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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 23, 1994
Commission Registrant; State of IRS Employer
File Number Incorporation; Address; and Identification No
Telephone Number
1-5611 CONSUMERS POWER COMPANY 38-0442310
(A Michigan Corporation)
212 West Michigan Avenue
Jackson, Michigan 49201
(517) 788-0351
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ITEM 5. OTHER EVENTS.
On March 30, 1994, Consumers Power Company issued and sold 8,000,000
shares of Consumers Power Company $2.08 Class A Preferred Stock
(Cumulative, Without Par Value) pursuant to an underwriting agreement
dated as of March 23, 1994 with Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Dean Witter Reynolds Inc., PaineWebber Incorporated and
Smith Barney Shearson Inc., as Representatives of the underwriters. Such
underwriting agreement is attached hereto as an exhibit to this Current
Report on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(1) - Underwriting Agreement dated March 23, 1994 between
Consumers Power Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Dean Witter Reynolds Inc.,
PaineWebber Incorporated and Smith Barney Shearson
Inc., as Representatives of the underwriters.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSUMERS POWER COMPANY
Dated: March 30, 1994 By: /s/ A M Wright
----------------------------------
Alan M. Wright
Senior Vice President and
Chief Financial Officer
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Exhibit (1)
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Exhibit (1)
8,000,000 Shares
CONSUMERS POWER COMPANY
$2.08 Class A Preferred Stock (Cumulative, Without Par Value)
_____________________________________
Underwriting Agreement
March 23, 1994
To the Representatives named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Consumers Power Company, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the several Underwriters (as defined in Section 14 hereof)
8,000,000 shares of its $2.08 Class A Preferred Stock (Cumulative, Without
Par Value) (the "Securities"). The Underwriters have designated the
Representatives (as defined in Section 14 hereof) to execute this
Agreement on their behalf and to act for them in the manner provided in
this agreement.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), in accordance with the provisions
of the Securities Act of 1933, as amended (the "Act"), a registration
statement on Form S-3 (No. 33-52159), including a prospectus relating to
the Securities, and such registration statement has become effective under
the Act. The registration statement at the time it initially became
effective and as it may have been thereafter amended to the date of this
Agreement (including the documents then incorporated by reference therein)
is hereinafter referred to as the "Registration Statement." The
prospectus forming a part of the Registration Statement at the time the
Registration Statement initially became effective (including the documents
then incorporated by reference therein) is hereinafter referred to as the
"Basic Prospectus," provided that in the event that the Basic Prospectus
shall have been amended, revised or supplemented prior to the date of this
Agreement, or if the Company shall have supplemented the Basic Prospectus
by filing any documents pursuant to Section 13 or 14 or 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), after
the time the Registration Statement initially became effective and prior
to the date of this Agreement, which documents are deemed to be
incorporated in the Basic Prospectus, the term "Basic Prospectus" shall
also mean such prospectus as so amended, revised or supplemented. The
Basic Prospectus, as it shall be supplemented to reflect the terms of the
offering and sale of the Securities by a prospectus supplement relating to
the Securities, to be filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Act, is hereinafter referred to
as the "Prospectus." Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement or
the Prospectus shall be deemed to include only amendments or supplements
to the Registration Statement or Prospectus, as the case may be, and
documents incorporated by reference therein after the date of this
Agreement and prior to the termination of the offering of the Securities
by the Underwriters.
1. Purchase and Sale: Upon the basis of the representations
and warranties and on the terms and subject to the conditions herein set
forth, the Company agrees to sell to the respective Underwriters named in
Schedule II hereto, severally and not jointly, and the respective
Underwriters, severally and not jointly, agree to purchase from the
Company, at the price of $24.2125 a share (except that the price of shares
which are to be sold to certain institutions shall be $24.375 a share),
the respective number of shares of Securities set opposite their names in
Schedule II hereto.
The Company is advised by the Representatives that the
Underwriters propose to make a public offering of their respective
portions of the Securities as soon as practicable, in their judgment,
after this Agreement has become effective. The Company is further advised
by the Representatives that the Securities are to be offered to the public
initially at $25.00 a share (the public offering price) and to certain
dealers selected by you at a price that represents a concession not in
excess of $.50 a share under the public offering price (except that such
concession shall be not in excess of $.3375 a share for sales to certain
institutions), and that any Underwriter may allow, and such dealers may
allow, a concession, not in excess of $.35 a share, to certain other
dealers.
2. Payment and Delivery: Payment for the Securities shall be
made to the Company or its order by bank check or checks, as requested by
the Company, payable in New York Clearing House Funds, at the offices of
Reid & Priest, 40 West 57th Street, New York, New York, 10019 (or such
other place or places of delivery as shall be agreed upon by the Company
and the Representatives in writing), upon the delivery of the Securities
at said offices (or such other place or places of delivery as shall be
agreed upon by the Company and the Representatives) to the Representatives
for the respective accounts of the Underwriters against receipt therefor
signed by the Representatives on behalf of themselves and as agent for the
other Underwriters. Such payment and delivery shall be made at
10:00 A.M., New York time on March 30, 1994 (or on such later business
day as shall be agreed upon by the Company and the Representatives in
writing), unless postponed in accordance with the provisions of Section 10
hereof. The day and time at which payment and delivery are to be made is
herein called the Time of Purchase.
Delivery of the Securities shall be made in definitive,
fully registered form in authorized denominations registered in such names
as the Representatives may request in writing to the Company not later
than three full business days prior to the Time of Purchase, or if no such
request is received, in the names of the respective Underwriters for the
respective number of shares of Securities set forth opposite the name of
each Underwriter in Schedule II in denominations selected by the Company.
The Company agrees to make the Securities available for
inspection by the Representatives at the office of Merrill Lynch, Pierce,
Fenner & Smith Incorporated at least 24 hours prior to the Time of
Purchase.
