to purchase
Securities is to commence or on which any Terms Agreement shall be executed
(such time and date being referred to herein as the "Commencement Date"),
the Agents shall be furnished at the offices of Xxxx & Priest LLP, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx:
(a) An opinion of Milbank, Tweed, Xxxxxx & XxXxxx, counsel to
the Agents, dated the Commencement Date, with respect to such matters
as the Agents may reasonably request, which opinion may rely, as to
all matters governed by Montana law, upon the opinion of Xxxxxxx X.
Xxxxxxxxx, Esq., referred to in Section 4(b) hereof;
(b) An opinion of Xxxxxxx X. Xxxxxxxxx, Esq., General Counsel
for the Company, dated the Commencement Date, in form and substance
reasonably satisfactory to the Agents, to the effect set forth in
Annex III, which opinion may rely as to all matters governed by New
York law upon the opinion of Xxxx & Priest LLP referred to in Section
4(c) hereof;
(c) An opinion of Xxxx & Priest LLP, dated the Commencement
Date, in form and substance reasonably satisfactory to the Agents, to
the effect set forth in Annex IV, which opinion may rely, as to all
matters governed by Montana law, upon the opinion of Xxxxxxx X.
Xxxxxxxxx, Esq., referred to in Section 4(b) hereof;
(d) A letter from the Company's independent accountants, dated
the Commencement Date, in form and substance reasonably satisfactory
to the Agents, to the effect set forth in Annex V hereto; and
(e) A certificate of the President or any Vice President of the
Company, dated the Commencement Date, in form reasonably satisfactory
to the Agents, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date,
as to the performance by the Company in all material respects of all
of its obligations hereunder to be performed at or prior to the
Commencement Date, as to the matters set forth in Sections 1(e) and
7(a) hereof and as to such other matters as the Agents may reasonably
request.
(f) Such further information, certificates and documents as the
Agents or counsel to the Agents may reasonably request.
5. Covenants of the Company. The Company covenants and agrees
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with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
any Agent shall reasonably disapprove by notice to the Company
promptly after reasonable notice thereof or (B) after the date of any
Terms Agreement or other agreement by an Agent to purchase Securities
as principal and prior to the related Time of Delivery which any Agent
party to such Terms Agreement or such other agreement shall reasonably
disapprove by notice to the Company promptly after reasonable notice
thereof; (ii) to prepare, with respect to each particular issue of
Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form reasonably satisfactory to such Agent and to file such Pricing
Supplement in accordance with Rule 424(b) under the Act; (iii) to make
no amendment or supplement to the Registration Statement or
Prospectus, other than a Pricing Supplement, without affording each
Agent a reasonable opportunity for review thereof and comment thereon;
(iv) to timely file all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Securities, and during
such same period to advise such Agent, promptly after the Company
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus (other than any
Pricing Supplement that relates to Securities not purchased through or
by such Agent) has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or
Prospectus or for additional information; (v) to promptly make every
reasonable effort to comply with all requests of the Commission for
additional information; and (vi) in the event of the issuance of any
such stop order or of any such order preventing or suspending the use
of any such prospectus or suspending any such qualification, to make
every reasonable effort to obtain its withdrawal;
(b) From time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as may be approved by
the Company and to comply with such laws so as to permit the
continuance of sales and dealings therein for as long as may be
necessary to complete the distribution or sale of the Securities;
provided, however, that in connection therewith the Company shall not
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be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction, or to comply with
any other requirement reasonably deemed by the Company to be unduly
burdensome;
(c) To furnish such Agent with copies of the Registration
Statement, each amendment thereto, the Prospectus and each amendment
or supplement thereto, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Act, and
with copies of the documents incorporated by reference therein (other
than exhibits incorporated by reference in the Registration
Statement), each in such quantities as such Agent may reasonably
request from time to time; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities to or through an Agent pursuant to this Agreement and if at
such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is to be
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such Agent,
in its capacity as agent of the Company, to suspend solicitation of
offers to purchase Securities from the Company (and, if so notified,
such Agent shall cease such solicitations as soon as practicable, but
in any event not later than one business day in New York City later);
and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus, to so advise such Agent
promptly by telephone (confirmed in writing) and to prepare and cause
to be filed promptly with the Commission an amendment or supplement to
the Registration Statement or the Prospectus or to file any document
incorporated by reference in the Prospectus that will correct such
statement or omission or effect such compliance; provided that, (i)
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should such event relate solely to activities of any Agent, such Agent
shall assume the expense of preparing and furnishing any such
amendment or supplement; (ii) if, during such period, such Agent shall
continue to own Securities purchased from the Company as principal or
such Agent otherwise shall be required to deliver a prospectus in
respect of transactions in the Securities, the Company shall promptly
prepare and file with the Commission such an amendment or supplement;
and (iii) if such Agent shall be required to deliver a prospectus in
connection with sales of any Securities purchased by it as principal
at any time nine months or more after the effective date of the
Registration Statement and (A) there shall be, as a result of such
purchase, no Securities remaining to be sold under the Registration
Statement or (B) the Company, pursuant to Section 2(d) hereof, shall
have instructed the Agents to suspend, during such nine month period,
the solicitation of offers to purchase the Securities, such Agent
shall assume the expense of preparing and furnishing any such
amendment or supplement in connection with the sales of any Securities
purchased by such Agent as principal. For the purposes of this
Section 5(c), the Company shall be entitled to assume that a
Prospectus shall no longer be required to be delivered under the Act
from and after the date six months from the date of the purchase by an
Agent as principal of the particular issuance of Securities to which
it relates, unless it shall have received notice from such Agent to
the contrary;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
(i) the effective date of the Registration Statement, (ii) the
effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statement, an earning statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e) For the period ending five years from the date any
Securities are sold by the Company pursuant to an offer solicited by
such Agent under this Agreement, to furnish to such Agent copies of
all reports or other communications (financial or other) furnished to
stockholders, and deliver to such Agent (i) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act, (ii) copies of all registration statements
filed under the Act (other than those in respect of customer,
shareholder or employee plans), and (iii) such additional information
concerning the business and financial condition of the Company as such
Agent may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished
to its stockholders generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent
or other agreement with such Agent to purchase Securities as principal
and continuing to and including the earlier of (i) the termination of
the trading restrictions for the Securities purchased thereunder, as
notified to the Company by such Agent and (ii) the related Time of
Delivery, the Company will not, without the prior written consent of
such Agent, offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company in a public offering which both have a
maturity of from nine months to 40 years and are substantially similar
to the Securities;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder procured by such Agent, as agent, and each
execution and delivery by the Company of a Terms Agreement or other
agreement with such Agent shall be deemed to be an affirmation to such
Agent that the representations and warranties of the Company contained
in or made pursuant to this Agreement are true and correct as of the
date of such acceptance or of such Terms Agreement or other agreement,
as the case may be, as though made as of such date, and an undertaking
that such representations and warranties will be true and correct as
of the Settlement Date for the Securities relating to such acceptance
or as of the Time of Delivery relating to such sale, as the case may
be, as though made as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented relating to such
Securities);
(h) That (i) each time the Company's Annual Report on Form 10-K
shall be filed by it under the Exchange Act (unless waived by the
Agents), (ii) at such other times as reasonably may be requested by
the Agents, and (iii) each time the Company sells Securities to an
Agent as principal pursuant to a Terms Agreement or other agreement
with an Agent to purchase Securities as principal and such Terms
Agreement or other agreement specifies the delivery of an opinion or
opinions by Milbank, Tweed, Xxxxxx & XxXxxx, counsel to the Agents, or
such other counsel to the Agents reasonably satisfactory to the
Company, as a condition to the purchase of Securities pursuant to such
Terms Agreement or other agreement, the Company shall furnish to such
counsel such papers and information as they may reasonably request to
enable them to furnish to such Agent a letter dated the date of such
filing, request or Time of Delivery relating to such sale, as the case
may be, in form reasonably satisfactory to such Agent, to the effect
that such Agent may rely on the opinion of such counsel referred to in
Section 4(a) hereof, to the same extent as though it was dated the
date of such letter (except that the statements in such opinion shall
be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented to the date of such letter), or in lieu of
such a letter, an opinion of the same tenor as the opinion of such
counsel referred to in Section 4(a) hereof, but modified to relate to
the Registration Statement and the Prospectus as amended and
supplemented to such date;
(i) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement),
each time a document incorporated by reference in the Prospectus as
amended or supplemented shall be filed under the Act or Exchange Act
(unless waived by the Agents), and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement or
other agreement with an Agent to purchase Securities as principal and
such Terms Agreement or other agreement specifies the delivery of an
opinion, letter or certificate under this Section 5(i) as a condition
to the purchase of Securities pursuant to such Terms Agreement or
other agreement, the Company shall furnish or cause to be furnished to
such Agent:
(i) a letter from Xxxxxxx X. Xxxxxxxxx, Esq., General Counsel
for the Company, or his successor, dated the date of such
amendment, supplement, incorporation or Time of Delivery
relating to such sale, as the case may be, in form
reasonably satisfactory to such Agent, to the effect that
such Agent may rely on the opinion of such counsel referred
to in Section 4(b) hereof to the same extent as though it
were dated the date of such letter (except that the
statements in such opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the date of such letter in accordance with
Rule 412 under the Act) or, in lieu of such a letter, an
opinion of the same tenor as the opinion of such counsel
referred to in Section 4(b) hereof, but modified to relate
