SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 21, 1998
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MDU RESOURCES GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-3480 41-0423660
(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
Schuchart Building
918 East Divide Avenue
P.O. Box 5650
Bismarck, North Dakota 58506-5650
(Address of principal executive offices)
Registrant's telephone number, including area code (701) 222-7900
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(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
1. Purchase Agreement, dated as of April 21, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 22, 1998
MDU RESOURCES GROUP, INC.
By: /s/ Vernon A. Raile
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Vernon A. Raile
Vice President, Controller and
Chief Accounting Oficer
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
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1 Purchase Agreement, dated as of April 21, 1998
Exhibit 1
Execution Copy
MDU RESOURCES GROUP, INC.
(a Delaware corporation)
2,100,000 Shares of Common Stock
(Par Value $3.33 Per Share)
PURCHASE AGREEMENT
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April 21, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Edward D. Jones & Co., L.P.
Lehman Brothers, Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
MDU Resources Group, Inc., a Delaware corporation (the
"Company"), and the persons listed in Schedule B hereto (the
"Selling Shareholders"), confirm their respective agreements with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other Underwriters
named in Schedule A hereto (collectively, the "Underwriters",
which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, Donaldson, Lufkin & Jenrette Securities Corporation,
Edward D. Jones & Co., L.P. and Lehman Brothers, Inc. are acting
as representatives (in such capacity, the "Representatives"),
with respect to (i) the sale by the Company and the Selling
Shareholders, acting severally and not jointly, and the purchase
by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $3.33 per
share, of the Company ("Common Stock") and the appurtenant
preference share purchase rights (the "Rights", and together with
the Common Stock, the "Initial Securities") set forth in
Schedules A and B hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of
300,000 additional shares of Common Stock and the rights attached
thereto to cover over-allotments, if any (the "Option
Securities"). The outstanding Rights have been issued pursuant
to a Rights Agreement (the "Rights Agreement") dated as of
November 3, 1988 between the Company and Norwest Bank Minnesota,
N.A., as Rights Agent. The Initial Securities and the Option
Securities are hereinafter called, collectively, the
"Securities."
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities
as soon as the Representatives deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-
3 (No. 333-48647) for the registration of the Securities under
the Securities Act of 1933, as amended (the "1933 Act") and the
offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"), and the Company has filed such
post-effective amendments thereto as may be required prior to the
execution of this Agreement. Such registration statement (as so
amended, if applicable) has been declared effective by the
Commission. Such registration statement (as so amended, if
applicable) is referred to herein as the "Registration
Statement", and the final prospectus and the final prospectus
supplement relating to the offering of the Securities, in the
form first furnished to the Underwriters by the Company for use
in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus", provided,
however, that all references to the "Registration Statement" and
the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the
execution of this Agreement. A "preliminary prospectus" shall be
deemed to refer to any prospectus used before the registration
statement became effective and any prospectus that omitted
information to be included upon pricing in a form of prospectus
filed with the Commission pursuant to Rule 424 of the 1933 Act
Regulations, that was used after such effectiveness and prior to
the execution and delivery of this Agreement. For purposes of
this Agreement, all references to the Registration Statement,
Prospectus, or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules (if any) and other information which is "contained,"
"included" or "stated" in the Registration Statement, any
preliminary prospectus or the Prospectus (or other references of
like import) shall be deemed to mean and include all such
financial statements and schedules (if any) and other information
which is incorporated by reference in the Registration Statement,
any preliminary prospectus or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements
to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectus, as the
case may be.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The
Company represents and warrants to each Underwriter, and agrees
with each Underwriter, as follows:
(i) Compliance with Registration Requirements. The
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Company meets the requirements for use of Form S-3 under the
1933 Act. The Registration Statement has become effective
under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request
on the part of the Commission for additional information has
been complied with.
At the respective times the Registration Statement and
any post-effective amendments thereto became effective and
at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration
Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations
and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was first
furnished to the Underwriters and at the Closing Time (and,
if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished
to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or
Prospectus.
Each preliminary prospectus and the prospectus filed as
part of the Registration Statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424
under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary
prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents
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incorporated or deemed to be incorporated by reference in
the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the
Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was first furnished to
the Underwriters and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), did not
and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who
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certified the financial statements and supporting schedules
included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Financial Statements. The financial statements
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included in the Registration Statement and the Prospectus,
together with the related schedules (if any) and notes,
present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows
of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been
prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as disclosed therein). The
supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected
financial data and the summary financial information
included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in
the Registration Statement.
(v) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the
Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or
in the results of operations, business affairs or properties
of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business or any development which the Company has reason to
believe would result in a prospective material adverse
change (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and
(C) except for regular quarterly dividends on the Common
Stock or Preferred Stock in amounts per share that are
consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has
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been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good
standing in each other jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect;
(vii) Good Standing of Subsidiaries. Each of
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Centennial Energy Holdings, Inc. ("Centennial"), Williston
Basin Interstate Pipeline Company ("Williston"), Knife River
Corporation ("Knife River"), KRC Holdings, Inc. ("KRC"),
Fidelity Oil Co. ("Fidelity"), Fidelity Oil Holdings, Inc.
("Fidelity Holdings"), Morse Bros., Inc. ("Morse") and
Utility Services, Inc. ("Utility Services"; together with
Centennial, Williston, Knife River, KRC, Fidelity, Fidelity
Holdings, and Morse (the "Subsidiaries", and individually, a
"Subsidiary") has been duly organized and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Registration Statement,
all of the issued and outstanding capital stock of each such
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (a)
the subsidiaries listed on Schedule D hereto and (b) certain
other subsidiaries which, considered in the aggregate as a
single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and
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outstanding common stock of the Company is as set forth in
the Prospectus in the row entitled "Shares of Common Stock
Outstanding at March 31, 1998 under the caption "Summary
Information - The Offering" (except for subsequent
issuances, if any, (A) pursuant to this Agreement, (B)
pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectus, (C) pursuant to the
exercise of convertible securities or options referred to in
the Prospectus, (D) following the date hereof, as may be
permitted by Section 3(j) hereof, or, (E) prior to the date
hereof, as set forth in Schedule E hereto). The shares of
issued and outstanding capital stock, including the
Securities to be purchased by the Underwriters from the
Selling Shareholders, have been duly authorized and validly
issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the
Securities to be purchased by the Underwriters from the
Selling Shareholders, was issued in violation of the
preemptive or other similar rights of any securityholder of
the Company.
(ix) Authorization of Agreement. This Agreement has
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been duly authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
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Common Stock to be purchased by the Underwriters from the
Company has been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will
be validly issued and fully paid and non-assessable; each of
the Common Stock and the Rights conforms to all statements
relating thereto contained in the Prospectus; no holder of
the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(xi) The Rights Agreement has been duly authorized,
executed and delivered by the Company; when the Rights shall
have been issued in accordance with the terms of this
Agreement such Rights will have been duly and validly
issued.
