Exhibit 1(a)
APPALACHIAN POWER COMPANY
Selling Agency Agreement
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Dear Sirs:
Appalachian Power Company, an Appalachian corporation (the
"Company"), confirms its agreement with each of you with respect to
the issue and sale by the Company of up to $____________ aggregate
principal amount of its [Unsecured Notes] (the "Notes"). The Notes
will be issued under the Indenture dated as of January 1, 1998,
between the Company and The Bank of New York, as trustee (the
"Trustee"), as previously supplemented and as it may be from time to
time further supplemented by one or more supplemental indentures
(said Indenture, as previously supplemented and as it may be further
supplemented, being hereafter referred to as the "Indenture"). The
Notes will be issued in minimum denominations of [$25] and in
integral multiples thereof, will be issued only in fully registered
form and will have the annual interest rates, maturities and, if
appropriate, other terms set forth in a supplement to the Prospectus
referred to below. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and, in the case of
Notes sold pursuant to Section 2(a) hereof, the [Unsecured Notes]
Administrative Procedures attached hereto as Exhibit A (the
"Procedures"). The Procedures may only be amended by written
agreement of the Company and you after notice to, and with the
approval of, the Trustee. For purposes of this Agreement, the term
"Agent" shall refer to any one of you and any Additional Agent as
defined and as provided for in Section 2(a) acting solely in the
capacity as agent for the Company pursuant to Section 2(a) and not as
principal (collectively, the "Agents"), the term the "Purchaser"
shall refer to one of you acting solely as principal pursuant to
Section 2(b) and not as agent, and the term "you" shall refer to you
collectively whether at any time any of you is acting in both such
capacities or in either such capacity.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, you as set forth below
in this Section 1. Certain terms used in this Section 1 are defined
in paragraph (d) hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such Form S-3 (File
Number: 333-_____), including a basic prospectus, which has
become effective, for the registration under the Act of
$250,000,000 aggregate principal amount of Unsecured Notes (the
"Notes"). Such registration statement meets the requirements
set forth in Rule 415(a)(1)(ix) or (x) under the Act and
complies in all other material respects with said Rule. The
Company will file with the Commission pursuant to the applicable
paragraph of Rule 424(b) under the Act a supplement to the form
of prospectus included in such registration statement relating
to the Notes and the plan of distribution thereof (the
"Prospectus Supplement"). In connection with the sale of Notes
the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act further
supplements to the Prospectus Supplement specifying the interest
rates, maturity dates and, if appropriate, other terms of the
Notes sold pursuant hereto or the offering thereof.
(b) As of the Execution Time, on the Effective Date, when
any supplement to the Prospectus is filed with the Commission,
as of the date of any Terms Agreement (as defined in Section
2(b)) and at the date of delivery by the Company of any Notes
sold hereunder (a "Closing Date"), (i) the Registration
Statement, as amended as of any such time, and the Prospectus,
as supplemented as of any such time, will comply in all material
respects with the applicable requirements of the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the respective rules under the Act,
the Exchange Act and the Trust Indenture Act; (ii) the
Registration Statement, as amended as of any such time, did not
or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; and (iii) the Prospectus, as supplemented as of any
such time, will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
the Company makes no representations or warranties as to (i)
those parts of the Registration Statement which shall constitute
a Statement of Eligibility (Form T-1) of the Trustee under the
Trust Indenture Act or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or
any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by any of you
expressly for use in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold
hereunder, the Indenture will constitute a legal, valid and
binding instrument enforceable against the Company in accordance
with its terms and such 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, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors'
rights generally, or general equitable principles (whether
considered in a proceeding in equity or at law), and an implied
covenant of good faith and fair dealing.
(d) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective
Date" shall mean each date that the Registration Statement and
any post-effective amendment or amendments thereto became or
become effective. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the form of basic
prospectus relating to the Securities contained in the
Registration Statement at the Effective Date. "Prospectus"
shall mean the Basic Prospectus as supplemented by the
Prospectus Supplement. "Registration Statement" shall mean the
Registration Statement referred to in paragraph (a) above,
including incorporated documents, exhibits and financial
statements, as amended at the Execution Time. "Rule 415" and
"Rule 424" refer to such rules under the Act. Any reference
herein to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date or the issue date
of the Basic Prospectus, the Prospectus Supplement or the
Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after
the Effective Date or the issue date of the Basic Prospectus,
the Prospectus Supplement or the Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(e) 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.
