Exhibit 1.1
TRUST PREFERRED CAPITAL SECURITIES
UNDERWRITING AGREEMENT
NORTHWESTERN CAPITAL FINANCING I
c/o Northwestern Corporation
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NORTHWESTERN CORPORATION
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▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
November 10, 1998
Ladies and Gentlemen:
On the basis of the representations and warranties, and subject to the
terms and conditions, set forth in this agreement (this "Agreement" or the
"Underwriting Agreement"), we, the Representative (as defined below) of the
Underwriters (as defined below), understand that Northwestern Capital
Financing I (the "Trust"), a statutory business trust organized under the
Delaware Business Trust Act of the State of Delaware (Chapter 38, Title 12,
of the Delaware Code, 12 Del. C. Section 3801 ET SEQ.) (the "Delaware Act")
and Northwestern Corporation, a Delaware corporation, as holder of the Common
Securities (as defined herein) of the Trust and as guarantor (the "Company"),
propose that the Trust issue and sell 2,200,000 aggregate number of its 7.20%
Trust Preferred Capital Securities (liquidation amount $25 per security),
representing preferred undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"). The Preferred Securities will be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise pursuant to, and to the extent set
forth in, the Preferred Securities Guarantee Agreement (the "Preferred
Securities Guarantee Agreement"), dated as of November 15, 1998, between the
Company and Wilmington Trust Company, as Trustee (the "Guarantee Trustee").
The Preferred Securities and the related Preferred Securities Guarantee
Agreement are referred to herein as the "Securities."
The entire proceeds from the sale of the Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its
common securities representing common undivided beneficial interests in the
assets of the Trust (the "Common Securities") guaranteed by the Company, to
the extent set forth in the Prospectus, with respect to distributions and
payments upon liquidation, redemption and otherwise pursuant to the Common
Securities Guarantee Agreement (the "Common Securities Guarantee Agreement"
and, together with the
Preferred Securities Guarantee Agreement, the "Guarantee Agreements"), dated
as of November 15, 1998, between the Company and the Guarantee Trustee, as
Trustee, and will be used by the Trust to purchase subordinated debt
securities issued by the Company ("Subordinated Debt Securities" and,
together with the Guarantee Agreements, the "Company Securities"). The
Preferred Securities and the Common Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust, dated as of November
15, 1998 (the "Declaration"), among the Company, as Sponsor, the trustees
named therein (the "Trustees") and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The Subordinated Debt
Securities will be issued pursuant to an indenture, dated as of August 1,
1995 (the "Base Indenture"), between the Company and The Chase Manhattan Bank
(as successor to The Chase Manhattan Bank, N.A.), as trustee (the "Debt
Trustee"), and a supplement to the Base Indenture, dated as of November 15,
1998 (the "Supplemental Indenture," and together with the Base Indenture as
heretofore supplemented and amended, the "Indenture"), between the Company
and the Debt Trustee.
The term "Underwriters" as used herein, shall be deemed to mean the
several persons, firms or corporations named in Schedule I hereto, and the
term "Representative," as used herein, shall be deemed to mean the
representatives of such Underwriters by whom or on whose behalf this
Underwriting Agreement is signed. If there shall be one person, firm or
corporation named in Schedule I, the term "Underwriters" and the term
"Representative," as used herein, shall mean that person, firm or
corporation. All obligations of the Underwriters are several and not joint.
The use of the term "Underwriter" herein shall not be deemed to establish or
admit that a purchaser of the Securities is an "underwriter" of the
Securities as such term is defined in and used under the Securities Act of
1933, as amended (the "Securities Act").
1. REPRESENTATIONS AND WARRANTIES. Each of the Trust and the Company
jointly and severally represents and warrants to and agrees with each of the
Underwriters that:
(a) The Trust and the Company have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration Statement No. 333-58491), including a prospectus, relating to
the Securities and the Subordinated Debentures, and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "Prospectus
Supplement") specifically relating to such securities pursuant to Rule 424
under the Securities Act. The term "Registration Statement" means the
registration statement, including the exhibits thereto, as amended to the
date of this Agreement. The term "Basic Prospectus" means the prospectus
included in the Registration Statement, as amended and supplemented to the
date of this Agreement (exclusive of any supplement to the prospectus
relating solely to securities other than the Securities and the Subordinated
Debentures). The term "Prospectus" means the Basic Prospectus together with
the Prospectus Supplement. The term "preliminary prospectus" means a
preliminary prospectus supplement specifically relating to the Securities,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"supplement," "amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of
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the Basic Prospectus by the Company or the Trust with the Commission pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect and
no proceedings for such purpose are pending before or, to the Trust's or the
Company's knowledge, are threatened by the Commission.
