INDIANA MICHIGAN POWER COMPANY Underwriting Agreement Dated November 9, 2006
EXHIBIT
1(a)
Dated
November 9, 2006
AGREEMENT
made between INDIANA MICHIGAN POWER COMPANY, a corporation organized and
existing under the laws of the State of Indiana (the Company), and the several
persons, firms and corporations (the Underwriters) named in Exhibit 1
hereto.
WITNESSETH:
WHEREAS,
the Company proposes to issue and sell $400,000,000 aggregate principal amount
of its 6.05% Senior Notes, Series H, due 2037 (the Notes) to be issued pursuant
to the Indenture dated as of October
1, 1998,
between
the Company and The Bank of New York, as trustee (the Trustee), as heretofore
supplemented and amended and as to be further supplemented and amended (said
Indenture as so supplemented being hereafter referred to as the Indenture);
and
WHEREAS,
the Underwriters have designated the persons signing this Agreement
(collectively, the Representative) to execute this Agreement on behalf of the
respective Underwriters and to act for the respective Underwriters in the manner
provided in this Agreement; and
WHEREAS,
the Company has prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended (the Act), with the Securities and Exchange
Commission (the Commission), a registration statement (File No. 333-136538)
and a
prospectus relating to $650,000,000 principal amount of, among other securities,
its Notes and such registration statement has become effective; and
WHEREAS,
such registration statement, including the financial statements, the documents
incorporated or deemed incorporated therein by reference, and the exhibits
thereto, being herein called, collectively, the Registration Statement, and
the
prospectus, including the documents incorporated or deemed incorporated therein
by reference, constituting a part of such Registration Statement, as it may
be
last amended or supplemented prior to the effectiveness of this Agreement,
but
excluding any amendment or supplement relating solely to securities other than
the Notes, being herein called the Basic Prospectus, and the Basic Prospectus,
as amended and supplemented, including documents incorporated by reference
therein, together with the Preliminary Prospectus Supplement dated November
9,
2006, immediately prior to the Applicable Time (as defined below), being herein
called the Pricing Prospectus, and the Basic Prospectus included in the
Registration Statement, as it is to be supplemented by a final prospectus
supplement (the Prospectus Supplement) to include information relating to the
Notes, including the names of the Underwriters, the price and terms of the
offering, the interest rate, maturity date and certain other information
relating to the Notes, which will be filed with the Commission pursuant to
Rule
424(b) of the Commission's General Rules and Regulations under the Act,
including all documents then incorporated or deemed to have been incorporated
therein by reference, being herein called the Prospectus.
For
purposes of this Agreement, the Applicable Time is 1:00 p.m. (NY Time) on the
date of this Agreement and the documents listed in Exhibit 3, taken together,
collectively being herein called the Pricing Disclosure Package.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, it is agreed between the parties as follows:
1. Purchase
and Sale:
Upon
the basis of the warranties and representations and on the terms and subject
to
the conditions herein set forth, the Company agrees to sell to the respective
Underwriters named in Exhibit 1 hereto, severally and not jointly, and the
respective Underwriters, severally and not jointly, agree to purchase from
the
Company, the respective principal amounts of the Notes set opposite their names
in Exhibit 1 hereto at a price equal to 98.557% of the principal amount
thereof.
2. Payment
and Delivery:
Payment
for the Notes shall be made to the Company in immediately available funds or
in
such other manner as the Company and the Representative shall mutually agree
upon in writing, upon the delivery of the Notes to the Representative for the
respective accounts of the Underwriters against receipt therefor signed by
the
Representative on behalf of itself and the other Underwriters. Such delivery
shall be made at 10:00 A.M., New York Time, on November 14, 2006 (or on such
later business day, not more than five business days subsequent to such day,
as
may be mutually agreed upon by the Company and the Underwriters), unless
postponed in accordance with the provisions of Section 9 hereof, at the office
of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇,
or at
such other place as the Company and the Representative shall mutually agree
in
writing. The time at which such payment and delivery are made is herein called
the Time of Purchase.
The
delivery of the Notes shall be made in fully registered form, registered in
the
name of CEDE & CO., to the offices of The Depository Trust Company in New
York, New York and the Representative shall accept such delivery on behalf
of
itself and the other Underwriters.
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 on the date
hereof, at the Applicable Time and at the Time of Purchase and to the following
other conditions:
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(a)
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That
all legal proceedings to be taken and all legal opinions to be rendered
in
connection with the issue and sale of the Notes shall be satisfac-tory
in
form and substance to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters.