3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the accuracy of
the warranties and representations on the part of the Company and to the
following other conditions:
(a) That all legal proceedings to be taken in
connection with the issue and sale of the Securities shall be
reasonably satisfactory in form and substance to Reid & Priest,
counsel to the Underwriters.
(b) That, at the Time of Purchase, the
Representatives shall be furnished with the following opinions,
dated the day of the Time of Purchase:
(1) Opinion of Denise M. Sturdy, Esq.,
finance counsel to the Company, substantially to
the effect set forth in Exhibit A to this
Agreement; and
(2) Opinion of Messrs. Reid & Priest, of New
York, New York, counsel to the Underwriters,
substantially to the effect set forth in
Exhibit B to this Agreement.
(c) That the Representatives shall have received a
letter from Arthur Andersen & Co. in form and substance
satisfactory to the Representatives, on and dated as of the day of
the Time of Purchase, (i) confirming that they are independent
public accountants within the meaning of the Act and the
applicable published rules and regulations of the Commission
thereunder, (ii) stating that in their opinion the financial
statements examined by them and included in the Registration
Statement complied as to form in all material respects with the
applicable accounting requirements of the Commission, including
applicable published rules and regulations of the Commission, and
(iii) covering, as of a date not more than five business days
prior to the date of such letter, such other matters as the
Representatives reasonably request.
(d) That, subsequent to the effectiveness of this
Agreement and prior to the Time of Purchase, to the extent it is
necessary to do so in the written opinion of counsel to the
Underwriters, the Company shall have amended the Registration
Statement or amended or supplemented the Prospectus in order to
make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading,
or in order to comply with law.
(e) That none of any amendment to the Registration
Statement, the Prospectus, or any amendment or supplement to the
Prospectus (including any document which would be deemed
incorporated in the Prospectus by reference), filed subsequent to
the effectiveness of this Agreement and prior to the Time of
Purchase shall contain material information (i) substantially
different from that contained in or contemplated by the
Registration Statement, as amended prior to the effectiveness of
this Agreement, or in the Basic Prospectus (including any document
which would be deemed incorporated in the Basic Prospectus by
reference prior to the effectiveness of this Agreement) and (ii)
relating to a material change in the business, properties or
financial condition of the Company which, in the judgment of the
Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities.
(f) That, at or before 8:00 P.M., New York time on
the first full business day after the effective date of this
Agreement, or at such later time and day as the Representatives
may from time to time consent to in writing or by telegram
confirmed in writing, an appropriate order or orders of the
Michigan Public Service Commission, necessary to permit the sale
of the Securities to the Underwriters, shall be in effect.
(g) That, at the Time of Purchase, the Company shall
have delivered to the Representatives a certificate of an
executive officer of the Company to the effect that, to the best
of his knowledge, information and belief, there has been no
material adverse change in the business, properties or financial
condition of the Company from that set forth in the Registration
Statement or Prospectus (other than changes referred to in or
contemplated by the Registration Statement or Prospectus).
(h) That any post-effective amendment to the
Registration Statement necessary, at the time this Agreement is
executed, to be declared effective shall have become effective not
later than 5:30 P.M., New York time on the business day following
the date of execution of this Agreement; and that no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company, threatened by
the Commission.
(i) That the Company shall have performed such of its
obligations under this agreement as are to be performed at or
before the Time of Purchase by the terms hereof.
(j) That between the date of the execution of this
Agreement and the day of the Time of Purchase, (i) there has been
no downgrading of the investment ratings of any of the Company's
securities by Standard & Poor's Corporation, Moody's Investors
Service, Inc. or Duff & Phelps Credit Rating Co., and (ii) the
Company shall not have been placed on "credit watch" or "credit
review" with negative implications by any of such statistical
rating organizations if, in the case of such placement on "credit
watch" or "credit review," such occurrence shall, in the
reasonable judgment of the Representatives, after reasonable
inquiries on the part of the Representatives, impair the
marketability of the Securities.
(k) That the Company shall have delivered to the
Representatives, a copy, certified by the Administrator,
Department of Commerce of the State of the Michigan of its
Restated Articles of Incorporation, as amended, including the
Certificate of amendment filed with said Department regarding the
terms of the Securities.
(l) That any additional documents or agreements
reasonably requested by counsel to the Underwriters to permit such
counsel to deliver opinions hereunder shall have been provided to
them.
(m) That any filing of the Prospectus and any
supplements thereto required pursuant to rule 424 under the Act
have been made in compliance with Rule 424 in the time periods
provided by Rule 424, or at such later time as may be acceptable
to the Representatives.
4. Conditions of Company's Obligations: The Company's
obligations hereunder are subject to the satisfaction of the conditions
set forth in Sections 3(e) and 3(g).
5. Certain Covenants of the Company: In further
consideration of the agreements of the Underwriters herein contained, the
Company covenants as follows:
(a) As soon as the Company is advised thereof, to
advise the Representatives and confirm the advice in writing of:
(i) the effectiveness of any amendment to the Registration
Statement, (ii) any request made by the Commission for amendments
to the Registration Statement or Prospectus or for additional
information with respect thereto, (iii) the suspension of
qualification of the Securities for the sale under Blue Sky or
state securities laws, and (iv) the entry of a stop order
suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceedings for that purpose and,
if such a stop order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or removal thereof.
(b) To deliver to the Underwriters, without charge,
as soon as practicable, and from time to time thereafter during
such period of time (not exceeding nine months) after the date of
the Prospectus as they are required by law to deliver a
prospectus, as many copies of the Prospectus (as supplemented or
amended if the Company shall have made any supplements or
amendments thereto) as the Representatives may reasonably request;
and in case any Underwriter is required to deliver a prospectus
after the expiration of nine months after the date of the
Prospectus, to furnish to the Representatives, upon request, at
the expense of such Underwriter, a reasonable quantity of a
supplemental prospectus or of supplements to the Prospectus
complying with Section 10(a)(3) of the Act.
