EXHIBIT 1 (a)
KENTUCKY POWER COMPANY
Selling Agency Agreement
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Dear Sirs:
Kentucky Power Company, a Kentucky 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
September 1, 1997, between the Company and Bankers Trust Company, 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 $150,000,000 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 has
included in Registration Statement 333-_____ a basic Prospectus which,
pursuant to Rule 429 under the Act, is a combined Prospectus also
relating to securities included in Registration Statement Nos.
333-35767 and 33-53007. 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-i)
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 Agree-ment,
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 Molding Company Act of 1935, as amended (the "1935 Act"); (C)
the qualification of the Indenture under the 1939 Act; (D) the approval
of the Kentucky Public Service Commission; 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 es 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) 0above, 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 state- ments 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).
(1) 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 Xxxxx Xxxxxxxxxx LLP, counsel to the Agents:
(1) Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, of New
York, New York, counsel to the Company, substantially in the
form heretofore made available to the Agents;
(2) Opinion of Xxxxx Xxxxxxxxxx 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, 0
Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000 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 Xxxxxxx Xxxxxxx
& Xxxxxxxx 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 Xxxxx Xxxxxxxxxx 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 Xxxxx'x 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 0 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000,
attention of X. X. Xxxx, 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 NewYork.
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,
KENTUCKY POWER COMPANY
By:_______________________________
X. X. Xxxx
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:___/___-____.