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(b)
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That,
at the Time of Purchase, the Representative shall be furnished with
the
following opinions, dated the day of the Time of Purchase, with conformed
copies or signed counterparts thereof for the other Underwriters,
with
such changes therein as may be agreed upon by the Company and the
Representative with the approval of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel
to the
Underwriters
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(1) Opinion
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq., counsel to the Company, substantially in the form heretofore previously
provided to the Underwriters; and
(2) Opinion
of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Underwriters, substantially in the
form
heretofore previously provided to the Underwriters.
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(c)
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That
the Representative shall have received on the date hereof and shall
receive at the Time of Purchase letters from Deloitte & Touche LLP
dated the date hereof and the date of the Time of Purchase, respectively,
in form and substance satisfactory to the Representative (which may
refer
to the letters previously delivered to the Representative, as applicable)
(i) confirming that with respect to the Company they are an independent
registered public accounting firm within the meaning of the Act and
the
applicable published rules and regulations of the Commission and
the
Public Company Accounting Oversight Board (United States) thereunder,
(ii)
stating that in their opinion the consolidated financial statements
audited by them and included or incorporated by reference in the
Registration Statement, Pricing Prospectus and Prospectus, respectively,
complied as to form in all material respects with the then applicable
accounting requirements of the Commission, including the applicable
published rules and regulations of the Commission and (iii) covering
as of
a date not less than three business days and not more than five business
days prior to the date of each such letter, as applicable, such other
matters as the Representative reasonably requests.
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(d)
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The
pricing term sheet contemplated by Section 6(b) hereof, and any other
material required pursuant to Section 433(d), shall have been filed
by the
Company with the Commission within the applicable time periods prescribed
by Rule 433.
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(e)
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That
no amendment to the Registration Statement and that no supplement
to the
Pricing Prospectus or the Prospectus of the Company (other than the
Pricing Prospectus or amendments, prospectuses or prospectus supplements
relating solely to securities other than the Notes) relating to the
Notes
and no document which would be deemed incorporated in the Pricing
Prospectus or Prospectus by reference filed subsequent to the date
hereof
and prior to the Time of Purchase shall contain material information
substantially different from that contained in the Pricing Prospectus
which is unsatisfactory in substance to the Representative or
unsatisfactory in form to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters.
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(f)
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That,
at the Time of Purchase, an appropriate order of the Indiana Utility
Regulatory Commission, necessary to permit the sale of the Notes
to the
Underwriters, shall be in effect; and that, prior to the Time of
Purchase,
no stop order with respect to the effectiveness of the Registration
Statement shall have been issued under the Act by the Commission
or
proceedings therefor initiated.
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(g)
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That,
from the date hereof to the Time of Purchase, there shall not have
been
any material adverse change in the business, properties or financial
condition of the Company from that set forth in the Pricing Prospectus
(other than changes referred to in or contemplated by the Pricing
Prospectus), and that the Company shall, at the Time of Purchase,
have
delivered to the Representative 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 such
change.
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(h)
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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.
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4. Certain
Covenants of the Company:
In
further consideration of the agreements of the Underwriters herein contained,
the Company covenants as follows:
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(a)
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As
soon as practicable, and in any event within the time prescribed
by Rule
424 under the Act, to file the Prospectus with the Commission and
make any
other required filings pursuant to Rule 433; as soon as the Company
is
advised thereof, to advise the Representative and confirm the advice
in
writing of any request made by the Commission for amendments to the
Registration Statement, Pricing Prospectus or Prospectus or for additional
information with respect thereto or of the entry of an order suspending
the effectiveness of the Registration Statement or preventing or
suspending the use of the Pricing Prospectus or the Prospectus or
of the
initiation or threat of any proceedings for that purpose and, if
such an
order should be entered by the Commission, to make every reasonable
effort
to obtain the prompt lifting or removal
thereof.
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(b)
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To
deliver to the Underwriters, without charge, as soon as practicable
(and
in any event within 24 hours after the date hereof), and from time
to time
thereafter during such period of time (not exceeding nine months)
after
the date hereof as they are required by law to deliver a prospectus
(or
required to deliver but for Rule 172 under the Act), as many copies
of the
Prospectus (as supplemented or amended if the Company shall have
made any
supplements or amendments thereto, other than supplements or amendments
relating solely to securities other than the Notes) as the Representative
may reasonably request; and in case any Underwriter is required to
deliver
a prospectus after the expiration of nine months after the date hereof,
to
furnish to any Underwriter, 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.
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(c)
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To
furnish to the Representative a copy, certified by the Secretary
or an
Assistant Secretary of the Company, of the Registration Statement
as
initially filed with the Commission and of all amendments thereto
(exclusive of exhibits), other than amendments relating solely to
securities other than the Notes and, upon request, to furnish to
the
Representative sufficient plain copies thereof (exclusive of exhibits)
for
distribution to the other
Underwriters.