(c) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder or pursuant
to said rules and regulations will be deemed to comply therewith; (ii) each
part of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (iii) the Registration Statement and the
Prospectus comply, and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder or pursuant to said rules
and regulations will be deemed to comply therewith; and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 1(c) do not apply
(A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to
the Trust or the Company in writing by such Underwriter expressly for use
therein or (B) to that part of the Registration Statement that constitutes
any Statement of Eligibility (Form T-l) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
(d) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Delaware and
has the corporate power and authority to own its property and to conduct its
business as described in the Prospectus, to issue the Company Securities, to
enter into and perform its obligations under the Underwriting Agreement, the
Declaration, the Indenture and the Company Securities, to purchase, own, and
hold the Common Securities issued by the Trust and to consummate the
transactions herein and therein contemplated. The Company is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated or
formed, is validly existing as a corporation or limited partnership, in good
standing under the laws of the jurisdiction of its incorporation or
formation, has the corporate or partnership power and authority, as the case
may be, to own its property and to conduct its business as described in the
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Prospectus and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; all of the outstanding shares of capital stock or partnership
interests (as applicable) of the Company's subsidiaries have been duly
authorized and are validly issued, fully paid and non-assessable and (except
for the shares or partnership interests of SYN, Inc., Cornerstone Propane
Partners, L.P., Communication Systems USA, Inc. and Blue Dot Services Inc.
that are not beneficially owned by the Company) are owned directly by the
Company or its subsidiaries, free and clear of all liens, encumbrances,
equities or claims.
(f) The Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, has the power and
authority to own its property and to conduct its business as described in the
Prospectus, to issue and sell the Preferred Securities and the Common
Securities, and to enter into and perform its obligations under this
Agreement, the Preferred Securities, the Common Securities and the
Declaration and to consummate the transactions herein and therein
contemplated; the Trust has no subsidiaries and is duly qualified to transact
business and in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Trust; the
Trust has conducted and will conduct no business other than the transactions
contemplated by this Agreement and as described in the Prospectus; the Trust
is not a party to or otherwise bound by any agreement other than those
described in the Prospectus, and is not a party to any action, suit or
proceeding of any nature; the Trust is classified as a grantor trust for
United States federal income tax purposes and is not classified as an
association taxable as a corporation for United States federal income tax
purposes; and the Trust is and will be treated as a consolidated subsidiary
of the Company.
(g) The Common Securities have been duly authorized and, when
issued and delivered by the Trust to the Company against payment therefor as
described in the Registration Statement and Prospectus, will be validly
issued common undivided beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not subject to preemptive or other
similar rights; at the Closing Date (as defined below), all of the issued and
outstanding Common Securities of the Trust will be directly owned by the
Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and the Common Securities will conform to the
description thereof contained in the Prospectus.
(h) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company.
(i) The Declaration has been duly qualified under the Trust Indenture
Act, has been duly authorized by the Company and, at the Closing Date, will have
been duly executed and delivered by the Company and each of the Trustees, and
assuming due authorization, execution and delivery of the Declaration by the
Property Trustee (as defined in the Declaration); the Declaration will, on the
Closing Date, be a valid and binding obligation of the Company and the
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Trustees, enforceable against the Company and the Trustees in accordance with
its terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally or by general principles of equity (whether as considered in a
proceeding at law or in equity); and the Declaration will conform to the
description thereof contained in the Prospectus.
(j) The Preferred Securities Guarantee Agreement has been duly
qualified under the Trust Indenture Act, and each of the Guarantee Agreements
has been duly authorized by the Company and, when validly executed and
delivered by the Company, will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms;
and the Guarantees and the Guarantee Agreement will conform to the
description thereof contained in the Prospectus.
(k) The Preferred Securities have been duly authorized and, when
issued and delivered against payment therefor in accordance with the
provisions of this Agreement and the Declaration, will be validly issued and
(subject to the terms of the Declaration) fully paid and non-assessable
preferred undivided beneficial interests in the assets of the Trust, and will
be entitled to the benefits of the Declaration; the issuance of the Preferred
Securities is not subject to preemptive or other similar rights; holders of
Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware (the
"GCL"); and the Preferred Securities will conform to the description thereof
contained in the Prospectus.
(l) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized by the Company and, when validly
executed and delivered by the Company, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally or by general principles of equity (whether considered in a
proceeding at law or in equity); and the Indenture will conform to the
description thereof contained in the Prospectus.
(m) The Subordinated Debt Securities have been duly authorized
and, on the Closing Date, will have been duly executed by the Company and,
when authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will be entitled to
the benefits of the Indenture, will rank PARI PASSU with the Company's 8-1/8%
Junior Deferrable Interest Debentures due 2025 and without preference among
themselves and will be subordinated to all Senior Indebtedness (as defined in
the Indenture) and will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally or by general principles
of equity (whether considered in a proceeding at law or in equity).
