SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 1, 2004
(Date of earliest event reported)
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
1-3457 APPALACHIAN POWER COMPANY 54-0124790
(A Virginia Corporation)
1 Riverside Plaza
Columbus, Ohio 43215
Telephone (614) 223-1000
Item 5. Other Events and Regulation FD Disclosure.
On June 24, 2004, Appalachian Power Company (the "Company") entered into
an Underwriting Agreement with Citigroup Global Markets Inc. and UBS Securities
LLC, as representatives of the underwriters named therein, relating to the
offering and sale by the Company of $125,000,000 of its Floating Rate Notes,
Series C, due 2007 (the "Notes").
Item 7. Financial Statements and Exhibits
(c) Exhibits
1(a) Underwriting Agreement, dated June 24, 2004, between the Company and
Citigroup Global Markets Inc. and UBS Securities LLC, as representatives
of the several underwriters named in Exhibit 1 thereto, in connection with
the sale of the Notes.
4(a) Company Order and Officer's Certificate, dated July 1, 2004, establishing
the terms of the Notes.
4(b) Form of the Notes (included in Exhibit 4(a) hereto).
5(a) Opinion of Simpson Thacher & Bartlett LLP regarding the legality of the
Notes.
SIGNATURE
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, thereunto duly authorized.
APPALACHIAN POWER COMPANY
By:_/s/ Thomas G. Berkemeyer_
Assistant Secretary
July 1, 2004
EXHIBIT INDEX
Exhibit
Number Description
1(a) Underwriting Agreement, dated June 24, 2004, between the Company and
Citigroup Global Markets Inc. and UBS Securities LLC, as representatives
of the several underwriters named in Exhibit 1 thereto, in connection with
the sale of the Notes.
4(a) Company Order and Officer's Certificate, dated July 1, 2004, establishing
the terms of the Notes.
4(b) Form of the Notes (included in Exhibit 4(a) hereto).
5(a) Opinion of Simpson Thacher & Bartlett LLP regarding the legality of the
Notes.
Exhibit 1(a)
APPALACHIAN POWER COMPANY
Underwriting Agreement
Dated June 24, 2004
AGREEMENT made between APPALACHIAN POWER COMPANY, a corporation organized
and existing under the laws of the Commonwealth of Virginia (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 $125,000,000 principal
amount of its Floating Rate Notes, Series C, due 2007 (the Floating Rate Notes)
to be issued pursuant to the Indenture dated as of January 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 (the Act), with the Securities and
Exchange Commission (the Commission), a registration statement (File No.
333-116284) and a prospectus relating to $500,000,000 principal amount of its
Unsecured 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 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 Floating Rate Notes, being herein called the Basic Prospectus, and the Basic
Prospectus, as supplemented by a prospectus supplement (the Prospectus
Supplement) to include information relating to the Floating Rate 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
Floating Rate Notes, which will be filed with the Commission pursuant to Rule
424(b) of the Commission's General Rules and Regulations under the Act (the
Rules), including all documents then incorporated or deemed to have been
incorporated therein by reference, being herein called the Prospectus.
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 Floating Rate Notes set opposite their names in Exhibit 1 hereto, together
aggregating all of the Floating Rate Notes, at a price equal to 99.650% of the
principal amount thereof.
2. Payment and Delivery: Payment for the Floating Rate 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 Floating Rate Notes to the Representative for the respective
accounts of the Underwriters against receipt therefor signed by the
Representative on behalf of itself and for the other Underwriters. Such delivery
shall be made at 10:00 A.M., New York Time, on July 1, 2004 (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 8 hereof, at the office of Simpson
Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017, or at such
other place as the Company and the Representative shall mutually agree in
writing. The time at which payment and delivery are to be made is herein called
the Time of Purchase.
The delivery of the Floating Rate 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 Underwriters shall accept such
delivery.
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 and at the Time of
Purchase and to the following other conditions:
(a) That all legal proceedings to be taken and all legal opinions to
be rendered in connection with the issue and sale of the Floating Rate Notes
shall be satisfactory in form and substance to Dewey Ballantine LLP, counsel to
the Underwriters.
(b) 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 Dewey Ballantine LLP, counsel to the
Underwriters:
(1) Opinion of Simpson Thacher & Bartlett and either of Thomas
G. Berkemeyer, Esq. or David C. House, Esq., counsel to the Company,
substantially in the forms heretofore previously provided to the
Underwriters; and
(2) Opinion of Dewey Ballantine LLP, counsel to the
Underwriters, substantially in the form heretofore previously
provided to the Underwriters.
