APPALACHIAN POWER COMPANY Underwriting Agreement Dated August 14, 2007
EXHIBIT
1(a)
APPALACHIAN
POWER COMPANY
Dated
August 14, 2007
AGREEMENT
made between APPALACHIAN
POWER COMPANY, a corporation organized and existing under the laws of the
Commonwealth of Virginia (the Company), and the several persons, firms and
corporations (the Underwriters) named in Exhibit 1 hereto.
WITNESSETH:
WHEREAS,
the Company proposes to issue
and sell $250,000,000 aggregate principal amount of its 5.65% Senior Notes,
Series O, due 2012 (the Series O Notes) and $250,000,000 aggregate principal
amount of its 6.70% Senior Notes, Series P, due 2037 (the Series P Notes and
collectively with the Series O Notes, the Notes) to be issued pursuant to the
Indenture dated as of January 1, 1998, between the Company and The Bank of
New
York, as trustee (the Trustee), as heretofore supplemented and amended and
as to
be further supplemented and amended (said Indenture as so supplemented being
hereafter referred to as the Indenture); and
WHEREAS,
the Underwriters have
designated the persons signing this Agreement (collectively, the Representative)
to execute this Agreement on behalf of the respective Underwriters and to act
for the respective Underwriters in the manner provided in this Agreement;
and
WHEREAS,
the Company has prepared and
filed, in accordance with the provisions of the Securities Act of 1933, as
amended (the Act), with the Securities and Exchange Commission (the Commission),
a registration statement on Form S-3 (File No. 333-136432), which was effective
upon filing with the Commission, and a prospectus relating to, among other
securities, its Senior Notes; and
WHEREAS,
such registration statement,
including the financial statements, the documents incorporated or deemed
incorporated therein by reference, and the exhibits thereto, being herein
called, the Registration Statement, and the prospectus, including the documents
incorporated or deemed incorporated therein by reference, constituting a part
of
such Registration Statement, as it may be last amended or supplemented prior
to
the effectiveness of this Agreement, but excluding any amendment or supplement
relating solely to securities other than the Notes, being herein called the
Basic Prospectus, and the Basic Prospectus, as amended and supplemented,
including documents incorporated by reference therein, together with and the
Preliminary Prospectus Supplement dated August 14, 2007, immediately prior
to
the Applicable Time (as defined below), being herein called the Pricing
Prospectus, and the Basic Prospectus included in the Registration Statement,
as
it is to be supplemented by a final prospectus supplement (the Prospectus
Supplement) to include information relating to the Notes, including the names
of
the Underwriters, the price and terms of the offering, the interest rate,
maturity date and certain other information relating to the Notes, which will
be
filed with the Commission pursuant to Rule 424(b) of the Commission's General
Rules and Regulations under the Act (the Rules), including all documents then
incorporated or deemed to have been incorporated therein by reference, being
herein called the Prospectus.
For
purposes of this Agreement, the
Applicable Time is 3:30 p.m. (NY Time) on the date of this Agreement and the
documents listed in Exhibit 3, taken together, collectively being herein called
the Pricing Disclosure Package.
NOW,
THEREFORE, in consideration of the
premises and the mutual covenants herein contained, it is agreed between the
parties as follows:
1. Purchase
and Sale: Upon the basis of the warranties and representations
and on the terms and subject to the conditions herein set forth, the Company
agrees to sell to the respective Underwriters named in Exhibit 1 hereto,
severally and not jointly, and the respective Underwriters, severally and not
jointly, agree to purchase from the Company, the respective principal amounts
of
the Notes set opposite their names in Exhibit 1 hereto, together aggregating
all
of the Notes, at a price for the Series O Notes equal to 99.22% of the principal
amount thereof and at a price for the Series P Notes equal to 99.10% of the
principal amount thereof.
2. Payment
and Delivery: Payment for the Notes shall be made to the Company
in immediately available funds or in such other manner as the Company and the
Representative shall mutually agree upon in writing, upon the delivery of the
Notes to the Representative for the respective accounts of the Underwriters
against receipt therefor signed by the Representative on behalf of itself and
for the other Underwriters. Such delivery shall be made at 10:00
A.M., New York Time, on June 29, 2007 (or on such later business day, not more
than five business days subsequent to such day, as may be mutually agreed upon
by the Company and the Underwriters), unless postponed in accordance with the
provisions of Section 9 hereof, at the office of Xxxxx Xxxxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
the
Company and the Representative shall mutually agree in writing. The
time at which payment and delivery are to be made is herein called the Time
of
Purchase.
The
delivery of the Notes shall be made
in fully registered form, registered in the name of CEDE & CO., to the
offices of The Depository Trust Company in New York, New York and the
Underwriters shall accept such delivery.