to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(ii) a letter of Xxxx & Priest LLP, New York, New York, counsel
for the Company, or other counsel for the Company
reasonably satisfactory to such Agent, dated the date of
such amendment, supplement, incorporation or Time of
Delivery relating to such sale, as the case may be, in form
reasonably satisfactory to such Agent, to the effect that
such Agent may rely on the opinion of such counsel referred
to in Section 4(c) hereof to the same extent as though it
were dated the date of such letter (except that the
statements in such opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to the date of such letter in accordance with
Rule 412 under the Act) or, in lieu of such letter, an
opinion of the same tenor as the opinion of such counsel
referred to in Section 4(c) hereof, but modified to relate
to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(iii) a letter of Price Waterhouse LLP or other independent
accountants for the Company reasonably satisfactory to the
Agent, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as
the case may be, in form reasonably satisfactory to such
Agent, to the effect that such Agent may rely upon the
letter of such accountants referred to in Section 4(d)
hereof to the same extent as though it were dated the date
of such subsequent letter (except the statements in such
former letter shall be deemed to relate to the financial
statements included or incorporated in the Registration
Statement and Prospectus as amended and supplemented to the
date of such latter letter), or, in lieu of such latter
letter, a letter of the same tenor as the letter referred
to in Section 4(d) hereof, but modified to relate to the
Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes
as may be necessary to reflect changes in the financial
statements and other information derived from the
accounting records of the Company, to the extent such
financial statements and other information are available as
of a date not more than five business days prior to the
date of such letter;
(iv) a certificate executed by the President or any Vice
President of the Company, dated the date of such
supplement, amendment, incorporation or Time of Delivery
relating to such sale, as the case may be, in such form as
shall be reasonably satisfactory to such Agent, to the
effect that the statements contained in the certificate
referred to in Section 4(e) hereof are true and correct at
such date as though made as of such date (except that such
statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to
such date) or, in lieu of such certificate, a certificate
of the same tenor as the certificate referred to in Section
4(e) hereof, but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to
such date; and
(j) To offer to any person who has agreed to purchase
Securities as the result of an offer to purchase solicited by such
Agent the right to refuse to purchase and pay for such Securities if,
at the Settlement Date for such Securities, any condition set forth in
Section 6 hereof shall not have been satisfied (it being understood
that the judgment of such person with respect to the impracticability
or inadvisability of such purchase of Securities shall be substituted,
for purposes of this Section 5(j), for the respective judgments of an
Agent with respect thereto); and
(k) To pay or cause to be paid the following: (i) the fees and
expenses of the Company's counsel and accountants in connection with
the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus, the Prospectus
and any Pricing Supplements and all other amendments and supplements
thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the fees and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and the
transactions contemplated hereunder; (iii) the cost of preparing this
Agreement, any Terms Agreement, and any other documents approved by
the Company in connection with the offering, purchase, sale and
delivery of the Securities; (iv) the fees and expenses of counsel for
the Agents in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section
5(b) hereof and the preparation of any blue sky and legal investment
memoranda; (v) any fees charged by securities rating services for
rating the Securities; (vi) any filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vii) the cost of preparing the
Securities; (viii) the fees and expenses of the Trustees and any agent
of any Trustee and any transfer or paying agent of the Company and the
fees and disbursements of counsel for the Trustees or any such agent
in connection with the Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities so long as such advertising
expenses have been approved by the Company; (x) the out-of-pocket
expenses of each Agent in connection with such Agent's services
hereunder in an amount not to exceed $7,500; and (xi) all other costs
and expenses incident to the performance of the Company's obligations
hereunder which are not otherwise specifically provided for in this
Section. Except as provided in Sections 9 and 10 hereof, each Agent
shall pay all other expenses it incurs, including any expenses that
may be incurred by it or for its account pursuant to the proviso of
Section 5(c) hereof.
6. Conditions to Agents' Obligations. The obligation of
---------------------------------
an Agent, as agent of the Company, at any time (each a "Solicitation
Time") to solicit offers to purchase the Securities and the obligation
of an Agent to purchase Securities as principal, pursuant to any Terms
Agreement or otherwise, in each case, shall be subject, in such
Agent's discretion, to the conditions that: (i) all of the
representations and warranties of the Company herein (and, in the case
of an obligation of an Agent under a Terms Agreement or other
agreement with an Agent to purchase Securities as principal, in or
incorporated in such agreement by reference) were true and correct (A)
on the Commencement Date; (B) each time that the Registration
Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement), (C) each time a document incorporated
by reference in the Prospectus as amended or supplemented shall be
filed by the Company under the Act or Exchange Act, and (D) on such
Solicitation Time or Time of Delivery, as the case may be, (ii) prior
to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder
theretofore to be performed, (iii) all requests for additional
information on the part of the Commission shall have been complied
with to the reasonable satisfaction of such Agent, and (iv) there
shall not have occurred: (A) any general suspension of trading in
securities on the New York Stock Exchange or the establishment by the
New York Stock Exchange or by the Commission or by any Federal or
State agency or by the decision of any court, any limitation on prices
for such trading or any restrictions on the distribution of
securities, all to such a degree as, in such Agent's judgment, would
restrict materially a free market for the Securities; (B) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; (C) an outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event, in the judgment of such Agent, makes it
impracticable or inadvisable to proceed with the solicitation of
offers to purchase Securities or the purchase of Securities from the
Company as principal on the terms and in the manner contemplated by
this Agreement and, if applicable, any Terms Agreement or other such
agreement; (D) a substantial loss, on the part of the Company or any
Subsidiary, by fire, explosion, flood, accident or other calamity
which renders it inadvisable to consummate the sale of the Securities
(regardless of whether or not such loss shall have been insured); or
(E) either (i) a downgrading shall have occurred in the rating
accorded the Company's long-term debt by Xxxxx'x Investors Service,
Inc. or Standard & Poor's Corporation or (ii) either of such
organizations shall have publicly announced that it has under
surveillance or review with a possibility of downgrading its rating of
any of the Company's long-term debt.
7. Conditions to Company's Obligations.
-----------------------------------
(a) The obligation of the Company to sell and deliver
Securities pursuant to a Terms Agreement or otherwise, in each case,
shall be subject to the conditions that, at the Time of Delivery, (i)
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall be pending before, or to the knowledge of the Company
contemplated by, the Commission and (ii) the order of the Public
Service Commission of the State of Montana with respect to the
Securities (the "Order") shall be in full force and effect and shall
permit the issuance and sale of the Securities on the terms herein set
forth or contemplated and shall contain no provision reasonably
unacceptable to the Company (it being understood that the Order in
effect on the date of this Agreement contains no such unacceptable
provision).
(b) If any of the conditions specified in Section 7(a) hereof
shall not have been fulfilled, the Terms Agreement or such other
agreement by an Agent to purchase Securities as principal may be
terminated by the Company and neither the Company nor any Agent shall
have any liability to the other, except for the obligation of the
Company to pay certain expenses to the extent provided for in Section
5(k) hereof and except for any liability under Section 8 hereof.
8. Indemnification.
---------------
(a) The Company will indemnify and hold harmless each Agent and
each person, if any, who controls such Agent within the meaning of the
Act against any losses, claims, damages or liabilities, joint or
several, to which such Agent or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or the Prospectus as amended or
supplemented, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse such Agent and each such controlling
person for any legal or other expenses reasonably incurred by such
Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability (or action in
respect thereof) as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability (or action in respect
thereof) arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, Prospectus or the
Prospectus as amended or supplemented with respect to the Securities
in reliance upon and in conformity with written information furnished
to the Company by, or on behalf of any Agent specifically for use in
the preparation thereof; and provided further, that the indemnity
agreement contained in this Section 8(a) shall not inure to the
benefit of any Agent (or of any person controlling such Agent) on
account of any losses, claims, damages or liabilities (or actions in
respect thereof) arising from the sale of Securities by or through
such Agent to any person if a copy of the Prospectus as it then may be
amended or supplemented (without the Incorporated Documents, unless
previously requested) shall not have been sent or given to such person
with or prior to the written confirmation of the sale involved to the
extent that the Prospectus as so amended or supplemented, if so sent
or delivered, would have cured the defect in the Prospectus giving
rise to such losses, claims, damages or liabilities and the Prospectus
as so amended or supplemented was made available to such Agent prior
to the sale of the Notes.
(b) Each Agent will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims,
damages or liabilities to which the Company or any such director,
officer or controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or the Prospectus as amended or supplemented with respect
to the Securities or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Prospectus as amended or
supplemented, in reliance upon and in conformity with written
information furnished to the Company by, or on behalf of such Agent
specifically for use in the preparation thereof; and will reimburse
the Company for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action.
(c) Promptly after receipt by an indemnified party under
Section 8(a) or Section 8(b) of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is
to be made against the indemnifying party under such Section, notify
the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under such Section. In case any such action is brought against
any indemnified party, and such indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and, to the extent that such
indemnifying party may wish, jointly with any other indemnifying
party, similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, without the
consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided,
however, that in no event shall such indemnifying party be obligated
to retain more than one counsel, in addition to counsel for such
indemnifying party, to represent any or all indemnified parties. 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 shall 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.
