<PAGE>
- --------------------------------------------------------------------------
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) January 18, 1996
Commission Registrant; State of IRS Employer
File Number Incorporation; Identification No.
Address; and
Telephone Number
1-5611 CONSUMERS POWER COMPANY 38-0442310
(A Michigan Corporation)
212 West Michigan Avenue
Jackson, Michigan 49201
(517) 788-1030
- -------------------------------------------------------------------------
<PAGE>
<PAGE>
ITEM 5. OTHER EVENTS.
On November 3, 1995 and December 19, 1995, Consumers Power Company (the
"Company") and Consumers Power Company Financing I, a statutory business
trust formed under the laws of the State of Delaware (the "Trust") filed a
combined Form S-3 Registration Statement and Amendment No. 1 to Form S-3
Registration, respectively, under the Securities Act of 1933, as amended,
with respect to the offering of 4,000,000 ___ % Trust Originated Preferred
Securities [SM] (Liquidation Amount $25 per Preferred Security (the
Preferred Securities"), among other securities. The Preferred Securities
will be offered subject to the terms and conditions set forth in an
underwriting agreement (the "Underwriting Agreement") in which the Trust
has agreed to sell to each of the underwriters named in the Underwriting
Agreement, and each of the Underwriters has severally agreed to purchase
the Preferred Securities, if any of the Preferred Securities are
purchased. Such form of Underwriting Agreement is attached hereto as an
exhibit to the Current Report on Form 8-K and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(1) - Form of Underwriting Agreement.
<PAGE>
<PAGE>
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: January 18, 1996 By: /s/ A M Wright
Alan M. Wright
Senior Vice President and
Chief Financial Officer
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number
1 Form of Underwriting Agreement
<PAGE>
<PAGE>
EXHIBIT (1)
<PAGE>
4,000,000 Preferred Securities
CONSUMERS POWER COMPANY FINANCING I
(a Delaware Trust)
____% Trust Originated Preferred Securities ("TOPrS")
(Liquidation Amount of $25 Per Preferred Security)SM
UNDERWRITING AGREEMENT
___________,
1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
as Representative of the several Underwriters
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Consumers Power Company Financing I (the "Trust"), a
statutory business trust organized under the Business Trust Act (the
"Delaware Act") of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. sections 3801 et seq.), and Consumers Power Company,
a Michigan corporation (the "Company" and, together with the Trust, the
"Offerors") confirm their agreement (the "Agreement") with Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch")
and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for
whom Merrill Lynch is acting as representative (in such capacity, Merrill
Lynch shall
____________________
SM "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co., Inc.<PAGE>
<PAGE> 2
hereinafter be referred to as the "Representative"), with respect to the
sale by the Trust and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of ____% Trust Originated
Preferred Securities (liquidation amount of $25 per preferred security) of
the Trust ("Preferred Securities") set forth in said Schedule A except as
may otherwise be provided in the Pricing Agreement, as hereinafter
defined. The Preferred Securities will be guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and
otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement (the "Preferred Securities Guarantee
Agreement"), dated as of _______, 1996, between the Company and The Bank
of New York, as trustee (the "Guarantee Trustee"), and in certain
circumstances described in the Prospectus, the Trust will distribute
Subordinated Debt Securities (as defined herein) to holders of Preferred
Securities. The Preferred Securities, the related Preferred Securities
Guarantee and the Subordinated Debt Securities are referred to herein as
the "Securities".
Prior to the purchase and public offering of the Preferred
Securities by the several Underwriters, the Offerors and the
Representative, acting on behalf of the several Underwriters, shall enter
into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement may take the form of an
exchange of any standard form of written telecommunication between the
Offerors and the Representative and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Preferred Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and
delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Nos.
33-63949 and 33-63949-01) and a related preliminary prospectus for the
registration under the Securities Act of 1933, as amended (the "1933 Act")
of up to a combination of $100,000,000 of (i) Preferred Securities, (ii)
guarantees of the Preferred Securities, and (iii) the Subordinated Debt
Securities, have filed such amendments thereto, if any, and such amended
preliminary prospectuses as may have been required to the date hereof, and
will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. Such registration statement at the time it
initially became effective and the prospectus constituting a part thereof
(including, in each case, all documents incorporated or deemed to be
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the 1933 Act and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations")), are hereinafter referred
to as the "Registration Statement" and the "Prospectus", respectively,
except that, if any revised prospectus (including a prospectus revised by
filing any documents pursuant to Section 13, 14 or 15 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution
and delivery of this Agreement) shall be provided to the Underwriters by
the Offerors for use in connection with the offering of the Preferred
Securities which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective, the term
"Prospectus" shall refer to such revised prospectus so provided to the
Underwriters for such use. All references in this Agreement to financial
statements and schedules and other information that is "contained,"
"included" or "stated" in the Registration Statement or the Prospectus
(and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information
that are or are deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement
or the Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act that is or is deemed to be, after the
execution and delivery of this Agreement, incorporated by reference in the
Registration Statement or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to
make a public offering of the Securities as soon as the Representative
deems advisable after the Pricing Agreement has been executed and
delivered, and the Declaration (as defined herein), the Indenture (as
defined herein), and the Preferred Securities Guarantee Agreement have
been qualified under the Trust Indenture Act of 1939, as amended (the
"1939 Act"). The entire proceeds from the sale of the Preferred
Securities will be combined with the entire proceeds from the sale by the
Trust to the Company of its common securities (the "Common Securities,"
and together with the Preferred Securities, the "Trust Securities"), as
guaranteed by the Company, to the extent set forth in the Prospectus, with
respect to distributions and payments upon liquidation and redemption (the
"Common Securities Guarantee" and together with the Preferred Securities
Guarantee, the "Guarantees") pursuant to the Common Securities Guarantee
Agreement (the "Common Securities Guarantee Agreement" and, together with
the Preferred Securities Guarantee Agreement, the "Guarantee Agreements"),
dated as of ______, 1996, between the Company and Guarantee Trustee, as
Trustee, and will be used by the Trust to purchase $103,092,800 of ____%
subordinated deferrable interest debt securities (the "Subordinated Debt
Securities") issued by the Company. The Preferred Securities and the
Common Securities will be issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of ______, 1996 (the
"Declaration"), among the Company, as Sponsor, Alan M. Wright, Thomas A.