(c) To furnish to each of the Representatives a
conformed copy, certified by the Secretary or an Assistant
Secretary of the Company, of the Registration Statement (including
all exhibits thereto) and full and complete sets of all comments
of the Commission or its staff and all responses thereto with
respect to the Registration Statement, and to furnish to the
Underwriters conformed copies of the Registration Statement
without exhibits.
(d) For such period of time (not exceeding nine
months) after the date of the Prospectus as they are required by
law to deliver a prospectus in respect of the Securities, if any
event shall have occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it becomes
necessary to amend or supplement the prospectus to comply with
law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus and furnish,
at its own expense, to the Underwriters and to dealers (whose
names and addresses are furnished to the Company by the
Representatives) to whom Securities may have been sold by the
Representatives on behalf of the Underwriters and, upon request,
to any other dealers making such request, such number of copies of
such amendments or supplements to the Prospectus as may be
reasonably requested.
(e) To make generally available to the Company's
security holders, as soon as practicable, an "earning statement"
(which need not be audited by independent public accountants)
covering a twelve-month period commencing after the effective date
of the Registration Statement and ending not later than 15 months
thereafter, which shall satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(f) To use its best efforts to qualify the Securities
for offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Representatives may designate and to pay (or
caused to be paid), or reimburse (or cause to be reimbursed) the
Underwriters and their counsel for, reasonable legal fees, filing
fees and expenses in connection therewith (including the
reasonable fees and disbursements of counsel to the Underwriters
and filing fees and expenses paid and incurred prior to the date
hereof) up to an amount not to exceed $5,000, provided, however,
that the Company shall not be required to qualify as a foreign
corporation or to file a consent to service of process or to file
annual reports or to comply with any other requirements deemed by
the Company to be unduly burdensome.
(g) To pay all expenses, fees and taxes (other than
transfer taxes on sales by the respective Underwriters) in
connection with the issuance and delivery of the Securities,
except that the Company shall be required to pay the fees and
disbursements (other than fees and disbursements referred to in
paragraph (g) of this Section 5) of Reid & Priest, counsel to the
Underwriters, only in the events provided in paragraph (i) of this
Section 5, the Underwriters hereby agreeing to pay such fees and
disbursements in any other event, and that except as provided in
Section (i), the Company shall not be responsible for any
out-of-pocket expenses of the Underwriters in connection with
their services hereunder.
(h) If the Underwriters shall not take up and pay for
the Securities due solely to the failure of the Company to comply
with any of the conditions specified in Section 3 hereof, or, if
this Agreement shall be terminated in accordance with the
provisions of Section 11 hereof, to pay the reasonable fees and
disbursements of Reid & Priest, counsel to the Underwriters, and,
if the Underwriters shall not take up and pay for the Securities
due to failure of the Company to comply with the conditions
specified in Section 3 hereof, to reimburse the Underwriters for
their reasonable out-of-pocket expenses, in an aggregate amount
not exceeding a total of $3,000, incurred in connection with the
financing contemplated by this Agreement.
(i) Prior to the termination of the offering of the
Securities, to not file any amendment to the Registration
Statement or supplement to the Prospectus (including the Basic
Prospectus) unless the Company has furnished the Representatives
and counsel to the Underwriters with a copy for their review and
comment a reasonable time prior to filing, or any such amendment
or supplement to which such counsel shall reasonably object on
legal grounds in writing, after consultation with the
Representatives.
(j) To furnish the Representatives with copies of all
documents required to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act subsequent to the time
the Registration Statement becomes effective and prior to the
termination of the offering of the Securities.
(k) Subsequent to the effectiveness of this Agreement
and prior to the Time of Purchase to not, without the prior
written consent of the Representatives, issue or announce the
proposed issuance of any preferred stock of the Company, other
than the Securities.
6. Representations and Warranties of the Company: The
Company warrants and represents to, and agrees with, each of the
Underwriters that:
(a) the Registration Statement has become effective
under the Act; any filing of the Prospectus and any supplements
thereto required pursuant to Rule 424(b) have been or will be made
in the manner required by Rule 424(b) and within the time period
required by Section 3(m) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purposes are pending before
or, to the knowledge of the Company, threatened by the Commission.
On the effective date of the Registration Statement, the
Registration Statement and the Basic Prospectus (as included in
the Registration Statement) complied, or were deemed to have
complied, on its issue date, the Basic Prospectus complied, or was
deemed to have complied, and on its issue date the Prospectus will
comply, or will be deemed to comply, in all material respects with
the applicable provisions of the Act, and the published rules and
regulations of the Commission; the Registration Statement on its
effective date, and the Basic Prospectus on its issue date, did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and the Prospectus,
as of its issue date and, as amended or supplemented, if
applicable, as of the Time of Purchase, will not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the Company makes no warranty or representation to any
Underwriter with respect to any statements or omissions made
therein in reliance upon and in conformity with information
furnished in writing to the Company by, or through the
Representatives on behalf of, any Underwriter expressly for use
therein.
(b) The documents incorporated by reference in the
Registration Statement, the Basic Prospectus and the Prospectus,
when they were filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed) with the
Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and any further documents so
filed and incorporated by reference will, when they are filed with
the Commission, conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder.
(c) The Company's Articles of Incorporation and all
amendments thereto to date have been duly authorized and all
necessary corporate action in connection therewith has been taken.
(d) The Securities have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable,
and the issuance of such Securities will not be subject to any
preemptive or similar rights.
(e) The capital stock of the Company conforms in all
material respects to the description thereof in the Prospectus.
(f) No order, license, consent, authorization or
approval of, or exemption by, or the giving of notice to, or the
registration with any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is
now required to be obtained by the Company to authorize its
execution or delivery of, or the performance of its obligations
under, this Agreement or the Securities, except such as have been
obtained or as may be required under state securities or Blue Sky
laws or as referred to in the Basic Prospectus.