(xii) Absence of Defaults and Conflicts. Neither the
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Company nor any of its subsidiaries is in violation of its
charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of
the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that
would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and
in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under
the caption "Use of Proceeds") and compliance by the Company
with its obligations hereunder have been duly authorized by
all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches, defaults or Repayment
Events or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable
law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their assets, properties
or operations where such violation, in the case of the
application of the proceeds of the sale of the Securities,
would have a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or
any subsidiary.
(xiv) Absence of Labor Dispute. No labor dispute with
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the employees of the Company or any subsidiary exists or, to
the knowledge of the Company, is imminent, and the Company
is not aware of any existing or imminent labor disturbance
by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which,
in either case, may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Proceedings. There is no action,
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suit, proceeding, inquiry or investigation before or brought
by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or
which (individually or collectively) might reasonably be
expected to result in a Material Adverse Effect, or which
(individually or collectively) might reasonably be expected
to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated
in this Agreement or the performance by the Company of its
obligations hereunder.
(xvi) Accuracy of Exhibits. There are no contracts or
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documents which are required to be described in the
Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as
required.
(xvii) Absence of Further Requirements. The Federal
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Energy Regulatory Commission (the "FERC"), the Montana
Public Service Commission and the Public Service Commission
of Wyoming have authorized the issuance and sale of the
Securities in the manner contemplated by this Agreement, and
said authorizations are in full force and effect and no
further filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary
or required for the performance by the Company of its
obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this
Agreement, except such as may be required in connection with
post-filing requirements with the FERC due after the date
hereof, and except such as have been already obtained and
are in full force and or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws and
except such as may be required in connection with the
exercise of the Rights.
(xviii) Possession of Licenses and Permits. The
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Company and its subsidiaries possess such permits, licenses,
franchises, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in
compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company
nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its
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subsidiaries have good and marketable title to all real
property owned by the Company and its subsidiaries and good
title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Prospectus or (b) do
not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which
the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect,
and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company
or such subsidiary to the continued possession of the leased
or subleased premises under any such lease or sublease.
(xx) Compliance with Cuba Act. The Company has
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complied with, and is and will be in compliance with, the
provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xxi) Environmental Laws. Except as described in the
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Registration Statement and except as would not, singly or in
the aggregate, result in a Material Adverse Effect, (A)
neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or
protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(b) Representations and Warranties by the Selling
Shareholders. Each Selling Shareholder severally represents and
warrants to each Underwriter and agrees with each Underwriter, as
follows:
(i) Accurate Disclosure. Such Selling Shareholder has
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reviewed and is familiar with the information included in
the Prospectus as set forth under the caption "Selling
Shareholders" relating specifically to such Selling
Shareholder ("Selling Shareholder Information") and such
information is true and correct, and does not include 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; such Selling Shareholder is
disposing of the shares to be sold by it pursuant to the
arrangements described in the Prospectus.
(ii) Authorization of Agreements. Each Selling
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Shareholder has the full right, power and authority to enter
into this Agreement and the Custody Agreement and Power of
Attorney (the "Custody Agreement and Power of Attorney") and
to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and
delivery of this Agreement and the Custody Agreement and
Power of Attorney and the sale and delivery of the
Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and
compliance by such Selling Shareholder with its obligations
hereunder have been duly authorized by such Selling
Shareholder and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default under, or result
in the creation or imposition of any tax, lien, charge or
encumbrance upon the Securities to be sold by such Selling
Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder
may be bound, or to which any of the property or assets of
such Selling Shareholder is subject, nor will such action
result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling
Shareholder, if applicable, or any applicable treaty, law,
statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties (except that no
representation is made with respect to state securities
laws).
(iii) Good and Marketable Title. Such Selling
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Shareholder has and will at the Closing Time have good and
marketable title to the Securities to be sold by such
Selling Shareholder hereunder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind, other than pursuant to
this Agreement and separate Shareholders' Agreements
(together, the "Shareholders' Agreement") and Stock
Disposition Agreements (together, the "Stock Disposition
Agreement"), each dated as of March 5, 1998 relating to the
Shares; and upon delivery of such Securities and payment of
the purchase price therefor as herein contemplated, assuming
each such Underwriter has no notice of any adverse claim,
each of the Underwriters will receive good and marketable
title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance
of any kind including, without limitation, pursuant to the
Shareholders' Agreement and the Stock Disposition Agreement.
(iv) Due Execution of Power of Attorney and Custody
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Agreement. Such Selling Shareholder has duly executed and
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delivered, in the form heretofore furnished to the
Representatives, the Custody Agreement and Power of Attorney
with J. Franklin Morse, as attorney-in-fact for the Selling
Shareholders (the "Attorney-in-Fact") and Norwest Bank
Minnesota, N.A., as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold
by such Selling Shareholder hereunder and to accept payment
therefor; and the Attorney-in-Fact is authorized to execute
and deliver this Agreement and the certificate referred to
in Section 5(f) on behalf of such Selling Shareholder, to
sell, assign and transfer to the Underwriters the Securities
to be sold by such Selling Shareholder hereunder, to
determine the purchase price to be paid by the Underwriters
to such Selling Shareholder, as provided in Section 2(a)
hereof, to authorize the delivery of the Securities to be
sold by such Selling Shareholder hereunder, to accept
payment therefor, and otherwise to act on behalf of such
Selling Shareholder in connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder
-----------------------
has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the
Securities.
(vi) Absence of Further Requirements. No filing with,
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or consent, approval, authorization, order, registration,
qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or
required for the performance by each Selling Shareholder of
its obligations hereunder or in the Custody Agreement and
Power of Attorney, or in connection with the sale and
delivery of the Securities hereunder or the consummation of
the transactions contemplated by this Agreement, except such
as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(vii) Restriction on Sale of Securities. During a
---------------------------------
period of 90 days from the date of the Prospectus, such
Selling Shareholder will not, without the prior written
consent of Merrill Lynch, (i) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable
for Common Stock or file any registration statement under
the 1933 Act with respect to any of the foregoing except
that the Selling Shareholder may make the following
transfers: (A) any bona fide gift of shares by such Selling
Shareholder, including a charitable gift, (B) any transfer
of such shares by a Selling Shareholder to a trustee for the
benefit of such Selling Shareholder or such Selling
Shareholder's ancestors, descendants or spouse, and (C) any
transfer of such shares by such Selling Shareholder to such
Selling Shareholder's executors, administrators or legal
representatives, heirs or devisees pursuant to the laws of
descent and distribution, provided that in any such case,
such shares may not be resold in a public offering until the
expiration of the foregoing period; or (ii) enter into any
swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to the Securities to be
sold hereunder.
(viii) Certificates Suitable for Transfer.
