EXHIBIT (1)-(1)
WISCONSIN ELECTRIC POWER COMPANY
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
New York, New York
Dated the date set
forth in Schedule I hereto
To the Underwriters
set forth in
Schedule II hereto
Dear Sirs and Madams:
Wisconsin Electric Power Company, a Wisconsin corporation
(the "Company"), proposes to issue and sell to the underwriter or
underwriters named in Schedule II hereto (the "Underwriters"), the
aggregate principal amount of a new series of its First Mortgage Bonds
(the "Securities") set forth in Schedule I hereto, to be issued pursuant
to the Mortgage and Deed of Trust dated October 28, 1938, as heretofore
supplemented and amended and as supplemented by a Supplemental Indenture
to be dated the date set forth in Schedule I hereto (said Mortgage and
Deed of Trust as so supplemented and amended is hereinafter called the
"Indenture"), between the Company and Firstar Trust Company (formerly
First Wisconsin Trust Company), as trustee (the "Trustee"). The terms of
the Securities are also set forth in Schedule I hereto. The terms "you"
and "yours" refer to those Underwriters who sign the Underwriting
Agreement either on behalf of themselves only or on behalf of themselves
and as representative or representatives of the Underwriters (the
"Representatives") named in Schedule II hereto, as the case may be.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"). The
Company has filed with the Securities and Exchange Commission (the
"Commission") two registration statements on such Form (Nos. 33-
49199 and 51749), which have become effective, for the registration
under the Act of the Securities (the "Original Registration
Statements"). In addition, the Company has subsequently filed with
the Commission a registration statement on such Form (No. 33-
_____), which has also become effective (the "New Registration
Statement"). Both the original Registration Statements and the New
Registration Statement, as amended at the date of this Agreement,
meet the requirements set forth in Rule 415(a)(1)(x) under the Act
and comply in all other material respects with said Rule. The
Company proposes to file with the Commission pursuant to Rule
424(b)(2) or 424(b)(5) under the Act a supplement (the "Prospectus
Supplement") to the form of prospectus, which constitutes a
"combined prospectus" as that term is used in Rule 429 under the
Act, included in the new Registration Statement relating to the
Securities and the plan of distribution thereof and has previously
advised you of all further information (financial and other) with
respect to the Company to be set forth therein. The Original
Registration Statements and the New Registration Statement,
including the exhibits thereto, as amended at the date of this
Agreement, are hereinafter collectively called the "Registration
-2-
Statement"; such prospectus in the form in which it appears in the
New Registration Statement is hereinafter called the "Basic
Prospectus"; and the Basic Prospectus, as supplemented by the
Prospectus Supplement, in the form in which it shall be filed with
the Commission pursuant to Rule 424(b)(2) or 424(b)(5) is
hereinafter called the "Final Prospectus". Any preliminary form of
the Final Prospectus which has heretofore been filed pursuant to
Rule 424(b)(2) or 424(b)(5) is hereinafter called the "Preliminary
Final Prospectus". Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act") on or before the date of this
Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case
may be; and any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this
Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case
may be, deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is
first filed or transmitted for filing pursuant to Rule 424(b)(2) or
424(b)(5) under the Act, when, prior to the Closing Date (as
hereinafter defined), any amendment to the Registration Statement
becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and
at the Closing Date, (i) the Registration Statement, as then
amended as of any such time, and the Final Prospectus, as then
amended or supplemented as of such time, and the Indenture will
comply in all material respects with the applicable requirements of
the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Exchange Act and the respective rules
thereunder and (ii) neither the Registration Statement, as then
amended as of such time, nor the Final Prospectus, as then amended
or supplemented, as of such time, will contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that the Company makes
no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by or on
behalf of any Underwriter specifically for use in connection with
the preparation of the Registration Statement and the Final
Prospectus.