(c) That the Representative shall have received a letter from
Deloitte & Touche LLP dated the day of the Time of Purchase in form and
substance satisfactory to the Representative (i) confirming that it is an
independent certified registered public accounting firm within the meaning of
the Act and the applicable published rules and regulations of the Commission
thereunder, (ii) stating that in their opinion the consolidated financial
statements audited by them and included or incorporated by reference in the
Registration Statement 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 more than five business days prior to the day of the Time of
Purchase such other matters as the Representative reasonably requests.
(d) That no amendment to the Registration Statement and that no
prospectus or prospectus supplement of the Company (other than the prospectus or
amendments, prospectuses or prospectus supplements relating solely to securities
other than the Floating Rate Notes) relating to the Floating Rate Notes and no
document which would be deemed incorporated in the 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
Registration Statement which is unsatisfactory in substance to the
Representative or unsatisfactory in form to Dewey Ballantine LLP, counsel to the
Underwriters.
(e) That, at the Time of Purchase, appropriate orders of the
Virginia State Corporation Commission and the Tennessee Regulatory Authority,
necessary to permit the sale of the Floating Rate 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.
(f) 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 Prospectus (other
than changes referred to in or contemplated by the 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.
(g) 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.
4. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) As soon as practicable, and in any event within the time
prescribed by Rule 424 under the Act, to file the Prospectus with the
Commission; 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 or Prospectus or for
additional information with respect thereto or of the entry of a stop order
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceedings for that purpose and, if such a stop order should
be entered by the Commission, to make every reasonable effort to obtain the
prompt lifting or removal thereof.
(b) 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, 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 Floating Rate 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.
(c) 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 Floating Rate Notes and, upon request, to furnish to the
Representative sufficient plain copies thereof (exclusive of exhibits) for
distribution to the other Underwriters.
(d) For such period of time (not exceeding nine months) after the
date hereof as they are required by law to deliver a prospectus, if any event
shall have occurred as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not 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 Floating
Rate 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 Prospectus or supplements to the Prospectus.
(e) 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.
(f) To use its best efforts to qualify the Floating Rate 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.
(g) To pay all expenses, fees and taxes (other than transfer taxes
on resales of the Floating Rate Notes by the respective Underwriters) in
connection with the issuance and delivery of the Floating Rate 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 7, the Underwriters hereby agreeing to pay such fees
and disbursements in any other event.
(h) If the Underwriters shall not take up and pay for the Floating
Rate 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 8 or 9 hereof, to pay
the fees and disbursements of Dewey Ballantine LLP, counsel to the Underwriters,
and, if the Underwriters shall not take up and pay for the Floating Rate 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.
(i) To timely file any certificate required by Rule 52 under the
Public Utility Holding Company Act of 1935, as amended (1935 Act) in connection
with the sale of the Floating Rate Notes.
(j) 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 Floating Rate 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 Floating Rate Notes of the Company or any substantially
similar securities of the Company without the consent of the Representative.
5. Warranties of the Company: The Company represents and warrants to, and
agrees with you, as set forth below:
(a) 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 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, and the Basic Prospectus on the date
of this Agreement and the Prospectus when first filed in accordance with Rule
424(b) 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 and the Prospectus when first
filed in accordance with Rule 424(b) under the Act do 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 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 any indenture trustee under an indenture of the
Company.
(b) As of the Time of Purchase, the Indenture will have been duly
authorized by the Company and duly qualified under the Trust Indenture Act, as
amended, 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 such Floating Rate 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.
(c) The documents incorporated by reference in the Registration
Statement or Prospectus, when they were filed with the Commission, complied in
all material respects with the applicable provisions of the 1934 Act and the
rules and regulations of the Commission thereunder, and as of such time of
filing, when read together with 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.
(d) Since the respective dates as of which information is given in
the Registration Statement and the 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.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) 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.)
(g) 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 Floating Rate Notes or the transactions by the
Company contemplated in this Agreement, except (A) such as may be required under
the 1933 Act or the rules and regulations thereunder; (B) such as may be
required under the 1935 Act, as amended; (C) the qualification of the Indenture
under the Trust Indenture Act; (D) the approval of the Virginia State
Corporation Commission and the Tennessee Regulatory Authority; and (E) such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws.