McNish and Doris F. Galvin (the "Regular Trustees"), The Bank of New York,
as property trustee (the "Property Trustee"), and The Bank of New York
(Delaware) (the "Delaware Trustee," and, together with the Property
Trustee and the Regular Trustees, the "Trustees"), and the holders from
time to time of undivided beneficial interests in the assets of the Trust.
The Subordinated Debt Securities will be issued pursuant to an indenture,
dated as of ______, 1996 (the "Base Indenture"), between the Company and
The Bank of New York as trustee (the "Debt Trustee"), and a supplement to
the Base Indenture, dated as of ______, 1996 (the "Supplemental
Indenture," and together with the Base Indenture and any other amendments
or supplements thereto, the "Indenture"), between the Company and the Debt
Trustee.
Section 1. Representations and Warranties.
(a) The Offerors jointly and severally
represent and warrant to each Underwriter as of the date hereof and as of
the date of the Pricing Agreement (such latter date being hereinafter
referred to as the "Representation Date") as follows:
(i) At the time the Registration
Statement becomes effective and at the Representation Date, the
Registration Statement will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under
the 1939 Act (the "1939 Act Regulations"), and will not contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at each
Representation Date and at the Closing Time referred to in Section
2 hereof, will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with
information furnished to the Offerors in writing by any
Underwriter through Merrill Lynch expressly for use in the
Registration Statement or Prospectus or to that part of the
Registration Statement which consists of the statements of
eligibility of trustees on Form T-1 under the 1939 Act.
(ii) The documents incorporated by
reference in the Registration Statement or Prospectus, at the time
they were filed with the Commission (or, if an amendment with
respect to any such document was filed, at the time such amendment
was filed), complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of
the Commission under the 1934 Act (the "1934 Act Regulations"), as
applicable, any further documents so filed and incorporated by
reference will, when they are filed with the Commission, comply in
all material respects to the requirements of the 1934 Act and the
1934 Act Regulations, and none of such documents when filed (or if
any amendment with respect any such document was filed, at the
time such amendment was filed) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(iii) Each of the Offerors meets, and at
the respective times of commencement and consummation of the
offering of the Securities will meet, the registrant requirements
for use of Form S-3 under the 1933 Act and the 1933 Act
Regulations.
(iv) There has been no material adverse
change in the business, properties or financial condition of the
Company or the Trust from that set forth in the Registration
Statement (other than changes referred to in or contemplated by
the Registration Statement or the Prospectus).
(v) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Michigan with corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement
and Prospectus, to enter into and perform its obligations under
this Agreement, the Pricing Agreement, the Declaration, the
Indenture and each of the Guarantees and to purchase, own, and
hold the Common Securities issued by the Trust.
(vi) The capital stock of the Company
conforms in all material respects to the description thereof in
the Prospectus.
(vii) The Trust has been duly created
and is validly existing in good standing as a business trust under
the Delaware Act with the power and authority to own property and
to conduct its business as described in the Registration Statement
and Prospectus and to enter into and perform its obligations under
this Agreement, the Pricing Agreement, the Preferred Securities,
the Common Securities and the Declaration; the Trust is duly
qualified to transact business as a foreign company and is in good
standing in any other jurisdiction in which such qualification is
necessary, except to the extent that the failure to so qualify or
be in good standing would not have a material adverse effect on
the Trust; the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; the Trust
is and will, under current law, be classified for United States
federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
(viii) The Common Securities have been
duly authorized by the Declaration and, when issued and delivered
by the Trust to the Company against payment therefor as described
in the Registration Statement and Prospectus, will be validly
issued and will represent undivided beneficial interests in the
assets of the Trust and will conform in all material respects to
the description thereof contained in the Prospectus; the issuance
of the Common Securities is not subject to preemptive or other
similar rights; and at the Closing Time all of the issued and
outstanding Common Securities of the Trust will be directly owned
by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(ix) This Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by
each of the Offerors.
(x) The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company and the Trustees, and
assuming due authorization, execution and delivery of the
Declaration by the Property Trustee and the Delaware Trustee, the
Declaration will, at the Closing Time, be a valid and binding
obligation of the Company and the Regular Trustees, enforceable
against the Company and the Regular Trustees in accordance with
its terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity) (the "Bankruptcy
Exceptions") and will conform in all material respects to the
description thereof contained in the Prospectus.
(xi) Each of the Guarantee Agreements
has been duly authorized by the Company and, when validly executed
and delivered by the Company, and, in the case of the Preferred
Securities Guarantee Agreement, assuming due authorization,
execution and delivery of the Preferred Securities Guarantee by
the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and each of
the Guarantees and the Guarantee Agreements will conform in all
material respects to the description thereof contained in the
Prospectus.
(xii) The Preferred Securities have been
duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid
and non-assessable undivided beneficial interests in the assets of
the Trust and will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of
the Preferred Securities is not subject to preemptive or other
similar rights.