-----------------------------------
Certificates for all of the Securities to be sold by such
Selling Shareholder pursuant to this Agreement, in suitable
form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with
signatures guaranteed have been placed in custody with the
Custodian with irrevocable conditional instructions to
deliver such Securities to the Underwriters pursuant to this
Agreement.
(ix) No Association with NASD. Neither such Selling
------------------------
Stockholder nor any of his/her affiliates directly, or
indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, or has
any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National
Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to
the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Shareholders as
such and delivered to the Representatives or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be
deemed a representation and warranty by such Selling Shareholder
as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the respective
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company and each
Selling Shareholder, severally and not jointly, agree to sell to
each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from
the Company and each Selling Shareholder, at the price per share
set forth in Schedule C, that proportion of the number of Initial
Securities set forth in Schedule B opposite the name of the
Company or such Selling Shareholder, as the case may be, which
the number of Initial Securities set forth in Schedule A opposite
the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof, bears
to the total number of Initial Securities, subject, in each case,
to such adjustments among the Underwriters as the Representatives
in their sole discretion shall make to eliminate any sales or
purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to
the terms and conditions herein set forth, the Company hereby
grants an option to the Underwriters, severally and not jointly,
to purchase up to an additional 300,000 shares of Common Stock
and related Rights, as set forth in Schedule B, at the price per
share set forth in Schedule C, less an amount per share equal to
any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after
the date hereof and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option
Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities
then being purchased which the number of Initial Securities set
forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case
to such adjustments as the Representatives in their discretion
shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and
delivery of certificates for, the Initial Securities shall be
made at the offices of Reid & Priest LLP, 40 West 57th Street,
New York, New York, or at such other place as shall be agreed
upon by the Representatives and the Company and the Selling
Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth,
if the pricing occurs after 4:30 P.M. (Eastern time) on any given
day) business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company and the
Selling Shareholders (such time and date of payment and delivery
being herein called "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the
purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at
such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company and the Selling
Shareholders by wire transfer of immediately available funds to
bank accounts designated by the Company and the Custodian
pursuant to each Selling Shareholder's Custody Agreement and
Power of Attorney, as the case may be, against delivery to the
Representatives for the respective accounts of the Underwriters
of certificates for the Securities to be purchased by them. It
is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial
Securities and the Option Securities, if any, which it has agreed
to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be
obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by
any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial Securities and the Option Securities, if any, shall be in
such denominations and registered in such names as the
Representatives may request in writing at least one full business
day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for
examination and packaging by the Representatives in The City of
New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company
------------------------
covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will notify the
Representatives immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to
Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing
under Rule 462(b)), or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will (i) in
all cases during the period when a prospectus is required to be
delivered under the 1933 Act and (ii) thereafter, as to the
Prospectus Supplement only, furnish the Representatives with
copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not
file or use any such document to which the Representatives or
counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for
the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to
the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each
preliminary prospectus as such Underwriter reasonably requested,
and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated
in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or
supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state
a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary,
in the reasonable opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions as the
Representatives may reasonably designate and to maintain such
qualifications in effect for a period of not less than one year
from the date of this Agreement, provided, however, that the
Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been
so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as practicable
an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of
the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to
effect the listing of the Securities on the New York Stock
Exchange and the Pacific Exchange.
(j) Restriction on Sale of Securities. During a period of
90 days from the date of the Prospectus, the Company will not,
without the prior written consent of Merrill Lynch, (i) directly
or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to
(A) the Securities to be sold hereunder, (B) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant
to existing benefit plans of the Company referred to in the
Prospectus or pursuant to the Rights, (C) any shares of Common
Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan or (D) any shares of Common Stock
issued in connection with mergers or acquisitions completed in
the ordinary course of business by the Company or its
subsidiaries provided such shares may not be resold in a public
offering until the expiration of the foregoing period.
(k) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses (a) Expenses. The
-------------------
Company will pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing
and delivery to the Underwriters of this Agreement, and such
other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates
for the Securities to the Underwriters, and any stock or other
transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities by the Company to
the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including
filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection therewith and in connection
with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities
and (ix) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange and
Pacific Exchange.
(b) Expenses of the Selling Shareholders. The Selling
Shareholders will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any
stamp duties, capital duties and stock transfer taxes, if any,
payable upon the sale of the Securities to the Underwriters, and
their transfer between the Underwriters pursuant to an agreement
between such Underwriters, and (ii) the fees and disbursements of
their respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is
terminated by the Representatives in accordance with the
provisions of Section 5, Section 9(a)(i) or Section 11 hereof,
the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
(d) Allocation of Expenses. The provisions of this Section
shall not affect any agreement that the Company and the Selling
Shareholders may make for the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The
---------------------------------------
obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Company
and the Selling Shareholders contained in Section 1 hereof or in
certificates of any officer of the Company or any subsidiary of
the Company or on behalf of any Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to
the following further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement has become effective and at Closing Time,
no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission,
and any request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus
containing information relating to the description of the
Securities, the specific method of distribution and similar
matters shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinions, dated
as of Closing Time, of Reid & Priest LLP, special counsel for the
Company, and Lester H. Loble, II, general counsel for the
Company, in substantially the forms of Exhibit A-1 and Exhibit A-
2 hereto, respectively.
(c) Opinion of Counsel for the Selling Shareholders. At
Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of Weatherford,
Thompson, Quick & Ashenfelter, P.C., counsel for the Selling
Shareholders, in substantially the form set forth in Exhibit B
hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time,
the Representatives shall have received the favorable opinion,
dated as of Closing Time, of Berlack, Israels & Liberman LLP,
counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters with
respect to the matters set forth in clauses (i), (iii), (iv)
(solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company),
(v) (solely as to the Purchase Agreement and Custody Agreement
and Power of Attorney), (vi) and (vii), inclusive, (ix), (x)
(solely as to the information in the Prospectus under
"Description of Common Stock and Rights") and the penultimate
paragraph of Exhibit A-1 hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law
of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state
that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of
public officials.
(e) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective
dates as of which information is given in the Prospectus, any
Material Adverse Effect, and the Representatives shall have
received a certificate of the President or a Vice President of
the Company and of the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such Material Adverse Effect, (ii) the
representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are to the
knowledge of the Company contemplated by the Commission.
(f) Certificate of Selling Shareholders. At Closing Time,
the Representatives shall have received a certificate of the
Attorney-in-Fact on behalf of each Selling Shareholder, dated as
of Closing Time, to the effect that (i) the respective
representations and warranties of each Selling Shareholder
contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly made
at and as of Closing Time and (ii) each Selling Shareholder has
complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or
prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have
received from Arthur Andersen a letter dated such date, in form
and substance satisfactory to the Representatives, together with
signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and
the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Arthur Andersen a
letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days
prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities
shall have been approved for listing on the New York Stock
Exchange and the Pacific Exchange, subject only to official
notice of issuance.