(h) The consolidated financial statements of the Company and its
consolidated subsidiaries together with the notes thereto, included or
incorporated by reference in 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 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 Prospectus.
(i) 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 Prospectus.
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 Floating Rate Notes hereunder.
6. 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 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 Floating Rate Notes hereunder.
7. Indemnification and Contribution:
(a) 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, joint or several, 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 alleged untrue statement or untrue statement of a material
fact contained in the Registration Statement, in the Basic Prospectus (if used
prior to the effective date of this Agreement), or in the Prospectus, or if the
Company shall furnish or cause to be furnished to you any amendments or any
supplements to the Prospectus, in the Prospectus as so amended or supplemented
except to the extent that such amendments or supplements relate solely to
securities other than the Floating Rate 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 arise out of or are based upon any 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 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 any indenture trustee under an
indenture of the Company, and except that this indemnity shall not inure to your
benefit (or of any person controlling you) on account of any losses, claims,
damages, liabilities or actions arising from the sale of the Floating Rate Notes
to any person if such loss arises from the fact that a copy of the Prospectus,
as the same may then be supplemented or amended to the extent such Prospectus
was provided to you by the Company (excluding, however, any document then
incorporated or deemed incorporated therein by reference), was not sent or given
by you to such person with or prior to the written confirmation of the sale
involved and the alleged omission or alleged untrue statement or omission or
untrue statement was corrected in the Prospectus as supplemented or amended at
the time of such confirmation, and such Prospectus, as amended or supplemented,
was timely delivered to you by the Company. 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
7(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 7(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).
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 7(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 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 7(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 7(b).
(c) If recovery is not available or insufficient under Section 7(a)
or 7(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 7(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 Floating Rate Notes realized, 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 or any person controlling such Underwriter shall be
obligated to contribute any amount or amounts hereunder which in the aggregate
exceeds the total price of the Floating Rate 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 7 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 7 (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 7 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 Floating Rate
Notes hereunder.
8. 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 Floating
Rate Notes which it has agreed to purchase and pay for hereunder, and the
aggregate principal amount of Floating Rate 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 Floating Rate Notes, the
other Underwriters shall be obligated severally in the proportions which the
amounts of Floating Rate Notes set forth opposite their names in Exhibit 1
hereto bear to the aggregate principal amount of Floating Rate Notes set forth
opposite the names of all such non-defaulting Underwriters, to purchase the
Floating Rate 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 Floating Rate Notes which any Underwriter
has agreed to purchase pursuant to Section 1 hereof be increased pursuant to
this Section 8 by an amount in excess of one-ninth of such principal amount of
Floating Rate Notes without the written consent of such Underwriter. If any
Underwriter or Underwriters shall fail or refuse to purchase Floating Rate Notes
and the aggregate principal amount of Floating Rate Notes with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
the Floating Rate 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
Floating Rate 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 Floating Rate 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.
9. 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 Floating Rate 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 Moody's 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 9, 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 Floating Rate 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.
10. 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 Citigroup Global
Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: Henry
A. Clark III (fax 212/816-0900), and UBS Securities LLC, 677 Washington
Boulevard, Stamford, Connecticut 06901, Attention: Fixed Income Syndicate (fax
203/719-0495); and, if to the Company, to Appalachian Power Company, c/o
American Electric Power Service Corporation, 1 Riverside Plaza, Columbus, OH
43215, Attention: General Counsel (fax 614/716-1687).
11. 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
7 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 8 hereof,
no other person shall acquire or have any right under or by the virtue of this
Agreement.
12. 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 8 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 Floating Rate
Notes from any of the respective Underwriters.
13. 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 Virginia State Corporation Commission and the Tennessee Regulatory Authority
shall have issued appropriate orders, and such orders shall remain in full force
and effect, authorizing the transactions contemplated hereby.
14. Applicable Law: This Agreement will be governed and construed in
accordance with the laws of the State of New York.
15. 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.
APPALACHIAN POWER COMPANY
By:__/s/ Stephan T. Haynes_____
Stephan T. Haynes
Assistant Treasurer
Citigroup Global Markets Inc.
UBS Securities LLC
as Representatives
and on behalf of the Underwriters
named in Exhibit 1 hereto
CITIGROUP GLOBAL MARKETS INC.