3. Conditions
of Underwriters' Obligations: The several obligations of the
Underwriters hereunder are subject to the accuracy of the warranties and
representations on the part of the Company on the date hereof and at the Time
of
Purchase and to the following other conditions:
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(a)
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That
all legal proceedings to be taken and all legal opinions to be rendered
in
connection with the issue and sale of the Notes shall be satisfactory
in form and substance to Xxxxx Xxxxxxxxxx LLP, counsel to the
Underwriters.
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(b)
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That,
at the Time of Purchase, the Representative shall be furnished with
the
following opinions, dated the day of the Time of Purchase, with conformed
copies or signed counterparts thereof for the other Underwriters,
with
such changes therein as may be agreed upon by the Company and the
Representative with the approval of Xxxxx Xxxxxxxxxx LLP, counsel
to the
Underwriters
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(1)
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Opinion
of Xxxxxxx X. Xxxxx, Esq., Xxxxxx X. Xxxxxxxxxx, Esq., Xxxxxxx X.
Xxxxxxx,
Esq., or Xxx X. Xxxx, Esq., counsel to the Company, substantially
in the
form heretofore previously provided to the Underwriters;
and
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(2)
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Opinion
of Xxxxx Xxxxxxxxxx LLP, counsel to the Underwriters, substantially
in the
form heretofore previously provided to the
Underwriters.
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(c)
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That
the Representative shall have received on the date hereof and shall
receive at the Time of Purchase letters from Deloitte & Touche LLP
dated the date hereof and the day of the Time of Purchase, respectively,
in form and substance satisfactory to the Representative (which may
refer
to the letters previously delivered to the Representative, as applicable)
(i) confirming that with respect to the Company they are an independent
registered public accounting firm within the meaning of the Act and
the
applicable published rules and regulations of the Commission thereunder,
(ii) stating that in their opinion the consolidated financial statements
audited by them and included or incorporated by reference in the
Registration Statement, Pricing Prospectus and Prospectus, respectively,
complied as to form in all material respects with the then applicable
accounting requirements of the Commission, including the applicable
published rules and regulations of the Commission and (iii) covering
as of
a date not more than three business days prior to the date of each
such
letter, as applicable, such other matters as the Representative reasonably
requests.
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(d)
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The
pricing term sheet contemplated by Section 6(b) hereof, and any other
material required pursuant to Section 433(d), shall have been filed
by the
Company with the Commission within the applicable time periods prescribed
by Rule 433.
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(e)
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That
no amendment to the Registration Statement and that no supplement
to the
Pricing Prospectus or the Prospectus of the Company (other than the
Pricing Prospectus or amendments, prospectuses or prospectus supplements
relating solely to securities other than the Notes) relating to the
Notes
and no document which would be deemed incorporated in the Pricing
Prospectus or Prospectus by reference filed subsequent to the date
hereof
and prior to the Time of Purchase shall contain material information
substantially different from that contained in the Pricing Prospectus
which is unsatisfactory in substance to the Representative or
unsatisfactory in form to Xxxxx Xxxxxxxxxx LLP, counsel to the
Underwriters.
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(f)
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That,
at the Time of Purchase, appropriate orders of the Virginia State
Corporation Commission and the Tennessee Regulatory Authority, necessary
to permit the sale of the Notes to the Underwriters, shall be in
effect;
and that, prior to the Time of Purchase, no stop order with respect
to the
effectiveness of the Registration Statement shall have been issued
under
the Act by the Commission or proceedings therefor
initiated.
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(g)
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That,
from the date hereof to the Time of Purchase, there shall not have
been
any material adverse change in the business, properties or financial
condition of the Company from that set forth in the Pricing Prospectus
(other than changes referred to in or contemplated by the Pricing
Prospectus), and that the Company shall, at the Time of Purchase,
have
delivered to the Representative a certificate of an executive officer
of
the Company to the effect that, to the best of his knowledge, information
and belief, there has been no such change.
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(h)
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That
the Company shall have performed such of its obligations under this
Agreement as are to be performed at or before the Time of Purchase
by the
terms hereof.
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4. Certain
Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
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(a)
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As
soon as practicable, and in any event within the time prescribed
by Rule
424 under the Act, to file the Prospectus with the Commission and
make any
other required filings pursuant to Rule 433; as soon as the Company
is
advised thereof, to advise the Representative and confirm the advice
in
writing of any request made by the Commission for amendments to the
Registration Statement, Pricing Prospectus or Prospectus or for additional
information with respect thereto or of the entry of an order suspending
the effectiveness of the Registration Statement or preventing or
suspending the use of the Pricing Prospectus or the Prospectus or
of the
initiation or threat of any proceedings for that purpose and, if
such an
order should be entered by the Commission, to make every reasonable
effort
to obtain the prompt lifting or removal thereof.