(xiii) The Indenture has been duly
authorized by the Company and, when validly executed and delivered
by the Company, will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions; the Indenture will conform
in all material respects to the description thereof contained in
the Prospectus.
(xiv) The Subordinated Debt Securities
have been duly authorized by the Company and, at the Closing Time,
will have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms
except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions, and will be in the form contemplated
by, and entitled to the benefits of, the Indenture and will
conform in all material respects to the description thereof in the
Prospectus.
(xv) Each of the Regular Trustees of
the Trust is an employee of the Company and has been duly
authorized by the Company to execute and deliver the Declaration.
(xvi) None of the Offerors is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act").
(xvii) The Trust is not in violation of
the Declaration or its certificate of trust filed with the State
of Delaware on October 30, 1995 (the "Certificate of Trust"); none
of the execution, delivery and performance of this Agreement, the
Pricing Agreement, the Declaration, the Preferred Securities, the
Common Securities, the Indenture, the Subordinated Debt
Securities, the Guarantee Agreements and the Guarantees and the
consummation of the transactions contemplated herein and therein
and compliance by the Offerors with their respective obligations
hereunder and thereunder 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 Certificate of Trust or the
Company's Articles of Incorporation or by-laws, any material
agreement or instrument to which either Offeror 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 either
Offeror or any of its properties or assets, or did or will result
in the creation or imposition of any lien on the properties or
assets of either Offeror.
(xviii) 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 in connection with the issuance and sale of the
Common Securities or the offering of the Preferred Securities, the
Subordinated Debt Securities or the Guarantees hereunder, except
for the order of the Michigan Public Service Commission, which has
already been obtained, and such as may be required under the 1933
Act or state securities laws and the qualification of the
Declaration, the Preferred Securities Guarantee Agreement and the
Indenture under the 1939 Act.
(xix) The Company has outstanding
unsecured non-convertible preferred securities rated by a
nationally recognized statistical rating organization in one of
its four (4) highest generic rating categories.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Trust agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Trust, at the price per security set forth in the
Pricing Agreement, the number of Preferred Securities set forth in
Schedule A opposite the name of such Underwriter (except as otherwise
provided in the Pricing Agreement), plus any additional number of
Preferred Securities that such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
The purchase price per security to be paid by the several
Underwriters for the Preferred Securities shall be an amount equal to the
initial public offering price. The initial public offering price per
Preferred Security shall be a fixed price to be determined by agreement
between the Representative and the Offerors. The initial public offering
price and the purchase price, when so determined, shall be set forth in
the Pricing Agreement. In the event that such prices have not been agreed
upon and the Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless
otherwise agreed to by the Offerors and the Representative. As
compensation to the Underwriters for their commitments hereunder and in
view of the fact that the proceeds of the sale of the Preferred Securities
will be used to purchase the Subordinated Debt Securities of the Company,
the Company hereby agrees to pay at Closing Time (as defined below) to the
Representative, for the accounts of the several Underwriters, a commission
per Preferred Security determined by agreement between the Representative
and the Company for the Preferred Securities to be delivered by the Trust
hereunder at Closing Time. The commission, when so determined, shall be
set forth in the Pricing Agreement.
(b) Payment of the purchase price for, and
delivery of certificates for, the Preferred Securities shall be made at
the office of Reid & Priest LLP, or at such other place as shall be agreed
upon by the Representative and the Trust, at 10:00 A.M. New York time on
the third business day (unless postponed in accordance with the provisions
of Section 10) after execution of the Pricing Agreement, or such other
time not later than ten business days after such date as shall be agreed
upon by the Representative, the Trust and the Company (such time and date
of payment and delivery being herein called "Closing Time"). Payment
shall be made to the Trust by certified or official bank check or checks
drawn in New York Clearing House funds or similar next day funds payable
to the order of the Trust to an account designated by the Trust, against
delivery to the Representative for the respective accounts of the
Underwriters of certificates for the Preferred Securities to be purchased
by them. Certificates for the Preferred Securities shall be in such
denominations and registered in such names as the Representative may
request in writing at least two business days before the Closing Time. It
is understood that each Underwriter has authorized the Representative, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Preferred Securities which it has agreed to
purchase. Merrill Lynch, individually and not as Representative of the
Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Preferred Securities to be purchased by any
Underwriter whose check has not been received by the Closing Time, but
such payment shall not relieve such Underwriter from its obligations
hereunder.
The certificate(s) for the Preferred Securities will be
made available for examination and packaging by the Representative not
later than 10:00 A.M. on the last business day prior to the Closing Time.
At the Closing Time, the Company will pay, or cause to be
paid, the commission payable at such time to the Underwriters under this
Section 2 by certified or official bank check or checks payable to Merrill
Lynch, Pierce, Fenner & Smith Incorporated in New York Clearing House
funds or other similar next day funds.
Section 3. Covenants of the Offerors. Each of the
Offerors jointly and severally covenant with each Underwriter as follows:
(a) The Offerors will promptly notify the
Representative or its counsel (i) of the effectiveness of the Registration
Statement and any amendment thereto (including any post-effective
amendment), (ii) of the receipt of any comments from the Commission or of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, (iii) of any suspension of qualification of the
Preferred Securities for sale under Blue Sky or state securities laws, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Offerors will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Prior to the termination of the offering of
the Preferred Securities, the Offerors will not file any amendment to the
Registration Statement or amendment or supplement to the Prospectus unless
the Representative and counsel to the Underwriters have been furnished
with a copy of such amendment or supplement for their review and comment a
reasonable time prior to such proposed filing and will not file any such
amendment or supplement to which counsel for the Underwriters shall
reasonably object on legal grounds in writing after consultation with the
Representative. Subject to the foregoing, the Offerors will promptly
prepare a supplement to the Prospectus to reflect the terms of the
Preferred Securities and the terms of the offering contemplated by this
Agreement. The Offerors will file such Prospectus as so supplemented
pursuant to Rule 424(b) under the Act within the time periods provided by
such Rule and Rule 430A(a)(3) under the Act.