(d) If the indemnification provided for in either Section 8(a)
or Section 8(b) is unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the
Company on the one hand and each Agent on the other from the offering
of the Securities to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence should not be permitted
by applicable law, or if the indemnified party failed to give the
notice required under Section 8(c) hereof, then each indemnifying
party shall contribute to such amount paid or payable by such
indemnified party, in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company
on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and each Agent on the other shall be
deemed to be in the same proportion as the total net proceeds from the
sale of the Securities (before deducting expenses) received by the
Company bear to the total commissions or discounts received by such
Agent in respect thereof. The relative fault 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 required to be stated therein or necessary in
order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any Agent on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and each Agent agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were
determined by per capita allocation (even if all Agents were treated
as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred
to above in this Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
Section 8(d) shall be deemed to include 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 8(d), no Agent shall be required to
contribute any amount in excess of the amount by which the total price
at which the Securities purchased by or through it or sold exceeds the
amount of any damages which such Agent 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Agents' obligations in this Section 8(d) to
contribute are several in proportion to the respective purchases made
by or through it to which such loss, claim, damage or liability (or
action in respect thereof) relates and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person,
if any, who controls any Agent within the meaning of the Act; and the
obligations of each Agent under this Section 8 shall be in addition to
any liability which such Agent may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company,
to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within
the meaning of the Act.
9. Nonperformance. Each Agent, in soliciting offers to
--------------
purchase Securities from the Company and in performing the other
obligations of such Agent hereunder (other than in respect of any purchase
by an Agent as principal pursuant to a Terms Agreement or otherwise), is
acting solely as agent for the Company and not as principal. Each Agent
will make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Securities from the Company was
solicited by such Agent and has been accepted by the Company, but such
Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default
on its obligation to deliver Securities to a purchaser whose offer it has
accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company
and (ii) notwithstanding such default, pay to the Agent that solicited such
offer any commission to which it would be entitled in connection with such
sale.
10. Survival of Agreement. The respective indemnities,
---------------------
agreements, representations, warranties and other statements by any Agent
and the Company set forth in or made pursuant to this Agreement shall
remain in full force and effect regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Agent or
any controlling person of any Agent or the Company, or any officer or
director or any controlling person of the Company, and shall survive each
delivery of and payment for any of the Securities.
11. Suspension or Termination. The provisions of this
-------------------------
Agreement relating to the solicitation of offers to purchase Securities
from the Company may be suspended or terminated at any time by the Company
as to any Agent or by any Agent as to such Agent upon the giving of written
notice of such suspension or termination to such Agent or the Company, as
the case may be. In the event of such suspension or termination with
respect to any Agent, this Agreement shall remain in full force and effect
with respect to (i) any Agent as to which such suspension or termination
has not occurred, (ii) the rights and obligations of any party which have
previously accrued or which relate to Securities which are already issued,
agreed to be issued or the subject of a pending offer at the time of such
suspension or termination and (iii) Sections 2(e), 5(d), (e) and (k), 8, 9
and 10 hereof.
12. Notices. Except as otherwise specifically provided herein
-------
or in the Administrative Procedure, all statements, requests, notices and
advices hereunder shall be in writing or by telephone, if promptly
confirmed in writing, and if to ________________, shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered
mail to ______________________________________, Facsimile Transmission No.
________________, Attention: _____________________________; if to
_________________________, shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to
_____________________________________, Attention:
_______________________________, Facsimile Transmission No.
________________________; and if to _________________________, shall be
sufficient in all respects when delivered or sent by facsimile transmission
or registered mail to ________________________________________, Facsimile
Transmission No. ____________________________, Attention:
_________________________; and if to the Company, shall be sufficient in
all respects when delivered or sent by facsimile transmission or registered
mail to 00 Xxxx Xxxxxxxx, Xxxxx, Xxxxxxx 00000, Facsimile Transmission No.
(000) 000-0000, Attention: Vice President and Chief Financial and
Information Officer, with copies to the General Counsel, Facsimile
Transmission No. 000-000-0000 and the Treasurer, Facsimile Transmission No.
000-000-0000.
13. Benefit of Agreement. This Agreement and any Terms
--------------------
Agreement shall be binding upon, and inure solely to the benefit of, each
Agent a party hereto and thereto and the Company, and to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of
the Company and any person who controls any Agent or the Company, and their
respective personal representatives, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement
or any Terms Agreement. No purchaser of any of the Securities through or
from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
14. Timing. Time shall be of the essence in this Agreement and
------
any Terms Agreement. As used herein, the term "business day" shall mean
any day when Banks in New York City are not authorized or obligated by law
or executive order to remain closed.
15. Governing Law. This Agreement and any Terms Agreement
-------------
shall be governed by and construed in accordance with the laws of the State
of New York.
16. Descriptive Headings. The descriptive headings of the
--------------------
several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
17. Execution in Counterparts. This Agreement and any Terms
-------------------------
Agreement may be executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall be an original,
but all of such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us four counterparts hereof, whereupon this letter and
the acceptance by each of you hereof shall constitute a binding agreement
between the Company and each of you in accordance with its terms.
Very truly yours,
THE MONTANA POWER COMPANY
By: ____________________________
Vice President and Chief
Financial and Information
Officer
Accepted in New York, New York,
as of the date hereof:
ANNEX I
The Montana Power Company
Medium-Term Notes, Series B
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined
in the Distribution Agreement, dated ___________, 1996 the ("Distribution
Agreement"), amongst The Montana Power Company (the "Company"), on the one
hand, and _____________________________________________________(each, an
"Agent" and, together, the "Agents"), on the other, to which this
Administrative Procedure is attached as Annex I. Defined terms used herein
and not defined herein shall have the meanings given such terms in the
Distribution Agreement or the Indenture. An Agent in relation to a purchase
of a Security by a purchaser solicited by such Agent is referred to herein
as the "Selling Agent" and, in relation to a purchase of a Security by such
Agent as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
The procedures to be followed with respect to the settlement of
sales of Securities directly by the Company to purchasers solicited by an
Agent, as agent, are set forth below. The terms and settlement details
related to a purchase of Securities by an Agent, as principal, from the
Company will be set forth in a Terms Agreement pursuant to the Distribution
Agreement, unless the Company and such Agent otherwise shall agree as
provided in Section 3 of the Distribution Agreement, in which case the
procedures to be followed in respect of the settlement of such sale will be
as set forth below.
The Company will advise each Agent in writing of those persons
with whom such Agent is to communicate regarding offers to purchase
Securities and the related settlement details.
Each Security will be issued only in fully registered form and
will be represented by either a global security (a "Global Security")
delivered to the Trustee, as agent for The Depository Trust Company (the
"Depository") or its nominee and recorded in the book-entry system
maintained by the Depository (a "Book-Entry Security") or a certificate
issued in definitive form (a "Certificated Security") delivered to an
Agent. An owner of a Book-Entry Security will not be entitled to receive a
certificate representing such a Security, except under limited
circumstances as provided in the Book-Entry Security.
Certificated Securities will be issued in accordance with the
Administrative Procedures set forth in Part I hereof, and Book-Entry
Securities will be issued in accordance with the Administrative Procedures
set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED SECURITIES
--------------------------------------------------------------
Posting Rates by Company:
------------------------
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by and the maturity of Securities
that may be sold as a result of the solicitation of offers by an Agent.
The Company may establish a fixed set of interest rates and maturities for
an offering period ("posting") and, if it should do so, will promptly
advise the Agents thereof. If the Company decides to change a posting, it
will promptly advise the Agents to suspend solicitation of offers until a
new posting has been established.
Acceptance of Offers by Company:
-------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other
than those rejected by such Agent. Each Agent, in its discretion
reasonably exercised, may reject any offer received by it in whole or in
part. Each Agent also may make offers to the Company to purchase
Securities as a Purchasing Agent. The Company, in its sole discretion, may
accept any offer to purchase Securities and may reject any such offer, in
whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Securities. If the Company accepts an offer to purchase
Securities, it will confirm such acceptance in writing to the Selling Agent
or Purchasing Agent, as the case may be.
Communication of Sale Information to Company by Selling Agent:
-------------------------------------------------------------
After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale Information") to
the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of Securities to be purchased;
(2) Issue Price ("Issue Price" shall mean (i) in the case of a sale
in which an Agent shall act as agent of the Company, the price to
the purchaser or (ii) in the case of a sale to an Agent as
principal, that Agent's reoffering price);
(3) Selling Agent's commission or, if applicable, Purchasing Agent's
discount (spread between the offering price and Agent's purchase
price);
(4) Net proceeds to the Company ((2) minus (3));
(5) Interest Rate, Interest Payment Dates and Initial Interest
Payment Date;
(6) Trade Date (i.e., the date of acceptance of an offer by the
Company) and Settlement Date (as hereinafter defined);
(7) Date of issue, if different from Settlement Date;
(8) Maturity date;
(9) If a redeemable Security, such of the following as are
applicable:
(i) Whether redeemable in whole or in part,
(ii) Initial Redemption Date,
(iii) Redemption Limitation Price,
(iv) Initial Redemption Price, and
(v) Reduction Percentage;
(10) The name of the Selling Agent or Purchasing Agent, as the case
may be;
(11) Name, address and taxpayer identification number of party to be
the registered owner;
(12) Denominations of certificates to be delivered at settlement;
(13) The name of the Company's bank and the account number for payment
of the purchase price.
(14) If a Security is repayable at the option of the holder thereof,
such of the following as are applicable:
(i) Repayment Date(s),
(ii) Repayment Price(s),
(iii) Election Period(s).
(15) Any other applicable terms.