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(b)
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To
deliver to the Underwriters, without charge, as soon as practicable
(and
in any event within 24 hours after the date hereof), and from time
to time
thereafter during such period of time (not exceeding nine months)
after
the date hereof as they are required by law to deliver a prospectus
(or
required to deliver but for Rule 172 under the Act), as many copies
of the
Prospectus (as supplemented or amended if the Company shall have
made any
supplements or amendments thereto, other than supplements or amendments
relating solely to securities other than the Notes) as the Representative
may reasonably request; and in case any Underwriter is required to
deliver
a prospectus after the expiration of nine months after the date hereof,
to
furnish to any Underwriter, upon request, at the expense of such
Underwriter, a reasonable quantity of a supplemental prospectus or
of
supplements to the Prospectus complying with Section 10(a)(3) of
the
Act.
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(c)
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To
furnish to the Representative a copy, certified by the Secretary
or an
Assistant Secretary of the Company, of the Registration Statement
as
initially filed with the Commission and of all amendments thereto
(exclusive of exhibits), other than amendments relating solely to
securities other than the Notes and, upon request, to furnish to
the
Representative sufficient plain copies thereof (exclusive of exhibits)
for
distribution to the other Underwriters.
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(d)
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For
such period of time (not exceeding nine months) after the date hereof
as
they are required by law to deliver a prospectus (or required to
deliver
but for Rule 172 under the Act), if any event shall have occurred
as a
result of which it is necessary to amend or supplement the Pricing
Prospectus or the Prospectus in order to make the statements therein,
in
the light of the circumstances when the Pricing Prospectus or the
Prospectus is delivered to a purchaser, not contain any untrue statement
of a material fact or not omit to state any material fact required
to be
stated therein or necessary in order to make the statements therein
not
misleading, forthwith to prepare and furnish, at its own expense,
to the
Underwriters and to dealers (whose names and addresses will be furnished
to the Company by the Representative) to whom principal amounts of
the
Notes may have been sold by the Representative for the accounts of
the
Underwriters and, upon request, to any other dealers making such
request,
copies of such amendments to the Pricing Prospectus or the Prospectus
or
supplements to the Pricing Prospectus or the
Prospectus.
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(e)
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As
soon as practicable, the Company will make generally available to
its
security holders and to the Underwriters an earnings statement or
statement of the Company and its subsidiaries which will satisfy
the
provisions of Section 11(a) of the Act and Rule 158 under the
Act.
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(f)
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To
use its best efforts to qualify the Notes for offer and sale under
the
securities or "blue sky" laws of such jurisdictions as the Representative
may designate within six months after the date hereof and itself
to pay,
or to reimburse the Underwriters and their counsel for, reasonable
filing
fees and expenses in connection therewith in an amount not exceeding
$3,500 in the aggregate (including filing fees and expenses paid
and
incurred prior to the effective date hereof), provided, however,
that the
Company shall not be required to qualify as a foreign corporation
or to
file a consent to service of process or to file annual reports or
to
comply with any other requirements deemed by the Company to be unduly
burdensome.
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(g)
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To
pay all expenses, fees and taxes (other than transfer taxes on resales
of
the Notes by the respective Underwriters) in connection with the
issuance
and delivery of the Notes, except that the Company shall be required
to
pay the fees and disbursements (other than disbursements referred
to in
paragraph (f) of this Section 4) of counsel to the Underwriters,
only in
the events provided in paragraph (h) of this Section 4 and paragraph
(a)
of Section 8, the Underwriters hereby agreeing to pay such fees and
disbursements in any other event.
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(h)
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If
the Underwriters shall not take up and pay for the Notes due to the
failure of the Company to comply with any of the conditions specified
in
Section 3 hereof, or, if this Agreement shall be terminated in accordance
with the provisions of Section 9 or 10 hereof, to pay the fees and
disbursements of counsel to the Underwriters, and, if the Underwriters
shall not take up and pay for the Notes due to the failure of the
Company
to comply with any of the conditions specified in Section 3 hereof,
to
reimburse the Underwriters for their reasonable out-of-pocket expenses,
in
an aggregate amount not exceeding a total of $10,000, incurred in
connection with the financing contemplated by this
Agreement.
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(i)
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During
the period from the date hereof and continuing to and including the
earlier of (i) the date which is after the Time of Purchase on which
the
distribution of the Notes ceases, as determined by the Representative
in
its sole discretion, and (ii) the date which is 30 days after the
Time of
Purchase, the Company agrees not to offer, sell, contract to sell
or
otherwise dispose of any Notes of the Company or any substantially
similar
securities of the Company without the consent of the
Representative.
