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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 corpo-
ration (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 supple-
mented and amended and as supplemented by a Supplemental Inden-
ture 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 rep-
resents 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")
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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 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
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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
name in Schedule II hereto, in each case at the purchase price set forth in
Schedule I hereto.
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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 Under-
writers 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
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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.
(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 documents
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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.
(f) 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:
(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.
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(b) The Company shall have furnished to the Underwriters the
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Director - Legal Department of the
Company, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Counsel of the Company, or A. ▇▇▇▇▇▇▇
▇▇▇▇▇, 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
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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;
(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
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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 acqui-
sition 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;
(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 bonds
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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;
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(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;
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(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
(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, ▇▇▇▇▇ & 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 ▇▇▇▇▇▇▇ & ▇▇▇▇▇, 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
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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 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
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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, con-
tained 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, com-
pleteness 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
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Utility Holding Company Act upon the opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq. or A. ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, ▇▇▇▇▇ & 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.
(d) The Underwriters shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq., or A. ▇▇▇▇▇▇▇
▇▇▇▇▇, 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, ▇▇▇▇▇ & 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
16
-16-
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 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:
17
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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
18
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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 Prospec-
tus to the date of the latest available unaudited consolidated
financial 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
19
-19-
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 ▇▇▇▇▇'▇ 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.
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
20
-20-
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
21
-21-
Prospectus or any Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus, as amended or supplemented). 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
22
-22-
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 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
23
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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.
24
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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 ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇
▇▇▇▇,
▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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.
26
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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.
27
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:
28
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Closing Date, Time and Location:
____________, 199_ at ____ _.M. (_________ time)
Offices of:
Securities delivered to:
29
SCHEDULE II
Underwriter Amount
$
----------
----------
----------
Total $
==========