(n) The Company's obligations under the Guarantees are subordinate
and junior in right of payment to all liabilities of the Company (other than
its guarantee relating to the 8-1/8% Trust Preferred Capital Securities
issued by NWPS Capital Financing I).
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(o) ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustees (the
"Regular Trustees") of the Trust, are employees of the Company and have been
duly authorized by the Company to execute and deliver the Declaration.
(p) Neither the Trust nor the Company is an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(q) The execution, delivery and performance of this Agreement, the
Declaration, the Preferred Securities, the Common Securities, the Indenture,
the Subordinated Debt Securities and the Guarantee Agreements and the
consummation of the transactions contemplated herein and therein and
compliance by the Trust and the Company with their respective obligations
hereunder and thereunder have been duly authorized by all necessary action
(corporate or otherwise) on the part of the Trust and the Company and do not
and will not result in any violation of the charter or by-laws of the Company
or any subsidiary, or the Declaration or Certificate of Trust of the Trust
filed with the State of Delaware on June 30, 1998 (the "Certificate of
Trust") and do not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust, the Company or any subsidiary under, (A) any
contract, indenture, mortgage, loan agreement, note, lease or other agreement
or instrument to which the Trust, the Company or any subsidiary is a party or
by which it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Trust or the Company and its subsidiaries, taken as a whole as one
enterprise) or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Trust, the Company, or any
subsidiary or any of their respective properties.
(r) There are no legal or governmental proceedings pending or
threatened to which the Company, any of its subsidiaries or the Trust is a
party or to which any of the properties of the Company, any of its
subsidiaries or the Trust is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described, or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(s) The Federal Energy Regulatory Commission (the "FERC") has
issued an appropriate order or orders with respect to the issuance and sale
of the Company Securities in accordance with, and as contemplated by, this
Agreement; such order or orders are in full force and effect; the issuance
and sale of the Securities are in conformity with the terms of such order or
orders; and no other authorization, approval or consent of any other
governmental body or agency is legally required for the issuance and sale of
the Common Securities, the Preferred Securities and the Company Securities as
contemplated by this Agreement, except such as have
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been obtained under the Securities Act and the Trust Indenture Act and such
as may be required under the state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Underwriters.
(t) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries (taken as a whole) or the Trust from that
set forth in the Prospectus.
(u) No holder of any security of the Company has any right under
(i) the warrants to purchase common stock issued by the Company to former
stockholders of Empire Energy Corporation or (ii) any agreement entered into
in connection with the issuance of such warrants, or otherwise, to require
the Company to (x) register the sale of any security of the Company in
connection with the filing of the Registration Statement (other than the
shares of Common Stock beneficially owned by the Selling Stockholders named
therein as described under the caption "Selling Stockholders") and the
Prospectus or the consummation of the transactions contemplated by this
Agreement or (y) include any security of the Company in the offering
contemplated by this Agreement.
(v) No pro forma financial statements of the Company or its
subsidiaries are required to be included or incorporated by reference in the
Registration Statement or the Prospectus, including in connection with the
proposed acquisition of Propane Continental, Inc. by Cornerstone Propane
Partners, L.P.
2. PUBLIC OFFERING. The Trust and the Company are advised by the
Representative that the Underwriters propose to make a public offering of
their respective portions of the Preferred Securities as soon after this
Agreement has been entered into as in the judgment of the Representative is
advisable. The terms of the public offering of the Preferred Securities are
set forth in the Prospectus.
3. PURCHASE AND DELIVERY. Subject to the terms and conditions set
forth or incorporated by reference herein, the Trust hereby agrees to sell,
and the Underwriters agree to purchase, severally and not jointly, the
respective number of Preferred Securities set forth below opposite their
names in Schedule I hereto at a purchase price of $25.00 per Preferred
Security.
The Company agrees to issue the Company Securities concurrently with the
issue and sale of the Preferred Securities as contemplated herein. The
Company hereby guarantees the timely performance by the Trust of its
obligations under this Section 3. The Trust agrees to purchase the
Subordinated Debt Securities with the proceeds of, and concurrently with, the
issue and sale of the Securities.
As compensation to the Underwriters for their commitments hereunder, and
because the proceeds of the sale of the Preferred Securities will be loaned
by the Trust to the Company, the Company hereby agrees to pay on the Closing
Date to the Representative, for the accounts of the several Underwriters, an
amount equal to (i) in the case of such number of Preferred Securities as are
reserved by the Underwriters for sale to institutional investors, $.7875 per
Preferred Security
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and (ii) in the case of such number of Preferred Securities as are not so
reserved, $.50 per Preferred Security. The Underwriters shall inform the
Company in writing, not later than the business day prior to the Closing
Date, of the number of Preferred Securities reserved for sale to such
institutional investors.
Payment for the Preferred Securities shall be made by wire transfer of
immediately available funds to a bank account designated by the Trust, at the
office of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, New York, New York, at 10:00
A.M. local time, on November 18, 1998, or at such other time on the same or
such other date, not later than November 25, 1998, as shall be designated in
writing by the Representative. The time and date of such payment are
hereinafter referred to as the Closing Date.