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(j)
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If
at any time when the Notes remain unsold by the Underwriters, the
Company
receives from the Commission a notice pursuant to Rule 401(g)(2)
of the
Act or otherwise ceases to be eligible to use the automatic shelf
registration statement form, the Company will (i) promptly notify
the
Representative, (ii) promptly file a new registration statement or
post-effective amendment on the proper form relating to the Notes,
in a
form satisfactory to the Representative, (iii) use its reasonable
best
efforts to cause such registration statement or post-effective amendment
to be declared effective and (iv) promptly notify the Representative
of
such effectiveness. The Company will take all other reasonable action
necessary or appropriate to permit the public offering and sale of
the
Notes to continue as contemplated in the registration statement that
was
the subject of the Rule 401(g)(2) notice or for which the Company
has
otherwise become ineligible. References herein to the Registration
Statement shall include such new registration statement or post-effective
amendment, as the case may be.
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5. Warranties
of the Company: The Company represents and warrants to, and
agrees with you, as set forth below:
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(a)
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the
Registration Statement on its effective date complied with the applicable
provisions of the Act and the rules and regulations of the Commission
thereunder and the Registration Statement at its effective date and
as of
the Applicable Time did not, and at the Time of Purchase will not,
contain
any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements
therein
not misleading, the Pricing Disclosure Package as of the Applicable
Time
did not contain an untrue statement of a material fact necessary
or omit
to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not
misleading, and the Basic Prospectus on the date of this Agreement
and the
Prospectus as of its date complies, and at the Time of Purchase the
Prospectus will comply, with the applicable provisions of the Act
and the
Trust Indenture Act of 1939, as amended (Trust Indenture Act), and
the
rules and regulations of the Commission, the Basic Prospectus on
the date
of this Agreement and the Prospectus when first filed in accordance
with
Rule 424(b) under the Act do not, and the Prospectus at the Time
of
Purchase will not, contain any untrue statement of a material fact
or omit
to state a material fact required to be stated therein or necessary
to
make the statements therein, in the light of the circumstances under
which
they were made, not misleading, except that the Company makes no
warranty
or representation to the Underwriters with respect to any statements
or
omissions made in the Registration Statement, the Basic Prospectus,
the
Pricing Prospectus, any Permitted Free Writing Prospectus or the
Prospectus in reliance upon and in conformity with information furnished
in writing to the Company by, or through the Representative on behalf
of,
any Underwriter expressly for use in the Registration Statement,
the Basic
Prospectus, the Pricing Prospectus, any Permitted Free Writing Prospectus
or Prospectus, or to any statements in or omissions from that part
of the
Registration Statement that shall constitute the Statement of Eligibility
under the Trust Indenture Act of any indenture trustee under an indenture
of the Company.
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(b)
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As
of the Time of Purchase, the Indenture will have been duly authorized
by
the Company and duly qualified under the Trust Indenture Act and,
when
executed and delivered by the Trustee and the Company, will constitute
a
legal, valid and binding instrument enforceable against the Company
in
accordance with its terms and 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, or other similar laws affecting
the
enforcement of creditors' rights in general, and except as the
availability of the remedy of specific performance is subject to
general
principles of equity (regardless of whether such remedy is sought
in a
proceeding in equity or at law), and by an implied covenant of good
faith
and fair dealing.
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(c)
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The
documents incorporated by reference in the Registration Statement
or
Pricing Prospectus, when they were filed with the Commission, complied
in
all material respects with the applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of
the
Commission thereunder, and as of such time of filing, when read together
with the Pricing Prospectus, the Permitted Free Writing Prospectuses
and
the Prospectus, none of such documents contained an untrue statement
of a
material fact or omitted to state a material fact required to be
stated
therein or necessary to make the statements therein, in the light
of the
circumstances under which they were made, not misleading. The
information contained in a Permitted Free Writing Prospectus listed
in
Exhibit 3 does not conflict with the information contained in the
Registration Statement, the Pricing Prospectus or the Prospectus
and no
such Permitted Free Writing Prospectus, taken together with the remainder
of the Pricing Disclosure Package as of the Applicable Time, did
contain
an untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not
misleading.
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(d)
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With
respect to the Registration Statement, (i) the Registration Statement
is
an “automatic shelf registration statement” (as defined in Rule 405 under
the Act), (ii) the Company has not received from the Commission any
notice
pursuant to Rule 401(g)(2) of the Act objecting to the use of the
automatic shelf registration statement and (iii) the conditions for
use of
Form S-3, as set forth in the General Instructions thereof, have
been
satisfied.
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(e)
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(A)
At the time of filing of the Registration Statement, (B) at the time
of
the most recent amendment to the Registration Statement for the purposes
of complying with Section 10(a)(3) of the Act (whether such amendment
was
by post-effective amendment, incorporated report filed pursuant to
Section
13 or 15(d) of the 1934 Act or form of prospectus) and (C) at the
time the
Company or any person acting on its behalf (within the meaning for
this
clause only, of Rule 163(c) under the Act) made any offer relating
to the
Notes in reliance on the exemption of Rule 163 under the Act, the
Company
was a “well-known seasoned issuer” (as defined in Rule 405 under the
Act).