(c) The Offerors will deliver to the
Representative one signed and as many conformed copies of the Registration
Statement, in each case as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference
therein) as the Representative may reasonably request and will also
deliver to the Representative a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters.
(d) The Offerors will furnish to each
Underwriter, without charge, from time to time during the period of time
(not exceeding nine months) after the date of the Prospectus when a
Prospectus is required to be delivered under the 1933 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request for the purposes contemplated by the 1933 Act or
the respective applicable rules and regulations of the Commission
thereunder; 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 Representative, 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
1933 Act.
(e) If at any time when the Prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Preferred Securities, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at
the time it is to be delivered to a purchaser, or if it shall be necessary
at any such time, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Offerors will promptly prepare
and file with the Commission subject to paragraph (b) above such amendment
or supplement as may be necessary to correct such untrue statement or
omission or to make the Registration Statement or the Prospectus comply
with such requirements; and the Offerors will furnish to the Underwriters,
without charge, a reasonable number of copies of such amendment or
supplement, except that in case any Underwriter is required to deliver a
prospectus in connection with sales of the Preferred Securities after the
expiration of nine months after the date of the Prospectus the Offerors
shall be required to furnish any such amendments or supplements to such
Underwriter only at the expense of such Underwriter.
(f) The Offerors will endeavor, in cooperation
with the Underwriters, to qualify the Securities for offering and sale
under the applicable securities laws of such states and the other
jurisdictions of the United States as the Representative may designate;
provided, however, that none of the Offerors shall be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so
qualified or to comply with any other requirements deemed by the Company
to be unduly burdensome.
(g) The Trust will make generally available to
its security holders as soon as practicable an earnings statement of the
Company (which need not be audited by independent public accountants)
covering a twelve-month period beginning after the "effective date" (as
defined in Rule 158 of the 1933 Act Regulations) of the Registration
Statement and ending not later than 15 months thereafter, that shall
satisfy the provisions of Section 11(a) of the 1933 Act and said Rule 158.
(h) For a period of 18 months after the Closing
Time, the Company will furnish to you and, upon request, to each
Underwriter, copies of all annual reports, quarterly reports and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company to
its stockholders or security holders generally.
(i) The Offerors will use best efforts to effect
the listing of the Preferred Securities (including the Preferred
Securities Guarantee with respect thereto) on the New York Stock Exchange;
if the Preferred Securities are exchanged for Subordinated Debt
Securities, the Company will use its best efforts to effect the listing of
the Subordinated Debt Securities on the exchange on which the Preferred
Securities were then listed.
(j) During a period of 30 days from the date of
the Pricing Agreement, neither the Trust nor the Company will, without the
Representative's prior written consent, directly or indirectly, sell,
offer to sell, contract to sell, grant any option for the sale of, or
otherwise dispose of, any Preferred Securities, any security convertible
into or exchangeable into or exercisable for Preferred Securities or the
Subordinated Debt Securities or any debt securities substantially similar
to the Subordinated Debt Securities or equity securities substantially
similar to the Preferred Securities (except for the Subordinated Debt
Securities and the Preferred Securities issued pursuant to this
Agreement).
Section 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of each Offeror's obligations under
this Agreement, including, but not limited to, (i) the printing and filing
of the Registration Statement as originally filed and of each amendment
thereto, (ii) the preparation, issuance and delivery of the certificates
for the Preferred Securities to the Underwriters, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants,
(iv) the qualification of the Securities in accordance with the provisions
of Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and
in connection with the preparation of any Blue Sky survey up to an
aggregate amount not to exceed $5,000, (v) the printing and delivery to
the Underwriters of copies of the Registration Statement as originally
filed and of each amendment thereto, of each preliminary prospectus, and
of the Prospectus and any amendments or supplements thereto, (vi) the
delivery to the Underwriters of copies of any Blue Sky survey, (vii) the
fee, if any, of the National Association of Securities Dealers, Inc.,
(viii) the fees and expenses of the Debt Trustee, the Property Trustee and
the Guarantee Trustee, including the fees and disbursements of counsel for
such trustees, in connection with the Indenture and the Subordinated Debt
Securities, the Declaration, the Certificate of Trust and the Guarantee
(it being understood that as among the Offerors and such trustees, such
fees and expenses shall not exceed $5,000.00), (ix) any fees payable in
connection with the rating of the Preferred Securities and Subordinated
Debt Securities, (x) the fees and expenses incurred in connection with the
listing of the Preferred Securities (and the related Preferred Securities
Guarantee) and, if applicable, the Subordinated Debt Securities on the New
York Stock Exchange, (xi) the cost and charges of any transfer agent or
registrar and (xii) the cost of qualifying the Preferred Securities with
The Depository Trust Company.
If the Underwriter shall not take up and pay for the
Securities due to the failure of the Offerors to comply with any of the
conditions specified in Section 5 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 9 hereof, the
Company will pay the reasonable fees and disbursements of counsel to the
Underwriters, and, if the Underwriters shall not take up and pay for the
Securities due to failure of the Offerors to comply with the conditions
specified in Section 5 hereof, the Company will also reimburse the
Underwriters for their reasonable out-of-pocket expenses, in an aggregate
amount not exceeding a total of $3,000.00, incurred in connection with the
offering contemplated by this Agreement.