Certificates for the Preferred Securities shall be in definitive form
and registered in such names and in such denominations as the Underwriters
shall request not later than two full business days prior to the Closing
Date. The certificates evidencing the Preferred Securities shall be
delivered to the Representative, through the facilities of The Depository
Trust Company ("DTC") for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer
of the Securities duly paid, against payment of the purchase price therefor.
4. CONDITIONS TO CLOSING. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company's securities
by any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company and
its subsidiaries, taken as a whole, or the Trust, from that set forth in
the Prospectus, that, in the judgment of the Representative, is material
and adverse and that makes it, in the judgment of the Representative,
impracticable to market the Preferred Securities on the terms and in the
manner contemplated in the Prospectus; and
(iii) at the Closing Date, the order or orders of the FERC
authorizing the issuance, sale and delivery of the Company Securities as
contemplated by this Agreement shall be in full force and effect and shall
not be contested or the subject of review or appeal.
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(b) (i) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive officer of
the Company to the effect (x) set forth in clauses (a)(i) and (a)(iii) above
and (y) that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied on or before the Closing
Date.
(ii) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an authorized
representative of the Trust to the effect (x) set forth in clause (a)(i)
above and (y) that the representations and warranties of the Trust contained
in the Underwriting Agreement are true and correct as of the Closing Date and
that the Trust has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied on or before the
Closing Date. The representative signing and delivering such certificate may
rely upon the best of his knowledge as to proceedings threatened.
(c) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the
Company and the Trust, to the effect that
(i) the Company has been duly incorporated and, based upon
certificates or letters from state or other appropriate authorities, is
validly existing as a corporation in good standing under the laws of the
State of Delaware and is duly qualified and in good standing as a foreign
corporation in the States of Iowa, Nebraska, North Dakota and South Dakota,
with corporate powers and statutory authority to carry on the business
which it now carries on as stated in the Prospectus and to own and operate
the properties used by it in such business;
(ii) each subsidiary of the Company has been duly incorporated
or formed and based upon certificates or letters from state or other
appropriate authorities, is validly existing as a corporation or limited
partnership, in good standing under the laws of the jurisdiction of its
incorporation or formation with corporate or partnership powers and
statutory authority to carry on the business which it now carries on as
stated in the Prospectus and to own and operate the properties used by it
in such business and is duly qualified and in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company and has been duly executed and
delivered by the Trust;
(iv) the FERC has issued an appropriate order or orders with
respect to the issuance and sale of the Company Securities, in accordance
with, or as contemplated by, the Underwriting Agreement; to the knowledge
of such counsel, such order or orders are in full force and effect; the
issuance and sale of the Company Securities are in conformity with the
terms of such order or orders; and no other authorization, approval or
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consent of any other governmental body or agency (including, without
limitation, in the jurisdictions of South Dakota, Nebraska, North Dakota
and Iowa) is legally required for the issuance and sale of the Common
Securities, the Preferred Securities and the Company Securities as
contemplated by the Underwriting Agreement, except such as have been
obtained under the Securities Act and the Trust Indenture Act and such as
may be required under the state securities or Blue Sky laws in connection
with the purchase and distribution of the Preferred Securities by the
Underwriters;
(v) the statements (A) in the Prospectus under the captions
"Risk Factors," "Northwestern Capital Financing I," "Description of the
Preferred Securities," "Description of the Subordinated Debentures,"
"Description of the Guarantee," "Effect of Obligations Under the
Subordinated Debentures and the Guarantee," "United States Federal Income
Taxation," "Underwriters," "The Trusts," "Description of the Trusts'
Preferred Securities," "Description of Debt Securities," "Description of
the Guarantees," and "Plan of Distribution" and (B) in the Registration
Statement under Item 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize the matters
referred to therein;
(vi) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries, or the Trust, is a party or to which any of the
properties of the Company or any of its subsidiaries, or the Trust, is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(vii) neither the Trust nor the Company is (x) an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act, or (y) a "holding company"
as such term is defined in the Public Utility Holding Company Act of 1935,
as amended;
(viii) the Registration Statement has become effective under
the Securities Act, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for a stop order with respect thereto
are pending or threatened under Section 8(d) of the Securities Act;
(ix) such counsel (A) is of the opinion that (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion) each document, if any, filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied when so filed as to form in all material respects
with
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the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (B) believes that (except for financial
statements and schedules as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes any Form T-l heretofore referred to) each part of the
Registration Statement, when such part became effective did not and, as
of the date such opinion is delivered, does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (C) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules included
therein as to which such counsel need not express any opinion), comply
as to form in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (D)
believes that (except for financial statements and schedules as to which
such counsel need not express any belief) the Prospectus, at the time
filed with the Commission pursuant to Rule 424(b) under the Securities
Act did not, and as of the date such opinion is delivered does not,
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(x) the Declaration has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and the Regular Trustees;
(xi) the Common Securities, the Preferred Securities, the
Subordinated Debt Securities, the Guarantees, the Declaration, the