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(f)
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Since
the respective dates as of which information is given in the Registration
Statement and the Pricing Prospectus, except as otherwise referred
to or
contemplated therein, there has been no material adverse change in
the
business, properties or financial condition of the
Company.
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(g)
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This
Agreement has been duly authorized, executed and delivered by the
Company.
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(h)
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The
consummation by the Company of the transactions contemplated herein
is not
in violation of its charter or bylaws, will not result in the violation
of
any applicable law, statute, rule, regulation, judgment, order, writ
or
decree of any government, government instrumentality or court having
jurisdiction over the Company or its properties, and will not conflict
with, or result in a breach of any of the terms or provisions of,
or
constitute a default under, or result in the creation or imposition
of any
lien, charge or encumbrance upon any property or assets of the Company
under any contract, indenture, mortgage, loan agreement, note, lease
or
other agreement or instrument to which the Company is a party or
by which
it may be bound or to which any of its properties may be subject
(except
for conflicts, breaches or defaults which would not, individually
or in
the aggregate, be materially adverse to the Company or materially
adverse
to the transactions contemplated by this Agreement).
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(i)
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No
authorization, approval, consent or order of any court or governmental
authority or agency is necessary in connection with the issuance
and sale
by the Company of the Notes or the 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) the
qualification of the Indenture under the Trust Indenture Act; (C)
the
approval of the Virginia State Corporation Commission and the Tennessee
Regulatory Authority; and (D) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or “Blue Sky” laws.
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(j)
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The
consolidated financial statements of the Company and its consolidated
subsidiaries together with the notes thereto, included or incorporated
by
reference in the Pricing Prospectus and the Prospectus present fairly
the
financial position of the Company at the dates or for the periods
indicated; said consolidated financial statements have been prepared
in
accordance with United States generally accepted accounting principles
applied, apart from reclassifications disclosed therein, on a consistent
basis throughout the periods involved; and the selected consolidated
financial information of the Company included in the Pricing Prospectus
and the Prospectus presents fairly the information shown therein
and has
been compiled, apart from reclassifications disclosed therein, on
a basis
consistent with that of the audited financial statements of the Company
included or incorporated by reference in the Pricing Prospectus and
the
Prospectus.
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(k)
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There
is no pending action, suit, investigation, litigation or proceeding,
including, without limitation, any environmental action, affecting
the
Company before any court, governmental agency or arbitration that
is
reasonably likely to have a material adverse effect on the business,
properties, financial condition or results of operations of the Company,
except as disclosed in the Pricing Prospectus
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(l)
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At
the determination date for purposes of the Notes within the meaning
of
Rule 164(h) under the Act, the Company was not an “ineligible issuer” as
defined in Rule 405 under the Act.
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(m)
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The
Company has not made any filings pursuant to the Securities Exchange
Act
of 1934, as amended, or the rules and regulations thereunder, within
24
hours preceding the Applicable
Time.
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The
Company's covenants, warranties and
representations contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any person,
and
shall survive the delivery of and payment for the Notes hereunder.
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6.
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Free
Writing Prospectuses:
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(a)
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The
Company represents and agrees that, without the prior consent of
the
Representative, it has not made and will not make any offer relating
to
the Notes that would constitute a “free writing prospectus” as defined in
Rule 405 under the Act, other than a Permitted Free Writing Prospectus;
each Underwriter, severally and not jointly, represents and agrees
that,
without the prior consent of the Company and the Representative,
it has
not made and will not make any offer relating to the Notes that would
constitute a “free writing prospectus,” as defined in Rule 405 under the
Act, other than a Permitted Free Writing Prospectus or one or more
free
writing prospectuses that contains only preliminary or final terms
of the
Notes (which may include prices of bonds from comparable issuers)
and is
not required to be filed by the Company pursuant to Rule 433 or
one or more free writing prospectuses that contains information
substantially the same as the information contained in Exhibit 2
hereto
(an “Underwriter Free Writing Prospectus”); any such free writing
prospectus the use of which has been consented to by the Company
and the
Representative (which shall include the pricing term sheet discussed
in
Section 6(b)) is listed in Exhibit 3 and herein called a “Permitted Free
Writing Prospectus.”
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(b)
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The
Company agrees to prepare a pricing term sheet, substantially in
the form
of Exhibit 2 hereto and approved by the Representative, and to file
such
pricing term sheet pursuant to Rule 433(d) under the Securities Act
within
the time period prescribed by such Rule.
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(c)
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The
Company and each Underwriter has complied and will comply with the
requirements of Rule 433 applicable to any other Permitted Free Writing
Prospectus, including timely Commission filing where required and
legending.