(j) Regulatory Authorizations. At the time of the
execution of this Agreement and at the Closing Time, there shall
be in full force and effect the orders of the FERC, the Montana
Public Service Commission and the Public Service Commission of
Wyoming, permitting the issuance and sale of the Securities as
contemplated by this Agreement.
(k) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company
contained herein and the statements in any certificates furnished
by the Company shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such
---------------------
Date of Delivery, of the President or a Vice President of
the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable
------------------------------
opinion of Reid & Priest LLP, special counsel for the
Company, together with the favorable opinion of Lester H.
Loble, II, general counsel for the Company, each in form and
substance satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The
-----------------------------------
favorable opinion of Berlack, Israels & Liberman LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from Arthur
-------------------------
Andersen, in form and substance satisfactory to the
Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(g)
hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date
of Delivery counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company and the
Selling Shareholders in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in
form and substance to the Representatives and counsel for the
Underwriters.
(m) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities,
may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without
liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
extent and in the manner set forth in clauses (i), (ii) and (iii)
below. In addition, each Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act as follows but only with respect to such Selling
Shareholder's Selling Shareholder Information:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein
or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company and the
Selling Shareholders; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply
-------- -------
to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, however, that the
-------- ------- -------
Company shall not be liable to an Underwriter to the extent that
the Company shall sustain the burden of proof that any such loss,
liability, claim, damage or expense resulted from the fact that
such Underwriter sold Securities to a person to whom such
Underwriter failed to send or give, at or prior to the Closing
Time or Date of Delivery, as the case may be, a copy of the
Prospectus if (i) the Company has previously furnished copies
thereof (sufficiently in advance of the Closing Time or Date of
Delivery, as the case may be), to allow for distribution by the
Closing Time or Date of Delivery, as the case may be, to the
Underwriters and the loss, liability, claim, damage or expense of
such Underwriter resulted from an untrue statement or alleged
untrue statement or omission contained in or omitted from the
preliminary prospectus which was corrected in the Prospectus and
such Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person and (ii) such
failure to give or send the Prospectus by the Closing Time or the
Date of Delivery, as the case may be, to the party or parties
asserting such loss, liability, claim damage or expense would
have constituted the sole defense to the claim asserted by such
person.
(b) Indemnification of Company, Directors and Officers and
Selling Shareholders. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of
its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder and each person, if any, who controls
any Selling Shareholder within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder,
but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in
any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In
the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate
at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If
at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among
the Company and the Selling Shareholders with respect to
indemnification.
SECTION 7. Contribution. If the indemnification provided
------------
for in Section 6 hereof is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Selling
Shareholders on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the
Prospectus.
The relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling
Shareholders or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters
agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation
(even if the Underwriters 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 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include
any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any
such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company or
Selling Shareholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or such Selling Shareholder, as the
case may be. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any
agreement among the Company and the Selling Shareholders with
respect to contribution.
SECTION 8. Representations, Warranties and Agreements to
---------------------------------------------
Survive Delivery. All representations, warranties and agreements
----------------
contained in this Agreement or in certificates of officers of the
Company or any of its subsidiaries or the Selling Shareholders
submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on
behalf of any Underwriter or controlling person, or by or on
behalf of the Company or the Selling Shareholders, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may
terminate this Agreement, by notice to the Company and the
Selling Shareholders, at any time at or prior to Closing Time or
the Date of Delivery (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material
adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in
national or international political, financial or economic
conditions, in each case the effect of which is such as to make
it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company
has been suspended or materially limited by the Commission or the
New York Stock Exchange or Pacific Exchange, or if trading
generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc.
or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant
to this Section, such termination shall be without liability of
any party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 6, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If
------------------------------------------
one or more of the Underwriters shall fail at Closing Time or a
Date of Delivery to purchase the Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities
in such amounts as may be agreed upon and upon the terms herein
set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the number of Securities to be purchased on
such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10%
of the number of Securities to be purchased on such date,
this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of
Delivery which is after the Closing Time, which does not result
in a termination of the obligation of the Underwriters to
purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the
Company and any Selling Shareholder shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 10.
SECTION 11. Default by one or more of the Selling
-------------------------------------
Shareholders or the Company. (a) If a Selling Shareholder shall
---------------------------
fail at Closing Time to sell and deliver the number of Securities
which such Selling Shareholder or Selling Shareholders are
obligated to sell hereunder, and the Company does not exercise
the right granted below to increase the number of Securities to
be sold by it hereunder by that number of Securities that are not
to be sold and delivered by the Selling Shareholder(s), then the
Underwriters may, at option of the Representatives, by notice
from the Representatives to the Company and the non-defaulting
Selling Shareholders, either (a) terminate this Agreement without
any liability on the fault of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in
full force and effect or (b) elect to purchase the Securities
which the non-defaulting Selling Shareholders and the Company
have agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve any Selling Shareholder so defaulting
from liability, if any, in respect of such default.
In the event the aggregate number of Securities which such
Selling Shareholder(s) have failed to sell and deliver (the
"Defaulted Securities") does not exceed 10% of the number of
Securities to be sold by all Selling Shareholders, the Company
shall have the right (but not the obligation) to increase the
number of Securities to be sold by it by an amount equal to the
number of Defaulted Securities, such right to be exercisable
within 24 hours of the Closing Time. In the event of a default
by any Selling Shareholder as referred to in this Section 11,
each of the Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in
order to effect any required change in the Registration Statement
or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the
Date of Delivery to sell the number of Securities that it is
obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any non-defaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and
8 shall remain in full force and effect. No action taken
pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed
to the Representatives at North Tower, World Financial Center,
New York, New York 10281-1201, attention of Russ Robertson;
notices to the Company shall be directed to it at MDU Resources
Group, Schuchart Building, 918 East Divide Avenue, Bismarck,
North Dakota 58501, attention of the office of the Treasurer; and
notices to the Selling Shareholders shall be directed to J.
Franklin Morse, attorney-in-fact to the Selling Shareholders, at
3616 NW Eagleview Drive, Albany, OR 97321.
SECTION 13. Parties. This Agreement shall each inure to
-------
the benefit of and be binding upon the Underwriters, the Company
and the Selling Shareholders and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholders
and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the
Selling Shareholders and their respective successors, and said
controlling persons and officers and directors and their heirs
and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL
----------------------
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 15. Effect of Headings. The Article and Section
------------------
headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the
Attorney-in-Fact for the Selling Shareholders a counterpart
hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the
Company and the Selling Shareholders in accordance with its
terms.
Very truly yours,
MDU RESOURCES GROUP, INC.
By /s/ Martin A. White
----------------------------------
Title:
J. FRANKLIN MORSE
By /s/ J. Franklin Morse
-----------------------------------
As Attorney-in-Fact acting on
behalf of the Selling Shareholders
named in Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
EDWARD D. JONES & CO., L.P.