(g) Neither the execution or delivery by the Company
of, nor the performance by the Company of its obligations under,
this Agreement did or will result in a breach of any of the terms
or provisions of, or constitute a default or require the consent
of any party under the Company's Articles of Incorporation or by-
laws, any material agreement or instrument to which it is a party,
any existing applicable law, rule or regulation or any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its properties or assets, or did or will result in the
creation or imposition of any lien on the Company's properties or
assets.
7. Representations and Warranties of Underwriters: Each
Underwriter represents and warrants that the information, if any,
furnished in writing to the Company through the Representatives expressly
for use in the Registration Statement and Prospectus is correct in all
material respects as to such Underwriter. Each Underwriter, in addition
to other information furnished to the Company for use in the Registration
Statement and Prospectus, herewith furnishes to the Company, through the
Representatives, for use in the Registration Statement and Prospectus, the
information stated herein with regard to the public offering, if any, by
such Underwriter and warrants and represents that such information is
correct in all material respects as to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by
law, to indemnify and hold harmless each of the Underwriters and
each person, if any, who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of 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 or otherwise, and to reimburse the Underwriters and
such controlling person or persons, if any, for any legal or other
expenses incurred by them in connection with defending any action,
suit or proceeding (including governmental investigations) as
provided in Section 8(c) hereof, insofar as such losses, claims,
damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary
prospectus (if used prior to the date of the Basic Prospectus),
the Basic Prospectus (if used prior to the date of the
Prospectus), the Prospectus, or if the Prospectus shall be amended
or supplemented, in the Prospectus as so amended or supplemented
(if such Prospectus or such Prospectus as amended or supplemented
is used after the period of time referred to in Section 5(e)
hereof, it shall contain or be used with such amendments or
supplements as the Company deems necessary to comply with
Section 10(a) of the Act), or arise out of or are based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims,
damages, liabilities or actions, suits or proceedings arise out of
or are based upon any such untrue statement or alleged untrue
statement or omission which was made in such preliminary
prospectus, Basic Prospectus, Registration Statement or
Prospectus, or in the Prospectus as so amended or supplemented, in
reliance upon and in conformity with information furnished in
writing to the Company by, or through the Representatives on
behalf of, any Underwriter expressly for use therein, and except
that this indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages, liabilities or actions,
suits or proceedings arising from the sale of the Securities to
any person if a copy of the Prospectus, as the same may then be
supplemented or amended (excluding, however, any document then
incorporated or deemed incorporated therein by reference) was not
sent or given by or on behalf of such Underwriter to such person
(i) with or prior to the written confirmation of the sale involved
or (ii) as soon as available after such written confirmation,
relating to an event occurring prior to the payment for and
delivery to such person of the Securities involved in such sale,
and the alleged omission or alleged untrue statement was corrected
in the Prospectus as supplemented or amended at such time.
The Company's indemnity agreement contained in this
Section 8(a), and the covenants, warranties and representations of
the Company contained in this Agreement, shall remain in full
force and effect regardless of any investigation made by or on
behalf of any person, and shall survive the delivery of and
payment for the Securities hereunder, and the indemnity agreement
contained in this Section 8 shall survive any termination of this
Agreement. The liabilities of the Company in this Section 8(a)
are in addition to any other liabilities of the Company under this
Agreement or otherwise.
(b) Each Underwriter agrees severally and not
jointly, to the extent permitted by law, to indemnify, hold
harmless and reimburse the Company, its directors and such of its
officers as shall have signed the Registration Statement, each
other Underwriter and each person, if any, who controls the
Company or any such other Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent and upon the same terms as the indemnity agreement of
the Company set forth in Section 8(a) hereof, but only with
respect to alleged untrue statements or omissions made in the
Registration Statement, the Basic Prospectus or the Prospectus, as
amended or supplemented (if applicable), in reliance upon and in
conformity with information furnished in writing to the Company by
such Underwriter expressly for use therein.
The indemnity agreement on the part of each Underwriter
contained in this Section 8(b), and the warranties and
representations of such Underwriter contained in this Agreement,
shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or other person,
and shall survive the delivery of and payment for the Securities
hereunder, and the indemnity agreement contained in this Section
8(b) shall survive any termination of this Agreement. The
liabilities of each Underwriter in this Section 8(b) are in
addition to any other liabilities of such Underwriter under this
Agreement or otherwise.
(c) If a claim is made or an action, suit or
proceeding (including governmental investigations) is commenced or
threatened against any person as to which indemnity may be sought
under Section 8(a) or 8(b), such person (the "Indemnified Person")
shall notify the person against whom such indemnity may be sought
(the "Indemnifying Person"), promptly after any assertion of such
claim threatening to institute an action, suit or proceeding or if
such an action, suit or proceeding is commenced against such
Indemnified Person promptly after such Indemnified Person shall
have been served with a summons or other first legal process,
giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however,
relieve the Indemnifying Person from any liability which it may
have on account of the indemnity under Section 8(a) or Section
8(b) if the Indemnifying Person has not been prejudiced in any
material respect by such failure. The Indemnifying Person shall
assume the defense of any such litigation or proceeding, including
the employment of counsel and the payment of all expenses. Such
counsel shall be designated in writing by the Representatives in
the case of parties indemnified pursuant to Section 8(b) and by
the Company in the case of parties indemnified pursuant to
Section 8(a). Any Indemnified Person shall have the right to
participate in such litigation or proceeding and to retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include (x) the
Indemnifying Person and (y) the Indemnified Person and, in the
written opinion of counsel to such Indemnified Person,
representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and
expenses of counsel (including disbursements) for such Indemnified
Person shall be reimbursed by the Indemnifying Person to the
Indemnified Person. If there is a conflict as described in clause
(ii) above, and the Indemnified Persons have participated in the
litigation or proceeding utilizing separate counsel whose fees and
expenses have been reimbursed by the Indemnifying Person, and the
Indemnified Persons, or any of them, are found to be solely
liable, such Indemnified Persons shall repay to the Indemnifying
Person such fees and expenses of such separate counsel as the
Indemnifying Person shall have reimbursed. It is understood that
the Indemnifying Person shall not, in connection with any
litigation or proceeding or related litigation or proceedings in
the same jurisdiction as to which the Indemnified Persons are
entitled to such separate representation, be liable under this
Agreement for the reasonable fees and out-of-pocket expenses of
more than one separate firm (together with not more than one
appropriate local counsel) for all such Indemnified Persons.