(f) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except
as otherwise stated therein, there has been no material adverse
change in the business, properties or financial condition of the
Company.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The consummation by the Company of the transactions
contemplated herein 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.)
(i) 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 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 Public Utility Holding Company Act of 1935,
as amended (the "1935 Act"); (C) the qualification of the
Indenture under the 1939 Act; (D) approvals 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.
2. Appointment of Agents; Solicitation by the Agents of
Offers to Purchase; Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein,
the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the
Notes from the Company.
On the basis of the representations and warranties,
and subject to the terms and conditions set forth herein, each
of the Agents agrees, as agent of the Company, to use its
reasonable best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures.
The Company reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for
any period of time or permanently, the solicitation of offers to
purchase the Notes. Upon receipt of instructions from the
Company, the Agents will forthwith suspend solicitation of
offers to purchase Notes from the Company until such time as the
Company has advised them that such solicitation may be resumed.
The Company expressly reserves the right, upon fifteen
business days' prior written notice to each Agent, to appoint
other persons, partnerships or corporations ("Additional
Agents") to act as its agent to solicit offers for the purchase
of Notes; provided, each Additional Agent shall be named in a
prospectus supplement or pricing supplement and shall either
execute this Agreement and become a party hereto or shall enter
into an agency agreement with the Company on terms substantially
similar to those contained herein; thereafter the term Agent as
used in this Agreement shall mean each Agent and each such
Additional Agent.
The Company agrees to pay each Agent a commission, on
the Closing Date with respect to each sale of Notes by the
Company as a result of a solicitation made by such Agent, in an
amount equal to that percentage specified in Schedule I hereto
of the aggregate principal amount of the Notes sold by the
Company. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
an Agent as agent for the Company at such time and in such
amounts as such Agent deems advisable. The Company may from
time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall
be in effect the Company shall not solicit or accept offers to
purchase Notes through any agent other than an Agent.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any Agent determine that the Company
shall sell Notes directly to such Agent as principal, each such
sale of Notes shall be made in accordance with the terms of this
Agreement and, unless otherwise agreed by the Company and such
Agent, any supplemental agreement relating thereto between the
Company and the Purchaser. Each such supplemental agreement
(which may be an oral or written agreement) is herein referred
to as a "Terms Agreement". Each Terms Agreement shall describe
(whether orally or in writing) the Notes to be purchased by the
Purchaser pursuant thereto, and shall specify the aggregate
principal amount of such Notes, the maturity date of such Notes,
the rate at which interest will be paid on such Notes, the dates
on which interest will be paid on such Notes and the record date
with respect to each such payment of interest, the Closing Date
for the purchase of such Notes, the place of delivery of the
Notes and payment therefor, the method of payment and any
requirements for the delivery of the opinions of counsel, the
certificates from the Company or its officers, or a letter from
the Company's independent public accountants, pursuant to
Section 6(b). Any such Terms Agreement may also specify the
period of time referred to in Section 4(m). Any written Terms
Agreement may be in the form attached hereto as Exhibit B. The
Purchaser's commitment to purchase Notes shall be deemed to have
been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms
and conditions herein set forth.
The Company also may sell Notes to any Agent, acting
as principal, at a discount to be agreed upon at the time of
sale, for resale to one or more investors or to another
broker-dealer (acting as principal for purposes of resale) at
varying prices related to prevailing market prices at the time
of such resale as determined by such Agent. An Agent may resell
a Note purchased by it as principal to another broker-dealer at
a discount, provided such discount does not exceed the
commission or discount received by such Agent from the Company
in connection with the original sale of such Note.
(c) The Company, however, expressly reserves the right to
place the Notes itself privately or through a negotiated
underwritten transaction with one or more underwriters without
notice to any Agent and without any opportunity for any Agent to
solicit offers for the purchase of the Notes. In such event, no
commission will be payable to the Agents.
Delivery of the Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made not later than the Closing
Date agreed to in such Terms Agreement, against payment of funds
to the Company in the net amount due to the Company for such
Notes by the method and in the form set forth in the Procedures
unless otherwise agreed to between the Company and the Purchaser
in such Terms Agreement.