Section 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Offerors herein contained, to
the performance by the Offerors of their obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with the consent
of the Representative, at a later time and date, not later, however, than
5:30 P.M. on the first business day following the date hereof, or at such
later time and date as may be approved by the Representative; and at
Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. The
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
1933 Act Regulations.
(b) At Closing Time the Representative shall
have received:
(1) The favorable opinion, dated as of
Closing Time, of Denise M. Sturdy, Esq., Assistant General Counsel of the
Company and counsel for the Offerors in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly
incorporated and is validly existing in good standing under the
laws of the State of Michigan with corporate power and authority
to carry on the public utility business in which it is engaged and
to own, lease and operate its properties and conduct its business
as described in the Prospectus.
(ii) The capital stock of the Company
conforms in all material respects to the description thereof in
the Prospectus.
(iii) The Trust is not required to be
qualified and in good standing as a foreign company in Michigan,
except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the Trust;
and the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus.
(iv) The Declaration has been duly
authorized, executed and delivered by the Company and the Trustees
and is a valid and binding obligation of the Company, enforceable
against the Company and each of the Regular Trustees in accordance
with its terms, except as enforcement thereof may be limited by
the Bankruptcy Exceptions; and the Declaration has been duly
qualified under the 1939 Act.
(v) All legally required proceedings in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
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 in accordance with this Agreement
(other than in connection with or in compliance with the
provisions of the securities or Blue Sky laws of any
jurisdictions, as to which no opinion need be expressed) have been
obtained and are in full force and effect.
(vi) The Registration Statement is
effective under the 1933 Act and, to the best of her knowledge and
information after due inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act, and no proceedings therefor have been initiated or
threatened by the Commission.
(vii) The Registration Statement as of
its effective date and the Prospectus and each amendment or
supplement thereto as of its issue date (in each case, other than
the operating statistics, the financial statements and the notes
thereto, the financial schedules, and any other financial and
statistical data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form
in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations; and the Declaration, the Indenture, the
Preferred Securities Guarantee Agreement and the Statements of
Eligibility on Forms T-1 with respect to each of the Property
Trustee, the Debt Trustee, and the Guarantee Trustee filed with
the Commission as part of the Registration Statement complied as
to form in all material respects with the requirements of the 1939
Act and the 1939 Act Regulations.
(viii) Each of the documents
incorporated by reference in the Registration Statement or the
Prospectus at the time they were filed or last amended (other than
the financial statements and the notes thereto, the financial
schedules, and any other financial or statistical data included or
incorporated by reference therein, as to which such counsel need
express no belief) complied as to form in all material respects
with the requirements of the 1934 Act, and the 1934 Act
Regulations, as applicable.
(ix) Each of the Offerors meets the
registrant requirements for use of Form S-3 under the 1933 Act
Regulations.
(x) The Common Securities, the Preferred
Securities, the Subordinated Debt Securities, each of the
Guarantees, the Declaration, the Indenture and each of the
Guarantee Agreements conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xi) The descriptions in the Registration
Statement and the Prospectus and each amendment or supplement
thereto 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 such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement
or the Prospectus or any amendment or supplement thereto 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 any amendment or supplement thereto or to be
filed as exhibits to the Registration Statement or any amendment
thereto that are not so described (or the descriptions of which
are not incorporated by reference) or so filed.
(xii) All of the issued and outstanding
Common Securities of the Trust are directly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(xiii) This Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by
each of the Trust and the Company.
(xiv) Each of the Guarantee Agreements
has been duly authorized, executed and delivered by the Company;
the Preferred Securities Guarantee Agreement, assuming it is duly
authorized, executed, and delivered by the Guarantee Trustee,
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions; and the Preferred Securities Guarantee
Agreement has been duly qualified under the 1939 Act.
(xv) The Indenture has been duly
executed and delivered by the Company and, assuming due
authorization, execution, and delivery thereof by the Debt
Trustee, is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions; and the Indenture has been duly
qualified under the 1939 Act.
(xvi) The Subordinated Debt Securities
are in the form contemplated by the Indenture, have been duly
authorized, executed and delivered by the Company and, when
authenticated by the Debt Trustee in the manner provided for in
the Indenture and delivered against payment therefor as provided
in this Agreement, will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(xvii) Neither the Company nor the Trust
is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the 1940 Act.
(xviii) The execution, delivery and
performance of this Agreement, the Pricing Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee
Agreements, and the Guarantees; the consummation of the
transactions contemplated herein and therein; and the compliance
by each of the Offerors with their respective obligations
hereunder and thereunder do not and will not result in any
violation of the charter or bylaws of the Company or the
Declaration or the Certificate of Trust, and do not and will not
result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Trust or the Company under (A) any contract,
indenture, mortgage, loan agreement, note, lease or any other
agreement or instrument known to such counsel to which the Trust
or the Company is a party or by which it may be bound or to which
any of its properties may be subject (except for such breaches or
defaults or liens, charges or encumbrances that would not have a
material adverse effect on the business, property or financial
condition of the Trust or the Company), (B) any existing
applicable law, rule or regulation (other than the securities or
blue sky laws of the various states, as to which such counsel need
express no opinion) or (C) any judgment, order or decree of any
government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other
governmental body having jurisdiction over the Trust, the Company
or any of their respective properties.
(xix) Nothing has come to attention of
such counsel which would lead her to believe that the Registration
Statement or any amendment thereto (except for the operating
statistics, financial statements and other financial and
statistical data included or incorporated by reference therein, or
the statements of eligibility under the 1939 Act of trustees 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 of such opinion
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.