Indenture and the Guarantee Agreements conform to the descriptions thereof
contained in the Prospectus;
(xii) all of the issued and outstanding Common Securities of the
Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, and the
Trust is and will be classified as a grantor trust and is not and will not
be classified as an association taxable as a corporation for United States
federal income tax purposes;
(xiii) each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company and (in the case of the
Preferred Security Guarantee Agreement only), assuming it is duly
authorized, executed, and delivered by the Property Trustee, constitutes a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency or other similar laws
involving creditors' rights generally or by general principles of equity
(whether considered in a proceeding at law or in equity); and the Preferred
Securities Guarantee Agreement has been duly qualified under the Trust
Indenture Act;
(xiv) the Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, is a valid and binding obligation of the Company,
enforceable in accordance
11
with its terms, except to the extent that enforcement thereof may be
limited by the bankruptcy, insolvency or other similar laws involving
creditors' rights generally or by general principles of equity (whether
considered in a proceeding at law or in equity); and the Indenture has
been duly qualified under the Trust Indenture Act;
(xv) the Subordinated Debt Securities are in the form
contemplated by the Indenture; the Subordinated Debt Securities have been
duly authorized, executed and delivered by the Company and when
authenticated by the Debt Trustee in the manner provided in the Indenture
and delivered against payment therefor, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws involving
creditors' rights generally or by general principles of equity (whether
considered in a proceeding at law or in equity); and
(xvi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Subordinated Debt Securities, the Guarantee Agreements, the Indenture and
the Declaration will not conflict with, result in a breach of or constitute
a default under (A) any provision of applicable law (except to the extent
that the indemnification provisions hereof may be unenforceable as against
public policy under certain circumstances), (B) the certificate of
incorporation or by-laws of the Company, (C) any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party that is material to the Company and its
subsidiaries, taken as a whole, or (D) any judgment, order or decree known
to such counsel of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary.
(d) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., Vice-President -
Law of the Company to the effect that (i) the Company (A) is in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, or pollutants or
contaminants ("Environmental Laws"), (B) has received all permits, licenses
or other approvals required of it under applicable Environmental Laws to
conduct its business and (C) is in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company, (ii) all of the outstanding shares of capital
stock or partnership interests (as applicable) of the Company's subsidiaries
have been duly authorized and are validly issued, fully paid and
non-assessable, (iii) the statements in "Item 3 - Legal Proceedings" of the
Company's most recent annual report on Form 10-K incorporated by reference in
the Prospectus and in "Item 1 -Legal Proceedings" of Part II of the Company's
quarterly reports on Form 10-Q filed since such annual report and reviewed by
such counsel, in each case insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to
therein, (iv) the
12
Trust has no subsidiaries and is duly authorized to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, and is not
required to be authorized to do business in any other jurisdiction; the Trust
is not a party to or otherwise bound by any agreement other than those
described in the Prospectus, and is not a party to any action, suit or
proceeding of any nature, (v) the issuance and sale by the Trust of the
Preferred Securities and Common Securities, the execution, delivery and
performance by the Trust of this Agreement and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Trust pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which the Trust is a party or by which it
or any of them may be bound, or to which any of the property or assets of the
Trust is subject, nor will such action result in any violation of any
applicable law, administrative regulation or administrative or court decree
to which it is subject, and (vi) the Trust is not in violation of its
Certificate of Trust or the Declaration or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or any other instrument of which the Trust is a party or by which it may be
bound, or to which any of the property or assets of the Trust is subject.
(e) The Representative shall have received on the Closing Date an
opinion dated the Closing Date of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., Delaware
counsel to the Company and the Trust, to the effect that
(i) the Underwriting Agreement has been duly authorized by all
necessary business trust action on the part of the Trust;
(ii) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
formation and valid existence of the Trust as a business trust have been
made; the Trust has the business trust power and authority to own property
and to conduct its business as described in the Prospectus, to issue and
sell the Preferred Securities and the Common Securities, and to execute and
perform its obligations under this Agreement, the Preferred Securities and
the Common Securities and to consummate the transactions herein and therein
contemplated;
(iii) the Declaration is a valid and binding obligation of the
Company and each of the Regular Trustees, enforceable against the Company
and each of the Regular Trustees, in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
affecting creditors' rights generally or by general principles of equity
(whether considered in a proceeding, in equity or at law);
(iv) the Common Securities have been duly authorized and are
validly issued common undivided beneficial interests in the assets of the
Trust; and the issuance of the Common Securities is not subject to
preemptive or other similar rights;
(v) the Preferred Securities have been duly authorized and are
validly
13
issued and (subject to the terms of the Declaration) when delivered to
and paid for by the Underwriters pursuant to this Agreement will be validly
issued, fully paid and non-assessable preferred undivided beneficial
interests in the assets of the Trust; holders of the Preferred Securities
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the GCL; and
the issuance of the Preferred Securities is not subject to preemptive or
other similar rights; and
(vi) the issuance and sale by the Trust of the Preferred
Securities and Common Securities, the execution, delivery and performance
by the Trust of this Agreement and the consummation of the transactions
contemplated hereby and thereby do not violate the Certificate of Trust or
the Declaration, or any Delaware law, rule or regulation.