Preparation of Pricing Supplement by Company:
--------------------------------------------
If the Company accepts an offer to purchase a Security, it will
prepare a Pricing Supplement. The Company will arrange to file the Pricing
Supplement with the Commission in accordance with Rule 424(b) under the Act
and will supply at least ten copies of such Pricing Supplement to the
Selling Agent or Purchasing Agent, as the case may be, not later than 5:00
p.m., New York City time, on the business day following the Trade Date, or,
if the Company and the purchaser should agree to settlement on the Trade
Date, not later than noon, New York City time, on such date. In addition,
the Company will make any filings with the Montana Public Service
Commission required by the Order.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
---------------------------------------------------------------------
The Selling Agent will deliver to the purchaser of a Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement)
relating to such Security prior to or together with the earlier of the
delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Security.
Record Date:
-----------
The Record Date with respect to each Interest Payment Date shall
be the 15th calendar day immediately preceding such Interest Payment Date,
whether or not such day is a business day.
Settlement Date:
---------------
All offers solicited by a Selling Agent or made by a Purchasing
Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which shall be the third business day after the Trade
Date, unless the Company and the purchaser shall agree to settle (a) on any
other business day after the Trade Date or (b) with respect to an offer
accepted by the Company prior to 10:00 a.m., New York City time, on the
Trade Date.
Instruction from Company to Trustee for Preparation of Securities:
-----------------------------------------------------------------
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such
Sale Information to the Trustee by means of facsimile transmission or by
such other means as may be agreed upon by the Company and the Trustee.
The Company will instruct the Trustee by means of facsimile
transmission or other acceptable written means to authenticate and deliver
the Securities no later than 2:15 p.m., New York City time, or as soon
thereafter as practicable, on the Settlement Date. Such instruction will
be given by the Company prior to 3:00 p.m., New York City time, on the
Trade Date, but in no event later than the business day prior to the
Settlement Date unless the Settlement Date is the Trade Date for the
Securities in which case such instruction will be given by the Company to
the Trustee by 10:00 a.m., New York City time on the Settlement Date or as
agreed to by the Trustee.
Preparation and Delivery of Securities by Trustee and Receipt of Payment
------------------------------------------------------------------------
Therefor:
--------
The Company will instruct the Trustee to:
(i) Prepare each Security and appropriate receipts that will
serve as the documentary control of the transaction.
(ii) In the case of a sale of Securities to a purchaser
solicited by an Agent, by 2:15 p.m., New York City time, on
the Settlement Date, deliver the Securities to the Selling
Agent, at the address listed below, for the benefit of the
purchaser of such Securities against delivery by the
Selling Agent of a receipt therefor. On the Settlement
Date, the Selling Agent will deliver payment for such
Securities in immediately available funds to the Company's
account at the bank designated on the Sales Information in
an amount equal to the Issue Price of the Securities less
the Selling Agent's commission; provided that the Selling
Agent reserves the right to withhold payment for which it
shall not have received funds from the purchaser. The
Company shall not use any proceeds advanced by a Selling
Agent to acquire securities.
(iii) In the case of a sale of Securities to a Purchasing Agent,
by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Securities to the Purchasing Agent, at the
address listed below, against delivery of payment therefor.
Payment for such Securities shall be made in immediately
available funds to the account of the Company as designated
in the Sales Information in an amount equal to the Issue
Price of the Securities less the Purchasing Agent's
discount.
Failure of Purchaser to Pay Selling Agent:
-----------------------------------------
If a purchaser shall fail to make payment to the Selling Agent
for any Security, the net proceeds to the Company which, theretofore, shall
have been paid by the Selling Agent to the Company, the Selling Agent will
promptly notify the Trustee and the Company of such failure in writing or
by facsimile transmission or by other acceptable written means. The
Selling Agent promptly will return such Security to the Trustee. Promptly
upon receipt of such Security by the Trustee, the Company will return to
the Selling Agent an amount equal to the amount previously paid to the
Company in respect of such Security. The Company will pay interest at the
then-prevailing broker loan rate to the Agent on the funds so paid to it
and returned during the period of one day or more in which such funds were
held by the Company.
The Trustee will cancel any Security in respect of which such a
failure shall occur, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy such Security.
Delivery of the Securities:
--------------------------
The Company shall instruct the Trustee that, unless otherwise
notified by either Agent, the Trustee shall deliver the Securities in
accordance with the procedures set forth above to the appropriate Agent at
the following address:
If to
If to
If to
If to
PART II: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
------------------------------------------------------------
In connection with the qualification of the Book-Entry Securities
for eligibility in the book-entry system maintained by the Depository, the
Trustee will perform the custodial, document control and administrative
functions described below, in accordance with its respective obligations
under a Letter of Representation from the Company and the Trustee to the
Depository, dated December __, 1996, and a Medium-Term Note Certificate
Agreement between the Trustee and the Depository, dated as of October 31,
1988 (the "Certificate Agreement") and its obligations as a participant in
the Depository, including the Depository's Same-Day Funds Settlement System
("SDFS").
Identification Numbers:
----------------------
The Company will arrange on or prior to the commencement of a
program for the offering of Book-Entry Securities, with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for
the reservation of a series of CUSIP numbers (including tranche numbers),
such series consisting of approximately 900 CUSIP numbers and relating to
Global Securities representing Book-Entry Securities. The Company will
obtain from the CUSIP Service Bureau a written list of such reserved CUSIP
numbers and will deliver such list to the Trustee and the Depository. The
Trustee will assign CUSIP numbers serially to Global Securities as
described under Settlement Procedure "B". The Depository will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has
assigned to Global Securities. At any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global Securities, the Trustee
shall so advise the Company and, if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment to Global Securities
representing BookEntry Securities. Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list of such additional CUSIP numbers
to the Trustee and the Depository.
Registration:
------------
Each Global Security will be registered in the name of CEDE &
Co., a nominee for the Depository, on the security register maintained
under the Indenture. The beneficial owner of a Book-Entry Security (or one
or more indirect participants in the Depository designated by such owner)
will designate one or more participants in the Depository (with respect to
such Security, the "Participants") to act as agent or agents for such owner
in connection with the book-entry system maintained by the Depository, and
the Depository will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with respect
to such Book-Entry Security in the account of such Participants. The
ownership interest of such beneficial owner in such Book-Entry Security
will be recorded through the records of such Participants or through the
separate records of such Participants and one or more indirect participants
in the Depository. So long as CEDE & Co. is the registered owner of a
Global Security, the Depository will be considered the sole owner and
holder of the Book-Entry Securities represented by such Global Security for
all purposes under the Indenture.
Transfers:
---------
Transfers of a Book-Entry Security will be accomplished by book
entries made by the Depository and, in turn, by Participants (and, in
certain cases, one or more indirect participants in the Depository) acting
on behalf of beneficial transferors and transferees of such Security.
Exchanges:
---------
The Trustee may deliver to the Depository and the CUSIP Service
Bureau at any time a written notice of consolidation (a copy of which shall
be attached to the Global Security resulting from such consolidation)
specifying (i) the CUSIP numbers of two or more outstanding Global
Securities that represent Book-Entry Securities having the same interest
rate, maturity date and tenor, and for which interest has been paid to the
same date, (ii) a date, occurring at least thirty days after such written
notice is delivered and at least thirty days before the next interest
payment date for such Global Securities, on which such Global Securities
shall be exchanged for a single replacement Global Security and (iii) a new
CUSIP number to be assigned to such replacement Global Security. Upon
receipt of such notice, the Depository will send to its Participants
(including the Trustee) a written reorganization notice to the effect that
such exchange will occur on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP Service Bureau a written notice
setting forth such exchange date and the new CUSIP number and stating that,
as of such exchange date, the CUSIP numbers of the Global Securities to be
exchanged will no longer be valid. On the specified exchange date, the
Trustee will exchange such Global Securities for a single Global Security
bearing the new CUSIP number and a new Issue Date, which shall be the most
recent interest payment date to which interest has been paid or duly
provided for on the predecessor Global Securities, and the CUSIP numbers of
the exchanged Global Securities will, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately reassigned.
Redemption:
----------
The Trustee will comply with the terms of the Letter of
Representations with regard to redemptions of the Book-Entry Securities. If
a Global Security is to be redeemed in part, the Trustee will cancel such
Global Security and issue a Global Security which shall represent the
remaining portion of such Global Security and shall bear the CUSIP number
of the cancelled Global Security.
Denominations:
-------------
Book-Entry Securities will be issued in principal amounts of
$1,000 or any amount in excess thereof that is an integral multiple of
$1,000. Global Securities will be denominated in principal amounts not in
excess of $150,000,000. If one or more Book-Entry Securities having an
aggregate principal amount in excess of $150,000,000 would, but for the
preceding sentence, be represented by a single Global Security, then one
Global Security will be issued to represent $150,000,000 principal amount
of such Book-Entry Security or Securities and an additional Global Security
will be issued to represent any remaining principal amount of such
Book-Entry Security or Securities. In such a case, each of the Global
Securities representing such Book-Entry Security or Securities shall be
assigned the same CUSIP number.
Interest:
--------
Standard & Poor's Corporation will use the information received
in the pending deposit message described under Settlement Procedure "C" to
include the amount of any interest payable and certain other information
regarding the related Global Security in the appropriate daily bond report
published by Standard & Poor's Corporation.
Record Date:
-----------
The Record Date with respect to each Interest Payment Date shall
be the 15th calendar day immediately preceding such Interest Payment Date,
whether or not such day is a business day.