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(d)
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For
such period of time (not exceeding nine months) after the date hereof
as
they are required by law to deliver a prospectus (or required to
deliver
but for Rule 172 under the Act), if any event shall have occurred
as a
result of which it is necessary to amend or supplement the Pricing
Prospectus or the Prospectus in order to make the statements therein,
in
the light of the circumstances when the Pricing Prospectus or the
Prospectus is delivered to a purchaser, not contain any untrue statement
of a material fact or not omit to state any material fact required
to be
stated therein or necessary in order to make the statements therein
not
misleading, forthwith to prepare and furnish, at its own expense,
to the
Underwriters and to dealers (whose names and addresses will be furnished
to the Company by the Representative) to whom principal amounts of
the
Notes may have been sold by the Representative for the accounts of
the
Underwriters and, upon request, to any other dealers making such
request,
copies of such amendments to the Pricing Prospectus or the Prospectus
or
supplements to the Pricing Prospectus or the
Prospectus.
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(e)
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As
soon as practicable, the Company will make generally available to
its
security holders and to the Underwriters an earnings statement or
statement of the Company and its subsidiaries which will satisfy
the
provisions of Section 11(a) of the Act and Rule 158 under the
Act.
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(f)
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To
use its best efforts to qualify the Notes for offer and sale under
the
securities or "blue sky" laws of such jurisdictions as the Representative
may designate within six months after the date hereof and itself
to pay,
or to reimburse the Underwriters and their counsel for, reasonable
filing
fees and expenses in connection therewith in an amount not exceeding
$3,500 in the aggregate (including filing fees and expenses paid
and
incurred prior to the effective date hereof), 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.
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(g)
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To
pay all expenses, fees and taxes (other than transfer taxes on resales
of
the Notes by the respective Underwriters) in connection with the
issuance
and delivery of the Notes, except that the Company shall be required
to
pay the fees and disbursements (other than disbursements referred
to in
paragraph (f) of this Section 4) of counsel to the Underwriters,
only in
the events provided in paragraph (h) of this Section 4 and paragraph
(a)
of Section 8, the Underwriters hereby agreeing to pay such fees and
disbursements in any other event.
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(h)
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If
the Underwriters shall not take up and pay for the Notes due 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 9 or 10 hereof, to pay the fees and
disbursements of counsel to the Underwriters, and, if the Underwriters
shall not take up and pay for the Notes due to the failure of the
Company
to comply with any of 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 $10,000, incurred in
connection with the financing contemplated by this
Agreement.
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(i)
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During
the period from the date hereof and continuing to and including the
earlier of (i) the date which is after the Time of Purchase on which
the
distribution of the Notes ceases, as determined by the Representative
in
its sole discretion, and (ii) the date which is 30 days after the
Time of
Purchase, the Company agrees not to offer, sell, contract to sell
or
otherwise dispose of any Notes of the Company or any substantially
similar
securities of the Company without the consent of the
Representative.
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5. Warranties
of the Company:
The
Company represents and warrants to, and agrees with you, as set forth
below:
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(a)
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the
Registration Statement on its effective date complied with the applicable
provisions of the Act and the rules and regulations of the Commission
and
the Registration Statement at its effective date and as of the Applicable
Time did not, and at the Time of Purchase will 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, the Pricing Disclosure Package as of the Applicable Time
did
not contain an untrue statement of a material fact necessary or omit
to
state a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and the Basic Prospectus as of the date of this Agreement and the
Prospectus as of its date complies, and at the Time of Purchase the
Prospectus will comply, with the applicable provisions of the Act
and the
Trust Indenture Act of 1939, as amended (Trust Indenture Act), and
the
rules and regulations of the Commission, the Basic Prospectus on
the date
of this Agreement does not and the Prospectus when first filed in
accordance with Rule 424(b) under the Act will not, and the Prospectus
at
the Time of Purchase will 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, in the light of the
circumstances under which they were made, not misleading, except
that the
Company makes no warranty or representation to the Underwriters with
respect to any statements or omissions made in the Registration Statement,
the Basic Prospectus, any Permitted Free Writing Prospectus (hereinafter
defined) or the Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by, or through the
Representative on behalf of, any Underwriter expressly for use in
the
Registration Statement, the Basic Prospectus or Prospectus, or to
any
statements in or omissions from that part of the Registration Statement
that shall constitute the Statement of Eligibility under the Trust
Indenture Act of the Trustee under the
Indenture.
