Exhibit 1(a)
APPALACHIAN POWER COMPANY
$150,000,000 Unsecured Medium Term Notes, Series A
Due From Nine Months to Forty-Two Years From Date of Issue
Selling Agency Agreement
________ __, ____
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Dear Sirs:
Appalachian Power Company, a Virginia corporation (the
"Company"), confirms its agreement with each of you with respect to
the issue and sale by the Company of up to $150,000,000 aggregate
principal amount of its Unsecured Medium Term Notes (the "Notes").
The Notes will be issued under the Indenture dated as of ________
__, 19__, between the Company and The Bank of New York, as trustee
(the "Trustee"), as it may be from time to time supplemented by one
or more supplemental indentures (said Indenture, as it may be so
supplemented, being hereafter referred to as the "Indenture"). The
Notes will be issued in minimum denominations of $1,000 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 Medium
Term 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 debt securities
(the "Securities"), including 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 require-
ments 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 state-
ments 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.
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 discre-
tion, 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 ("Addi-
tional 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 pay-
ment 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 the 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 informa-
tion; (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 debt
securities of the Company, or any proposal to downgrade the
rating of the Notes or any other debt securities 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 downgrad-
ing 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 infor-
mation, 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 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 accep-
tance 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 amend-
ment 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 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 amend-
ment 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 State-
ment 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 debt
securities, 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Agents:
(1) Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, of New
York, New York, counsel to the Company, substantially in
the form heretofore made available to the Agents;
(2) Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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 certifi-
cate 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, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ 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
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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, certifi-
▇▇▇▇▇ 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 debt securities by ▇▇▇▇▇'▇
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 debt securities 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 supple-
mented, 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. 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 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). The
Company shall not be liable in the event of any settlement of
any such action effected without its 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.
9. Termination.
(a) This Agreement will continue in effect until termi-
nated 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 debt
securities by ▇▇▇▇▇'▇ or S&P or either ▇▇▇▇▇'▇ or S&P shall
have publicly announced that it has any of such debt
securities 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 re-
spective 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 sur-
vive 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 ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, attention of ▇. ▇. ▇▇▇▇, Treasurer.
12. Successors. This Agreement will inure to the bene-
fit 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:___________________________
▇. ▇. ▇▇▇▇
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: ___/___-
____.