Subject to the next paragraph, all such fees and expenses shall be
reimbursed by payment to the Indemnified Persons of such
reasonable fees and expenses of counsel promptly after payment
thereof by the Indemnified Persons.
In furtherance of the requirement above that fees
and expenses of any separate counsel for the Indemnified Persons
shall be reasonable, the Representatives and the Company agree
that the Indemnifying Person's obligations to pay such fees and
expenses shall be conditioned upon the following:
(1) in case separate counsel is proposed to
be retained by the Indemnified Persons pursuant to
clause (ii) of the preceding paragraph the identity of
such counsel shall be reasonably acceptable to the
Indemnifying Party; and
(2) reimbursable fees and expenses of such
separate counsel shall be detailed and supported in a
manner reasonably acceptable to the Indemnifying Person
(but nothing herein shall be deemed to require the
furnishing to the Indemnifying Person of any information,
including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the
judgment of such counsel, furnishing such information
might reasonably be expected to result in a waiver of any
attorney-client privilege); and
(3) the Company and the Representatives shall
cooperate in monitoring and controlling the fees and
expenses of separate counsel for Indemnified Persons for
which the Indemnifying Person is liable hereunder, and the
Indemnified Person shall use every reasonable effort to
cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the
Indemnifying Person.
The Indemnifying Person shall not be liable for any
settlement of any litigation or proceeding effected without the written
consent of the Indemnifying Person, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person
agrees, subject to the provisions of this Section 8, to indemnify the
Indemnified Person from and against any loss, damage, liability or expense
by reason of such settlement or judgment. The Indemnifying Person shall
not, without the prior written consent of the Indemnified Person effect
any settlement of any pending or threatened litigation, proceeding or
claim in respect of which indemnity has been properly sought by the
Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in
Section 8 above is unavailable to or insufficient to hold harmless an
Indemnified Person under such Section in respect of any losses, claims,
damages or liabilities (or actions, suits or proceedings (including
governmental investigations) in respect thereof) referred to therein, then
each Indemnifying Person under Section 8 shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities (or actions, suits or proceedings in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Indemnifying Person on the one hand and
the Indemnified Person on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law, then each Indemnifying Person shall
contribute to such amount paid or payable by such Indemnified Person in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of each Indemnifying Person, if any,
on the one hand and the Indemnified Person on the other in connection with
the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions, suits or proceedings (including governmental
investigations) in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover page of the Prospectus bear to the
aggregate offering price of the Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 9. The amount paid or
payable by an Indemnified Person as a result of the losses, claims,
damages or liabilities (or actions, suits or proceedings (including
governmental proceedings) in respect thereof) referred to above in this
Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Person in connection with
investigating or defending any such action, suits or proceedings
(including governmental proceedings) or claim, provided that the
provisions of Section 8 have been complied with (in all material respects)
in respect of any separate counsel for such Indemnified Person.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount greater than the excess of (i) the total
price at which the Securities underwritten by it and distributed to the
public were offered to the public over (ii) the amount of any damages
which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 9 to contribute are several in
proportion to their respective underwriting obligations and not joint.
The agreement with respect to contribution contained in
Section 9 hereof shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter, and
shall survive delivery of and payment for the Securities hereunder and any
termination of this Agreement.
10. Substitution of Underwriters: If any Underwriter under
this agreement shall fail or refuse (otherwise than for some reason
sufficient to justify, in accordance with the terms hereof, the
termination of its obligations hereunder) to purchase the Securities which
it had agreed to purchase, the Representatives shall immediately notify
the Company, and the Representatives and the other Underwriters may,
within 36 hours of the giving of such notice, determine to purchase, or to
procure one or more other members of the National Association of
Securities Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
foreign banks, dealers or institutions not registered under the Exchange
Act and who agree in making sales to comply with the NASD's Rules of Fair
Practice), satisfactory to the Company, to purchase, upon the terms herein
set forth, the principal amount of Securities which the defaulting
Underwriter had agreed to purchase. If any non-defaulting Underwriter or
Underwriters shall determine to exercise such right, the Representatives
shall give written notice to the Company of such determination within
36 hours after the Company shall have received notice of any such default,
and thereupon the Time of Purchase shall be postponed for such period, not
exceeding three business days, as the Company shall determine. If in the
event of such a default the Representatives shall fail to give such
notice, or shall within such 36-hour period give written notice to the
Company that no other Underwriter or Underwriters, or others, will
exercise such right, then this Agreement may be terminated by the Company,
upon like notice given to the Representatives, within a further period of
36 hours. If in such case the Company shall not elect to terminate this
agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to
purchase and pay for the respective principal amounts of
Securities which they had severally agreed to purchase hereunder,
as hereinabove provided, and, in addition, the principal amount of
Securities which the defaulting Underwriter shall have so failed
to purchase up to a principal amount thereof equal to one-ninth
(1/9) of the respective principal amounts of Securities which such
non-defaulting Underwriters have otherwise agreed to purchase
hereunder; and/or
(b) to procure one or more other members of the NASD
(or, if not members of the NASD, who are foreign banks, dealers or
institutions not registered under the Exchange Act and who agree
in making sales to comply with the NASD's Rules of Fair Practice),
to purchase, upon the terms herein set forth, the principal amount
of Securities which such defaulting Underwriter had agreed to
purchase, or that portion thereof which the remaining Underwriters
shall not be obligated to purchase pursuant to the foregoing
clause (a).