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(b)
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As
of the Time of Purchase, the Indenture will have been duly authorized
by
the Company and duly qualified under the Trust Indenture Act and,
when
executed and delivered by the Trustee and the Company, will constitute
a
legal, valid and binding instrument enforceable against the Company
in
accordance with its terms and the Notes will have been duly authorized,
executed, authenticated and, when paid for by the purchasers thereof,
will
constitute legal, valid and binding obligations of the Company entitled
to
the benefits of the Indenture, except as the enforceability thereof
may be
limited by bankruptcy, insolvency, or other similar laws affecting
the
enforcement of creditors' rights in general, and except as the
availability of the remedy of specific performance is subject to
general
principles of equity (regardless of whether such remedy is sought
in a
proceeding in equity or at law), and by an implied covenant of good
faith
and fair dealing.
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(c)
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The
documents incorporated by reference in the Registration Statement
or
Pricing Prospectus, when they were filed with the Commission, complied
in
all material respects with the applicable provisions of the Securities
Exchange Act of 1934, as amended and the rules and regulations of
the
Commission thereunder, and as of such time of filing, when read together
with the Pricing Prospectus, the Permitted Free Writing Prospectuses
and
the Prospectus, none of such documents 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. The information
contained in a Permitted Free Writing Prospectus listed in Exhibit
3 does
not conflict with the information contained in the Registration Statement,
the Pricing Prospectus or the Prospectus and no such Permitted Free
Writing Prospectus, taken together with the remainder of the Pricing
Disclosure Package as of the Applicable Time, did contain an untrue
statement of a material fact or omit to state a material fact necessary
in
order to make the statements therein, in light of the circumstances
under
which they were made, not
misleading.
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(d)
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Since
the respective dates as of which information is given in the Registration
Statement and the Pricing Prospectus, except as otherwise referred
to or
contemplated therein, there has been no material adverse change in
the
business, properties or financial condition of the
Company.
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(e)
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This
Agreement has been duly authorized, executed and delivered by the
Company.
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(f)
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The
consummation by the Company of the transactions contemplated herein
is not
in violation of its charter or bylaws, will not result in the violation
of
any applicable law, statute, rule, regulation, judgment, order, writ
or
decree of any government, government instrumentality or court having
jurisdiction over the Company or its properties, and will not conflict
with, or 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 Company
under any contract, indenture, mortgage, loan agreement, note, lease
or
other agreement or instrument to which the Company is a party or
by which
it may be bound or to which any of its properties may be subject
(except
for conflicts, breaches or defaults which would not, individually
or in
the aggregate, be materially adverse to the Company or materially
adverse
to the transactions contemplated by this
Agreement).
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(g)
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No
authorization, approval, consent or order of any court or governmental
authority or agency is necessary in connection with the issuance
and sale
by the Company of the Notes or the consummation of the transactions
by the
Company contemplated by this Agreement, except (A) such as may be
required
under the Act or the rules and regulations thereunder; (B) the
qualification of the Indenture under the Trust Indenture Act; (C)
the
approval of the Indiana Utility Regulatory Commission;
and (D) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or “Blue Sky”
laws.
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(h)
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The
consolidated financial statements of the Company and its consolidated
subsidiaries together with the notes thereto, included or incorporated
by
reference in the Pricing Prospectus and the Prospectus present fairly
the
financial position of the Company at the dates or for the periods
indicated; said consolidated financial statements have been prepared
in
accordance with United States generally accepted accounting principles
applied, apart from reclassifications disclosed therein, on a consistent
basis throughout the periods involved; and the selected consolidated
financial information of the Company included in the Pricing Prospectus
and the Prospectus presents fairly the information shown therein
and has
been compiled, apart from reclassifications disclosed therein, on
a basis
consistent with that of the audited financial statements of the Company
included or incorporated by reference in the Pricing Prospectus and
the
Prospectus.
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(i)
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There
is no pending action, suit, investigation, litigation or proceeding,
including, without limitation, any environmental action, affecting
the
Company before any court, governmental agency or arbitration that
is
reasonably likely to have a material adverse effect on the business,
properties, financial condition or results of operations of the Company,
except as disclosed in the Pricing
Prospectus.
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(j)
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At
the determination date for purposes of the Notes within the meaning
of
Rule 164(h) under the Act, the Company was not an “ineligible issuer” as
defined in Rule 405 under the Act.
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(k)
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The
Company has not made any filings pursuant to the Securities Exchange
Act
of 1934, as amended, or the rules and regulations thereunder, within
24
hours preceding the Applicable
Time.
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The
Company's covenants, warranties and representations 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
Notes hereunder.