_/s/ Henry A. Clark, III________
By:_Henry A. Clark, III________
Name: Managing Director______
UBS SECURITIES LLC
_/s/ Christopher Forshner______
By:__Christopher Forshner_____
Name: Managing Director______
EXHIBIT 1
Name Principal Amount
Citigroup Global Markets Inc. $ 56,250,000
UBS Securities LLC 56,250,000
BNY Capital Markets, Inc. 12,500,000
----------------
TOTAL $ 125,000,000
================
Exhibit 4(a)
July 1, 2004
Company Order and Officers' Certificate
Floating Rate Notes, Series C, due 2007
The Bank of New York, as Trustee
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Ladies and Gentlemen:
Pursuant to Article Two of the Indenture, dated as of January 1, 1998 (as it may
be amended or supplemented, the "Indenture"), from Appalachian Power Company
(the "Company") to The Bank of New York, as trustee (the "Trustee"), and the
Board Resolutions dated February 24, 2004, a copy of which certified by the
Secretary or an Assistant Secretary of the Company is being delivered herewith
under Section 2.01 of the Indenture, and unless otherwise provided in a
subsequent Company Order pursuant to Section 2.04 of the Indenture,
1. The Company's Floating Rate Notes, Series C, due 2007 (the
"Notes") are hereby established. The Notes shall be in substantially the
form attached hereto as Exhibit 1.
2. The terms and characteristics of the Notes shall be as follows
(the numbered clauses set forth below correspond to the numbered
subsections of Section 2.01 of the Indenture, with terms used and not
defined herein having the meanings specified in the Indenture or in the
Notes):
(i) the aggregate principal amount of Notes which may be
authenticated and delivered under the Indenture shall be limited to
$125,000,000, except as contemplated in Section 2.01(i) of the
Indenture;
(ii) the date on which the principal of the Notes shall be
payable shall be June 29, 2007 ("Stated Maturity");
(iii) interest on the Notes shall be payable on March 29, June
29, September 29 and December 29 of each year (each, an "Interest
Payment Date"), commencing on September 29, 2004 and shall accrue
from and including the date of authentication of the Notes to, but
excluding, September 29, 2004, and thereafter, from and including
each Interest Payment Date to, but excluding, the next succeeding
Interest Payment Date or Stated Maturity, as the case may be; the
Regular Record Date for the determination of holders to whom
interest is payable on any such Interest Payment Date shall be the
fifteenth calendar day preceding the relevant Interest Payment Date;
provided that interest payable on Stated Maturity shall be paid to
the Person to whom principal shall be paid;
(iv) the Notes will bear interest at a per annum rate
("Interest Rate") determined by the Calculation Agent, subject to
the maximum interest rate permitted by New York or other applicable
state law, as such law may be modified by United States law of
general application. The Interest Rate for each Interest Period will
be equal to LIBOR on the Interest Determination Date for such
Interest Period plus 0.33%; provided, however, that in certain
circumstances described below, the Interest Rate will be determined
without reference to LIBOR.
If the following circumstances exist on any Interest Determination Date, the
Calculation Agent shall determine the Interest Rate for the Notes as follows:
(1) In the event no Reported Rate appears on Telerate
Page 3750 as of approximately 11:00 a.m. London time on an
Interest Determination Date, the Calculation Agent shall
request the principal London offices of each of four major
banks in the London interbank market selected by the
Calculation Agent (after consultation with the Company) to
provide a quotation of the rate (the "Rate Quotation") at
which three month deposits in amounts of not less than
$1,000,000 are offered by it to prime banks in the London
interbank market, as of approximately 11:00 a.m. on such
Interest Determination Date, that is representative of single
transactions at such time (the "Representative Amounts"). If
at least two Rate Quotations are provided, the interest rate
will be the arithmetic mean of the Rate Quotations obtained by
the Calculation Agent, plus 0.33%.
(2) In the event no Reported Rate appears on Telerate
Page 3750 as of approximately 11:00 a.m. London time on an
Interest Determination Date and there are fewer than two Rate
Quotations, the interest rate will be the arithmetic mean of
the rates quoted at approximately 11:00 a.m. New York City
time on such Interest Determination Date, by three major banks
in New York City selected by the Calculation Agent (after
consultation with the Company), for loans in Representative
Amounts in U. S. dollars to leading European banks, having an
index maturity of three months for a period commencing on the
second London Business Day immediately following such Interest
Determination Date, plus 0.33%; provided, however, that if
fewer than three banks selected by the Calculation Agent are
quoting such rates, the interest rate for the applicable
Interest Period will be the same as the interest rate in
effect for the immediately preceding Interest Period.