2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth,
the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, the
principal amount of the Securities set forth opposite such Underwriter's
-3-
name in Schedule II hereto, in each case at the purchase price set forth
in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between you and the Company or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being
herein called the"Closing Date"). Delivery of the Securities shall be
made to you or your designee for the respective accounts of the several
Underwriters against payment of the purchase price thereof to or upon the
order of the Company by either wire transfer or certified or official
bank check or checks payable in either immediately available funds or
next-day funds, all as set forth in Schedule I hereto. Certificates for
the Securities shall be registered in such names and in such
denominations as you may request not less than two full business days in
advance of the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by you in New York, New York, not
later than 1:00 P.M. on the business day immediately preceding the
Closing Date.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Securities for sale to the
public as set forth in the Final Prospectus.
5. Agreements. The Company agrees with the several
Underwriters that:
(a) Prior to the termination of the offering of the
Securities, the Company will not file any amendment to the
Registration Statement or supplement (including the Final
Prospectus or the Basic Prospectus) unless the Company has
furnished to you copies for your review prior to filing and will
not file any such proposed amendment or supplement to which you
reasonably object (except any filings required to be made pursuant
to the Exchange Act or the rules and regulations thereunder).
Subject to the foregoing sentence, the Company will cause the Final
Prospectus to be filed with the Commission pursuant to Rule
424(b)(2) or 424(b)(5) or will cause the Final Prospectus to be
transmitted by a means reasonably calculated to result in filing
with the Commission pursuant to said Rule. The Company will
promptly advise you (i) when the Final Prospectus shall have been
transmitted to the Commission for filing or filed pursuant to Rule
424(b)(2) or 424(b)(5), (ii) when any amendment to the Registration
Statement shall have been filed or become effective, (iii) of any
request by the Commission for any amendment of the Registration
Statement or amendment or supplement to the Final Prospectus or for
any additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any amendment thereto or the initiation or the
threatened initiation of any proceeding for that purpose and (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or the threatened initiation of any
proceeding for such purpose. The Company will use its best efforts
to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
-4-
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to you an earnings statement
or statements of the Company which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and
counsel for the Underwriters without charge, copies of the
Registration Statement (including exhibits thereto) and each
amendment thereto which shall become effective on or prior to the
Closing Date, the Basic Prospectus and, so long as delivery of a
prospectus by the Underwriters or a dealer may be required by the
Act, as many copies of any Preliminary Final Prospectus, the Final
Prospectus, any amendments and supplements thereto and incorporated
by reference therein as you may reasonably request. The Company
will pay the expenses of printing all documents relating to the
offering of the Securities.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as you may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Securities and will arrange
for the determination of the legality of the Securities for
purchase by institutional investors; provided, however, that the
Company shall not be required to qualify as a foreign corporation
or to file any consent to service of process under the laws of any
jurisdiction or to comply with any other requirements deemed by the
Company to be unduly burdensome.
Until the business day following the Closing Date, the
Company will not without your consent offer, sell or contract to
sell, or announce the offering of, any debt securities covered by
the Registration Statement or any other registration statement
filed under the Act.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part
of the Company contained herein as of the date hereof, as of the date of
the effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the statements of the Company or the Company officers made in
any certificates pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
-6-
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or the Company will cause the Final Prospectus to be
transmitted by a means reasonably calculated to result in filing
with the Commission not later than 5:00 P.M., New York City time,
on the business day following the date hereof.
(b) The Company shall have furnished to the Underwriters
the opinion of Xxxxxx X. Xxxxxxx, Esq., Director - Legal Department
of the Company, Xxxxx X. Xxxxxxxxxxx, Counsel of the Company, or A.