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Free
Writing Prospectuses:
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(a)
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The
Company represents and agrees that, without the prior consent of
the
Representative, it has not made and will not make any offer relating
to
the Notes that would constitute a “free writing prospectus” as defined in
Rule 405 under the Act, other than a Permitted Free Writing Prospectus;
each Underwriter, severally and not jointly, represents and agrees
that,
without the prior consent of the Company and the Representative,
it has
not made and will not make any offer relating to the Notes that would
constitute a “free writing prospectus,” as defined in Rule 405 under the
Act, other than a Permitted Free Writing Prospectus or one or more
free
writing prospectuses that contain only preliminary or final terms
of the
Notes (which may include prices of bonds from comparable issuers)
and is
not required to be filed by the Company pursuant to Rule 433 or one
or
more free writing prospectuses that contains information substantially
the
same as the information contained in Exhibit 2 hereto (an “Underwriter
Free Writing Prospectus”). Any “free writing prospectus” the use of which
has been consented to by the Company and the Representative (which
shall
include the pricing term sheet discussed in Section 6(b)) is listed
in
Exhibit 3 and herein called a “Permitted Free Writing Prospectus.”
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(b)
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The
Company agrees to prepare a pricing term sheet, substantially in
the form
of Exhibit 2 hereto and approved by the Representative, and to file
such
pricing term sheet pursuant to Rule 433(d) under the Securities Act
within
the time period prescribed by such
Rule.
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(c)
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The
Company and each Underwriter has complied and will comply with the
requirements of Rule 433 applicable to any other Permitted Free Writing
Prospectus, including timely Commission filing where required and
legending.
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(d)
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The
Company and each Underwriter agrees that if at any time following
issuance
of a Permitted Free Writing Prospectus any event occurred or occurs
as a
result of which such Permitted Free Writing Prospectus would conflict
in
any material respect with the information in the Registration Statement,
the Pricing Prospectus or the Prospectus or include an untrue statement
of
a material fact or omit to state any material fact necessary in order
to
make the statements therein, in light of the circumstances then
prevailing, not misleading, then (i) the party that first becomes
aware of
the foregoing will give prompt notice thereof to the Representative
and/
or the Company, as applicable, and, (ii) if requested by the
Representative or the Company, as applicable, the Company will prepare
and
furnish without charge a Permitted Free Writing Prospectus or other
document which will correct such conflict, statement or
omission.
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(e)
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Each
Underwriter agrees that (i) no information that is conveyed to investors
by such Underwriter has been or will be inconsistent with the information
contained in the Pricing Disclosure Package, and (ii) if
an Underwriter shall use an Underwriter Free Writing
Prospectus,
the liability arising from its use
shall be the sole responsibility of the Underwriter using such Underwriter
Free Writing Prospectus; provided, however, that, for the avoidance
of
doubt, this clause 6(e)(ii) shall not be interpreted as tantamount
to the
indemnification obligations contained in Section 8(b) hereof.
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7. Warranties
of Underwriters:
Each
Underwriter warrants and represents that the information furnished in writing
to
the Company through the Representative for use in the Registration Statement,
in
the Basic Prospectus, in any Permitted Free Writing Prospectus, in the Pricing
Prospectus, in the Prospectus, or in the Prospectus as amended or supplemented
is correct as to such Underwriter. 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 Notes
hereunder.
8. Indemnification
and Contribution:
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(a)
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To
the extent permitted by law, the Company agrees to indemnify and
hold you
harmless, your officers and directors and each person, if any, who
controls you within the meaning of Section 15 of the Act, against
any and
all losses, claims, damages or liabilities to which you, they or
any of
you or them may become subject under the Act or otherwise, and to
reimburse you and such controlling person or persons, if any, for
any
legal or other expenses incurred by you or them in connection with
defending any action, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any (i) alleged untrue
statement
or untrue statement of a material fact contained in (A) the Registration
Statement, (B) the Basic Prospectus (if used prior to the effective
date
of this Agreement), (C) the Pricing Prospectus, (D) any Permitted
Free
Writing Prospectus, (E) any “issuer free writing prospectus” (as defined
in Rule 433 under the Act), (F) the Prospectus, or (G) if the Company
shall furnish or cause to be furnished to you any amendments or any
supplements to the Pricing Prospectus or the Prospectus, in the Pricing
Prospectus or the Prospectus as so amended or supplemented except
to the
extent that such amendments or supplements relate solely to securities
other than the Notes (provided that if such Prospectus or such Prospectus,
as amended or supplemented, is used after the period of time referred
to
in Section 4(b) hereof, it shall contain such amendments or supplements
as
the Company deems necessary to comply with Section 10(a) of the Act),
or
(ii) alleged omission or 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 alleged
untrue statement or omission, or untrue statement or omission which
was
made in the Registration Statement, in the Basic Prospectus, in the