LEHMAN BROTHERS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Robert Craig
------------------------------------------
Authorized Signatory
For themselves, and as Representatives of the other Underwriters
named in Schedule A hereto.
<PAGE>
SCHEDULE A
Name of Underwriter Number of
------------------- Initial
Securities
-------------
Merrill Lynch, Pierce, Fenner & Smith 352,500
Incorporated
Donaldson, Lufkin & Jenrette Securities 352,500
Corporation 352,500
Edward D. Jones & Co., L.P. 352,500
Lehman Brothers, Inc.
BT Alex. Brown Incorporated 60,000
CIBC Oppenheimer Corp. 60,000
Credit Suisse First Boston Corporation 60,000
A.G. Edwards & Sons, Inc. 60,000
Goldman, Sachs & Co. 60,000
Morgan Stanley & Co., Incorporated 60,000
Painewebber Incorporated 60,000
Smith Barney Inc. 60,000
Davenport & Company LLC 30,000
D.A. Davidson & Co. Incorporated 30,000
Janney Montgomery Scott Inc. 30,000
Petrie Parkman & Co., Inc. 30,000
Piper Jaffray Inc. 30,000
Ragen Mackenzie Incorporated 30,000
Redwood Securities Group, Inc. 30,000
---------
Total . . . . . . . . . . . . . . . . . . . . . 2,100,000
<PAGE>
SCHEDULE B
Number of Initial Maximum Number of
Securities to be Option Securities
Sold to Be Sold
---------------- -----------------
The Company 869,068 300,000
Selling Shareholders:
J. Franklin Morse 100,238
The Joseph D. Morse 24,294
Revocable Trust, dated
January 25, 1993
The Forrest W. Morse 28,739
Revocable Trust, dated May
21, 1993
The William F. Morse 26,516
Revocable Trust, dated
October 5, 1993
Scot F. Morse 8,301
Kerry Lin Tong 8,301
Michael D. Morse 143,117
Derek C. Morse 3,018
Brock M. Morse 3,018
Tari Morse as Custodian for 3,018
Tyler A. Morse Under the
Oregon Uniform Transfer to
Minors Act
The Tyler A. Morse Trust, 5,865
dated April 21, 1997
The Joy L. Morse 7,224
Irrevocable Trust, dated
December 24, 1996
The Brock M. Morse Trust, 5,865
dated April 21, 1997
The Derek C. Morse Trust, 5,865
dated April 24, 1997
Steven G. Morse 169,021
Jennifer L. Smith 4,398
Gregory F. Morse 162,684
The Sara L. Morse Trust, 3,018
dated October 31, 1995
The Bryan T. Morse Trust, 3,018
dated October 31, 1995
Jonathan B. Morse 110,712
Travis L. Morse 1,359
Gabriel J. Morse 1,359
Susan L. Morse as Custodian 1,359
for Justin W. Morse Under
the Oregon Uniform Transfer
to Minors Act
Susan L. Morse as Custodian 1,359
for Amanda N. Morse Under
the Oregon Uniform
Transfers to Minors Act
The Travis Lee Morse Gift 3,160
Trust, dated May 15, 1997
The Justin Wade Morse Gift 3,160
Trust, dated May 15, 1997
The Amanda Nicole Morse 3,160
Gift Trust, dated May 15,
1997
The Gabriel Jerome Morse 3,160
Gift Trust, dated May 15,
1997
Raymond W. Morse 44,770
Phyllis J. Helland 44,770
Diana M. Perdue 44,770
John G. Perdue 44,770
The Anne M. Novakovich 57,678
Family Trust, dated October
29, 1996
The Anne M. Novakovich 20,532
Children's Trust, dated
April 8, 1997
Angela Andersen 1,606
Clinton D. Andersen 1,606
The McBride Family Limited 30,606
Partnership
Debbie McCool 2,436
Richard Lyon 2,436
Northwest Christian College 60,150
Willamette Valley 8,270
Rehabilitation Center, Inc.
R. Gary Ferguson 14,225
Dennis L. Smallwood 8,001
--------- -------
Total . . . . . . . . . . . 2,100,000 300,000
<PAGE>
SCHEDULE C
MDU Resources Group, Inc.
2,100,000 Shares of Common Stock
(Par Value $3.33 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be
$35.625.
2. The purchase price per share for the Securities to be
paid by the several Underwriters shall be $34.645, being an
amount equal to the initial public offering price set forth above
less $.98 per share; provided that the purchase price per share
for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced
by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but
not payable on the Option Securities.
<PAGE>
SCHEDULE D
LIST OF SUBSIDIARIES
State or
Other
Jurisdiction
in Which
Incorporated
-----------
Alaska Basic Industries, Inc. Alaska
Anchorage Sand and Gravel Company, Inc. Alaska
Baldwin Contracting Company, Inc. California
Centennial Energy Holdings, Inc. Delaware
Concrete, Inc. California
Fidelity Oil Co. Delaware
Fidelity Oil Holdings, Inc. Delaware
High Line Equipment, Inc. Delaware
ILB Hawaii, Inc. Hawaii
International Line Builders, Inc. Delaware
Knife River Corporation Delaware
Knife River Dakota, Inc. Delaware
Knife River Hawaii, Inc. Delaware
Knife River Marine, Inc. Delaware
KRC Aggregate, Inc. Delaware
KRC Holdings, Inc. Delaware
LTM, Incorporated Oregon
Medford Ready Mix, Inc. Delaware
Morse Bros., Inc. Oregon
Pouk & Steinle, Inc. California
Prairie Propane, Inc. Delaware
Prairielands Energy Marketing, Inc. Delaware
Rogue Aggregates, Inc. Oregon
S<2>-F Corp. Oregon
Utility Services, Inc. Delaware
WBI Canadian Pipeline, Ltd. Canada
Williston Basin Interstate Pipeline Company Delaware
<PAGE>
SCHEDULE E
Issuance of MDU Resources Group, Inc. common stock, $3.33 par
value, subsequent to March 31, 1998: 545,545 shares.
<PAGE>
Exhibit A-1
[Letterhead of Reid & Priest LLP]
New York, New York
April , 1998
---
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
EDWARD D. JONES & CO., L.P.
LEHMAN BROTHERS, INC.
as Representatives of the
several Underwriters
named in Schedule A
to the Purchase Agreement
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
We have acted as special counsel to MDU Resources
Group, Inc., a Delaware corporation (the "Company"), in
connection with the preparation, execution and delivery of the
Purchase Agreement (the "Agreement"), dated April , 1998, by
---
and among the Company, you, as Representatives of the several
Underwriters named in Schedule A thereto and the persons listed
in Schedule B thereto, relating to the offering of 2,100,000
shares of the Company's Common Stock, par value $3.33 per share
(such shares being hereinafter referred to as the "Common
Stock"), and the appurtenant preference share purchase rights
(the "Rights", and together with the Common Stock, the
"Securities") and the preparation and filing of a Registration
Statement on Form S-3 (File No. 333-48647) (the "Registration
Statement") relating to such offering. All capitalized terms
used herein without definition shall have the respective meanings
set forth in the Agreement.