Xxxxxxx Xxxxx, Esq., Counsel of the Company, dated the Closing
Date, to the effect that:
(i) the Company has been duly incorporated
and is validly existing as a corporation in active status
under the laws of the State of Wisconsin, with full corporate
power and authority to own its properties and conduct its
business as described in the Final Prospectus and is duly
qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases
material properties or conducts
material business;
(ii) the Securities conform as to legal
matters in all material respects to the description thereof
contained in the Final Prospectus;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, has
been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as
to enforcement, to the qualifications set forth in the next
sentence); and the Securities have been duly authorized by
all necessary corporate action of the Company, executed and
authenticated in accordance with the provisions of the
Indenture (assuming that the Securities have been duly
authenticated by the Trustee, which fact such counsel need
not verify by an inspection of the Securities) and constitute
legal, valid and binding obligations of the Company entitled
to the benefits and security of the Indenture and enforceable
in accordance with their terms (subject, as to enforcement,
to the qualifications set forth in the next sentence). The
opinions that the Indenture and the Securities are
enforceable in accordance with their terms are subject to:
(i) applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights
generally from time to time in effect; (ii) general equity
principles; and (iii) the qualification that certain of the
remedial provisions in the Indenture may be limited or
rendered unenforceable under applicable laws and judicial
decisions, including, but not limited to, the provisions
regarding right of possession, assignment of rents without a
receiver, power of sale, and waiver of the right of
redemption, but that this should not materially interfere
with the practical realization of the security intended to be
provided by the Indenture;
-7-
(iv) the Company has good and marketable
title in fee simple to all of the real property specifically
described in the granting clauses of the Indenture other than
leasehold estates, except property which has been released
from the lien of the Indenture in accordance with the
provisions thereof, and also has good title to all other
physical properties, rights of way and easements used in
connection with its business, subject only to: (i) the
exceptions referred to in said granting clauses; (ii)
existing leases to others; (iii) certain liens, reservations,
defects, rights of way and encumbrances; and (iv) the lien of
the Indenture and permitted liens as defined in the
Indenture.
Substantially all of the electric transmission lines of the
Company of over 66,000 volts are constructed on private
rights of way held by deed or easements. The other electric
transmission lines, the electric distribution lines, some of
the electric substations and the steam distribution mains are
located in or on streets and highways, and on land owned for
the most part by others than the Company.
Various parcels of land owned by the Company are
subject to rights of way for railroads, pipe lines, highways,
pole lines and other similar easements and to minor defects
and encumbrances. In the opinion of such counsel, the
Company has satisfactory title to its properties for use in
its business, and such liens, reservations, defects, rights
of way and encumbrances as may exist do not and will not
materially interfere with the use of such properties.
Examinations of title to land acquired in fee by the
Company or Wisconsin Michigan Power Company ("Wisconsin
Michigan"), a former subsidiary which was merged into the
Company in 1977, were made at the time of acquisition of such
land by the Company or Wisconsin Michigan and examinations of
title to land on which permanent structures or transmission
lines of over 66,000 volts are located pursuant to easements
or other rights were made at the time of acquisition of such
rights by the Company or Wisconsin Michigan. Additionally,
examinations of title to property owned in fee on which major
improvements are located are made on a periodic basis. In
the case of electric lines of 66,000 volts or less and steam
mains the Company or Wisconsin Michigan obtained, from the
apparent owners of the land involved, agreements granting the
necessary easements and rights of way. In most cases no
detailed examination of the title of such owners has been
made. A substantial part of the lines of the Company located
on land owned by others has been in use by it or Wisconsin
Michigan for more than 20 years, the period of the statute of
limitations in Wisconsin and Michigan being 20 years (under
certain circumstances, 10 years) and 15 years, respectively,
and no adverse claims have been made with respect thereto.
In the opinion of such counsel, the Company possesses the
power of eminent domain with respect to its present utility
operations;
-8-
(v) the Company conducts its business
under valid franchises, permits and licenses which contain
no burdensome restrictions and which are adequate for the
business of the Company in the territories which it serves,
except that the Company has no franchise in several small
areas where, for the most part, the Company is serving
certain customers at the request of other companies who have
franchises in those areas;
(vi) the Indenture has been duly (i)
recorded in each of the counties in Wisconsin and Michigan in
which any of the real properties of the Company are situated,
(ii) filed in the office of The Secretary of State of
Michigan and (iii) filed for recording with the Interstate
Commerce Commission of the United States;
(vii) the Indenture constitutes, and the
Securities are secured equally and ratably with all now
outstanding and bonds which may hereafter be issued under the
Indenture by, a valid and direct first lien on substantially
all of the fixed properties and interests therein owned and
all franchises held by the Company at the date of such
opinion, subject to: (i) the exceptions set forth in the
granting clauses of the Indenture; (ii) existing leases,
other than those which by their terms are subordinate to the
lien of the Indenture; (iii) existing easements for streets,
rights of way and railroad purposes, permitted liens as
defined in the Indenture, and certain exceptions and
reservations in the instruments by which the Company acquired
title to its properties, none of which, in the opinion of
such counsel, materially affects the Company's title to, or
its right to use, such properties; and (iv) the prior lien of
the Trustee for its compensation, expenses and liabilities.