Pricing Prospectus, in any Permitted Free Writing Prospectus, in
any
“issuer free writing prospectus” (as defined in Rule 433 under the Act) or
in the 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 Representative expressly for use therein
or
with any statements in or omissions from that part of the Registration
Statement that shall constitute the Statement of Eligibility under
the
Trust Indenture Act of the Trustee under the Indenture. You agree
promptly
after the receipt by you of written notice of the commencement of
any
action in respect to which indemnity from the Company on account
of its
agreement contained in this Section 8(a) may be sought by you, or
by any
person controlling you, to notify the Company in writing of the
commencement thereof, but your omission so to notify the Company
of any
such action shall not release the Company from any liability which
it may
have to you or to such controlling person otherwise than on account
of the
indemnity agreement contained in this Section 8(a). In case any such
action shall be brought against you or any such person controlling
you and
you shall notify the Company of the commencement thereof, as above
provided, the Company shall be entitled to participate in, and, to
the
extent that it shall wish, including the selection of counsel (such
counsel to be reasonably acceptable to the indemnified party), to
direct
the defense thereof at its own expense. In case the Company elects
to
direct such defense and select such counsel (hereinafter, Company's
counsel), you or any controlling person shall have the right to employ
your own counsel, but, in any such case, the fees and expenses of
such
counsel shall be at your expense unless (i) the Company has agreed
in
writing to pay such fees and expenses or (ii) the named parties to
any
such action (including any impleaded parties) include both you or
any
controlling person and the Company and you or any controlling person
shall
have been advised by your counsel that a conflict of interest between
the
Company and you or any controlling person may arise (and the Company’s
counsel shall have concurred in good faith with such advice) and
for this
reason it is not desirable for the Company’s counsel to represent both the
indemnifying party and the indemnified party (it being understood,
however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in
the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of
more than
one separate firm of attorneys for you or any controlling person
(plus any
local counsel retained by you or any controlling person in their
reasonable judgment), which firm (or firms) shall be designated in
writing
by you or any controlling person).
|
|
(b)
|
Each
Underwriter agrees, to the extent permitted by law, severally and
not
jointly, to indemnify, hold harmless and reimburse the Company, its
directors and such of its officers as shall have signed the Registration
Statement, and each person, if any, who controls the Company within
the
meaning of Section 15 of the 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 untrue statements or alleged untrue
statements or omissions or alleged omissions made in the Registration
Statement, or in the Basic Prospectus, or in the Pricing Prospectus,
or in
any Permitted Free Writing Prospectus, or in the 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
the
Representative on behalf of such Underwriter expressly for use therein.
The Company agrees promptly after the receipt by it of written notice
of
the commencement of any action in respect to which indemnity from
you on
account of your agreement contained in this Section 8(b) may be sought
by
the Company, or by any person controlling the Company, to notify
you in
writing of the commencement thereof, but the Company's omission so
to
notify you of any such action shall not release you from any liability
which you may have to the Company or to such controlling person otherwise
than on account of the indemnity agreement contained in this Section
8(b).
|
|
(c)
|
If
recovery is not available or insufficient under Section 8(a) or 8(b)
hereof for any reason other than as specified therein, the indemnified
party shall be entitled to contribution for any and all losses, claims,
damages, liabilities and expenses for which such indemnification
is so
unavailable or insufficient under this Section 8(c). In determining
the
amount of contribution to which such indemnified party is entitled,
there
shall be considered the portion of the proceeds of the offering of
the
Notes realized by the Company on the one hand and the Underwriters
on the
other hand, the relative knowledge and access to information concerning
the matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission, and any equitable
considerations appropriate under the circumstances. The Company and
the
Underwriters agree that it would not be equitable if the amount of
such
contribution were determined by pro rata or per capita allocation
(even if
the Underwriters were treated as one entity for such purpose) without
reference to the considerations called for in the previous sentence.
No
Underwriter shall be obligated to contribute any amount or amounts
hereunder which in the aggregate exceeds the total price of the Notes
purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages which such Underwriter and its controlling
persons
have otherwise been required to pay in respect of the same claim
or any
substantially similar claim. 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. An Underwriter’s obligation to contribute
under this Section 8 is in proportion to its purchase obligation
and not
joint with any other Underwriter.
|
|
(d)
|
No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry
of any
judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 8 (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by
or on
behalf of such indemnified party.
|
|
(e)
|
In
no event shall any indemnifying party have any liability or responsibility
in respect of the settlement or compromise of, or consent to the
entry of
any judgment with respect to, any pending or threatened action or
claim
effected without its prior written
consent.
|
The
agreements contained in this Section 8 hereof 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 Notes hereunder.