(v) The Notes are not subject to redemption prior to their
maturity. The Notes are not subject to the benefits of any sinking
fund.
(vi)(a) the Notes shall be issued in the form of a Global
Note; (b) the Depositary for such Global Note shall be The
Depository Trust Company; and (c) the procedures with respect to
transfer and exchange of Global Notes shall be as set forth in the
form of Note attached hereto;
(vii) the title of the Notes shall be "Floating Rate Notes,
Series C, due 2007";
(viii) the form of the Notes shall be as set forth in
Paragraph 1, above;
(ix) see item (iv) above;
(x) the Notes shall not be subject to a Periodic Offering;
(xi) not applicable;
(xii) not applicable;
(xiii) not applicable;
(xiv) the Notes shall be issuable in denominations of $1,000
and any integral multiple thereof;
(xv) not applicable;
(xvi) the Notes shall not be issued as Discount Securities;
(xvii) not applicable;
(xviii) see item (iv) above; and
(xix) So long as any of the Notes are outstanding, the Company
will not create or suffer to be created or to exist any additional
mortgage, pledge, security interest, or other lien (collectively
"Liens") on any of its utility properties or tangible assets now
owned or hereafter acquired to secure any indebtedness for borrowed
money ("Secured Debt"), without providing that the Notes will be
similarly secured. This restriction does not apply to the Company's
subsidiaries, nor will it prevent any of them from creating or
permitting to exist Liens on their property or assets to secure any
Secured Debt. Further, this restriction on Secured Debt does not
apply to the Company's existing first mortgage bonds that have
previously been issued under its Indenture, dated December 1, 1940,
between the Company and Bankers Trust Company and R. Gregory Page,
as Trustees or any indenture supplemental thereto; provided that
this restriction will apply to future issuances thereunder (other
than issuances of refunding first mortgage bonds). In addition, this
restriction does not prevent the creation or existence of:
(a) Liens on property existing at the time of acquisition or
construction of such property (or created within one year after completion of
such acquisition or construction), whether by purchase, merger, construction or
otherwise, or to secure the payment of all or any part of the purchase price or
construction cost thereof, including the extension of any Liens to repairs,
renewals, replacements, substitutions, betterments, additions, extensions and
improvements then or thereafter made on the property subject thereto;
(b) Financing of the Company's accounts receivable for electric
service;
(c) Any extensions, renewals or replacements (or successive
extensions, renewals or replacements), in whole or in part, of liens permitted
by the foregoing clauses; and
(d) The pledge of any bonds or other securities at any time issued
under any of the Secured Debt permitted by the above clauses.
In addition to the permitted issuances above, Secured Debt not otherwise so
permitted may be issued in an amount that does not exceed 15% of Net Tangible
Assets as defined below.
"Net Tangible Assets" means the total of all assets (including revaluations
thereof as a result of commercial appraisals, price level restatement or
otherwise) appearing on the Company's balance sheet, net of applicable reserves
and deductions, but excluding goodwill, trade names, trademarks, patents,
unamortized debt discount and all other like intangible assets (which term shall
not be construed to include such revaluations), less the aggregate of the
Company's current liabilities appearing on such balance sheet. For purposes of
this definition, the Company's balance sheet does not include assets and
liabilities of its subsidiaries.
This restriction also does not apply to or prevent the creation or existence of
leases made, or existing on property acquired, in the ordinary course of
business.
3. You are hereby requested to authenticate $125,000,000 aggregate
principal amount of Floating Rate Notes, Series C, due 2007, executed by
the Company and delivered to you concurrently with this Company Order and
Officers' Certificate, in the manner provided by the Indenture.
4. You are hereby requested to hold the Notes as custodian for DTC
in accordance with the Letter of Representations dated June 24, 2004, from
the Company to DTC.
5. Concurrently with this Company Order and Officers' Certificate,
an Opinion of Counsel under Sections 2.04 and 13.06 of the Indenture is
being delivered to you.