3. Offering and Sale of Notes. Each Agent and the
Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of any offering of the Notes,
the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus (except for (i)
periodic or current reports filed under the Exchange Act; (ii) a
supplement relating to any offering of Notes providing solely
for the specification of or a change in the maturity dates,
interest rates, issuance prices or other similar terms of any
Notes or (iii) a supplement relating to an offering of
Securities other than the Notes) unless the Company has
furnished each of you a copy for your review prior to filing and
given each of you a reasonable opportunity to comment on any
such proposed amendment or supplement. Subject to the foregoing
sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to you of such
filing. The Company will promptly advise each of you (i) when
the Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b); (ii) when,
prior to the termination of the offering of the Notes, any
amendment of the Registration Statement shall have been filed or
become effective; (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the
Prospectus or for any additional information; (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose; and (v) of
the receipt by the Company of any notification with respect to
the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use every reasonable effort
to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then supplemented
would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary to amend the
Registration Statement or to supplement the Prospectus to comply
with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will (i) notify each of you to
suspend solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend
such solicitation and cease using the Prospectus as then
supplemented); (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this Section
4, an amendment or supplement which will correct such statement
or omission or effect such compliance; and (iii) supply any
supplemented Prospectus to each of you in such quantities as you
may reasonably request. If such amendment or supplement, and
any documents, certificates and opinions furnished to each of
you pursuant to paragraph (g) of this Section 4 in connection
with the preparation or filing of such amendment or supplement
are satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement with the Commission and
upon the effectiveness of an amendment to the Registration
Statement, if such an amendment is required, resume your
obligation to use your reasonable best efforts to solicit offers
to purchase Notes hereunder.
(c) The Company, during the period when a prospectus
relating to the Notes is required to be delivered under the Act,
will file promptly all documents required to be filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and will furnish to each of you copies of such
documents. In addition, on or prior to the date on which the
Company makes any announcement to the general public concerning
earnings or concerning any other event which is required to be
described, or which the Company proposes to describe, in a
document filed pursuant to the Exchange Act, the Company will
furnish to each of you the information contained or to be
contained in such announcement. The Company also will furnish
to each of you copies of all other press releases or
announcements to the general public. The Company will
immediately notify each of you of any downgrading in the rating
of the Notes or any other Unsecured Notes of the Company, or any
proposal to downgrade the rating of the Notes or any other
Unsecured Notes of the Company, by any "nationally recognized
statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), as soon as the Company learns of any
such downgrading or proposal to downgrade.
(d) As soon as practicable, the Company will make
generally available to its security holders and to each of you
an earning statement or statements of the Company which will
satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(e) The Company will furnish to each of you and your
counsel, without charge, copies of the Registration Statement
(without exhibits) and, so long as delivery of a prospectus may
be required by the Act, as many copies of the Prospectus and any
supplement thereto as you may reasonably request.
(f) The Company will use its best efforts to qualify the
Notes for offer and sale under the securities or "blue sky" laws
of such jurisdictions as you may designate within six months
after the final sale of Notes pursuant to this Agreement and
agrees to pay, or to reimburse you and your counsel for,
reasonable filing fees and expenses in connection therewith in
an amount not exceeding $5,000 in the aggregate (including
filing fees and expenses paid and incurred prior to the 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) The Company shall furnish to each of you such
information, documents, certificates of officers of the Company
and opinions of counsel for the Company relating to the
business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments
thereof or supplements thereto, the Indenture, the Notes, this
Agreement, the Procedures and the performance by the Company and
you of its and your respective obligations hereunder and
thereunder as any of you may from time to time and at any time
prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the
Notes is consummated, (i) pay all expenses incident to the
performance of its obligations under this Agreement, including
the fees and disbursements of its accountants and counsel, the
cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof
and supplements thereto, the Indenture, this Agreement and all
other documents relating to the offering, the cost of preparing,
printing, packaging and delivering the Notes, the fees and
disbursements of the Trustee and the fees of any agency that
rates the Notes; (ii) reimburse each of you on a monthly basis
for all out-of-pocket expenses (including without limitation
advertising expenses) incurred with the prior approval of the
Company in connection with this Agreement; and (iii) pay the
reasonable fees and expenses of your counsel incurred in
connection with this Agreement, including fees of counsel
incurred in compliance with and to the extent stated in Section
4(f), including the preparation of a Blue Sky Survey.