9. Default
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
cancellation or termination of its obligations hereunder) to purchase and pay
for the principal amount of Notes which it has agreed to purchase and pay for
hereunder, and the aggregate principal amount of Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more
than one-tenth of the aggregate principal amount of the Notes, the other
Underwriters shall be obligated severally in the proportions which the amounts
of Notes set forth opposite their names in Exhibit 1 hereto bear to the
aggregate principal amount of Notes set forth opposite the names of all such
non-defaulting Underwriters, to purchase the Notes which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on the
terms set forth herein; provided that in no event shall the principal amount
of
Notes which any Underwriter has agreed to purchase pursuant to Section 1 hereof
be increased pursuant to this Section 9 by an amount in excess of one-ninth
of
such principal amount of Notes without the written consent of such Underwriter.
If any Underwriter or Underwriters shall fail or refuse to purchase Notes and
the aggregate principal amount of Notes with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of the Notes
then this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter; provided, however, that the non-defaulting
Underwriters may agree, in their sole discretion, to purchase the Notes which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on the terms set forth herein. In the event of any such termination,
the Company shall not be under any liability to any Underwriter (except to
the
extent, if any, provided in Section 4(h) hereof), nor shall any Underwriter
(other than an Underwriter who shall have failed or refused to purchase the
Notes without some reason sufficient to justify, in accordance with the terms
hereof, its termination of its obligations hereunder) be under any liability
to
the Company or any other Underwriter.
Nothing
herein contained shall release any defaulting Underwriter from its liability
to
the Company or any non-defaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination
of Agreement by the Underwriters:
This
Agreement may be terminated at any time prior to the Time of Purchase by the
Representative if, after the execution and delivery of this Agreement and prior
to the Time of Purchase, in the Representative's reasonable judgment, the
Underwriters' ability to market the Notes shall have been materially adversely
affected because:
(i) trading
in securities on the New York Stock Exchange shall have been generally suspended
by the Commission or by the New York Stock Exchange or trading in the securities
of the Company shall have been suspended by the New York Stock Exchange,
or
(ii) there
shall have occurred any outbreak or escalation of hostilities, declaration
by
the United States of a national emergency or war or other national or
international calamity or crisis, or
(iii) a
general
banking moratorium shall have been declared by Federal or New York State
authorities, or
(iv) there
shall have been any decrease in the ratings of the Company's debt securities
by
▇▇▇▇▇'▇ Investors Services, Inc. (Moody's) or Standard & Poor's Ratings
Group (S&P) or either Moody's or S&P shall publicly announce that it has
such debt securities under consideration for possible further
downgrade.
If
the
Representative elects to terminate this Agreement, as provided in this Section
10, the Representative will promptly notify the Company by telephone or by
telex
or facsimile transmission, confirmed in writing. If this Agreement shall not
be
carried out by any Underwriter for any reason permitted hereunder, or if the
sale of the Notes 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 (except
that the Company shall remain liable to the extent provided in Section 4(h)
hereof) and the Underwriters shall be under no liability to the Company nor
be
under any liability under this Agreement to one another.
11. Notices:
All
notices hereunder shall, unless otherwise expressly provided, be in writing
and
be delivered at or mailed to the following addresses or by telex or facsimile
transmission confirmed in writing to the following addresses: if to the
Underwriters, to the Representative at BNP Paribas Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate Desk (fax ▇▇▇-▇▇▇-▇▇▇▇),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Investment Banking Department (fax
▇▇▇-▇▇▇-▇▇▇▇) and UBS Securities LLC, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Fixed Income Syndicate and, if to the Company,
to
Indiana Michigan Power Company c/o American Electric Power Service Corporation,
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel (fax
614/▇▇▇-▇▇▇▇).
12. 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), the
controlling persons, if any, referred to in Section 8 hereof, and their
respective successors, assigns, executors and administrators, and, except as
expressly otherwise provided in Section 9 hereof, no other person shall acquire
or have any right under or by the virtue of this Agreement. The
Company acknowledges and agrees that in connection with all aspects of each
transaction contemplated by this Underwriting Agreement, the Company and the
Underwriters have an arms length business relationship that creates no fiduciary
duty on the part of any party and each expressly disclaims any fiduciary
relationship.
13. Definition
of Certain Terms:
If
there be two or more persons, firms or corporations named in Exhibit 1 hereto,
the term "Underwriters", as used herein, shall be deemed to mean the several
persons, firms or corporations, so named (including the Representative herein
mentioned, if so named) and any party or parties substituted pursuant to Section
9 hereof, and the term "Representative", as used herein, shall be deemed to
mean
the representative or representatives designated by, or in the manner authorized
by, the Underwriters. All obligations of the Underwriters hereunder are several
and not joint. If there shall be only one person, firm or corporation named
in
Exhibit 1 hereto, the term "Underwriters" and the term "Representative", as
used
herein, shall mean such person, firm or corporation. The term "successors"
as
used in this Agreement shall not include any purchaser, as such purchaser,
of
any of the Notes from any of the respective Underwriters.