6. The undersigned Stephan T. Haynes and Thomas G. Berkemeyer, the
Assistant Treasurer and Assistant Secretary, respectively, of the Company
do hereby certify that:
(i) we have read the relevant portions of the Indenture,
including without limitation the conditions precedent provided for
therein relating to the action proposed to be taken by the Trustee
as requested in this Company Order and Officers' Certificate, and
the definitions in the Indenture relating thereto;
(ii) we have read the Board Resolutions of the Company and the
Opinion of Counsel referred to above;
(iii) we have conferred with other officers of the Company,
have examined such records of the Company and have made such other
investigation as we deemed relevant for purposes of this
certificate;
(iv) in our opinion, we have made such examination or
investigation as is necessary to enable us to express an informed
opinion as to whether or not such conditions have been complied
with; and
(v) on the basis of the foregoing, we are of the opinion that
all conditions precedent provided for in the Indenture relating to
the action proposed to be taken by the Trustee as requested herein
have been complied with.
Kindly acknowledge receipt of this Company Order and Officers' Certificate,
including the documents listed herein, and confirm the arrangements set forth
herein by signing and returning the copy of this document attached hereto.
Very truly yours,
APPALACHIAN POWER COMPANY
By:_/s/ Stephan T. Haynes
Assistant Treasurer
And: /s/ Thomas G. Berkemeyer
Assistant Secretary
Acknowledged by Trustee:
THE BANK OF NEW YORK
By: /s/ Cynthia Chaney
Vice President
Exhibit 1
Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
to be issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein. Except as otherwise provided
in Section 2.11 of the Indenture, this Security may be transferred, in whole but
not in part, only to another nominee of the Depository or to a successor
Depository or to a nominee of such successor Depository.
No. R1
APPALACHIAN POWER COMPANY
Floating Rate Notes, Series C, due 2007
CUSIP: 037735CA3 Original Issue Date: July 1, 2004
Stated Maturity: 06-29-2007
Principal Amount: $125,000,000
Redeemable: Yes [ ] No [X]
In Whole: Yes [ ] No [X]
In Part: Yes [ ] No [X]
APPALACHIAN POWER COMPANY, a corporation duly organized and existing under
the laws of the Commonwealth of Virginia (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the Principal Amount specified above on the Stated Maturity
specified above, and to pay interest on said Principal Amount on March 29, June
29, September 29 and December 29 of each year, commencing on September 29, 2004
at the per annum interest rate determined by the Calculation Agent on each
Interest Determination Date, as such terms are defined herein, until the
Principal Amount shall have been paid or duly provided for. The amount of
interest payable on any Interest Payment Date shall be computed on the basis of
the actual number of days for which interest is payable in the relevant Interest
Period, divided by 360.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date, as provided in the Indenture, as hereinafter defined,
shall be paid to the Person in whose name this Note (or one or more Predecessor
Securities) shall have been registered at the close of business on the fifteenth
calendar day before each Interest Payment Date (the "Regular Record Date")
provided that interest payable on the Stated Maturity shall be paid to the
Person to whom principal is paid. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the registered holder
on such Regular Record Date and shall be paid as provided in said Indenture.
If any Interest Payment Date (other than at the Stated Maturity) is not a
Business Day, then such Interest Payment Date shall be the next succeeding
Business Day, except that if such Business Day is in the next calendar month,
such Interest Payment Date shall be the immediately preceding Business Day. If
the Stated Maturity of this Note falls on a day that is not a Business Day, the
payment of principal and interest will be made on the next succeeding Business
Day, and no interest shall accrue on such amounts for the period from and after
such Stated Maturity. The principal of and the interest on this Note shall be
payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, the City of New York, New York, in any coin or
currency of the United States of America which at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest (other than interest payable on the Stated Maturity) may be made at
the option of the Company by check mailed to the registered holder at such
address as shall appear in the Security Register or by wire transfer to the
account designated by the person entitled thereto.
This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series under and pursuant to an Indenture
dated as of January 1, 1998 duly executed and delivered between the Company and
The Bank of New York, a corporation organized and existing under the laws of the
State of New York, as Trustee (herein referred to as the "Trustee") (such
Indenture, as originally executed and delivered and as thereafter supplemented
and amended being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto or Company Orders reference is
hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the registered
holders of the Notes. By the terms of the Indenture, the Notes are issuable in
series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This Note is one of the series of
Notes designated on the face hereof.
This Note may not be redeemed prior to its maturity. This Note is not
subject to the benefits of any sinking fund.