(i) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its
representations and warranties contained in this Agreement and
in any Certificate previously delivered pursuant hereto are true
and correct at the time of such acceptance, as though made at
and as of such time, and a covenant that such representations
and warranties will be true and correct at the time of delivery
to the purchaser of the Notes relating to such acceptance, as
though made at and as of such time (it being understood that for
purposes of the foregoing affirmation and covenant such
representations and warranties shall relate to the Registration
Statement and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the
purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as
of the settlement date for the sale of such Notes, after giving
effect to the issuance of such Notes, of any other Notes to be
issued on or prior to such settlement date and of any other
Securities to be issued and sold by the Company on or prior to
such settlement date, the aggregate amount of Securities
(including any Notes) which have been issued and sold by the
Company will not exceed the amount of Securities registered
pursuant to the Registration Statement.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to any offering of
Securities other than the Notes; (ii) incorporating by reference
information contained in a Current Report on Form 8-K filed by
the Company under the Exchange Act that is (A) filed solely
under Item 5 of Form 8-K and (B) not required to be filed to
comply with Section 4(b); or (iii) providing solely for the
specification of or a change in the maturity dates, the interest
rates, the issuance prices or other similar terms of any Notes
sold pursuant hereto, unless, in the case of clause (ii) above,
in the reasonable judgment of any of you, such information is of
such a nature that a certificate of the Company should be
delivered), the Company will deliver or cause to be delivered
promptly to each of you a certificate of the Company, signed by
a Vice President, Treasurer or Assistant Treasurer of the
Company, dated the date of the effectiveness of such amendment
or the date of the filing of such supplement, in form reasonably
satisfactory to you, of the same tenor as the certificate
referred to in Section 5(c) but modified to relate to the last
day of the fiscal quarter for which financial statements of the
Company were last filed with the Commission and to the
Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment
or the filing of such supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to any offering of
Securities other than the Notes; (ii) incorporating by reference
information contained in a Current Report on Form 8-K filed by
the Company under the Exchange Act that is (A) filed solely
under Item 5 of Form 8-K and (B) not required to be filed to
comply with Section 4(b); or (iii) providing solely for the
specification of or a change in the maturity dates, the interest
rates, the issuance prices or other similar terms of any Notes
sold pursuant hereto, unless, in the case of this clause (ii)
above, in the reasonable judgment of any of you, such
information is of such a nature that an opinion of counsel
should be furnished), the Company shall furnish or cause to be
furnished promptly to each of you a written opinion or opinions
of counsel of the Company satisfactory to each of you (which may
include counsel employed by American Electric Power Service
Corporation, an affiliate of the Company), dated the date of the
effectiveness of such amendment or the date of the filing of
such supplement, substantially in the form delivered pursuant to
Section 5(b)(1) and Section 5(b)(3) hereof or, in lieu of such
opinion, counsel last furnishing such an opinion or opinions to
you may furnish each of you with a letter to the effect that you
may rely on such last opinion to the same extent as though it
were dated the date of such letter authorizing reliance (except
that statements in such last opinion will be deemed to relate to
the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment
or the filing of such supplement).
(l) If requested, each time that the Registration
Statement or the Prospectus is amended or supplemented to
include or incorporate amended or supplemental financial
information, the Company shall cause its independent public
accountants promptly to furnish each of you a letter, dated the
date of the effectiveness of such amendment or the date of the
filing of such supplement, in form satisfactory to each of you,
of the same tenor as the letter referred to in Section 5(d) with
such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as
amended or supplemented to the date of such letter; provided,
however, that, if the Registration Statement or the Prospectus
is amended or supplemented solely to include or incorporate by
reference financial information as of and for a fiscal quarter,
the Company's independent public accountants may limit the scope
of such letter, which shall be satisfactory in form to each of
you, to the unaudited financial statements, the related
"Management's Discussion and Analysis of Results of Operations
and Financial Condition" and any other information of an
accounting, financial or statistical nature included in such
amendment or supplement, unless, in the reasonable judgment of
any of you, such letter should cover other information or
changes in specified financial statement line items.
(m) During the period, if any, which shall not exceed ten
days, specified in any Terms Agreement, the Company shall not,
without the prior consent of the Purchaser thereunder, issue or
announce the proposed issuance of any of its Unsecured Notes,
including Notes, with terms substantially similar to the Notes
being purchased pursuant to such Terms Agreement, other than
borrowings under its revolving credit agreements and lines of
credit, issuances of its commercial paper, and other forms of
unsecured borrowings from banks or other financial institutions.