This opinion is rendered to you in accordance with
Section 5(b) of the Agreement.
We have examined the Registration Statement and the
Prospectus, which pursuant to Form S-3 under the Securities Act
of 1933, as amended (the "Act"), incorporates or is deemed to
incorporate by reference the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1997, the Current
Report on Form 8-K, dated April 16, 1998, and the Registration
Statement on Form 8-A of the Company, dated November 17, 1988
(the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, we have examined, and have relied as to matters of
fact upon, the documents delivered to you at the closing (except
the certificates representing the Common Stock, of which we have
examined a specimen), and upon originals or copies, certified or
otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of
officers and representatives of the Company, and have made such
other and further investigations, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as certified or photostatic copies, and the authenticity of such
latter documents.
Based upon the foregoing, and subject to the
qualifications and limitations stated herein, we are of the
opinion that:
(i) The Company is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(ii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in Montana, North
Dakota, South Dakota and Wyoming.
(iii) The Common Stock to be purchased by the
Underwriters from the Company has been duly authorized for
issuance and sale to the Underwriters pursuant to the Agreement
and, when issued and delivered by the Company pursuant to the
Agreement against payment of the consideration set forth therein,
will be validly issued and fully paid and non-assessable, and no
holder of the Common Stock is subject to personal liability by
reason of being such a holder. The Common Stock to be purchased
from the Selling Shareholders has been duly authorized and
validly issued and is fully paid and non-assessable.
(iv) The issuance and sale of the Securities by the Company
and the sale of the Securities by the Selling Shareholders are
not subject to the preemptive or other similar rights of any
securityholder of the Company.
(v) The Agreement and the Custody Agreement and Power of
Attorney each has been duly authorized, executed and delivered by
the Company. The Rights Agreement, dated as of November 3, 1988
(the "Rights Agreement"), between the Company and Norwest Bank
Minnesota N.A., as Rights Agent, has been duly authorized,
executed and delivered by the Company; and when the Rights shall
have been issued in accordance with the Agreement, the Rights to
be purchased by the Underwriters will have been duly and validly
issued.
(vi) The Registration Statement has become effective under
the Act, any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for
that purpose have been instituted or are pending or threatened by
the Commission.
(vii) The Registration Statement, the Prospectus,
excluding the Exchange Act Documents, and each supplement to the
Registration Statement and Prospectus, excluding the Exchange Act
Documents, as of the time the Registration Statement became
effective, and the Prospectus as of the date it was filed
pursuant to Rule 424(b) under the Act (other than the financial
statements and supporting schedules and other financial data
included therein, or the information relating to the Company's
interest in oil and natural gas reserves attributed to Ralph E.
Davis Associates, Inc. or the information concerning the lignite
coal reserves of Knife River Coal Mining Company attributed to
Paul Weir International Mining Consultants contained therein,
upon which we express no opinion (collectively, the "Excepted
Information")) complied as to form in all material respects with
the requirements of the Act and the 1933 Act Regulations.
(viii) The Exchange Act Documents (other than the
Excepted Information, upon which we express no opinion), when
they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder.
(ix) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of the
Restated Certificate of Incorporation and by-laws of the Company
and the requirements of the New York Stock Exchange and the
Pacific Exchange.
(x) The information in the Prospectus under "Description of
Common Stock and Rights" and in the Registration Statement under
Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's Restated Certificate of
Incorporation and by-laws, or legal proceedings or legal
conclusions, has been reviewed by us and is correct in all
material respects.
(xi) The Federal Energy Regulatory Commission (the "FERC"),
the Montana Public Service Commission and the Public Service
Commission of Wyoming have authorized the issuance and sale of
the Securities in the manner contemplated by the Agreement, and,
to the best of our knowledge, said authorizations are still in
full force and effect. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, and under the
Act and the 1933 Act Regulations, which have been obtained, or as
may be required under the securities or blue sky laws of the
various states, as to which we express no opinion) is necessary
or required in connection with the due authorization, execution
and delivery of the Agreement or for the offering, issuance, sale
or delivery of the Securities, except such as may be required in
connection with post-filing requirements with the FERC due after
the date hereof.
(xii) The execution, delivery and performance of the
Agreement and the consummation of the transactions contemplated
in the Agreement and in the Registration Statement (including the
issuance and sale of the Securities) and compliance by the
Company with its obligations under the Agreement do not and will
not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default
or Repayment Event (as defined in Section 1(a)(xii) of the
Agreement) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other
agreement or instrument, each of a material nature and known to
us, to which the Company is a party or by which it may be bound,
or to which any of the property or assets of the Company is
subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances or Repayment Events that would not
have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the Restated Certificate of
Incorporation or by-laws of the Company, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known
to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
of its properties, assets or operations.
We have not independently verified the accuracy,
completeness or fairness of the statements made or included in
the Registration Statement, the Prospectus or the Exchange Act
Documents and take no responsibility therefor, except to the
extent set forth in paragraph (x) above. In the course of
preparation by the Company of the Registration Statement and the
Prospectus, we participated in conferences with certain of its
officers and employees, with its General Counsel, with your
representatives and with representatives of Arthur Andersen LLP,
the independent accountants who examined certain of the financial
statements included in the Exchange Act Documents. Based on our
examination of the Registration Statement, the Prospectus and the
Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the
Prospectus and our participation in the conferences referred to
above, nothing has come to our attention that would lead us to
believe that the Registration Statement (except for the Excepted
Information, upon which we make no statement), at the time such
Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (except for the
Excepted Information, upon which we make no statement), as of the
date the Prospectus was filed under Rule 424(b) under the Act or
on the date hereof, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
We are members of the Bar of the State of New York and
do not hold ourselves out as experts in the laws of any other
state. We express no opinion as to the laws of any jurisdiction
other than the laws of the State of New York, the General
Corporation Law of the State of Delaware, and the Federal laws of
the United States of America.
In rendering this opinion, we have relied as to all
matters of Montana, North Dakota, South Dakota and Wyoming law
and, as to the matters addressed therein, with your consent, upon
the opinion addressed to you of even date herewith of Lester H.
Loble, II, Esq., Bismarck, North Dakota, the General Counsel of
the Company, and we believe that we and the Underwriters are
justified in relying upon such opinion.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon
by you for any other purpose, or relied upon by or furnished to
any other person, firm or corporation (other than the several
Underwriters), other than Lester H. Loble, II, Esq., the
Company's General Counsel, to the extent set forth in his opinion
of even date herewith addressed to you, without our prior
consent.
Very truly yours,
REID & PRIEST LLP
<PAGE>
Exhibit A-2
[LETTERHEAD OF MDU RESOURCES GROUP, INC.]