In the event the Company shall exercise its rights under clause (a) and/or
(b) above, the Company shall give written notice thereof to the
Representatives within such further period of 36 hours, and thereupon the
Time of Purchase shall be postponed for such period, not exceeding three
business days, as the Company shall determine. In the event the Company
shall be entitled to but shall not elect to exercise its rights under
clause (a) and/or (b), the Company shall be deemed to have elected to
terminate this Agreement.
Any action taken by the Company under this Section 10
shall not relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement. Termination by the
Company under this Section 10 shall be without any liability on the part
of the Company or any non-defaulting Underwriter.
In the computation of any period of 36 hours referred to
in this Section 10, there shall be excluded a period of 24 hours in
respect of each Saturday, Sunday or legal holiday which would otherwise be
included in such period of time.
11. Termination of Agreement: This Agreement may be
terminated at any time prior to the Time of Purchase by the
Representatives if prior to such time (i) trading in securities on the New
York Stock Exchange shall have been generally suspended by the Commission
or the New York Stock Exchange, (ii) trading of any securities of the
Company shall have been suspended on any exchange or over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by federal or New York State authorities or
(iv) there shall have occurred any outbreak or material escalation of
hostilities or any other calamity or crisis, the effect of which on the
financial markets of the United States is such as to impair, in the
Representatives' reasonable judgment, after reasonable inquiries on the
part of the Representatives, the marketability of the Securities.
If the Representatives elect to terminate this Agreement,
as provided in this Section 11, the Representatives will promptly notify
the Company and each other Underwriter by telephone or telecopy, confirmed
by letter. If this Agreement shall not be carried out by any Underwriter
for any reason permitted hereunder, or if the sale of the Securities to
the Underwriters as herein contemplated shall not be carried out because
the Company is not able to comply with the terms hereof, the Company shall
not be under any obligation under this Agreement and shall not be liable
to any Underwriter or to any member of any selling group for the loss of
anticipated profits from the transactions contemplated by this Agreement
and the Underwriters shall be under no liability to the Company nor be
under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5(g),
5(i), 8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to the
following addresses or be sent by telecopy as follows: if to the
Underwriters or the Representatives, to the Representatives at the address
designated in Schedule I hereto and, if to the Company, to Consumers Power
Company, 212 West Michigan Avenue, Jackson, Michigan 49201, Attention:
Senior Vice President and Chief Financial Officer, Telecopy: (517)
788-0351.
13. Parties in Interest: The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company
(including the directors thereof and such of the officers thereof as shall
have signed the Registration Statement), and the controlling persons, if
any, referred to in Sections 8 hereof, and their respective successors,
assigns, executors and administrators, and, except as expressly otherwise
provided in Section 10 hereof, no other person shall acquire or have any
right under or by virtue of this Agreement.
14. Definition of Certain Terms: The term "Underwriters", as
used herein, shall be deemed to mean the several persons, firms or
corporations, named in Schedule II hereto (including the Representatives
herein mentioned, if so named), and the term "Representatives", as used
herein, shall be deemed to mean the representative or representatives
designated by the Underwriters in Schedule I hereto. All obligations of
the Underwriters hereunder are several and not joint. If there shall be
only one person, firm or corporation named in Schedule I and Schedule II
hereto, the term "Underwriters" and the term "Representatives", as used
herein, shall mean such person, firm or corporation. If the firm or firms
listed in Schedule I hereto are the same as the firm or firms listed in
Schedule II hereto, then the terms "Underwriters" and "Representatives",
as used herein, shall each be deemed to refer to such firm or firms. The
term "successors" as used in this Agreement shall not include any
purchaser, as such purchaser, of any of the Securities from any of the
respective Underwriters.
15. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one
or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters and the Company.
Very truly yours,
CONSUMERS POWER COMPANY
By: /s/ AM Wright
__________________________
Accepted as of the date hereof
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Dean Witter Reynolds Inc.,
PaineWebber Incorporated,
Smith Barney Shearson, Inc.,
As Representatives
By: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Michael E. Carboy
_________________________________<PAGE>
<PAGE>
Schedule I
The Representatives
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Dean Witter Reynolds Inc.
PaineWebber Incorporated
Smith Barney Shearson Inc.