The foregoing opinions may be limited to the laws of
Delaware, Michigan and the federal law of the United States. In giving
such opinion, such counsel may rely, as to matters of Delaware Law, upon
the opinion of Richards, Layton & Finger, P.A., special Delaware counsel
to the Company, in which case the opinion shall state that such counsel
believes that you and she are entitled to so rely.
(2) The favorable opinion, dated as
of Closing Time, of Richards, Layton & Finger, P.A., special Delaware
counsel to the Offerors, in form and substance satisfactory to counsel for
the Underwriters, to the effect that:
(i) The Trust has been duly created
and is validly existing in good standing as a business trust under
the Delaware Act, and all filings required under the laws of the
State of Delaware with respect to the creation and valid existence
of the Trust as a business trust have been made.
(ii) Under the Delaware Act and the
Declaration, the Trust has the power and authority to own property
and conduct its business, all as described in the Prospectus.
(iii) The Declaration constitutes a
valid and binding obligation of the Company and the Trustees and
is enforceable against the Company and the Trustees in accordance
with its terms, subject, as to enforcement, to (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance and other similar laws relating to or
affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in
a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions
relating to indemnification and contribution.
(iv) Under the Delaware Act and the
Declaration, the Trust has the power and authority to (i) execute
and deliver, and to perform its obligations under, this Agreement
and the Pricing Agreement and (ii) issue, and perform its
obligations under, the Trust Securities.
(v) Under the Delaware Act and the
Declaration, the execution and delivery by the Trust of this
Agreement and the Pricing Agreement, and the performance by the
Trust of its obligations hereunder and under the Pricing
Agreement, have been duly authorized by all necessary action on
the part of the Trust.
(vi) The Preferred Securities have
been duly authorized by the Declaration and are duly and validly
issued and, subject to qualifications hereinafter expressed in
this paragraph (vi), fully paid and nonassessable undivided
beneficial interests in the assets of the Trust; the holders of
the Preferred Securities, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware; said counsel
may note that the holders of the Preferred Securities may be
obligated to make payments as set forth in the Declaration.
(vii) The Common Securities have been
duly authorized by the Declaration and are duly and validly issued
and represent undivided beneficial interests in the assets of the
Trust.
(viii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is not subject
to preemptive rights.
(ix) The issuance and sale by the
Trust of the Trust Securities, the purchase by the Trust of the
Subordinated Debt Securities, the execution, delivery and
performance by the Trust of this Agreement and the Pricing
Agreement, the consummation by the Trust of the transactions
contemplated hereby and by the Pricing Agreement and compliance by
the Trust with its obligations hereunder and thereunder will not
violate (i) any of the provisions of the Certificate of Trust or
the Declaration or (ii) any applicable Delaware law or
administrative regulation.
(3) The opinion of Reid & Priest LLP,
special tax counsel to the Company and the Trust, generally to the effect
that the discussion set forth in the Prospectus under the heading "CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES" is a fair and accurate
summary of the matters addressed therein, based upon current law and the
assumptions stated or referred to therein. Such opinion may be
conditioned on, among other things, the initial and continuing accuracy of
the facts, financial and other information, covenants and representations
set forth in certificates of officers of the Company and the Trust and
other documents deemed necessary for such opinion.
(4) The favorable opinion, dated as
of Closing Time, of Reid & Priest LLP, counsel for the Underwriters, in
form and substance satisfactory to the Underwriters with respect to the
incorporation and legal existence of the Company, the Preferred
Securities, the Indenture, the Preferred Securities Guarantee Agreement,
this Agreement, the Pricing Agreement, the Registration Statement, the
Prospectus and other related matters as the Representative may require.
In giving its opinion, Reid & Priest LLP may rely as to certain matters of
Michigan and Delaware law upon the opinions of Denise M. Sturdy, Esq. and
Richards, Layton & Finger, P.A., counsel for the Offerors, which shall be
delivered in accordance with Section 5(b)(1) and 5(b)(2) hereto.
(c) Between the date of this Agreement and prior
to the Closing Time, no material adverse change shall have occurred in the
business, properties or financial condition of the Company or the Trust,
which in the judgment of the Representative, after reasonable inquiries on
the part of the Representative, impairs the marketability of the
Securities (other than changes referred to in or contemplated by the
Registration Statement or Prospectus).
(d) At Closing Time, the Representative shall
have received a certificate of an executive officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of Closing
Time, to the effect that to the best of such person's knowledge,
information and belief (i) there has been no material adverse change in
the business, properties or financial condition of the Company or the
Trust from that set forth in the Registration Statement or Prospectus
(other than changes referred to in or contemplated by the Registration
Statement or Prospectus), (ii) the representations and warranties in
Section 1 hereof are true and correct as though expressly made at and as
of Closing Time, (iii) the Trust and the Company have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At the Closing Time the Representative shall
have received from Arthur Andersen LLP a letter dated such date, in form
and substance satisfactory to the Representative, to the effect that: (i)
they are independent public accountants with respect to the Company and
its consolidated subsidiaries, within the meaning of the 1933 Act and the
1933 Act Regulations; (ii) in their opinion, the financial statements
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 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 Representative shall reasonably request.
(f) Any additional documents or agreements
reasonably requested by counsel to the Underwriters to permit such counsel
to deliver opinions hereunder at Closing Time shall have been provided to
them and all proceedings taken by the Offerors in connection with the
issuance and sale of the Preferred Securities as herein contemplated shall
be satisfactory in form and substance to the Representative and Reid &
Priest LLP, counsel for the Underwriters.