Payments of Principal and Interest:
----------------------------------
(i) Payments of Interest Only. Promptly after each record
-------------------------
date, the Trustee will deliver to the Company and the Depository a written
notice specifying by CUSIP number the amount of interest to be paid on each
Global Security on the following interest payment date (other than an
interest payment date coinciding with the maturity date) and the total of
such amounts. Such information may be provided by means of facsimile
transmission. The Depository will confirm the amount payable on each
Global Security on such interest payment date by reference to the daily
bond reports published by Standard & Poor's Corporation. The Company will
pay to the Trustee the total amount of interest due on such interest
payment date, and the Trustee will pay such amount to the Depository at the
times and in the manner set forth below under "Manner of Payment". If any
interest payment date for a Book-Entry Security is not a business day, the
payment due on such day shall be made on the next succeeding business day
and no interest shall accrue on such payment for the period from and after
such interest payment date.
(ii) Payments at Maturity. On or about the first business day
--------------------
of each month, the Trustee will deliver to the Company and the Depository a
written list of principal and interest to be paid on each Global Security
maturing in the following month. The Company, the Trustee and the
Depository will confirm the amounts of such principal and interest payments
with respect to each such Global Security on or about the fifth business
day preceding the maturity of such Global Security. The Company will pay
to the Trustee, as the paying agent, the principal amount of such Global
Security, together with interest due at such maturity. Upon surrender of a
Global Security, the Trustee will pay such amounts to the Depository at the
times and in the manner set forth below under "Manner of Payment". If any
maturity of a Global Security representing Book-Entry Securities is not a
business day, the payment due on such day shall be made on the next
succeeding business day and no interest shall accrue on such payment for
the period from and after such maturity. Promptly after payment to the
Depository of the principal, interest and premium, if any, due at the
maturity of such Global Security, the Trustee will cancel and destroy such
Global Security.
(iii) Manner of Payment. The total amount of any principal and
-----------------
interest due on a Global Security on any interest payment date or at
maturity shall be paid by the Company to the Trustee in funds available for
use by the Trustee as of 9:30 a.m., New York City time, on such date. The
Company will make such payment on such Global Securities by instructing the
Trustee to withdraw funds from an account maintained by the Company at
Citibank, N. A., account number ____________. The Company will confirm
instructions regarding payment in writing to the Trustee. Prior to 10:00
a.m., New York City time, on each maturity date or as soon as possible
thereafter, following receipt of such funds from the Company, the Trustee
will pay by separate wire transfer (using Fedwire message entry
instructions in a form previously specified by the Depository) to an
account at the Federal Reserve Bank of New York previously specified by the
Depository, in funds available for immediate use by the Depository, each
payment of principal (together with interest thereon) due on Global
Securities on any maturity date. On each interest payment date, interest
payment shall be made to the Depository in accordance with existing
arrangements between the Trustee and the Depository. Thereafter, on each
such date, the Depository will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds available for immediate
use to the respective Participants in whose names the Book-Entry Securities
represented by such Global Securities are recorded in the book-entry system
maintained by the Depository. NEITHER THE COMPANY NOR THE TRUSTEE SHALL
HAVE ANY DIRECT RESPONSIBILITY OR LIABILITY FOR THE PAYMENT BY THE
DEPOSITORY TO SUCH PARTICIPANTS OF THE PRINCIPAL OF AND INTEREST ON THE
BOOK-ENTRY SECURITIES.
(iv) Withholding Taxes. The amount of any taxes required under
-----------------
applicable law to be withheld from any interest payment on a Book-Entry
Security will be determined and withheld by the Participant, indirect
participant in the Depository or other person responsible for forwarding
payments and materials directly to the beneficial owner of such Security.
Posting Rates by Company:
------------------------
The Company and the Agents will discuss from time to time the
rates of interest per annum to be borne by and the maturity of Book-Entry
Securities that may be sold as a result of the solicitation of offers by an
Agent. The Company may establish a fixed set of interest rates and
maturities for a posting and, if it should do so, will promptly advise the
Agents thereof. If the Company decides to change a posting, it will
promptly advise the Agents to suspend solicitation of offers until a new
posting has been established.
Acceptance of Offers by Company:
-------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry
Securities, other than those rejected by such Agent. Each Agent, in its
discretion reasonably exercised, may reject any offer received by it in
whole or in part. Each Agent also may make offers to the Company to
purchase Book-Entry Securities as a Purchasing Agent. The Company, in its
sole discretion, may accept any offer to purchase Book-Entry Securities and
may reject any such offer, in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Book-Entry Securities. If the Company accepts an offer to
purchase Book-Entry Securities, it will confirm such acceptance in writing
to the Selling Agent or Purchasing Agent, as the case may be.
Communication of Sale Information to the Company by Selling Agent and
---------------------------------------------------------------------
Settlement Procedures:
---------------------
A. After the acceptance of an offer by the Company, the Selling
Agent or Purchasing Agent, as the case may be, will communicate promptly,
but in no event later than the time set forth under "Settlement Procedure
Timetable" below, the following Sale Information to the Company by
telephone (confirmed in writing) or by facsimile transmission or other
acceptable written means:
(1) Principal amount of Book-Entry Securities to be purchased;
(2) Issue Price;
(3) Selling Agent's commission or, if applicable, Purchasing Agent's
discount (spread between the offering price and Agent's purchase
price);
(4) Net proceeds to the Company ((2) minus (3));
(5) Interest Rate, Interest Payment Dates, and Initial Interest
Payment Date;
(6) Trade Date and Settlement Date;
(7) Date of issue, if different from Settlement Date;
(8) Maturity date;
(9) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Whether redeemable in whole or in part,
(ii) Initial Redemption Date,
(iii) Redemption Limitation Date,
(iv) Initial Redemption Price, and
(v) Reduction Percentage;
(10) The name of the Selling Agent or Purchasing Agent, as the case
may be;
(11) If the Book-Entry Security is repayable at the option of the
holder thereof, such of the following as are applicable:
(i) Repayment Date(s),
(ii) Repayment Price(s),
(iii) Election Period(s).
(12) Any other applicable terms.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, the Company will communicate such Sale Information to the
Trustee by means of facsimile transmission (confirmed by telephone) or by
such other means as may be agreed upon by the Company and the Trustee. The
Trustee will assign a CUSIP number to the Global Security from a list of
CUSIP numbers previously delivered to the Trustee by the Company
representing such Book-Entry Security and then advise the Company and the
Selling Agent or Purchasing Agent, as the case may be, by telephone of such
CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depository's Participant Terminal System, providing the following
settlement information to the Depository (which shall route such
information to Standard & Poor's Corporation and Interactive Data
Corporation) and the relevant Agent:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such
Book-Entry Security;
(3) Whether such Global Security will represent any other
Book-Entry Security (to the extent known at such time);
(4) Number of Participant accounts maintained by the Depository
on behalf of the Selling Agent or Purchasing Agent, as the
case may be;
(5) The interest payment periods;
(6) Initial Interest Payment Date for such Book-Entry Security,
number of days by which such date succeeds the record date
for the Depository's purposes and, if calculable at that
time, the amount of interest payable on such Interest
Payment Date per $1,000 principal amount of BookEntry
Securities;
D. The Company will deliver to the Trustee from time to time an
inventory of Global Securities representing Book-Entry Securities.
E. The Trustee will complete and authenticate the Global Security
representing such Book-Entry Security.
F. The Depository will credit such Book-Entry Security to the
Trustee's participant account at the Depository.
G. The Trustee will enter an SDFS deliver order through the
Depository's Participant Terminal System, with respect to each Book-Entry
Security represented by the Global Security to be issued, instructing the
Depository to (i) debit such Book-Entry Security to the Trustee's
participant account and credit such Book-Entry Security to such Agent's
participant account and (ii) debit such Agent's settlement account and
credit the Trustee's settlement account for an amount equal to the price of
such Book-Entry Security less such Agent's commission. The entry of such a
deliver order shall constitute a representation and warranty by the Trustee
to the Depository that (a) the Global Security representing such Book-Entry
Security has been delivered and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
H. Such Agent will enter an SDFS deliver order through the
Depository's Participant Terminal System, with respect to each Book-Entry
Security represented by the Global Security to be issued, instructing the
Depository (i) to debit such Book-Entry Security to such Agent's
participant account and credit such Book-Entry Security to the participant
accounts of the Participant with respect to such Book-Entry Security and
(ii) to debit the settlement accounts of such Participant and credit the
settlement account of such Agent for an amount equal to the price of such
Book-Entry Security.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures in effect on the settlement date.
J. Upon confirmation of receipt of funds, the Trustee will transfer
to the account of the Company maintained at Citibank, N. A., account number
______________, or such other account as the Company may have previously
specified to the Trustee, in funds available for immediate use in the
amount transferred to the Trustee in accordance with Settlement Procedure
"G".
K. Upon request, the Trustee will send to the Company a statement
setting forth the principal amount of Book-Entry Securities outstanding as
of that date under the Indenture. Such information may be provided by means
of facsimile transmission.
L. Such Agent will confirm the purchase of each Book-Entry Security
to the purchaser either by transmitting to the Participants with respect to
such Book-Entry Security a confirmation order or orders through the
Depository's institutional delivery system or by mailing a written
confirmation to such purchaser.
M. The Depository will, at any time upon request of the Company or
the Trustee, promptly furnish to the Company or the Trustee a list of the
names and addresses of the participants for whom the Depository has
credited Book-Entry Securities.