The Indenture will constitute a valid and direct first lien
on all property of the character above referred to hereafter
acquired by the Company subject, however, to any liens,
charges or encumbrances existing thereon at the time of
acquisition, to liens for taxes and assessments and to any
rights of creditors, purchasers or others having superior
equities which may attach prior to the recording or filing of
an appropriate supplemental indenture subjecting such after-
acquired property to the lien of the Indenture;
(viii) there is no pending legal proceeding
or, to the best knowledge of such counsel (after due
inquiry), threatened action, suit or other legal proceeding
before any court or governmental agency, authority, or body
or any arbitrator involving the Company, of a character
required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus; there is
no franchise, contract or other document of a character
required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and the statements included
or incorporated by reference in the Final Prospectus
describing any legal proceedings or material contracts or
agreements relating to the Company fairly summarize such
matters;
-9-
(ix) the Registration Statement and any
amendments thereto have become effective under the Act; no
stop order suspending the effectiveness of the Registration
Statement, as amended, has been issued, no proceedings for
that purpose have been instituted or, to the best knowledge
of such counsel, threatened, and the Registration Statement,
the Final Prospectus and each amendment thereof or supplement
thereto as of their respective effective or issue dates
(other than the financial statements and other financial and
statistical information contained or incorporated by
reference therein as to which such counsel need express no
opinion) on their face complied as to form in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; and such
counsel has no reason to believe that the Registration
Statement, or any amendment thereof, at the time it became
effective and at the date of this Agreement, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Final
Prospectus, as amended or supplemented, includes any untrue
statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(x) this Agreement has been duly authorized,
executed and delivered by the Company;
(xi) all requisite approvals of the Public
Service Commission of Wisconsin ("PSCW") and the Michigan
Public Service Commission ("MPSC") for the execution and
delivery of the Indenture and the issuance and sale by the
Company of the Securities to the Underwriters under this
Agreement have been obtained; the Securities have been issued
and sold to the Underwriters by the Company in conformity
with the orders of such Commissions issued with respect
thereto; and such counsel knows of no other approvals of
regulatory authorities required in connection with such
matters, other than approvals which may be required under
blue sky or state securities laws;
(xii) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach of, or
constitute a default under the Restated Articles of
Incorporation or Bylaws of the Company, as amended, or the
terms of any indenture or other agreement or instrument to
which the Company is a party or bound, or any law, rule,
order, decision, judgment or regulation applicable to the
Company of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company;
(xiii) no holders of securities of the Company
have rights to the registration of such securities under the
Registration Statement; and
-10-
(xiv) each of the Company and Wisconsin
Energy Corporation ("Wisconsin Energy") is exempt from the
provisions of the Public Utility Holding Company Act of 1935,
as amended (the "Public Utility Holding Company Act"), except
Section 9(a)(2) thereof relating to the acquisition of
securities of other public utility companies.
In rendering such opinion such counsel may rely (A) as to
matters of Michigan law relating to authority to do business and
regulatory approval for the Securities in Michigan upon the opinion of
Messrs. Loomis, Ewert, Parsley, Xxxxx & Gotting, P.C., Michigan counsel
to the Company, furnished to the Underwriters; and (B) as to matters of
fact, to the extent he deems proper, on certificates of responsible
officers of the Company, the Trustee and public officials.