14. Conditions
of the Company's Obligations:
The
obligations of the Company hereunder are subject to the Underwriters'
performance of their obligations hereunder, and the further condition that
at
the Time of Purchase the Commission shall have issued appropriate orders, and
such orders shall remain in full force and effect, authorizing the transactions
contemplated hereby.
15. Applicable
Law:
This
Agreement will be governed and construed in accordance with the laws of the
State of New York.
16. Execution
of Counterparts:
This
Agreement may be executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same
document.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized, on the date first above
written.
By:
/s/
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Title: Assistant Treasurer
BNP
PARIBAS SECURITIES CORP.
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & CO. INCORPORATED
UBS
SECURITIES LLC
as
Representative
and
on
behalf of the Underwriters
named
in
Exhibit 1 hereto
BNP
PARIBAS SECURITIES CORP.
By: /s/
▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇ ▇▇▇▇▇▇
Title:
Managing Director
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/
▇▇▇▇▇▇▇ ▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Managing Director
UBS
SECURITIES LLC
By: /s/
▇▇▇▇▇ ▇▇▇▇▇▇▇ By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Executive
Director
Title: Director
EXHIBIT
1
Underwriters:
|
Name
|
Principal
Amount of the Notes
|
|||
|
BNP
Paribas Securities Corp.
|
$
120,000,000
|
|||
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated
|
$
|
120,000,000
|
||
|
UBS
Securities LLC
|
$
|
120,000,000
|
||
|
LaSalle
Financial Services, Inc.
|
$
|
16,000,000
|
||
|
Wachovia
Capital Markets, LLC
|
$
|
16,000,000
|
||
|
Fifth
Third Securities, Inc.
|
$
|
8,000,000
|
||
|
TOTAL
|
$
|
400,000,000
|
||
EXHIBIT
2
PRICING
TERM SHEET
Underwriting
Agreement dated November 9, 2006
Series
H Notes
|
Designation:
|
6.05%
Senior Notes, Series H, due 2037
|
|
Principal
Amount:
|
$400,000,000
|
|
Maturity:
|
March
15, 2037
|
|
Coupon:
|
6.05%
|
|
Interest
Payment Dates:
|
March
15 and September 15
|
|
First
Interest Payment Date:
|
March
15, 2007
|
|
Treasury
Benchmark:
|
UST
4.500% due February 15, 2036
|
|
Treasury
Price:
|
96-15+
|
|
Treasury
Yield:
|
4.722%
|
|
Reoffer
Spread:
|
1.370%
|
|
Yield
to Maturity:
|
6.092%
|
|
Price
to Public:
|
99.432%
of the principal amount thereof
|
|
Redemption
Terms:
|
|
|
Make-whole
call:
|
At
any time at a discount rate of the Treasury Rate plus 25 basis
points
|
|
Minimum
Denomination:
|
$1,000
|
|
Joint
Book-Running Managers:
|
BNP
Paribas Securities Corp.
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated
UBS
Securities LLC
|
|
|
Settlement
Date:
|
November
14, 2006
|
|
CUSIP:
|
▇▇▇▇▇▇▇▇▇
|
|
Ratings:
|
Baa2
by ▇▇▇▇▇’▇ Investors Service, Inc.
BBB
by Standard & Poor’s Ratings Services
BBB
by Fitch Ratings Ltd.
|
Note:
A
securities rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time.
The
issuer has filed a registration statement (including a prospectus) with the
SEC
for the offering to which this communication relates. Before you invest, you
should read the prospectus in the registration statement and other documents
the
issuer has filed with the SEC for more complete information about the issuer
and
this offering. You may get these documents for free by visiting ▇▇▇▇▇ on the
SEC
Web site at ▇▇▇.▇▇▇.▇▇▇. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus
if
you request it by calling BNP Paribas Securities Corp. toll free at
▇-▇▇▇-▇▇▇-▇▇▇▇, or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated toll free at
1-866-718-1649, or UBS Securities LLC toll free at ▇-▇▇▇-▇▇▇-▇▇▇▇, ext
1088.
EXHIBIT
3
PRICING
DISCLOSURE PACKAGE
|
1)
|
Prospectus
dated August 30, 2006
|
|
2)
|
Preliminary
Prospectus Supplement dated November 9, 2006 (including Incorporated
Documents)
|
|
3)
|
Permitted
Free Writing Prospectuses
|
|
a) Pricing
Term Sheet attached as Exhibit 2
hereto
|