(f) The Representative shall have received on the Closing Date
opinions dated the Closing Date of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A.
counsel to Wilmington Trust Company, as Delaware Trustee and Property
Trustee under the Declaration, and Guarantee Trustee under the Guarantee
Agreements, in form and substance satisfactory to counsel for the
Underwriters, to the effect that
(i) Wilmington Trust Company ("WTC") is duly organized,
validly existing and in good standing as a banking corporation with
trust powers under the laws of the State of Delaware.
(ii) WTC, the Delaware Trustee, the Property Trustee or the
Guarantee Trustee, as the case may be, each has full power and authority
to execute, deliver and perform its obligations under the terms of the
Declaration and the Preferred Securities Guarantee Agreement.
(iii) The Declaration and the Guarantee Agreements have been
duly authorized, executed and delivered by WTC, as the Delaware Trustee,
the Property Trustee or the Guarantee Trustee, as the case may be.
(iv) The execution, delivery and performance of the
Declaration and the Guarantee Agreements by WTC, the Delaware Trustee,
the Property Trustee or the Guarantee Trustee, as the case may be, do
not conflict with or constitute a breach of the charter or Bylaws of WTC.
(v) No consent, approval or authorization of, or
registration with or notice to, any governmental authority or agency of
the State of Delaware or United States governing the banking or trust
powers of WTC is required for the execution, delivery or performance by
WTC, the Delaware Trustee, the Property Trustee or the Guarantee
Trustee, as the case may be, of the Declaration and the Preferred
Securities Guarantee Agreement.
(g) The Representative shall have received on the Closing Date an
opinion
14
dated the Closing Date, of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to
the Underwriters, covering such matters as the Underwriters may reasonably
request.
With respect to subparagraph (ix) of paragraph (c) above, ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇, counsel to the Company, may state that its opinion and belief are
based upon its participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto (excluding (for
purposes of clauses (B) and (D) of such paragraph ) certain of the documents
incorporated by reference therein (to be specified in such opinion)) and
review and discussion of the contents thereof (including the documents
incorporated by reference therein), but are without independent check or
verification, except as specified.
The opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Company, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., Vice-President - Law of the Company and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, P.A., Delaware counsel to the Company and the Trust, described in
paragraphs (c), (d) and (e) above shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
(h) The Representative shall have received on the date of this
Agreement a letter, dated the date of this Agreement, in form and substance
satisfactory to the Representative, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in or incorporated by reference into the Prospectus.
(i) The Representative shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Representative, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the Company's independent public
accountants, to the effect that such accountants reaffirm, as of the Closing
Date, and as though made on the Closing Date, the statements made in the
letter furnished by such accountants pursuant to Section 4(h), except that
the specified date referred to therein shall be a date not more than three
business days prior to the Closing Date.
(j) At the Closing Date, a registration statement on Form 8-A
under the Exchange Act with respect to the Preferred Securities shall be
effective and the Preferred Securities shall have been approved for listing
on the New York Stock Exchange upon notice of issuance.
(k) On the Closing Date, Standard & Poor's and ▇▇▇▇▇'▇ Investors
Service, Inc. shall have publicly assigned to the Preferred Securities
ratings of A and A2, respectively, which ratings shall be in full force and
effect on the Closing Date.
(l) The Underwriters shall have received such additional documents
as the Representative may reasonably request.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in Section 5(i)
hereof.
15
5. COVENANTS OF THE TRUST AND THE COMPANY. In further consideration
of the agreements of the Underwriters herein contained, the Trust and the
Company covenant as follows:
(a) To furnish the Representative, without charge, a signed copy
of the Registration Statement (including exhibits thereto) and to deliver to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph (c)
below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Underwriters may reasonably request (delivery
of the Prospectus to be made in New York, New York no later than 10:00 A.M.
on the business day immediately succeeding the date of this Agreement).
(b) To cause the Prospectus to be filed with the Commission
pursuant to and in compliance with Rule 424 under the Securities Act.
(c) Before amending or supplementing the Registration Statement or
the Prospectus during such period after the first date of the public offering
of the Preferred Securities as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales by
any Underwriter or a dealer, to furnish to the Underwriters a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Underwriters reasonably object.