This Note will bear interest at a per annum rate ("Interest Rate")
determined by the Calculation Agent, subject to the maximum interest rate
permitted by New York or other applicable state law, as such law may be modified
by United States law of general application. The Interest Rate for each Interest
Period will be equal to LIBOR on the Interest Determination Date for such
Interest Period plus 0.33%; provided, however, that in certain circumstances
described below, the Interest Rate will be determined without reference to
LIBOR. Promptly upon such determination, the Calculation Agent will notify the
Trustee for the Notes, if the Trustee is not then serving as the Calculation
Agent, of the Interest Rate for the new Interest Period. The Interest Rate
determined by the Calculation Agent, absent manifest error, shall be binding and
conclusive upon the beneficial owners and registered holders of this Note, the
Company and the Trustee for the Notes.
Interest on this Note will accrue from and including the Original Issue
Date specified above to, but excluding, September 29, 2004, and thereafter, from
and including each Interest Payment Date to, but excluding, the next succeeding
Interest Payment Date or Stated Maturity, as the case may be.
If the following circumstances exist on any Interest Determination Date,
the Calculation Agent shall determine the Interest Rate for the Notes as
follows:
(1) In the event no Reported Rate appears on Telerate Page 3750 as
of approximately 11:00 a.m. London time on an Interest Determination Date,
the Calculation Agent shall request the principal London offices of each
of four major banks in the London interbank market selected by the
Calculation Agent (after consultation with the Company) to provide a
quotation of the rate (the "Rate Quotation") at which three month deposits
in amounts of not less than $1,000,000 are offered by it to prime banks in
the London interbank market, as of approximately 11:00 a.m. on such
Interest Determination Date, that is representative of single transactions
at such time (the "Representative Amounts"). If at least two Rate
Quotations are provided, the interest rate will be the arithmetic mean of
the Rate Quotations obtained by the Calculation Agent, plus 0.33%.
(2) In the event no Reported Rate appears on Telerate Page 3750 as
of approximately 11:00 a.m. London time on an Interest Determination Date
and there are fewer than two Rate Quotations, the interest rate will be
the arithmetic mean of the rates quoted at approximately 11:00 a.m. New
York City time on such Interest Determination Date, by three major banks
in New York City selected by the Calculation Agent (after consultation
with the Company), for loans in Representative Amounts in U. S. dollars to
leading European banks, having an index maturity of three months for a
period commencing on the second London Business Day immediately following
such Interest Determination Date, plus 0.33%; provided, however, that if
fewer than three banks selected by the Calculation Agent are quoting such
rates, the interest rate for the applicable Interest Period will be the
same as the interest rate in effect for the immediately preceding Interest
Period.
"Business Day" means, with respect to this Note, any day that is not a day
on which banking institutions in New York City are authorized or required by law
or regulation to close.
"Calculation Agent" means The Bank of New York, or its successor appointed
by the Company, acting as calculation agent.
"Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.
"Interest Period" means the period commencing on an Interest Payment Date
(or commencing on the Original Issue Date, if no interest has been paid or duly
made available for payment since that date) and ending on the day before the
next succeeding Interest Payment Date.
"LIBOR" for any Interest Determination Date will be the offered rate for
deposits in U. S. dollars having an index maturity of three months for a period
commencing on the second London Business Day immediately following the Interest
Determination Date in amounts of not less than $1,000,000, as such rate appears
on Telerate Page 3750 or a successor reporter of such rates selected by the
Calculation Agent and acceptable to the Company, at approximately 11:00 a.m.
London time on the Interest Determination Date (the "Reported Rate").
"London Business Day" means a day other than a Saturday or Sunday that is
not a day on which banking institutions in London, England and New York, New
York are authorized or obligated by law or executive order to be closed and a
day on which dealings in deposits in U. S. dollars are transacted, or with
respect to any future date are expected to be transacted, in the London
interbank market.
"Telerate Page 3750" means the display designated on page 3750 on
Moneyline Telerate, Inc. (or such other page as may replace the 3750 page on
that service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for U.
S. dollar deposits).
Upon request, the Calculation Agent will provide the current Interest Rate
and, if determined, the Interest Rate which will become effective for the next
Interest Period.
All percentages resulting from any calculation of the Interest Rate will
be rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards, and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upwards).