(c) The Company shall have furnished to the Underwriters
the opinion of Xxxxxxx & Xxxxx, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and constitutes a
valid instrument legally binding upon the Company; the
Securities have been duly authorized by all necessary
corporate action of the Company, have been duly issued
(assuming that the Securities have been duly authenticated by
the Trustee, which fact such counsel need not verify by an
inspection of the Securities), constitute legal, valid and
binding obligations of the Company enforceable in accordance
with their terms (subject, as to enforcement, to the
qualifications set forth in the next sentence) and are
entitled to the benefits and security of the Indenture. The
opinion that the Securities are enforceable in accordance
with their terms is subject to: (i) applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in
effect; (ii) general equity principles; and (iii) the
qualification that certain of the remedial provisions in the
Indenture may be limited or rendered unenforceable under
applicable laws and judicial decisions, including, but not
limited to, the provisions regarding right of possession,
assignment of rents without a receiver, power of sale, and
waiver of the right of redemption, but that this should not
materially interfere with the practical realization of the
security intended to be provided by the Indenture;
(ii) the Company's Registration Statements on
Form S-3 (File Nos. 33-49199, and 33-51749) relating to the
Securities have become effective under the Act and, to the
best of the knowledge of such counsel, no stop order
proceedings with respect thereto are pending or threatened
under Section 8(d) of the Act;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) all requisite approvals of the PSCW and
the MPSC for the execution and delivery of the Indenture and
the issuance and sale by the Company of the Securities to the
Underwriters under this Agreement have been obtained; the
Securities have been issued and sold to the Underwriters by
-11-
the Company in conformity with the orders of such Commissions
issued with respect thereto; and such counsel know of no
other approvals of regulatory authorities required in
connection with such matters, other than approvals which may
be required under blue sky or state securities laws;
(v) the Securities conform as to legal
matters in all material respects to the description thereof
in the Final Prospectus insofar as relating to provisions of
the Indenture and the Bonds referred to therein; and
(vi) the Registration Statement, when it
became effective, and the Final Prospectus, as of the date of
the Prospectus Supplement, appeared on their face to comply
as to form, in all material respects, with the requirements
of the Act, the Trust Indenture Act and the applicable rules
and regulations of the Commission thereunder and further that
nothing came to the attention of such counsel in the course
of their representation of the Company which has caused such
counsel to believe that the Registration Statement, when it
became effective, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading or that the Final
Prospectus, on the date of the Prospectus Supplement and on
the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Such opinion may state that such counsel have not
independently verified, do not pass upon and do not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and
Final Prospectus except for those made under the captions
"Description of New Bonds" in the Basic Prospectus and
"Certain Terms of the New Bonds of this Series" and
"Underwriting" in the Prospectus Supplement insofar as they
relate to the provisions of documents therein described and
that they do not express any opinion or belief as to the
financial statements or other financial data or statistical
information contained or incorporated by reference in the
Registration Statement, the Basic Prospectus or the
Prospectus Supplement, as to the incorporation of the
Company, franchise matters, questions of title or the
lien of the Indenture, or as to the Statement of Eligibility
on Form T-1 of the Trustee.
In rendering such opinion or opinions, such counsel may rely
(A) as to [all] matters of Michigan law and the exempt status of the
Company and Wisconsin Energy under the Public Utility Holding Company Act
upon the opinion of Xxxxxx X. Xxxxxxx, Esq., Xxxxx X. Xxxxxxxxxxx, Esq.
or A. Xxxxxxx Xxxxx, Esq.; (B) as to [all] matters of Michigan law
relating to regulatory approval for the Securities in Michigan upon the
opinion of Loomis, Ewert, Parsley, Xxxxx & Gotting, P.C., Michigan
counsel to the Company, furnished to you; and (C) as to matters of fact,
to the extent they deem proper on certificates of responsible officers of
the Company, the Trustee and public officials, and may state that they
are not passing upon the incorporation of the Company, its franchises,
matters relating to the title of the Company to the properties purported
to be owned by it, or the lien of the Indenture on property now owned or
hereafter acquired by the Company.
-12-
(d) The Underwriters shall have received from Xxxxxx Xxxxxx
& Xxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of
the Securities, the Indenture, and other related matters as you may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
In rendering such opinion such counsel may rely (A) as to
[all] matters of Wisconsin and Michigan law and the exempt status of the
Company and Wisconsin Energy under the Public Utility Holding Company Act
upon the opinion of Xxxxxx X. Xxxxxxx, Esq., Xxxxx X. Xxxxxxxxxxx, Esq.,
or A. Xxxxxxx Xxxxx, Esq.; (B) as to [all] matters of Michigan law
relating to regulatory approval for the Securities in Michigan upon the
opinion of Loomis, Ewert, Ederer, Parsley, Xxxxx & Gotting, P.C.,
Michigan counsel to the Company, furnished to you; and (C) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company, the Trustee and public officials.