Address for Notices: c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Attention: Anthony V. Leness
Telecopy: (212) 449-8636
<PAGE>
<PAGE>
Schedule II
Number of Shares of
Underwriters Securities to be Purchased
- ------------ --------------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 1,125,000
Dean Witter Reynolds Inc. 1,125,000
PaineWebber Incorporated 1,125,000
Smith Barney Shearson Inc. 1,125,000
Bear, Stearns & Co. Inc. 150,000
Donaldson, Lufkin & Jenrette Securities Corporation 150,000
First of Michigan Corporation 150,000
Goldman, Sachs & Co. 150,000
Kidder, Peabody & Co. Incorporated 150,000
Morgan Stanley & Co. Incorporated 150,000
Salomon Brothers Inc 150,000
Robert W. Baird & Co. Incorporated 100,000
Alex. Brown & Sons Incorporated 100,000
Dillon, Read & Co. Inc. 100,000
A.G. Edwards & Sons, Inc. 100,000
Kemper Securities, Inc. 100,000
McDonald & Company Securities, Inc. 100,000
Oppenheimer & Co., Inc. 100,000
Piper Jaffray Inc. 100,000
Raymond James & Associates, Inc. 100,000
Rodman & Renshaw, Inc. 100,000
Advest, Inc. 50,000
J.C. Bradford & Co. 50,000
JW Charles Securities, Inc. 50,000
Cowen & Company 50,000
Craigie Incorporated 50,000
Dain Bosworth Incorporated 50,000
Doft & Co., Inc. 50,000
Doley Securities, Inc. 50,000
Fahnestock & Co. Inc. 50,000
First Albany Corporation 50,000
Freeman Securities Company, Inc. 50,000
Furman Selz Incorporated 50,000
Gruntal & Co., Incorporated 50,000
Interstate/Johnson Lane Corporation 50,000
Janney Montgomery Scott Inc. 50,000
Edward D. Jones & Co. 50,000
Josephthal Lyon & Ross, Incorporated 50,000
Legg Mason Wood Walker, Incorporated 50,000
Morgan Keegan & Company, Inc. 50,000
The Ohio Company 50,000
Rauscher Pierce Refsnes, Inc. 50,000
The Robinson-Humphrey Company, Inc. 50,000
Roney & Co. 50,000
Stifel, Nicolaus & Company, Incorporated 50,000
Sutro & Co. Incorporated 50,000
Tucker Anthony Incorporated 50,000
US Clearing Corp. 50,000
Utendahl Capital Partners, L.P. 50,000
Wheat, First Securities, Inc. 50,000
------
Total 8,000,000
=========
<PAGE>
<PAGE>
Exhibit A
[Opinion of Denise M. Sturdy, Esq.,
Finance Counsel to Consumers Power Company]
___________, 1994
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Dean Witter Reynolds Inc.,
PaineWebber Incorporated,
Smith Barney Shearson Inc.,
As Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement referred to below
c/o Merrill Lynch, Pierce, Fenner &
Smith Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Re: Consumers Power Company
8,000,000 Shares of $__ Class A
Preferred Stock (Cumulative, Without Par Value)
Ladies and Gentlemen:
I address this opinion to you individually and as Representatives of the
Underwriters (the "Underwriters") named in Schedule II to the Underwriting
Agreement dated March __, 1994 (the "Underwriting Agreement") between you,
as such Representatives, and Consumers Power Company, a Michigan
corporation (the "Company"), with respect to the issuance and sale of
8,000,000 shares of the Company's $____ Class A Preferred Stock.
(Cumulative, Without Par Value) (Securities"). Capitalized terms not
defined herein have the meanings specified in the Underwriting Agreement.
In rendering the opinions expressed below, I, or attorneys acting under my
supervision, have examined originals, or copies of originals certified to
my satisfaction, of such agreements, documents, certificates and other
statements of governmental officials and corporate officers and such other
papers and evidence as I or we have deemed relevant and necessary as a
basis for such opinions. We have assumed the authenticity of all
documents submitted to me as originals and the conformity with the
original documents of any copies thereof submitted to me for my
examination. We have also relied upon the representations and warranties
as to factual matters contained in and made pursuant to the Underwriting
Agreement.
The terms "Registration Statement" and "Prospectus", as used herein, have
the same meanings as the same terms in the Underwriting Agreement.
Whenever the opinion herein with respect to the existence or absence of
facts is indicated to be based on my knowledge or awareness, it is
intended to signify that during the course of my representation of the
Company, no information has come to my attention which would give me
actual knowledge of the existence or absence of such facts.
(1) The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Michigan and has
corporate authority to carry on the public utility business in
which it is engaged and to own and use the properties owned and
used by it in such business.
(2) All legally required proceedings in connection with the
authorization, issuance and validity of the Securities and the
sale of the Securities by the Company in accordance with the
Underwriting Agreement (other than the filing of post-issuance
reports, the non-filing of which would not render the Securities
invalid) have been taken and all legally required orders, consents
or other authorizations or approvals of the Michigan Public
Service Commission and of any other public boards or bodies in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities by the Company in
accordance with the Underwriting Agreement (other than in
connection with or in compliance with the provisions of the
securities or Blue Sky laws of any jurisdiction, as to which no
opinion is expressed) have been obtained and are in full force and
effect.
(3) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best
of my knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under
the Act.
(4) The Registration Statement and the Prospectus (except in each case
for (i) the operating statistics, financial statements and
schedules contained or incorporated by reference therein
(including the notes thereto and auditors' reports thereon), and
(ii) the other financial data or statistical information contained
or incorporated by reference therein, as to which no opinion is
expressed), as of their effective and issue dates, respectively,
complied as to form in all material respects with the requirements
of Form S-3 under the Act, and the applicable rules and regula-
tions under said Act.
(5) Each document incorporated by reference in the Registration
Statement and the Prospectus, when they were filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(except in each case for (i) the operating statistics, financial
statements and schedules contained or incorporated by reference
therein (including the notes thereto and auditors' reports
thereon), and (ii) the other financial data or statistical
information contained or incorporated by reference therein, as to
which no opinion is expressed) complied as to form in all material
respects with the requirements of the Exchange Act and the
applicable rules and regulations thereunder.
(6) To the best of my knowledge, no order directed to the adequacy or
accuracy of any document incorporated by reference in the
Prospectus has been issued by the Securities and Exchange
Commission, and no challenge by the Securities and Exchange
Commission has been made to the adequacy or accuracy of any such
document.
(7) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(8) The Company's Restated Articles of Incorporation and all
amendments thereto have been duly authorized and all necessary
corporate action in connection therewith has been taken.
(9) The Securities have been duly authorized by all necessary
corporate action on the part of the Company and validly issued and
are fully paid and nonassessable, and the issuance of such
Securities will not be subject to any preemptive or similar
rights.
(10) The capital stock of the Company conforms in all material respects
to the description thereof in the Prospectus.
(11) The statements made in the Registration Statement and Prospectus
under the captions "Description of New Preferred Stock" and
"Supplemental Description of New Preferred Stock" accurately
summarize the provisions of the Company's Restated Articles of
Incorporation, as amended, and the Securities conform as to legal
matters to the descriptions thereof and to the statements in
regard thereto contained in the Registration Statement and
Prospectus.