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Note upon compliance by the Company with certain conditions
set forth therein.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the registered holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the registered holders of the Notes;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof, or reduce the amount
of the principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to the Indenture,
without the consent of the registered holder of each Note then outstanding and
affected; (ii) reduce the aforesaid percentage of Notes, the registered holders
of which are required to consent to any such supplemental indenture, or reduce
the percentage of Notes, the registered holders of which are required to waive
any default and its consequences, without the consent of the registered holder
of each Note then outstanding and affected thereby; or (iii) modify any
provision of Section 6.01(c) of the Indenture (except to increase the percentage
of principal amount of securities required to rescind and annul any declaration
of amounts due and payable under the Notes), without the consent of the
registered holder of each Note then outstanding and affected thereby. The
Indenture also contains provisions permitting the registered holders of a
majority in aggregate principal amount of the Notes of all series at the time
outstanding affected thereby, on behalf of the registered holders of the Notes
of such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences, except a default in the
payment of the principal of or premium, if any, or interest on any of the Notes
of such series. Any such consent or waiver by the registered holder of this Note
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such registered holder and upon all future registered holders and owners of
this Note and of any Note issued in exchange herefor or in place hereof (whether
by registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is transferable by the registered holder hereof on the
Security Register of the Company, upon surrender of this Note for registration
of transfer at the office or agency of the Company as may be designated by the
Company accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his or her attorney duly authorized in writing, and thereupon
one or more new Notes of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Security Registrar may deem and
treat the registered holder hereof as the absolute owner hereof (whether or not
this Note shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving payment of or on account of the principal hereof and premium, if
any, and interest due hereon and for all other purposes, and neither the Company
nor the Trustee nor any paying agent nor any Security Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.
The Notes of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the registered
holder surrendering the same.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
APPALACHIAN POWER COMPANY
By:___________________________
Name: Stephan T. Haynes
Title: Assistant Treasurer
Attest:
By:___________________________
Name: Thomas G. Berkemeyer
Title: Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes designated in accordance
with, and referred to in, the within-mentioned Indenture.
Dated: July 1, 2004
THE BANK OF NEW YORK
By:___________________________
Authorized Signatory
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
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(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
- ----------------------------------------------------------------
ASSIGNEE) the within Note and all rights thereunder, hereby
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irrevocably constituting and appointing such person attorney to
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transfer such Note on the books of the Issuer, with full
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power of substitution in the premises.
Dated:________________________ _________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular, without alteration
or enlargement or any change whatever and NOTICE: Signature(s) must be
guaranteed by a financial institution that is a member of the Securities
Transfer Agents Medallion Program ("STAMP"), the Stock Exchange Medallion
Program ("SEMP") or the New York Stock Exchange, Inc. Medallion Signature
Program ("MSP").
Exhibit 5(a)
July 1, 2004
Appalachian Power Company
1 Riverside Plaza
Columbus, Ohio 43215
Ladies and Gentlemen:
We have acted as counsel to Appalachian Power Company, a Virginia
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (Registration Statement No. 333-116284) (the "Registration Statement")
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), relating
to $125,000,000 aggregate principal amount of Floating Rate Notes, Series C, due
2007 (the "Notes") issued under an Indenture, dated as of January 1, 1998 (the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee").
We have examined the Registration Statement and the Indenture which
has been filed with the Commission as an exhibit to the Registration Statement.
We also have examined the originals, or duplicates or certified or conformed
copies, of such corporate records, agreements, documents and other instruments
and have made such other investigations as we have deemed relevant and necessary
in connection with the opinions hereinafter set forth. As to questions of fact
material to this opinion, we have relied upon certificates or comparable
documents of public officials and of officers and representatives of the
Company.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies and the authenticity of the originals of such latter
documents. We also have assumed that: (1) the Indenture is the valid and legally
binding obligation of the Trustee; and (2) the Company is validly existing under
the laws of Virginia.
We have assumed further that (1) the Company has duly authorized,
executed and delivered the Indenture and (2) execution, delivery and performance
by the Company of Indenture and the Notes do not and will not violate the laws
of Virginia or any other applicable laws (excepting the laws of the State of New
York and the Federal laws of the United States).
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that assuming the due
authentication of the Notes by the Trustee, the Notes will constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to the effects of (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, (ii) general
equitable principles (whether considered in a proceeding in equity or at law)
and (iii) an implied covenant of good faith and fair dealing.
We do not express any opinion herein concerning any law other than
the law of the State of New York and the Federal law of the United States.
We hereby consent to the filing of this opinion letter as Exhibit 5
to the Registration Statement and to the use of our name under the caption
"Legal Opinions" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett LLP
SIMPSON THACHER & BARTLETT LLP