Preparation of Pricing Supplement by Company:
--------------------------------------------
If the Company accepts an offer to purchase a Book-Entry
Security, it will prepare a Pricing Supplement. The Company will file the
Pricing Supplement with the Commission in accordance with Rule 424(b) under
the Act and will supply at least ten copies of such Pricing Supplement to
the Selling Agent or Purchasing Agent, as the case may be, not later than
5:00 p.m., New York City time, on the business day following the Trade
Date, or, if the Company and the purchaser should agree to settlement on
the Trade Date, not later than noon, New York City time, on such date. In
addition, the Company will make any filings with the Montana Public Service
Commission required by the Order.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
---------------------------------------------------------------------
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and payment
instructions. In addition, the Selling Agent will deliver to such
purchaser or its agent the Prospectus as amended or supplemented (including
the Pricing Supplement) relating to such Book-Entry Security prior to or
together with the earlier of the delivery to such purchaser or its agent of
(a) the confirmation of sale or (b) the Book-Entry Security.
Settlement Date:
---------------
The receipt by the Company of immediately available funds in
payment for a Book-Entry Security and the authentication and issuance of
the Global Security or Global Securities representing such Book-Entry
Security shall constitute "settlement" with respect to such Book-Entry
Security. All orders accepted by the Company will be settled on the third
business day after the Trade Date pursuant to the timetable for settlement
set forth below unless the Company and the purchaser agree to settlement on
another day which shall be no earlier than the next business day following
the Trade Date.
Settlement Procedure Timetable:
------------------------------
For orders of Book-Entry Securities solicited by an Agent, as
agent, and accepted by the Company, Settlement Procedures "A" through "J"
set forth above shall be completed as soon as possible but not later than
the respective times (New York City time) set forth below:
Settlement
Procedure
---------
A 2:00 p.m. on the business day following Trade Date
B 2:00 p.m. on the business day following Trade Date
C 5:00 p.m. on the business day following Trade Date
D 3:00 p.m. on the business day before the
Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J 5:00 p.m. on Settlement Date
If a sale is to be settled within one business day after the
Trade Date, Settlement Procedures "A," "B," "C" and "D" shall be completed
as soon as practicable but not later than 5:00 p.m. on the Trade Date.
Settlement Procedure "I" is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in
the SDFS operating procedures in effect on the Settlement Date.
If settlement of a Book-Entry Security is rescheduled or
canceled, the Company shall notify the Trustee, upon receipt of such
notice, the Trustee will deliver to the Depository, through the
Depository's Participation Terminal System, a cancellation message to such
effect by no later than 2:00 p.m., New York City time, on the business day
immediately preceding the scheduled Settlement Date.
Failure to Settle
-----------------
If the Trustee fails to enter an SDFS deliver order with respect
to a Book-Entry Security pursuant to Settlement Procedure "G", then upon
written request (which may be evidenced by telecopy transmission) of the
Company the Trustee shall deliver to the Depository, through the
Depository's Participant Terminal System, as soon as practicable but no
later than 2:00 p.m. on any business day, a withdrawal message instructing
the Depository to debit such Book-Entry Security to the Trustee's
participant account, provided that the Trustee's participant account
contains a principal amount of the Global Security representing such
Book-Entry Security that is at least equal to the principal amount to be
debited. If a withdrawal message is processed with respect to all the
Book-Entry Securities represented by a Global Security, the Trustee will
xxxx such Global Security "canceled", make appropriate entries in the
Trustee's records and send such canceled Global Security to the Company.
The CUSIP number assigned to such Global Security shall, in accordance with
CUSIP Service Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed with respect to one or
more, but not all, of the Book-Entry Securities represented by a Global
Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Security or
Securities and shall be canceled immediately after issuance and the other
of which shall represent the remaining Book-Entry Securities previously
represented by the surrendered Global Security and shall bear the CUSIP
number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely
paid to the participants with respect to such Book-Entry Security by the
beneficial purchaser thereof (or a person, including an indirect
participant in the Depository, acting on behalf of such purchaser), such
participants and, in turn, the Agent for such Book-Entry Security may enter
deliver orders through the Depository's Participant Terminal System
debiting such Book-Entry Security to such participant's account and
crediting such Book-Entry Security to such Agent's account and then
debiting such Book-Entry Security to such Agent's account and crediting
such Book Entry Security to the Trustee's participant account and shall
notify the Company and the Trustee thereof. Thereafter, the Trustee will
(i) immediately notify the Company, once the Trustee has confirmed that
such Book-Entry Security has been credited to its participant account, and
the Company shall immediately transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Security
which was credited to the account of the Company maintained at the Trustee
in accordance with Settlement Procedure J, and (ii) deliver the withdrawal
message and take the related actions described in the preceding paragraph.
If such failure shall have occurred for any reason other than default by
the applicable Agent to perform its obligations hereunder or under the
Distribution Agreement, the Company will pay interest at the
then-prevailing broker loan rate to such Agent on the funds so paid to it
and returned during the period of one day or more in which such funds were
held by the Company.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Security, the Depository may take any actions in
accordance with its SDFS operating procedures then in effect. In the event
of a failure to settle with respect to one or more, but not all, of the
Book-Entry Securities to have been represented by a Global Security, the
Trustee will provide, in accordance with Settlement Procedure "D" and "E,"
for the authentication and issuance of a Global Security representing the
other Book-Entry Securities to have been represented by such Global
Security and will make appropriate entries in its records.
Trustee Not to Risk Funds:
-------------------------
Nothing herein shall be deemed to require the Trustee to risk or
expend its own funds in connection with any payment to the Company, or the
Agents or the Depository, it being understood by all parties that payments
made by the Trustee to either the Company, the Depository or the Agents
shall be made only to the extent that funds are provided to the Trustee for
such purpose.
ANNEX II
The Montana Power Company
Medium-Term Notes, Series B
Terms Agreement
---------------
Ladies and Gentlemen:
Subject to the terms and conditions set forth herein and, to the
extent provided below, in the Distribution Agreement, dated _________ ,
19__ (the "Distribution Agreement"), amongst The Montana Power Company (the
"Company"), on the one hand, and ___________________(each an "Agent" and,
together, the "Agents"), on the other, the Company proposes to issue and
sell to ___________________________ the Securities (as defined in the
Distribution Agreement) specified in the Schedule hereto (the "Purchased
Securities"), at the time, place and purchase price and upon the terms and
conditions set forth in the Schedule hereto. Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be
part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein.
Each of the representations and warranties set forth in the
Distribution Agreement shall be deemed to have been made by the Company at
and as of the date of this Terms Agreement, except that each such
representation and warranty which makes reference to the Prospectus shall
be deemed to be a representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Terms
Agreement in relation to the Prospectus as amended and supplemented to
relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Purchased Securities,
in the form heretofore delivered to and approved by you, is now proposed to
be filed with the Commission in accordance with Rule 424(b) under the Act.
Subject to the terms and conditions set forth herein and to those
of the Distribution Agreement incorporated herein by reference, the Company
agrees to issue and sell to _______________________________________ and
___________________________________________agrees to purchase from the
Company the Purchased Securities, at the time and place, in the principal
amount and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us three counterparts hereof, whereupon this letter,
including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you and
the Company.
THE MONTANA POWER COMPANY
By:_________________________
Title:
Accepted in New York, New York,
as of the date hereof:
Schedule to Annex II
Title of Purchased Securities: Medium-Term Notes, Series B
-----------------------------
Aggregate Principal Amount: $
--------------------------
Price to Public:
---------------
Purchase Price by _______________ : % of the principal amount of the
----------------------------------
Purchased Securities [, plus accrued interest from to ] [and
accrued amortization, if any, from to ] .-
Method of and Specified Funds for Payment of Purchase Price:
-----------------------------------------------------------
[By certified or official bank check or checks, payable to the
order of the Company, in [[New York Clearing House] [immediately available]
funds]
[By wire transfer to a bank account specified by the Company in
[next day] [immediately available] funds]
Time of Delivery:
----------------
Closing Location:
----------------
Maturity:
--------
Interest Rate:
-------------
Interest Payment Dates: [months and dates]
----------------------
Redemption, if any:
------------------
Documents to be Delivered as a Condition to the Closing:
-------------------------------------------------------
[(1) The opinion of counsel to the Agents referred to in Section
4(a).]
[(2) The opinion of counsel to the Company referred to in
Section 4(b).]
[(3) The opinion of counsel to the Company referred to in
Section 4(c).]
[(4) The accountants' letter referred to in Section 4(d).]
[(5) The officers' certificate referred to in Section 4(e).]
[(6) Such other documents required by the Agents or counsel to
the Agents referred to in Section 4(f).
Other Provisions (including Syndicate Provisions,
-------------------------------------------------
if applicable):
--------------
ANNEX III
FORM OF OPINION OF
XXXXXXX X. XXXXXXXXXX, ESQ.
[DATE]
[AGENTS]
Ladies and Gentlemen:
I am General Counsel of The Montana Power Company (the "Company")
and have acted as such in connection with the proposed issuance and sale
from time to time by the Company of up to $150,000,000 in aggregate
principal amount of the Company's Medium-Term Notes, Series B (the
"Notes"), to be issued under the Company's Indenture, dated as of December
1, 1989, to Citibank, N.A., as Trustee (the "Trustee") (the "Indenture"),
and the appointment of each of you as agent of the Company pursuant to the
Distribution Agreement, dated __________, 19__ (the "Distribution
Agreement"), between the Company and each of you, for the purposes of
soliciting and receiving offers to purchase Notes and purchasing Notes, as
principals, from the Company.