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(d)
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The
Company and each Underwriter agrees that if at any time following
issuance
of a Permitted Free Writing Prospectus any event occurred or occurs
as a
result of which such Permitted Free Writing Prospectus would conflict
in
any material respect with the information in the Registration Statement,
the Pricing Prospectus or the Prospectus or include an untrue statement
of
a material fact or omit to state any material fact necessary in order
to
make the statements therein, in light of the circumstances then
prevailing, not misleading, then (i) the party that first becomes
aware of
the foregoing will give prompt notice thereof to the Representative
and/
or the Company, as applicable, and, (ii) if requested by the
Representative or the Company, as applicable, the Company will prepare
and
furnish without charge a Permitted Free Writing Prospectus or other
document which will correct such conflict, statement or
omission.
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(e)
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Each
Underwriter agrees that (i) no information that is conveyed to investors
by such Underwriter has been or will be inconsistent with the information
contained in the Pricing Disclosure Package, and (ii) if an Underwriter
shall use an Underwriter Free Writing Prospectus that contains information
in addition to, or in conflict with, the Pricing Disclosure Package,
the
liability arising from the use of such additional or conflicting
information shall be the sole responsibility of the Underwriter using
such
Underwriter Free Writing Prospectus; provided, however, that, for
the
avoidance of doubt, this clause 6(e)(ii) shall not be interpreted
as
tantamount to the indemnification obligations contained in Section
8(b)
hereof.
|
7. Warranties
of Underwriters: Each Underwriter warrants and represents that the
information furnished in writing to the Company through the Representative
for
use in the Registration Statement, in the Basic Prospectus, in any Permitted
Free Writing Prospectus, in the Pricing Prospectus, in the
Prospectus, or in the Prospectus as amended or supplemented is correct as to
such Underwriter. The warranties and representations of such
Underwriter contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or other
person, and shall survive the delivery of and payment for the Notes
hereunder.
8. Indemnification
and Contribution:
|
(a)
|
To
the extent permitted by law, the Company agrees to indemnify and
hold you
harmless, your officers and directors and each person, if any, who
controls you within the meaning of Section 15 of the Act, against
any and
all losses, claims, damages or liabilities, joint or several, to
which
you, they or any of you or them may become subject under the Act
or
otherwise, and to reimburse you and such controlling person or persons,
if
any, for any legal or other expenses incurred by you or them in connection
with defending any action, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any alleged
untrue
statement or untrue statement of a material fact contained in the
Registration Statement, in the Basic Prospectus (if used prior to
the
effective date of this Agreement), in the Pricing Prospectus, in
any
Permitted Free Writing Prospectus, in any “issuer free writing prospectus”
(as defined in Rule 433 under the Act) or in the Prospectus, or if
the
Company shall furnish or cause to be furnished to you any amendments
or
any supplements to the Pricing Prospectus or the Prospectus, in the
Pricing Prospectus or the Prospectus as so amended or supplemented
except
to the extent that such amendments or supplements relate solely to
securities other than the Notes (provided that if such Prospectus
or such
Prospectus, as amended or supplemented, is used after the period
of time
referred to in Section 4(b) hereof, it shall contain such amendments
or
supplements as the Company deems necessary to comply with Section
10(a) of
the Act), or arise out of or are based upon any alleged omission
or
omission to state therein a material fact required to be stated therein
or
necessary to make the statements therein not misleading, except insofar
as
such losses, claims, damages, liabilities or actions arise out of
or are
based upon any such alleged untrue statement or omission, or untrue
statement or omission which was made in the Registration Statement,
in the
Basic Prospectus, in the Pricing Prospectus, in any Permitted Free
Writing
Prospectus, in any “issuer free writing prospectus” (as defined in Rule
433 under the Act) or in the Prospectus, or in the Prospectus as
so
amended or supplemented, in reliance upon and in conformity with
information furnished in writing to the Company by or through the
Representative expressly for use therein or with any statements in
or
omissions from that part of the Registration Statement that shall
constitute the Statement of Eligibility under the Trust Indenture
Act of
any indenture trustee under an indenture of 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).
|
|
|
(b)
|
Each
Underwriter agrees, to the extent permitted by law, severally and
not
jointly, to indemnify, hold harmless and reimburse the Company, its
directors and such of its officers as shall have signed the Registration
Statement, and each person, if any, who controls the Company within
the
meaning of Section 15 of the Act, to the same extent and upon the
same
terms as the indemnity agreement of the Company set forth in Section
8(a)
hereof, but only with respect to untrue statements or alleged untrue
statements or omissions or alleged omissions made in the Registration
Statement, or in the Basic Prospectus, or in the Pricing Prospectus,
or in
any Permitted Free Writing Prospectus, or in the Prospectus, or in
the
Prospectus as so amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company by
the
Representative on behalf of such Underwriter expressly for use
therein. The Company agrees promptly after the receipt by it of
written notice of the commencement of any action in respect to which
indemnity from you on account of your agreement contained in this
Section
8(b) may be sought by the Company, or by any person controlling the
Company, to notify you in writing of the commencement thereof, but
the
Company's omission so to notify you of any such action shall not
release
you from any liability which you may have to the Company or to such
controlling person otherwise than on account of the indemnity agreement
contained in this Section 8(b).