April , 1998
----
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
EDWARD D. JONES & CO., L.P.
LEHMAN BROTHERS, INC.
as Representatives of the
several Underwriters
named in Schedule A
to the Purchase Agreement
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
I am General Counsel of MDU Resources Group, Inc., a
Delaware corporation (the "Company"), and am delivering this
opinion in connection with the Purchase Agreement (the
"Agreement"), dated April , 1998, by and among the Company, you, as
--
Representatives of the several Underwriters named in Schedule A
thereto and the persons listed in Schedule B thereto, relating to
the offering of 2,100,000 shares of the Company's Common Stock,
par value $3.33 per share (such shares being hereinafter referred
to as the "Common Stock"), and the appurtenant preference share
purchase rights (the "Rights", and together with the Common
Stock, the "Securities") and the preparation and filing of a
Registration Statement on Form S-3 (File No. 333-48647) (the
"Registration Statement") relating to such offering. All
capitalized terms used herein without definition shall have the
respective meanings set forth in the Agreement.
This opinion is rendered to you in accordance with
Section 5(b) of the Agreement.
I have examined the Registration Statement and the
Prospectus, which pursuant to Form S-3 under the Securities Act
of 1933, as amended (the "Act"), incorporates or is deemed to
incorporate by reference the Annual Report on Form 10-K of the
Company for the fiscal year ended December 31, 1997, the Current
Report on Form 8-K, dated April 16, 1998, and the Registration
Statement on Form 8-A of the Company, dated November 17, 1988
(the "Exchange Act Documents"), each as filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, I have examined, and have relied as to matters of
fact upon, the documents delivered to you at the closing (except
the certificates representing the Common Stock, of which I have
examined a specimen), and upon originals or copies, certified or
otherwise identified to my satisfaction, of such corporate
records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of
officers and representatives of the Company, and have made such
other and further investigations, as I have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In such examination, I have assumed the genuineness of
all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me
as certified or photostatic copies, and the authenticity of such
latter documents.
Based upon the foregoing, and subject to the
qualifications and limitations stated herein, I am of the opinion
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Agreement. The Company holds valid and
subsisting franchises, licenses and permits authorizing it to
carry on the utility business in which it is engaged, except as
may be stated or referred to in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
Montana, North Dakota, South Dakota and Wyoming and is not
required, whether by reason of the ownership or leasing of
property or the conduct of business, to be qualified in any other
jurisdiction, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(iv) The outstanding common stock of the Company is as set
forth in the Prospectus in the row entitled "Shares of Common
Stock outstanding at March 31, 1998" under the caption
"Capitalization" (except for subsequent issuances, if any, (A)
pursuant to the Agreement or (B) pursuant to reservations,
agreements or employee benefit plans referred to in the
Prospectus or (C) pursuant to the exercise of convertible
securities or options referred to in the Prospectus or (D)
[Angell, Pouk] shares issued pursuant to acquisitions by the
Company); the shares of issued and outstanding capital stock of
the Company, including the Common Stock to be purchased by the
Underwriters from the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-
assessable, and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(v) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the best of my
knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Subsidiary was issued
in violation of the preemptive or similar rights of any
securityholder of such Subsidiary.
(vi) To the best of my knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a party,
or to which the property of the Company or any subsidiary is
subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions
contemplated in the Agreement or the performance by the Company
of its obligations thereunder.
(vii) The information in the Prospectus under
"Description of Common Stock and Rights" in the Prospectus
Supplement and in the Registration Statement under Item 15, to
the extent that it constitutes matters of law, summaries of legal
matters, the Company's charter and by-laws, or legal proceedings
or legal conclusions, has been reviewed by me and is correct in
all material respects.
(viii) To the best of my knowledge, there are no material
statutes or regulations that are required to be described in the
Prospectus that are not described as required.
(ix) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its
subsidiaries are a party are accurate in all material respects,
to the best of my knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments, each of a material nature, required to be described
or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits
thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(x) To the best of my knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xi) The Federal Energy Regulatory Commission (the "FERC"),
the Montana Public Service Commission and the Public Service
Commission of Wyoming have authorized the issuance and sale of
the Securities in the manner contemplated by the Agreement, and,
to the best of my knowledge, said authorizations are still in
full force and effect. No filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency,
domestic or foreign (other than as described above, under the Act
and the 1933 Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of the various
states, as to which I express no opinion) is necessary or
required in connection with the due authorization, execution and
delivery of the Agreement or for the offering, issuance, sale or
delivery of the Securities, except such as may be required in
connection with post-filing requirements with the FERC due after
the date hereof.
(xii) The execution, delivery and performance of the
Agreement and the consummation of the transactions contemplated
in the Agreement and in the Registration Statement (including the
issuance and sale of the Securities) and compliance by the
Company with its obligations under the Agreement do not and will
not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default
or Repayment Event (as defined in Section 1(a)(xii) of the
Agreement) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
any other agreement or instrument, each of a material nature and
known to me, to which the Company or any subsidiary is a party or
by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens,
charges or encumbrances or Repayment Events that would not have a
Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to me, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary
or any of their respective properties, assets or operations.
I have not independently verified the accuracy,
completeness or fairness of the statements made or included in
the Registration Statement, the Prospectus or the Exchange Act
Documents and take no responsibility therefor, except to the
extent set forth in paragraph (vii) above. In the course of
preparation by the Company of the Registration Statement and the
Prospectus, I participated in conferences with certain of its
officers and employees, with other counsel for the Company, with
your representatives and with representatives of Arthur Andersen
LLP, the independent accountants who examined certain of the
financial statements included in the Exchange Act Documents.
Based on my examination of the Registration Statement, the
Prospectus and the Exchange Act Documents, my investigations made
in connection with the preparation of the Registration Statement
and the Prospectus and my participation in the conferences
referred to above, nothing has come to my attention that would
lead me to believe that the Registration Statement (except for
the Excepted Information, upon which I make no statement), at the
time such Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus
(except for the Excepted Information, upon which I make no
statement), as of the date the Prospectus was filed under Rule
424(b) under the Act or on the date hereof, included or includes
an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
I am a member of the North Dakota and Montana Bars and
do not hold myself out as an expert on the laws of any other
state, but I have made a study of the laws of such states insofar
as such laws are involved in the conclusions stated in this
opinion. As to matters of the General Corporation Law of the
State of Delaware and the Federal laws of the United States of
America, I have relied, with your consent, upon the opinion of
Reid & Priest LLP, counsel to the Company, a copy of which has
been delivered to you.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon
by you for any other purpose, or relied upon by or furnished to
any other person, firm or corporation (other than the several
Underwriters), other than Reid & Priest LLP, special counsel to
the Company, and Berlack, Israels & Liberman LLP, counsel to the
Underwriters, to the extent set forth in their opinions of even
date herewith addressed to you, without my prior written consent.