(e) The Company shall have furnished to you a certificate
of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration
Statement, the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement, as amended, has
been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent
financial statements included or incorporated by reference in
the Final Prospectus, there has been no material adverse
change in the condition (financial or other), earnings,
business or properties of the Company, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus.
(f) At the time this Agreement is executed and at the
Closing Date, Price Waterhouse shall have furnished to the
Underwriters a letter or letters, dated as of the date of this
Agreement and the Closing Date (which may refer to the letter
previously delivered to the Underwriters), in form and substance
satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the
applicable published rules and regulations thereunder, and stating
in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Final Prospectus and reported on by them comply as to
-13-
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations with respect to registration
statements on Form S-3;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter, consisting of:
a) reading the minutes of meetings
of the stockholders and directors of the Company
since a specified date as of the end of the last
period for which they have audited the financial
statements of the Company, as set forth in the
minute books, through a specified date not more
than five business days prior to the date of
such letter;
b) reading the unaudited interim
financial data of the Company included or
incorporated by reference in the Registration
Statement and the Final Prospectus and the
unaudited interim financial data as of the
latest date made available by the Company; and
c) making inquiries of certain
officials of the Company who have responsibility
for financial and accounting matters regarding
the specific items for which representations are
requested below;
nothing has come to their attention as a result of the
foregoing procedures that caused them to believe that:
(1) any unaudited financial data included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the published
rules and regulations thereunder; and said unaudited
financial data are not stated on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and
the Final Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent financial statements incorporated in the
Registration Statement and the Final Prospectus, there were
any changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt
of the Company or capital stock of the Company or decreases
in the stockholders' equity of the Company or any decrease in
retained earnings of the Company as compared with the amounts
shown on the most recent balance sheet included or
incorporated by reference in the Registration Statement and
the Final Prospectus, or for the period from the date of the
most recent financial statements incorporated by reference in
the Registration Statement and the Final Prospectus to the
date of the latest available unaudited consolidated financial
-14-
data of the Company there were any decreases, as compared
with the corresponding period in the preceding year, in
Operating Revenues, Operating Income or Net Income of the
Company, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by you; and
(iii) they have performed certain other
specified procedures as a result of which they determined
that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial
or statistical information derived from the general
accounting records of the Company subject to its system of
internal accounting controls) set forth in the Registration
Statement, as amended, and the Final Prospectus, as amended
or supplemented, and in Exhibit 12 to the Registration
Statement, including the information included under the
captions "Capitalization" in the Final Prospectus or "Certain
Summary Financial Information" or "Recent Developments" in
the Basic Prospectus and the Final Prospectus, or included or
incorporated by reference in Items 1, 3, 5, 6, 7 and 11 of
the Company's annual report on Form 10-K incorporated therein
or in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated
in any of the Company's quarterly reports on Form 10-Q
incorporated by reference therein, agrees with the accounting
records of the Company, excluding any question of legal
interpretation.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f) of
this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company the effect of which, in any case referred
to in clause (i) or (ii) above, is, in your judgment, so material
and adverse as to make it impractical or inadvisable to proceed
with the offering or the delivery of the Securities as contemplated
by the Registration Statement and the Final Prospectus.
(h) Subsequent to the execution of this Agreement, there
shall not have been any decrease in the ratings of any of the
Company's debt securities by Xxxxx'x Investors Service, Inc., or
Standard & Poor's Corporation.
(i) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and
documents as you may reasonably request.
(j) The issuance and sale of the Securities as contemplated
in this Agreement and the Final Prospectus shall have been duly
authorized and approved by orders of the PSCW and the MPSC; such
orders shall be in full force and effect at the Closing Date and
shall not contain any modifications from their form at the date
hereof not reasonably acceptable to you; and no action,
authorization or approval of any other regulatory authority or
court shall then be required in connection with the issuance and
sale by the Company of the Securities.