(g) (i) At Closing Time, the Preferred
Securities shall be rated Ba1 Moody's Investors Service, Inc., BB+ by
Standard & Poor's Rating Group, BBB- by Duff & Phelps Credit Rating Co.
and BBB by Fitch Investors Service, Inc., and (ii) between the date of
this Agreement and the Closing Time, there shall not have occurred a
downgrading of the investment ratings of any of the Company's securities
by Standard & Poor's Rating Group, Moody's Investors Service, Inc., Duff &
Phelps Credit Rating Co. or Fitch Investors Service, Inc., and the Company
shall not have been placed on "credit watch" or "credit review" with
negative implications by any of such nationally recognized 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 Representative, after reasonable inquiries on the part of the
Representative, impair the marketability of the Securities.
(h) At the Closing Time, the Preferred
Securities shall have been approved for listing on the New York Stock
Exchange upon notice of issuance.
If any condition specified in this Section shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representative by notice to the Offerors at any time at
or prior to Closing Time, and such termination shall be without liability
of any party to any other party except as provided in Section 4 hereof.
Section 6. Conditions of Offerors' Obligations. The
obligations of the Offerors hereunder are subject to the following
conditions:
(a) The Registration Statement shall be effective
under the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission.
(b) The order of the Michigan Public Service
Commission in connection with the authorization, issuance and sale of the
Securities shall be in full force and effect.
Section 7. Indemnification.
(a) The Offerors agree to the extent permitted
by law to jointly and severally indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the 1933
Act or otherwise, and, subject to and in accordance with Section 7(d)
hereof, 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) 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 (or any amendment thereto), including the information deemed to
be a part of the Registration Statement pursuant to Rule 430A(b) of the
1933 Act Regulations, if applicable, any preliminary prospectus as of its
issue date, 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 3(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 1933 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 arise out of or are based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
which was made in such preliminary prospectus, Registration Statement (or
amendment thereto) 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 Merrill Lynch on behalf
of, any Underwriter expressly for use therein, and except that this
indemnity is subject to the condition that, insofar as it relates to any
untrue statement or omission, or any alleged untrue statement or omission,
made in a preliminary prospectus but eliminated or remedied in the
Prospectus, it shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting the
claim purchased the Securities (or to the benefit of any person who
controls such Underwriter) if the Offerors have complied with their
Prospectus delivery obligations pursuant to Section 3 of this Agreement
and a copy of the Prospectus, excluding documents incorporated therein by
reference, was not sent or given to such person at or prior to the time
required by the 1933 Act and the receipt thereof would have constituted
the sole defense to the claim asserted by such person.
The Offerors' indemnity agreement contained in this
Section 7(a), and the covenants, representations and warranties of the
Offerors 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 Preferred Securities
hereunder, and the indemnity agreement contained in this Section 7 shall
survive any termination of this Agreement. The liabilities of the
Offerors in this Section 7(a) are in addition to any other liabilities of
the Offerors under this Agreement or otherwise.
(b) The Company agrees to indemnify the Trust
against all loss, liability, claim, damage and expense whatsoever, as due
from the Trust under Section 7(a) hereunder.
(c) Each Underwriter agrees, severally and not
jointly, to the extent permitted by law, to indemnify, hold harmless and
reimburse the Offerors, their directors and such of their officers or
trustees, as the case may be, as shall have signed the Registration
Statement, and each person, if any, who controls the Offerors or any such
other Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, to the same extent and upon the same terms as
the indemnity agreement of the Offerors set forth in Section 7(a) hereof,
but only with respect to alleged untrue statements or omissions made in
the Registration Statement (or any amendment thereto), or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with information furnished in writing to
the Offerors by such Underwriter through Merrill Lynch expressly for use
therein.
The indemnity agreement on the part of each
Underwriter contained in this Section 7(c) shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Offerors or any other person, and shall survive the delivery of and
payment for the Preferred Securities hereunder, and the indemnity
agreement contained in this Section 7(c) shall survive any termination of
this Agreement. The liabilities of each Underwriter in this Section 7(c)
are in addition to any other liabilities of such Underwriter under this
Agreement or otherwise.
(d) If a claim is made or an action, suit or
proceeding (including governmental investigation) is commenced or
threatened against any person as to which indemnity may be sought under
Section 7(a) or 7(c), 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 7(a) or 7(c) if the Indemnifying
Person has not been prejudiced in any material respect by such failure.
Subject to the immediately succeeding sentence, the Indemnifying Person
shall assume the defense of any such litigation or proceeding, including
the employment of counsel and the payment of all expenses counsel, with
such being designated, subject to the immediately succeeding sentence, in
writing by the Representative in the case of parties indemnified pursuant
to Section 7(c) and by the Company in the case of parties indemnified
pursuant to Section 7(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 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 in connection with any one action or separate but
similar related actions in the same jurisdiction arising out of the same
general allegations or circumstances. 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 Representative and the Offerors 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 Indemnified Persons shall in good faith
fully consult with the Indemnifying Person in advance as to the
selection of such counsel; 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 Representative 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 reasonable efforts to cause such separate counsel to
minimize duplication of activities 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 7, to indemnify the
Indemnified Person from and against any loss, damage, liability or
expenses by reason of such settlement or judgment. The Indemnifying
Person shall not, without the prior written consent of the Indemnified
Persons, 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.
Section 8. Contribution. If the indemnification provided for in
Section 7 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 7 shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities (or actions 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 Offerors 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 Offerors and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus, bear to the aggregate
public 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
Offerors 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 Offerors and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 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 8. 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 8 shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Person in connection with
investigating or defending any such actions, suits or proceedings
(including governmental proceedings) or claims, provided that the
provisions of Section 7 have been complied with (in all material respects)
in respect of any separate counsel for such Indemnified Person.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the total price at which
the Securities underwritten by it and distributed to the public were
offered to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8 to
contribute are several in proportion to their respective underwriting
obligations and not joint.