|
|
|
(c)
|
If
recovery is not available or insufficient under Section 8(a) or 8(b)
hereof for any reason other than as specified therein, the indemnified
party shall be entitled to contribution for any and all losses, claims,
damages, liabilities and expenses for which such indemnification
is so
unavailable or insufficient under this Section 8(c). In
determining the amount of contribution to which such indemnified
party is
entitled, there shall be considered the portion of the proceeds of
the
offering of the Notes realized by the Company on the one hand and
the
Underwriters on the other hand, the relative knowledge and access
to
information concerning the matter with respect to which the claim
was
asserted, the opportunity to correct and prevent any statement or
omission, and any equitable considerations appropriate under the
circumstances. The Company and the Underwriters agree that it
would not be equitable if the amount of such contribution were determined
by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) without reference to the
considerations called for in the previous sentence. No
Underwriter or any person controlling such Underwriter shall be obligated
to contribute any amount or amounts hereunder which in the aggregate
exceeds the total price of the Notes purchased by such Underwriter
under
this Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required
to
pay in respect of the same claim or any substantially similar
claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. An Underwriter’s obligation to contribute
under this Section 8 is in proportion to its purchase obligation
and not
joint with any other Underwriter.
|
|
|
(d)
|
No
indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification
or contribution could be sought under this Section 8 (whether or
not the
indemnified parties are actual or potential parties thereto), unless
such
settlement, compromise or consent (i) includes an unconditional release
of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act by
or on
behalf of such indemnified party.
|
|
|
(e)
|
In
no event shall any indemnifying party have any liability or responsibility
in respect of the settlement or compromise of, or consent to the
entry of
any judgment with respect to, any pending or threatened action or
claim
effected without its prior written
consent.
|
The
agreements contained in this
Section 8 hereof shall remain in full force and effect regardless of any
investigation made by or on behalf of any person, and shall survive the delivery
of and payment for the Notes hereunder.
9. Default
of Underwriters: If any Underwriter under this Agreement shall
fail or refuse (otherwise than for some reason sufficient to justify, in
accordance with the terms hereof, the cancellation or termination of its
obligations hereunder) to purchase and pay for the principal amount of Notes
which it has agreed to purchase and pay for hereunder, and the aggregate
principal amount of Notes which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Notes, the other Underwriters shall be
obligated severally in the proportions which the amounts of Notes set forth
opposite their names in Exhibit 1 hereto bear to the aggregate principal amount
of Notes set forth opposite the names of all such non-defaulting Underwriters,
to purchase the Notes which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on the terms set forth herein; provided that
in no event shall the principal amount of Notes which any Underwriter has agreed
to purchase pursuant to Section 1 hereof be increased pursuant to this Section
9
by an amount in excess of one-ninth of such principal amount of Notes without
the written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase Notes and the aggregate principal
amount of Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Notes then this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter;
provided, however, that the non-defaulting Underwriters may agree, in their
sole
discretion, to purchase the Notes which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on the terms set forth
herein. In the event of any such termination, the Company shall not
be under any liability to any Underwriter (except to the extent, if any,
provided in Section 4(h) hereof), nor shall any Underwriter (other than an
Underwriter who shall have failed or refused to purchase the Notes without
some
reason sufficient to justify, in accordance with the terms hereof, its
termination of its obligations hereunder) be under any liability to the Company
or any other Underwriter.
Nothing
herein contained shall release
any defaulting Underwriter from its liability to the Company or any
non-defaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination
of Agreement by the Underwriters: This Agreement may be
terminated at any time prior to the Time of Purchase by the Representative
if,
after the execution and delivery of this Agreement and prior to the Time of
Purchase, in the Representative's reasonable judgment, the Underwriters' ability
to market the Notes shall have been materially adversely affected
because:
|
(i)
|
|||
|
(ii)
|
there
shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other national
or
international calamity or crisis, or
|
||
|
(iii)
|
a
general banking moratorium shall have been declared by Federal or
New York
State authorities, or
|
||
|
(iv)
|
there
shall have been any decrease in the ratings of the Company's debt
securities by Xxxxx'x Investors Services, Inc. (Moody's) or Standard
&
Poor's Ratings Group (S&P) or either Moody's or S&P shall publicly
announce that it has such debt securities under consideration for
possible
further downgrade.
|
If
the Representative elects to
terminate this Agreement, as provided in this Section 10, the Representative
will promptly notify the Company by telephone or by telex or facsimile
transmission, confirmed in writing. If this Agreement shall not be
carried out by any Underwriter for any reason permitted hereunder, or if the
sale of the Notes to the Underwriters as herein contemplated shall not be
carried out because the Company is not able to comply with the terms hereof,
the
Company shall not be under any obligation under this Agreement and shall not
be
liable to any Underwriter or to any member of any selling group for the loss
of
anticipated profits from the transactions contemplated by this Agreement (except
that the Company shall remain liable to the extent provided in Section 4(h)
hereof) and the Underwriters shall be under no liability to the Company nor
be
under any liability under this Agreement to one another.