-15-
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided in
this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to you, this
Agreement and all the obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date. Notice
of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6
hereof or any condition to the obligations of the Company in Section 10
hereof is not satisfied, because of any termination pursuant to
Section 11 or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision
hereof, other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters, severally, upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by the Underwriters in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for
the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus or the Final Prospectus,
any Preliminary Final Prospectus or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriter specifically for use in connection with the
preparation thereof and (ii) such indemnity with respect to the Basic
Prospectus or any Preliminary Final Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person did
not receive a copy of the Final Prospectus (or the Final Prospectus, as
amended or supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of the Securities
to such person in any case where such delivery is required by the Act and
the untrue statement or omission of a material fact contained in the
Basic Prospectus or any Preliminary Final Prospectus was corrected in the
Final Prospectus (or the Final Prospectus, as amended or supplemented).
-16-
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signs the Registration Statement and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to such
Underwriter, furnished to the Company by or on behalf of such
Underwriter, specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by
you in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or
(iii).
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in paragraph
(a) of this Section 8 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Company on grounds of
-17-
policy or otherwise, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and one or more of the Underwriters
may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount bears to the sum of such discount and the purchase
price of the Securities and the Company is responsible for the balance;
provided, however, that (y) in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of
the underwriting discount applicable to the Securities purchased
hereunder and (z) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company,
subject in each case to clauses (y) and (z) of this paragraph (d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this paragraph (d), notify such party or parties
from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d). This contribution
agreement will be in addition to any liability which the Company or any
Underwriter may otherwise have.
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and
such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Securities set forth opposite their names
in Schedule II hereto bears to the aggregate amount of Securities set
forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter
as set forth in this Section 9, the Closing Date shall be postponed for
such period, not exceeding seven days, as you shall determine in order
that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default
hereunder.
-18-
10. Conditions to the Obligations of the Company. The
obligation of the Company to sell the Securities shall be subject to the
condition that the issuance and sale of the Securities as contemplated in
this Agreement and the Final Prospectus shall have been duly authorized
and approved by orders of the PSCW and MPSC; such orders shall be in full
force and effect at the Closing Date and shall not contain any
modification from their form at the date hereof not reasonably acceptable
to the Company; and no authorization or approval of any other regulatory
authority shall then be required in connection with the issuance and sale
by the Company of the Securities.
11. Termination. This Agreement shall be subject to
termination in your absolute discretion by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the common stock of Wisconsin Energy Corporation
shall have been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange; (ii) a banking moratorium shall
have been declared either by federal or New York State authorities; or
(iii) there shall have occurred any outbreak or material escalation of
hostilities, declaration by the United States of a national emergency or
war or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Securities.
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this
Agreement.
13. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Underwriters
will be mailed, delivered or telegraphed and confirmed to you, at the
address set forth in Schedule I; or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 000 Xxxx Xxxxxxxx
Xxxxxx, X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, attention of the Chief
Financial Officer.
14. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors
and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
-19-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement between the Company and the Underwriters.
Very truly yours,
WISCONSIN ELECTRIC POWER COMPANY
By:
---------------------------
Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[NAME(S) OF REPRESENTATIVE(S)]
By: _________________________
Authorized Signatory
For itself and the other Underwriters,
if any, named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated _________, 199_
Registration Statement No. 33-_______
Name and Address of Representative(s):
Date of Supplemental Indenture: __________________, 199_
Title and Certain Terms of Securities:
Title: First Mortgage Bonds ______% Series due ________________,
____
Principal amount: $_________
Maturity: ________, ____ (__ years)
Interest Rate: ______%
Interest Payment Dates: _________ and _________
Sinking Fund:
Redemption provisions:
Purchase Price (include accrued interest or amortization,
if any): ______% of principal amount, plus accrued
interest, if any, from _______, 199_ to the date of delivery
Payment for the Securities shall be made in the following form
and funds:
Closing Date, Time and Location:
________, 199_ ____ _.M. (_________ time)
Offices of:
Securities delivered to:
SCHEDULE II
Underwriter Amount
$
----------
----------
----------
Total $
==========