The agreement with respect to contribution contained in
this Section 8 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 Preferred Securities
hereunder and any termination of this Agreement.
Section 9. Termination of Agreement.
(a) The Representative may terminate this
Agreement, by notice to the Offerors, at any time at or prior to Closing
Time (i) if there has occurred any material adverse disruption in the
financial markets or any outbreak or material escalation of hostilities or
any other calamity or crisis the effect of which is such as to impair, in
the reasonable judgment of the Representative after having made reasonable
inquiry, the marketability of the Preferred Securities, (ii) if trading in
the Preferred Securities has been suspended by the Commission, or if
trading generally on the New York Stock Exchange has been suspended,
limited or restricted or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by
said exchange or by order of the Commission or any other governmental
authority, (iii) if trading of any securities of the Company shall have
been suspended on any exchange or over-the-counter market, or (iv) if a
general moratorium on commercial banking activities in New York or
Delaware has been declared by Federal, New York, or Delaware authorities.
(b) If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof.
Section 10. Substitution of Underwriters. If any
Underwriter 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 at the Closing Time, the Representative shall
immediately notify the Company and the Representative 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 1934 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 number of Securities which the defaulting
Underwriter had agreed to purchase. If any non-defaulting Underwriter or
Underwriters shall determine to exercise such right, the Representative
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 Closing Time 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 Representative 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 Representative 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 number of Securities which
they had severally agreed to purchase hereunder, as hereinabove
provided, and, in addition, the Securities which the defaulting
Underwriter shall have so failed to purchase up to a number of
Securities equal to one-ninth (1/9) of the respective number 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 1934 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 number 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 Representative within such further period of 36 hours, and
thereupon the Closing Time shall be postponed for such period, not
exceeding five 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.
Section 11. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to the
Representative at Merrill Lynch World Headquarters, North Tower, World
Financial Center, New York, New York 10281-1201, attention of Anthony V.
Leness, Managing Director; notices to the Trust and the Company shall be
directed to them at 212 West Michigan Avenue, Jackson, Michigan 49201,
attention of Alan M. Wright, Senior Vice President and Chief Financial
Officer.
Section 12. Parties. This Agreement and the Pricing
Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Trust and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement or the
Pricing Agreement is intended or shall be construed to give any person,
firm or corporation, other than the Underwriters and the Trust and the
Company and their respective successors and the controlling persons and
officers, directors and trustees referred to in Sections 7 and 8 and their
heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or the Pricing Agreement or
any provision herein or therein contained. This Agreement and the Pricing
Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the Underwriters and
the Trust and the Company and their respective successors, and said
controlling persons and officers, directors and trustees and their heirs
and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and
the Pricing Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and
to be performed in said State. Except as otherwise set forth herein,
specified times of day refer to New York City time.
Section 14. 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
of our agreement, please sign and return to the Trust a counterpart
hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement between the Underwriters and the Trust and the
Company in accordance with its terms.
Very truly yours,
CONSUMERS POWER COMPANY
By
----------------------------
Senior Vice President and
Chief Financial Officer
CONSUMERS POWER COMPANY FINANCING I
By
----------------------------
Title: Regular Trustee
By
----------------------------
Title: Regular Trustee
By
----------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By
-----------------------------------
Authorized Signatory
For itself and as Representative of the other
Underwriters named in Schedule A hereto.<PAGE>
<PAGE>
SCHEDULE A
NAME OF UNDERWRITER NUMBER OF SECURITIES
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . . . . . .
A.G. Edwards & Sons, Inc. . . . . . . . . . . .
First of Michigan Corporation . . . . . . . . .
Roney & Co. . . . . . . . . . . . . . . . . . .
Total 4,000,000
---------<PAGE>
<PAGE>
EXHIBIT A
4,000,000 Preferred Securities
CONSUMERS POWER COMPANY FINANCING I
(a Delaware business trust)
% Trust Originated Preferred Securities ("TOPrS")
(Liquidation Amount of $25 Per Security)
PRICING AGREEMENT
MERRILL LYNCH & CO. , 1996
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
as Representative of the several
Underwriters named in the within-
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ,
1996 (the "Underwriting Agreement"), relating to the purchase by the
several Underwriters named in Schedule A thereto, for whom Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as
representative (the "Representative"), of the above % Trust Originated
Preferred Securities (the "Preferred Securities"), of CONSUMERS POWER
COMPANY FINANCING I, a Delaware business trust (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the Trust and
Consumers Power Company (the "Company"), a Michigan corporation, agree
with each Underwriter as follows:
1. The initial public offering price per security for the
Preferred Securities, determined as provided in said Section 2, shall be
$_____.
2. The purchase price per security for the Preferred Securities
to be paid by the several Underwriters shall be $_____, being an amount
equal to the initial public offering price set forth above.
3. The compensation per Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be $__________; provided, however, that the compensation
per Preferred Security for sales of 10,000 or more Preferred Securities to
a single purchaser shall be $_________.
<PAGE>
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters and the Trust and the Company
in accordance with its terms.
Very truly yours,
CONSUMERS POWER COMPANY
By
-----------------------------
Title:
CONSUMERS POWER COMPANY FINANCING I
By
------------------------------
Title: Regular Trustee
By
---------------------------
Title: Regular Trustee
By
---------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By________________________________
Authorized Signatory
For itself and as Representative of the other
Underwriters named in the Underwriting Agreement.