5. Conditions to the Obligations of the Agents. The
obligations of each Agent to use its reasonable best efforts to
solicit offers to purchase the Notes shall be subject to the accuracy
of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date,
when any supplement to the Prospectus is filed with the Commission
and as of each Closing Date, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof at
each such time or date, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus,
and any such supplement, shall have been filed in the manner and
within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) That, at the Execution Time, each Agent shall be
furnished with the following opinions, dated the date thereof,
with such changes therein as may be agreed upon by the Company
and the Agents with the approval of Dewey Ballantine LLP,
counsel to the Agents:
(1) Opinion of Simpson Thacher & Bartlett, of New
York, New York, counsel to the Company, substantially in
the form heretofore made available to the Agents;
(2) Opinion of Dewey Ballantine LLP, of New York, New
York, counsel to the Agents, substantially in the form
heretofore made available to the Agents;
(3) Opinion of an attorney employed by American
Electric Power Service Corporation, substantially in the
form heretofore made available to the Agents.
(c) The Company shall have furnished to each Agent a
certificate of the Company, signed by a Vice President,
Treasurer or Assistant Treasurer of the Company, dated the
Execution Time, to the effect that the signer of such
certificate has carefully examined the Registration Statement,
the Prospectus, any supplement to the Prospectus and this
Agreement and that:
(1) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the date hereof with the same effect
as if made on the date hereof and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied as a condition to the
obligation of the Agents to solicit offers to purchase the
Notes;
(2) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(3) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, there has been no material adverse change in
the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus.
(d) That the Agents shall have received a letter from
Deloitte & Touche LLP in form and substance satisfactory to
them, dated as of the Execution Time, (i) confirming that they
are independent public accountants within the meaning of the Act
and the applicable published rules and regulations of the
Commission thereunder; (ii) stating that in their opinion the
financial statements 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 applicable
published rules and regulations of the Commission and (iii)
covering as of a date not more than five business days prior to
the date of such letter such other matters as the Agents
reasonably request.
(e) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may
reasonably request.
If any of the conditions specified in this Section 5 shall
not have been fulfilled in all material respects when and as provided
in this Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to
such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the
Agents without any liability whatsoever. Notice of such cancellation
shall be given to the Company in writing or by telephone or telex or
facsimile transmission confirmed in writing.
The documents required to be delivered by this Section 5
shall be delivered at the offices of American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215 on the date
hereof.
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase any Notes will be subject to
the accuracy of the representations and warranties on the part of the
Company herein as of the date of any related Terms Agreement and as
of the Closing Date for such Notes, to the performance and observance
by the Company of all covenants and agreements herein contained on
its part to be performed and observed and to the following additional
conditions precedent:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus,
and any such supplement, shall have been filed in the manner and
within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) If specified by any related Terms Agreement and except
to the extent modified by such Terms Agreement, the Purchaser
shall have received, appropriately updated, (i) a certificate of
the Company, dated as of the Closing Date, to the effect set
forth in Section 5(c) (except that references to the Prospectus
shall be to the Prospectus as supplemented at the time of
execution of the Terms Agreement); (ii) the opinion of counsel
for the Company (which may be either Simpson Thacher & Bartlett
or an attorney employed by American Electric Power Service
Corporation, an affiliate of the Company), dated as of the
Closing Date, substantially in the form delivered pursuant to
Section 5(b)(1) hereof; (iii) the opinion of Dewey Ballantine
LLP, counsel for the Agents, dated as of the Closing Date,
substantially in the form delivered pursuant to Section 5(b)(2)
hereof; (iv) the opinion of an attorney employed by American
Electric Power Service Corporation, dated as of the Closing
Date, substantially in the form delivered pursuant to Section
5(b)(3) hereof; and (v) the letter of Deloitte & Touche LLP,
independent accountants for the Company, dated as of the Closing
Date, substantially in the form delivered pursuant to Section
5(d) hereof.
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided
in this Agreement and any Terms Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement or
such Terms Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its counsel,
such Terms Agreement and all obligations of the Purchaser thereunder
and with respect to the Notes subject thereto may be canceled at, or
at any time prior to, the respective Closing Date by the Purchaser
without any liability whatsoever. Notice of such cancellation shall
be given to the Company in writing or by telephone or telex or
facsimile transmission confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to
Purchase. The Company agrees that any person who has agreed to
purchase and pay for any Note, including a Purchaser and any person
who purchases pursuant to a solicitation by any of the Agents, shall
have the right to refuse to purchase such Note if (a) at the Closing
Date therefor, any condition set forth in Section 5 or 6, as
applicable, shall not be satisfied or (b) subsequent to the agreement
to purchase such Note, there shall have been any decrease in the
ratings of any of the Company's Unsecured Notes by Moody's Investors
Service, Inc. ("Moody's") or Standard & Poor's Ratings Group ("S&P")
or either Moody's or S&P shall publicly announce that it has any of
such Unsecured Notes under consideration for possible downgrade.