(d) If, during such period after the first date of the public
offering of the Preferred Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with law, forthwith
to prepare, file with the Commission and furnish, at their own expense, to
the Underwriters, and to the dealers (whose names and addresses the
Representative will furnish to the Company and the Trust) to which Preferred
Securities may have been sold by the Underwriters on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(e) To endeavor to qualify the Preferred Securities and the
Subordinated Debt Securities for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Underwriters shall reasonably request
and to maintain such qualification for as long as the Underwriters shall
reasonably request.
(f) To make generally available to the Trust's security holders
and to the Representative as soon as practicable an earning statement
covering a twelve month period
16
beginning on the first day of the first full fiscal quarter after the date of
the Underwriting Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is the last
fiscal quarter of the Company's fiscal year, such earning statement shall be
made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(g) During the period ending 30 days after the date of this
Agreement, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, not to (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or otherwise transfer or
dispose of, directly or indirectly, any securities of the Company or the
Trust substantially similar to the Preferred Securities or any securities
convertible into or exercisable or exchangeable therefor (other than the
Securities and the Subordinated Debentures) or (2) enter into any swap or
similar arrangement that transfers, in whole or in part, the economic
consequences of ownership of any of the foregoing, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Preferred Securities or such other securities, in cash or otherwise.
(h) To use its reasonable efforts to cause each of its current
executive officers and directors to refrain, during the period ending 30 days
after the date of this Agreement, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, from (1) offering, pledging, selling, contracting
to sell, granting any option, right or warrant to purchase, lending or
otherwise transferring or disposing of, directly or indirectly, any debt
securities or preferred securities of the Company or the Trust substantially
similar to the Preferred Securities or the Subordinated Debt Securities or
any securities convertible into or exercisable or exchangeable therefor or
(2) entering into any swap or similar arrangement that transfers, in whole or
in part, the economic consequences of ownership of the foregoing, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Preferred Securities or such other securities, in cash or
otherwise.
(i) Whether or not any sale of Preferred Securities is
consummated, to pay all expenses incident to the performance of its
obligations under the Underwriting Agreement, including: (i) the preparation
and filing of the Registration Statement and the Prospectus and all
amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Preferred Securities, (iii) the fees and disbursements of the
Company's counsel and accountants and of the Trustee and its counsel, (iv)
the qualification of the Preferred Securities under state securities or Blue
Sky laws in accordance with the provisions of Section 5(e), including filing
fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Memoranda in an aggregate amount not to exceed $10,000, (v) the printing and
delivery to the Underwriters in quantities as hereinabove stated of copies of
the Registration Statement and any amendments thereto and of the Prospectus
and any amendments or supplements thereto, (vi) any fees charged by rating
agencies for the rating of the Preferred Securities, (vii) the fees and
expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc., (viii) the fees and expenses, if
any, incurred in connection with the listing of the Preferred Securities on
any securities exchange
17
November 11, 1998
and (viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing
of the offering of the Preferred Securities, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road show
presentation with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the
road show.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and the Trust
agree to jointly and severally indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably
incurred by any Underwriter or any such controlling person in connection with
investigating or defending any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company or the Trust
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the Company
or the Trust in writing by such Underwriter expressly for use therein.
(b) The Company agrees to indemnify the Trust against all loss,
liability, claim, damage and expense whatsoever, as due from the Trust under
Section 6(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the directors, officers or Trustees of the
Company or the Trust who sign the Registration Statement and each person, if
any, who controls the Company or the Trust within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company and the Trust to such
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company and the Trust in writing by such
Underwriter expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (c) above, such
person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be
18
at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
the Representative, in the case of parties indemnified pursuant to paragraph
(a) above, and by the Company or the Trust, in the case of parties
indemnified pursuant to paragraph (c) above. The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request and this Agreement prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.
(e) To the extent the indemnification provided for in paragraph
(a) or (c) of this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in
lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Trust on the one hand and the Underwriters on the other hand from the
offering of the Preferred Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company or the Trust on the one
hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Trust on the one hand and
the Underwriters on the other hand in connection with the offering of the
Preferred Securities shall be deemed to be in the same respective proportions
as the net proceeds from the offering of such Preferred Securities (before
deducting expenses) received by the Company and the Trust and the total
underwriting discounts and commissions received by the Underwriters, in
19
each case as set forth in the table on the cover of the Prospectus
Supplement, bear to the aggregate public offering price of the Preferred
Securities. The relative fault of the Company and the Trust on the one hand
and of the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Trust or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section 6 are several in proportion to the respective principal amounts of
Preferred Securities they have purchased hereunder, and not joint.