In my capacity as General Counsel, I have examined and am
familiar with: (a) the Restated Articles of Incorporation, as amended, and
Bylaws, as amended, of the Company; (b) the Indenture; (c) the Distribution
Agreement; (d) the Registration Statement filed by the Company with the
Securities and Exchange Commission (the "Commission") for the registration
under the Securities Act of 1933, as amended (the "Act"), of the Notes; (e)
the Prospectus as amended and supplemented; (f) the proceedings before the
Montana Public Service Commission relating to the issuance and sale of the
Notes; and (g) the records of various corporate and other proceedings
relating to the authorization, issuance and sale of the Notes. I have also
examined or caused to be examined such other documents and satisfied myself
as to such other matters as I have deemed necessary in order to render this
opinion. I have not examined the Notes, except a specimen thereof. The
terms "Registration Statement" and "Prospectus as amended and supplemented"
as used herein have the respective meanings ascribed thereto in the
Distribution Agreement.
In my examination of the documents referred to above, I have
assumed the authenticity of all such documents submitted to me as
originals, the genuineness of all signatures, the due authority of the
persons executing such documents and the conformity to the originals of all
documents submitted to me as copies. I also have assumed that the Notes
will be delivered to you or in accordance with your instructions and that
the Company will receive payment of the purchase price thereof.
Based upon the foregoing and upon my familiarity with the
properties and affairs of the Company generally, I am of the opinion that:
(1) The Company and its Subsidiaries (as defined in the
Distribution Agreement) have been duly incorporated and are validly
existing as corporations in good standing under the laws of the
respective jurisdictions of their incorporation, with full corporate
power and authority to own and operate their properties and conduct
the businesses in which they are now engaged as described in the
Prospectus as amended and supplemented; and the Company and its
Subsidiaries are duly qualified to do business as foreign corporations
and are in good standing in all other jurisdictions in the United
States and in Canada in which such qualification is required; and all
of the outstanding shares of capital stock of each Subsidiary are
owned beneficially by the Company, subject to no mortgage, pledge,
lien, charge or other encumbrance.
(2) The Company and its Subsidiaries have valid and subsisting
franchise rights, licenses, permits, and other authorizations, free
from any restrictions or conditions which are unusual or unduly
burdensome, sufficient for the ownership of their properties and the
conduct of the businesses in which they are now engaged as described
in the Prospectus.
(3) The Registration Statement has become effective under the
Act, and, to the best of my knowledge, no stop order suspending the
effectiveness thereof has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission; the
Indenture has been duly qualified under the Trust Indenture Act of
1939 (the "Trust Indenture Act"); the Registration Statement, when it
became effective, complied, and the Prospectus (excluding the
documents incorporated therein by reference pursuant to Item 2 of Form
S-3), on the date hereof, complies as to form in all material respects
with the requirements of the Act, the rules and regulations thereunder
and the Trust Indenture Act; and such incorporated documents as of
their respective dates of filing complied as to form in all material
respects with the requirements of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder (except, in each
case, I express no opinion as to the financial statements and other
financial or statistical data contained therein).
(4) The Montana Public Service Commission has entered an order
(the "Order"), which, to the best of my knowledge, remains in full
force and effect, authorizing the issuance and sale by the Company of
the Notes in conformity with the Distribution Agreement; no other
authorization, approval, consent, registration, qualification or other
order of or with any governmental authority is required for the
authorization of the issuance and sale of the Notes in conformity with
the Order by the Company pursuant to the Distribution Agreement,
except such as have been obtained under the Act and the Trust
Indenture Act or as may be required under state securities laws in
connection with the purchase and distribution of the Notes; and the
Company is not a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(5) The Notes have been duly authorized by the resolutions
adopted by the Board of Directors on October 22, 1996 (the "Board
Resolution"), and when the terms of the Notes shall have been
determined as contemplated by and in accordance with the Indenture and
the Board Resolution, such terms will have been duly authorized by the
Company and will have been established in conformity with the
Indenture.
(6) The Notes, when executed by the Company, completed and
authenticated by the Trustee, delivered by the Company and paid for by
the purchasers thereof, all as contemplated by and in accordance with
the Indenture, the Board Resolution and the Order, will have been duly
issued under the Indenture and will constitute valid and legally
binding obligations of the Company, entitled to the benefits provided
by the Indenture.
(7) The Indenture has been duly authorized, executed and
delivered by the Company and the Trustees (or their predecessors), and
is a valid and legally binding obligation of the Company enforceable
in accordance with its terms, except as the same may be limited by
applicable bankruptcy, reorganization or other similar laws affecting
creditors' rights generally.
(8) The Distribution Agreement [and any applicable Terms
Agreement (as defined in the Distribution Agreement)] has been duly
authorized, executed and delivered by the Company.
(9) The performance of the Distribution Agreement and the
consummation of the transactions therein contemplated will not result
in a breach of any the terms and provisions of, or constitute a
default under, the Company's Restated Articles of Incorporation, as
amended, or Bylaws, as amended, or any indenture, mortgage, deed of
trust or other agreement or instrument known to me to which the
Company is a party or by which it is bound or to which any of the
property of the Company is subject or any order, rule or regulation
known to me of any court or governmental agency or body having
jurisdiction over the Company or any of its properties.
(10) Except as described in the Prospectus, as amended and
supplemented, there are no pending material legal or governmental
proceedings and, to my knowledge, no material threatened legal or
governmental proceedings, to which the Company or any Subsidiary is a
party or of which any of the property of the Company or any Subsidiary
is subject, other than ordinary litigation incidental to the kinds of
businesses conducted by the Company or the Subsidiaries.
(11) The statements of Montana and Federal law, and legal
conclusions based thereon, contained in the documents incorporated by
reference pursuant to Item 2 of Form S-3 in the Prospectus as amended
and supplemented have been reviewed by me and are correct (except to
the extent that any statement contained in any such incorporated
document may be deemed to have been modified or superseded by any such
subsequently filed document).
In the course of the preparation by the Company of the
Registration Statement, the Prospectus as amended and supplemented and the
documents incorporated therein by reference pursuant to Item 2 of Form S-3,
I have participated in conferences with certain officers and employees of
the Company and representatives of Price Waterhouse, the independent
accountants who examined certain of the financial statements included in
the Registration Statement, but I have made no independent verification of
the accuracy or completeness of the representations and statements made to
me by such person or the information included by the Company in the
Registration Statement and the Prospectus as amended and supplemented, and
take no responsibility therefor, except as set forth in paragraph 11
hereof. However, my examination of the Registration Statement and the
Prospectus as amended and supplemented and my discussions in the
above-mentioned conferences did not disclose to me any information which
gives me reason to believe that, when the Registration Statement became
effective, it 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, as of the date of this
opinion, the Prospectus as amended and supplemented (including the
documents incorporated therein by reference pursuant to Item 2 of Form S-3)
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, that I do not express any belief as to the financial statements
or other financial or statistical data contained in the Registration
Statement or the Prospectus as amended and supplemented, or as to any
information contained therein furnished to the Company in writing by either
of you expressly for use therein.
I am a member of the bar of the State of Montana and do not hold
myself out as an expert on the laws of the State of New York or Federal
securities laws. Accordingly, in rendering this opinion, I have relied,
with your consent, as to all matters governed by the laws of the State of
New York or by Federal securities laws upon the opinion of even date
herewith addressed to you by Xxxx & Priest LLP, New York, New York, special
counsel for the Company. I have read such opinion and concur in the
conclusions expressed therein insofar as such conclusions involve questions
of Montana law.
This opinion may be relied upon by you only in connection with
the issuance and sale of the Notes. This opinion also may be relied upon
by the Trustee and, as to matters governed by the laws of the State of
Montana, by Xxxx & Priest LLP and your counsel, Milbank, Tweed, Xxxxxx &
XxXxxx, only in connection with the issuance and sale of the Notes, as if
they were named addressees of this opinion. This opinion may not be relied
upon by you, them or any other person for any other purpose whatsoever
without, in each instance, my prior written consent.
Very truly yours,
Xxxxxxx X. Xxxxxxxxxx, Esq.
ANNEX IV
FORM OF OPINION OF Xxxx & Priest LLP
[DATE]
[AGENTS]
Ladies and Gentlemen:
We have acted as special counsel to The Montana Power Company
(the "Company") in connection with the proposed issuance and sale from time
to time by the Company of up to $150,000,000 in aggregate principal amount
of the Company's Medium-Term Notes, Series B (the "Notes"), to be issued
under the Company's Indenture, dated as of December 1, 1989 to Citibank,
N.A., as Trustee (the "Trustee") (the "Indenture"), and the appointment of
each of you as agents of the Company pursuant to the Distribution
Agreement, dated _________, 19__ (the "Distribution Agreement"), between
the Company and each of you, for the purpose of soliciting and receiving
offers to purchase Notes and purchasing Notes, as principals, from the
Company.
In our capacity as such counsel, we have examined and are
familiar with: (a) the Restated Articles of Incorporation, as amended, and
Bylaws, as amended, of the Company; (b) the Indenture; (c) the Distribution
Agreement; (d) the Registration Statement filed by the Company with the
Securities and Exchange Commission (the "SEC") for the registration under
the Securities Act of 1933, as amended (the "Act"), of the Notes; (e) the
Prospectus as amended and supplemented; and (f) the application to and
order of the Montana Public Service Commission relating to the issuance and
sale of the Notes. We have also examined such other documents and
satisfied ourselves as to such other matters as we have deemed necessary in
order to render this opinion. We have not examined the Notes, except a
specimen thereof. The terms "Registration Statement" and "Prospectus as
amended and supplemented" as used herein have the respective meanings
ascribed thereto in the Distribution Agreement.