Notwithstanding the foregoing, no Agent shall have any obligation to
exercise its judgment on behalf of any purchaser.
8. Indemnification.
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold you harmless 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, or in the Prospectus,
or if the Company shall furnish or cause to be furnished to you
any amendments or any supplemental information, in the
Prospectus as so amended or supplemented other than amendments
or supplements relating 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 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 such Registration
Statement 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
you 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 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 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). 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 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 any
indemnified party. 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.
(b) Each of you agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs
the Registration Statement and each person who controls the
Company within the meaning of Section 15 of the Act, to the same
extent as the foregoing indemnity from the Company to you, but
only with reference to written information relating to such of
you furnished to the Company by such of you specifically for use
in the preparation of the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any
liability which you may otherwise have. 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).
9. Termination.
(a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be
terminated by either the Company as to any of you or by any of
you insofar as this Agreement relates to such of you, by giving
written notice of such termination to such of you or the
Company, as the case may be. This Agreement shall so terminate
at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is
given. In the event of such termination, no party shall have
any liability to the other party hereto, except as provided in
the fifth paragraph of Section 2(a), Section 4(h), Section 8 and
Section 10. The provisions of this Agreement (including without
limitation Section 7 hereof) applicable to any purchase of a
Note for which an agreement to purchase exists prior to the
termination hereof shall survive any termination of this
Agreement. If, at the time of any such termination, (i) any
Purchaser shall own any Notes purchased pursuant to a Terms
Agreement with the intention of reselling them or (ii) an offer
to purchase any of the Notes has been accepted by the Company
but the time of delivery to the purchaser or its agent of such
Notes has not occurred, the covenants set forth in Sections 4
and 6 hereof shall remain in effect for such period of time (not
exceeding nine months) until such Notes are so resold or
delivered, as the case may be.
(b) Each Terms Agreement shall be subject to termination
if, in the Purchaser's reasonable judgment, the Purchaser's
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; (ii) a general
banking moratorium shall have been declared by Federal or New
York state authorities; (iii) there shall have been a decrease
in the ratings of any of the Company's Unsecured Notes by
Moody's or S&P or either Moody's or S&P shall have publicly
announced that it has any of such Unsecured Notes under
consideration for possible downgrade; or (iv)(A) a war involving
the United States of America shall have been declared, (B) any
other national calamity shall have occurred, or (C) any conflict
involving the armed forces of the United States of America shall
have commenced or escalated.
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and
other statements of the Company or its officers and of you set forth
in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of you
or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of
and payment for the Notes. The provisions of the fifth paragraph of
Section 2(a) and Sections 4(h) and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to any of you,
will be delivered or sent by mail, telex or facsimile transmission to
such of you, at the address specified in Schedule I hereto; or, if
sent to the Company, will be delivered or sent by mail, telex or
facsimile transmission to it at 1 Riverside Plaza, Columbus, Ohio
43215, attention of A. A. Pena, Treasurer.
12. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons
referred to in Section 8 hereof, and no other person will have any
right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
14. 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.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement among the Company and you.
Very truly yours,
APPALACHIAN POWER COMPANY
By:___________________________
A. A. Pena
Treasurer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
______________________________
By:___________________________
Its:___________________________
______________________________
By:___________________________
Its:__________________________
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold on an
agency basis by such Agent:
Term Commission Rate
From 9 months to less than 1 year
From 1 year to less than 18 months
From 18 months to less than 2 years
From 2 years to less than 3 years
From 3 years to less than 4 years
From 4 years to less than 5 years
From 5 years to less than 6 years
From 6 years to less than 7 years
From 7 years to less than 10 years
From 10 years to less than 15 years
From 15 years to less than 20 years
From 20 years up to and including 42 years
Unless otherwise specified in the applicable Terms Agreement,
the discount or commission payable to a Purchaser shall be determined
on the basis of the commission schedule set forth above.
Address for Notice to you:
Notices to __________________________________ shall be directed
to it at ________________________________, Attention:
____________________, telephone: ___/___-____, telecopy: ___/___-____.
Notices to __________________________________ shall be directed
to it at ________________________________, Attention:
____________________, telephone: ___/___-____, telecopy: ___/___-____.