(12) Nothing has come to my attention which would lead me to believe
that the Registration Statement (except for the financial
statements and other financial and statistical data included or
incorporated by reference therein, as to which no opinion is
expressed), when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented or modified by the filing of a document incorporated
by reference therein (except as aforesaid), on its issue date and
on the date hereof contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(13) The description in the Registration Statement or the Prospectus of
franchises, regulations, statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly present the information required to be shown and I do not
know of any legal or governmental proceedings required to be
described in the Prospectus that are not so described (or the
descriptions of which are not incorporated by reference) or of any
contracts or documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described
(or the descriptions of which are not incorporated by reference)
or so filed.
(14) The issuance and sale of the Securities in accordance with the
terms of the Underwriting Agreement do not violate the provisions
of the Restated Articles of Incorporation, as amended, or the
By-Laws of the Company.
I am a member of the State Bar of Michigan and I do not express any
opinion herein concerning any law other than the applicable federal laws
of the United States and the laws of the State of Michigan.
The opinion letter is furnished by me, as counsel to the Company, solely
for the benefit of you, the addressees of this letter, in connection with
the transaction referred to herein and may be relied upon only by you in
such capacity. No one else, other than Reid & Priest for purposes of its
opinion in connection with the transaction referred to herein, has the
right to rely upon this opinion letter, nor may you release it or quote
from it, nor may you rely upon it in any other capacity or employ it in
any transaction other than the transaction discussed herein, without my
prior written consent.
Very truly yours,
<PAGE>
<PAGE>
Exhibit B
[Opinion of Reid & Priest]
_____________, 1994
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Dean Witter Reynolds Inc.,
PaineWebber Incorporated,
Smith Barney Shearson Inc.,
As Representatives of the Underwriters
named in Schedule II to the Underwriting
Agreement referred to below
c/o Merrill Lynch, Pierce Fenner & Smith
Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Re: Consumers Power Company
8,000,000 Shares of $__ Class A
Preferred Stock (Cumulative, Without Par Value)
Ladies and Gentlemen:
We have acted as your counsel in connection with the purchase by
you of 8,000,000 shares of $__ Class A Preferred Stock (Cumulative,
Without Par Value) (the "Securities"), of Consumers Power Company (the
"Company") pursuant to the Underwriting Agreement dated March __, 1994
between you and the Company (the "Underwriting Agreement").
We have examined the Registration Statement on Form S-3 (File
No. 33-52129) filed by the Company under the Securities Act of 1933, as
amended (the "Act"), as it became effective under the Act; the prospectus
of the Company dated February 14, 1994, as supplemented by the prospectus
supplement dated March 23, 1994 (the "Prospectus"), filed pursuant to Rule
424(b)(2) of the rules and regulations of the Securities and Exchange
Commission (the "Commission") under the Act, which pursuant to Form S-3
incorporates by reference certain reports of the Company (the "Exchange
Act Documents"), filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); and the Company's Restated Articles of
Incorporation, as amended. In addition, we have examined, and have relied
as to matters of fact upon, the documents delivered to you by the Company
at the closing, including, without limitation, a certificate of the
transfer agent and registrar as to the execution of the Securities, and
the cross-receipt with regard to delivery thereof and payment therefor.
We have not examined certificates of the Securities, except a specimen
thereof. In addition, we have made such other and further investigations
as we deemed necessary to enable us to express the opinions hereinafter
set forth.
We are of the opinion that:
1. The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of
Michigan.
2. The Securities have been duly authorized by all
necessary corporate action on the part of the Company and validly
issued and are fully paid and nonassessable.
3. The statements made in the Prospectus under the
caption "Description of New Preferred Stock", insofar as they
purport to constitute summaries of the terms of the Company's
Restated Articles of Incorporation, as amended constitute accurate
summaries of the terms of such documents in all material respects.
4. The Registration Statement, as of its effective
date, and the Prospectus, as of the date thereof (except in each
case for (i) the operating statistics, financial statements and
schedules contained or incorporated by reference therein
(including the notes thereto and the auditors' reports thereon);
(ii) the other financial and statistical information contained or
incorporated by reference therein; or (iii) the exhibits thereto,
as to which we do not express an opinion), complied, or were
deemed to have complied, as to form in all material respects with
the requirements of Form S-3 under the Act and the applicable
rules and regulations of the Commission thereunder.
5. The Company has duly authorized, executed and
delivered the Underwriting Agreement.
We have participated in conferences with certain officers and
other representatives of the Company, counsel for the Company,
representatives of the independent certified public accountants for the
Company and representatives of the Underwriters, at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed. Although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in such registration statement or the Prospectus
(except to the extent set forth in paragraph 4 above), we advise you that,
on the basis of the foregoing, no facts have come to our attention which
lead us to believe that such registration statement (except in each case
for the financial statements and other financial and statistical data
included or incorporated by reference therein, as to which we do not
express comment) contained, on the effective date of such registration
statement, any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (except for the
financial statements and other financial and statistical data included or
incorporated by reference therein, as to which we do not comment), as of
the date of the Prospectus contained, or as of the date hereof contains,
any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the federal law
of the United States and the laws of the States of New York and Michigan.
Insofar as the opinions expressed herein relate to or are dependent upon
matters governed by the laws of the State of Michigan, we have, with your
consent, relied upon the opinion, dated the date hereof, rendered to you
by Denise M. Sturdy, Esq., which opinion is in form satisfactory to us.
This opinion is rendered to you in connection with the above-
described transaction. This opinion may not be relied upon by you for any
other purpose, or relied upon by or furnished to any other person, firm or
corporation without our prior written consent.
Very truly yours,
REID & PRIEST
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