In our examination of the documents referred to above, we have
assumed the authenticity of all such documents submitted to us as
originals, the genuineness of all signatures, the due authority of the
persons executing such documents and the conformity to the originals of all
documents submitted to us as copies. We also have assumed that the Notes
will be delivered to you or in accordance with your instructions and that
the Company will receive payment of the purchase price thereof.
Based upon the foregoing, we are of the opinion that:
(1) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Montana, with full corporate power and authority to own and operate its
properties and conduct the business in which it is now engaged as described
in the Prospectus as amended and supplemented.
(2) The Registration Statement has become effective under the
Act, and, to the best of our knowledge, no stop order suspending the
effectiveness thereof has been issued and no proceeding for that purpose
has been initiated or threatened by the SEC; the Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); the Registration Statement, when it became effective,
complied, and the Prospectus (excluding the documents incorporated therein
by reference pursuant to Item 2 of Form S-3), on the date hereof, complies,
as to form in all material respects with the requirements of the Act, the
Trust Indenture Act and the rules and regulations of the SEC thereunder;
and such incorporated documents, as of their respective dates of filing,
complied as to form in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC thereunder (except, in each case we express no opinion as to the
financial statements and other financial or statistical data contained
therein).
(3) The Montana Public Service Commission has entered an order
(the "Order"), which, to the best of our knowledge, remains in full force
and effect, authorizing the issuance and sale by the Company of the Notes
in conformity with the Distribution Agreement; no other authorization,
approval, consent, registration, qualification or other order of or with
any governmental authority is required for the authorization of the
issuance and sale of the Notes in conformity with the Order by the Company
pursuant to the terms of the Distribution Agreement, except such as have
been obtained under the Act and the Trust Indenture Act or as may be
required under state securities laws in connection with the purchase and
distribution of the Notes; and the Company is not a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(4) The Notes have been duly authorized by the resolutions
adopted by the Board of Directors on October 22, 1996 (the "Board
Resolution"); when the terms of the Notes shall have been determined as
contemplated by and in accordance with the Indenture and the Board
Resolution, such terms will have been duly authorized by the Company and
will have been established in conformity with the Indenture; and the Notes
conform to the description thereof contained in the Prospectus as amended
and supplemented.
(5) The Notes, when executed by the Company, completed and
authenticated by the Trustee, delivered by the Company and paid for by the
purchasers thereof, all as contemplated by and in accordance with the
Indenture, the Board Resolution and the Order, will have been duly and
validly issued under the Indenture and will constitute valid and legally
binding obligations of the Company, entitled, equally and ratably with all
other securities issued and to be issued thereunder, to the benefits
provided by the Indenture.
(6) The Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, and is a valid and legally
binding obligation of the Company enforceable in accordance with its terms,
except as the same may be limited by applicable bankruptcy, reorganization
or similar laws affecting creditors' rights generally, and conforms to the
description thereof contained in the Prospectus as amended and
supplemented.
(7) The Distribution Agreement [and any applicable Terms
Agreement (as defined in the Distribution Agreement)] has been duly
authorized, executed and delivered by the Company.
(8) The performance of the Distribution Agreement and the
consummation of the transactions therein contemplated will not result in a
breach of or violation of any of the terms and provisions of, or constitute
a default under, the Indenture, the Company's Debenture Agreement, dated as
of January 1, 1973, with respect to its 7 1/2% Sinking Fund Debentures, or
its Restated Articles of Incorporation, as amended, or Bylaws, as amended.
In the course of the preparation by the Company of the
Registration Statement and the Prospectus as amended and supplemented, we
had conferences with certain officers and employees of the Company, with
the General Counsel for the Company, with you and your counsel and with
representatives of Price Waterhouse, the independent accountants who
examined certain of the financial statements included in the Registration
Statement, but we made no independent verification of the accuracy or
completeness of the representations and statements made to us by such
persons or the information included by the Company in the Registration
Statement and the Prospectus as amended and supplemented, and take no
responsibility therefor, except insofar as set forth in paragraphs 4 and 6
hereof. In passing upon the forms of the Registration Statement and the
Prospectus as amended and supplemented, we have, therefore, assumed the
accuracy and completeness of such representations, statements and
information, except as aforesaid. However, our examination of the
Registration Statement and the Prospectus as amended and supplemented and
our discussions in the abovementioned conferences did not disclose to us
any information which gives us reason to believe that, when the
Registration Statement became effective, it 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, as of the date of this opinion, the Prospectus as amended and
supplemented (including the documents incorporated therein by reference
pursuant to Item 2 of Form S-3) includes an untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, that we do not express any belief as to the
financial statements or other financial or statistical data contained in
the Registration Statement or the Prospectus as amended and supplemented,
or as to any information contained therein furnished to the Company in
writing by either of you expressly for use therein.
We are members of the bar of the State of New York and do not
hold ourselves out as experts on the laws of the State of Montana.
Accordingly, in rendering this opinion, we have relied, with your consent,
as to all matters governed by the laws of the State of Montana upon the
opinion of even date herewith addressed to you by Xxxxxxx X. Xxxxxxxxx,
Esq., General Counsel of the Company. That opinion is satisfactory to us
in form and scope. In our judgment, you and we are justified in relying
upon such opinion as to such matters.
This opinion may be relied upon by you only in connection with
the issuance and sale of the Notes. This opinion also may be relied upon
by the Trustees and, with respect to the laws of the State of New York and
Federal securities laws, by Xxxxxxx X. Xxxxxxxxx, Esq., only in connection
with the issuance and sale of the Notes, as if they were named addressees
of this opinion. This opinion may not be relied upon by you, them or any
other person for any other purpose whatsoever without, in each instance,
our prior written consent.
Very truly yours,
Xxxx & Priest LLP
ANNEX V
[Contents of Letter of Price Waterhouse LLP]
The letter of Price Waterhouse LLP will state in effect that:
(1) They are independent accountants with respect to the
Company within the meaning of the Act and the applicable
published rules and regulations thereunder;
(2) In their opinion, the financial statements and
financial statement schedules examined by them and included or
incorporated by reference in the Prospectus comply as to form in
all material respects with the applicable accounting requirements
of the Act and the Exchange Act and of the published rules and
regulations and instructions of the Commission thereunder;
(3) On the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting
of (A) a reading of (1) the unaudited interim consolidated
financial information of the Company and its Subsidiaries as of
March 31, June 30, and September 30, 1996, incorporated by
reference in the Prospectus, and (2) the most recent unaudited
consolidated financial statements of the Company and its
Subsidiaries available five business days prior to the date of
such letter, not included in the Prospectus, (B) a reading of the
minutes of the meetings of the stockholders and boards of
directors of the Company and its Subsidiaries for the period from
January 1, 1996, to a specified date not more than five business
days prior to the date of such letter, and (C) making inquiries
of certain officials of the Company responsible for financial and
accounting matters regarding the specific matters for which
representations are requested below, nothing came to their
attention which caused them to believe that (x) the unaudited
interim consolidated financial information of the Company and its
Subsidiaries as of March 31, June 30, 1996 and September 30,
1996, incorporated by reference in the Prospectus, was not
prepared on a basis substantially consistent with that of the
audited consolidated financial statements, incorporated by
reference in the Prospectus and in conformity with generally
accepted accounting principles, (y) the most recent unaudited
consolidated financial statements of the Company and its
Subsidiaries available five business days prior to the date of
such letter, not included in the Prospectus, were not prepared on
a basis substantially consistent, except that such unaudited
consolidated financial statements do not include a consolidated
statement of common shareholders' equity or notes to the
consolidated financial statements, with that of the audited
consolidated financial statements incorporated by reference in
the Prospectus, and (z) during the period from the date of the
most recent consolidated balance sheet of the Company and its
Subsidiaries included or incorporated by reference in the
Prospectus to a specified date not more than five business days
prior to the date of such letter, there has been any change in
the capital stock or long-term debt (other than the issuance of
shares of Common Stock under the Company's dividend reinvestment
and stock purchase plan, employees' plans, scheduled redemptions
of preferred stock or repayments of long-term debt and purchases
of debentures for sinking fund purposes) of the Company and its
Subsidiaries on a consolidated basis, or any decrease in common
shareholders' equity of the Company and its Subsidiaries on a
consolidated basis, as compared with amounts shown on said
balance sheet, or if unaudited consolidated financial statements
for any period subsequent to September 30, 1996 shall be
available five business days prior to the date of such letter,
during the period from September 30, 1996 to the date of the most
recent of such unaudited consolidated financial statements
available five business days prior to the date of such letter,
there has been any decrease, as compared with the corresponding
period in the preceding year, in utility operating revenues,
utility operating income, income from utility operations, Entech
sales, income from Entech operations, consolidated net income or
net income available for common stock, of the Company and its
Subsidiaries on a consolidated basis, except in all instances for
changes or decreases as set forth in such letter, identifying the
same and specifying the amounts thereof, or which the Prospectus
discloses have occurred or may occur; and
(4) They have performed certain other specified procedures
with respect to certain amounts and percentages set forth or
incorporated by reference in the Prospectus, as heretofore agreed
upon with the Agents, and have found them to be in agreement with
the records of the Company and the computations to be
arithmetically correct.