(f) The Company, the Trust and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 6
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in
paragraph (e) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 6, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Preferred Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
7. TERMINATION. This Agreement shall be subject to termination, by
notice given by the Representative to the Company and the Trust, if (a) after
the execution and delivery of the Underwriting Agreement and prior to the
Closing Date, (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers,
Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade, (ii) trading of any securities of the Trust or
the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity
or crisis that, in the judgment of the Representative, is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in the judgment of the Representative, impracticable to market the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus. This Agreement may also be terminated at any time prior to the
Closing Date if in the judgment of the Representative the subject matter of
any amendment or
20
supplement to the Registration Statement or Prospectus prepared and furnished
by the Company or the Trust reflects a material adverse change in the
business, properties or financial condition of the Company or the Trust which
renders it either inadvisable to proceed with such offering, if any, or
inadvisable to proceed with the delivery of the Preferred Securities to be
purchased hereunder.
8. DEFAULTING UNDERWRITERS. If, on the Closing Date, any one or more
of the Underwriters shall fail or refuse to purchase the Preferred Securities
that it has or they have agreed to purchase hereunder on such date, and the
aggregate amount of Preferred Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate amount of the Preferred Securities to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the amount of Preferred Securities set forth opposite their
respective names in Schedule I of this Agreement bears to the aggregate
amount of Preferred Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the
Representative may specify, to purchase the Preferred Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the amount of
Preferred Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 8 by an amount in excess
of one-ninth of such amount of Preferred Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase the Preferred Securities that
it has or they have agreed to purchase and the aggregate amount of Preferred
Securities with respect to which such default occurs is more than one-tenth
of the aggregate amount of Preferred Securities to be purchased, and
arrangements satisfactory to the Representative and the Company for the
purchase of such Preferred Securities are not made within 36 hours after such
default, the Underwriting Agreement shall terminate without liability on the
part of any non-defaulting Underwriter, the Company or the Trust. In any
such case either the Representatives or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under the Underwriting Agreement.
If the Underwriting Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Company
or the Trust to comply with the terms or to fulfill any of the conditions of
the Underwriting Agreement, or if for any reason the Company or the Trust
shall be unable to perform its obligations under the Underwriting Agreement,
the Company and the Trust will reimburse the Underwriters or such
Underwriters as have so terminated the Underwriting Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with the Underwriting Agreement or the offering of the Preferred
Securities.
If the Underwriting Agreement shall be terminated by the Company because
of any failure or refusal on the part of the Underwriters to comply with the
terms or to fulfill any of the
21
conditions of the Underwriting Agreement, or if for any reason the
Underwriters shall be unable to perform their obligations under the
Underwriting Agreement, the Underwriters will reimburse the Company for all
out-of-pocket expenses (including the fees and disbursements of its counsel)
reasonably incurred by the Company in connection with the Underwriting
Agreement or the offering of the Preferred Securities.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the officers or Trustees of the Company and the Trust (as
the case may be) and the Underwriters set forth in the Underwriting Agreement
will remain in full force and effect, regardless of any termination of the
Underwriting Agreement, any investigation made by or on behalf of any
Underwriter, the Company or the Trust or any of the officers, directors or
controlling persons referred to in Section 6 and delivery of and payment for
the Preferred Securities.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 6, and no
other person will have any right or obligation hereunder.
11. COUNTERPARTS. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. The Underwriting Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of the Underwriting
Agreement have been inserted for convenience of reference only and shall not
be deemed a part of the Underwriting Agreement.
14. NOTICES. All communications hereunder will be in writing and, if
sent to (i) the Underwriters, will be mailed, delivered or telecopied and
confirmed to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇, (ii)
the Company, will be mailed, delivered or telecopied and confirmed to it at
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇. ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, President and Chief Operating Officer, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
and (iii) the Trust, will be mailed, delivered or telecopied and confirmed to
it ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, trustee, Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇.
15. DEFINITION OF "SUBSIDIARY". The term "subsidiary," as used in this
Agreement, shall be deemed to refer only to those direct or indirect
subsidiaries of the Company which would qualify (including on a pro forma
basis) as "significant subsidiaries" pursuant to Rule 405 under the
Securities Act (and, regardless of such qualification, shall be deemed to
include Communication Systems USA, Inc. and Blue Dot Services Inc.).
22
Please confirm your agreement by having an authorized officer sign a
copy of the Underwriting Agreement in the space set forth below.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
Acting severally on behalf of themselves and the several Underwriters named
herein
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: _______________________________
Name:
Title:
Accepted, November ___, 1998
NORTHWESTERN CAPITAL FINANCING I
By: _______________________________
Name:
Title: Trustee
By: _______________________________
Name:
Title: Trustee
NORTHWESTERN CORPORATION
By: _______________________________
Name:
Title:
23
SCHEDULE I
Number of
Name of Underwriter Preferred Securities
------------------- --------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 4,400,000
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp. 4,400,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. 4,400,000
PaineWebber Incorporated 4,400,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. 4,400,000
---------
Total 2,200,000
---------
---------