Very truly yours,
Lester H. Loble, II
General Counsel
and Secretary
<PAGE>
Exhibit B
[LETTERHEAD OF WEATHERFORD, THOMPSON, QUICK & ASHENFELTER, P.C.]
April 27, 1998
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
Edward D. Jones & Co., L.P.
Lehman Brothers, Inc.
as Representatives of the several Underwriters
C/O Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
In connection with that certain Purchase Agreement dated
April 21, 1998, (the "Purchase Agreement") between Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
each of the other Underwriters named in Schedule A attached
thereto (collectively, the "Underwriters"), MDU Resources Group,
Inc., a Delaware Corporation and the Selling Shareholders (the
"Selling Shareholders") listed in Schedule B thereto, we advise
you that we represent the Selling Shareholders, as listed in
Schedule B of the Purchase Agreement, in connection with the
transactions set forth and described in the Purchase Agreement.
The capitalized terms used herein and not otherwise defined have
the meaning assigned in the Purchase Agreement.
In connection with the transactions set forth and described
in the Purchase Agreement, we further advise you that we have
examined and are familiar with the originals or copies of the
following documents:
The Purchase Agreement, dated April 21, 1998, entered into
by and between Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
and Smith Incorporated, and each of the other Underwriters named
in Schedule A attached thereto, MDU Resources Group, Inc., a
Delaware Corporation, and the Selling Shareholders named and
listed in Schedule B attached thereto.
The Custody Agreement and Power of Attorney, dated as of the
April 21, 1998, by and among MDU Resources Group, Inc., a
Delaware Corporation, the Selling Shareholders (as identified on
Exhibit A thereto), J. Franklin Morse, as attorney-in-fact for
the Selling Shareholders, and Norwest Bank Minnesota, N.A., as
custodian.
The Stock Disposition Agreement, dated as of March 5, 1998,
entered into by and among MDU Resources Group, Inc. and the
Shareholders listed on Exhibit I thereto (former holders of
shares of capital stock of Morse Bros., Inc.).
The Stock Disposition Agreement, dated as of March 5, 1998,
entered into by and among MDU Resources Group, Inc., Dennis L.
Smallwood and R. Gary Ferguson.
The Stockholders' Agreement, dated as of March 5, 1998, by
and among MDU Resources Group, Inc. and each of the stockholders
whose names appear on the signature page thereof (former holders
of shares of capital stock of Morse Bros., Inc.).
The Stockholders' Agreement, dated as of March 5, 1998, by
and among MDU Resources Group, Inc. and each of the stockholders
whose names appear on the signature page thereof (Dennis L.
Smallwood and R. Gary Ferguson).
Certificates representing the Securities to be sold by the
Selling Shareholders and the related stock powers executed by the
respective Selling Shareholders.
The Prospectus, for the sale of 2,100,000 shares of MDU
Resources Group, Inc. common stock with supplement dated April
21, 1998.
Based upon our examination and review of the documents above
described, and such further documents and materials as we deemed
necessary to review for purposes of rendering this opinion, we
are of the opinion that:
(1) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any
court or governmental authority or agency, domestic or foreign
(other than the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations,
approvals, or consents as may be necessary under state securities
laws, as to which we express no opinion), is necessary or
required to be obtained by the Selling Shareholders for the
performance by each Selling Shareholder of each Selling
Shareholder's obligations under the Purchase Agreement or under
the Custody Agreement and Power of Attorney, or in connection
with the offer, sale or delivery of the Securities.
(2) The Custody Agreement and Power of Attorney has been
duly authorized, executed and delivered by each Selling
Shareholder. The Courts of the State of Oregon, if properly
presented with the question, should give effect to the choice-of-
law provisions contained in the Custody Agreement and Power of
Attorney (the "Agreement"), which by their terms are governed by
the laws of the State of New York, subject to the application of
the law of other states to the extent that such a court may
conclude that to give such effect to such provisions would
contravene the public policy of the State of Oregon. Should,
however, an Oregon court elect the internal laws of the State of
Oregon as the choice of law for the interpretation and
enforcement of the Agreement, the Agreement would be the valid
and binding obligation of each Selling Shareholder enforceable
against such Selling Shareholder in accordance with its terms
under the internal laws of the State of Oregon, except as such
enforceability may be limited by: (i) the effect of general
principles of equity; (ii) the effect of federal and state
securities laws, rules and regulations, and public policy as they
may limit rights to indemnification; and (iii) the effect of
bankruptcy, insolvency and other similar laws relating to or
affecting the rights of creditors generally.
(3) The Purchase Agreement has been duly authorized,
executed and delivered by or on behalf of each Selling
Shareholder.
(4) J. Franklin Morse, the Attorney-in-Fact, has been duly
authorized by each Selling Shareholder to deliver the Securities
on behalf of each Selling Shareholder in accordance with the
terms of the Purchase Agreement.
(5) The execution, delivery and performance of the Purchase
Agreement and the Custody Agreement and Power of Attorney and the
sale and delivery of the Securities and the consummation of the
transactions contemplated in the Purchase Agreement and in the
Registration Statement and compliance by each Selling Shareholder
with its obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of such Selling
Shareholder and to the best of our knowledge do not and will not,
whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default
under or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities or any property or
assets of such Selling Shareholder pursuant to, any contract,
indenture, mortgage, deed or trust, loan or credit agreement,
note, license, lease or other instrument or agreement to which
any selling Shareholder is a party or by which they may be bound,
or to which any of the property or assets of any Selling
Shareholder may be subject nor to the best of our knowledge will
such action result in any violation of the provisions of the
charter or by-laws of any Selling Shareholder, if applicable, or
any law, administration regulation, judgment or order of any
governmental agency or body or any administrative or court decree
having jurisdiction over such Selling Shareholder or any of its
properties.
(6) To the best of our knowledge, each Selling Shareholder
has valid and marketable title to the Securities to be sold by
such Selling Shareholder pursuant to the Purchase Agreement, free
and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant
to the Purchase Agreement. By delivery of a certificate or
certificates therefor such Selling Shareholder will transfer to
the Underwriters who have purchased such Securities pursuant to
the Purchase Agreement (without notice of any defect in the title
of such Selling Shareholder and who are otherwise bona fide
purchasers for purposes of the Uniform Commercial Code) valid and
marketable title to such Securities free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of
any kind.
Based on our examination of the information included in the
Prospectus under the caption "Selling Shareholders," nothing has
come to our attention that would lead us to believe that, as of
the date the Prospectus was filed under Rule 424(b) under the
1933 Act and as of the Closing Time, such information included or
includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
We are licensed to practice law in the State of Oregon and
do not hold ourselves out as experts in the laws of any other
state.
WEATHERFORD, THOMPSON, QUICK & ASHENFELTER, P.C.
By:
-----------------------------------------------
Dennis D. Ashenfelter