11. Notices: All
notices hereunder shall, unless otherwise expressly provided, be in writing
and
be delivered at or mailed to the following addresses or by telex or facsimile
transmission confirmed in writing to the following addresses: if to
the Underwriters, to the Representatives at AMB AMRO Incorporated, 00 Xxxx
00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000; Barclays Capital Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx
Xxxx, 00000, Attention: Fixed Income Syndicate; Calyon Securities (USA) Inc.,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Kvolick
and, if to the Company, to Appalachian Power Company, c/o American Electric
Power Service Corporation, 0 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000, Attention:
General Counsel (fax 614/000-0000).
12. Parties
in Interest: The agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Company (including the directors
thereof and such of the officers thereof as shall have signed the Registration
Statement), the controlling persons, if any, referred to in Section 8 hereof,
and their respective successors, assigns, executors and administrators, and,
except as expressly otherwise provided in Section 9 hereof, no other person
shall acquire or have any right under or by the virtue of this
Agreement. The Company acknowledges and agrees that in connection
with all aspects of each transaction contemplated by this Underwriting
Agreement, the Company and the Underwriters have an arms length business
relationship that creates no fiduciary duty on the part of any party and each
expressly disclaims any fiduciary relationship.
13. Definition
of Certain Terms: If there be two or more persons, firms or
corporations named in Exhibit 1 hereto, the term "Underwriters", as used herein,
shall be deemed to mean the several persons, firms or corporations, so named
(including the Representative herein mentioned, if so named) and any party
or
parties substituted pursuant to Section 9 hereof, and the term "Representative",
as used herein, shall be deemed to mean the representative or representatives
designated by, or in the manner authorized by, the Underwriters. All
obligations of the Underwriters hereunder are several and not
joint. If there shall be only one person, firm or corporation named
in Exhibit 1 hereto, the term "Underwriters" and the term "Representative",
as
used herein, shall mean such person, firm or corporation. The term
"successors" as used in this Agreement shall not include any purchaser, as
such
purchaser, of any of the Notes from any of the respective
Underwriters.
14. Conditions
of the Company's Obligations: The obligations of the Company
hereunder are subject to the Underwriters' performance of their obligations
hereunder, and the further condition that at the Time of Purchase the Commission
shall have issued appropriate orders, and such orders shall remain in full
force
and effect, authorizing the transactions contemplated hereby.
15. Applicable
Law: This Agreement will be governed and construed in accordance
with the laws of the State of New York.
16. Execution
of Counterparts: This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
IN
WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed by their respective officers thereunto
duly authorized, on the date first above written.
|
APPALACHIAN
POWER COMPANY
|
||
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
|
| Name: |
Xxxxxxx
X. Xxxxxx
|
|
| Title: |
Assistant
Treasurer
|
|
ABN
AMRO
INCORPORATED
BARCLAYS
CAPITAL INC.
CALYON
SECURITIES (USA) INC.
|
as
Representatives
and
on behalf of the Underwriters
named
in Exhibit 1 hereto
|
|
ABN
AMRO INCORPORATED
|
||
|
By:
|
/s/
Xxxx X. Xxxxxx
|
|
| Name: |
Xxxx
X. Xxxxxx
|
|
| Title: |
Managing
Director
|
|
|
BARCLAYS
CAPITAL INC.
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxx
|
|
| Name: |
Xxxxxx
Xxxxxxx
|
|
| Title: |
Director
|
|
|
CALYON
SECURITIES (USA) INC.
|
||
|
By:
|
/s/
Xxxxxx Xxxxxxxxx
|
|
| Name: |
Xxxxxx
Xxxxxxxxx
|
|
| Title: |
Managing
Director
|
|
EXHIBIT
1
|
Underwriters:
|
|
|
Name
|
Principal
Amount of Series O Notes
|
|
|
ABN
AMRO Incorporated
|
$75,000,000
|
|
|
Barclays
Capital Inc.
|
$75,000,000
|
|
|
Calyon
Securities (USA) Inc.
|
$75,000,000
|
|
|
BNY
Capital Markets, Inc.
|
$8,333,334
|
|
|
BNP
Paribas Securities Corp.
|
$8,333,333
|
|
|
UBS
Warburg LLC
|
$8,333,333
|
|
|
TOTAL
|
$250,000,000
|
|
Name
|
Principal
Amount of Series P Notes
|
|
|
ABN
AMRO Incorporated
|
$75,000,000
|
|
|
Barclays
Capital Inc
|
$75,000,000
|
|
|
Calyon
Securities (USA) Inc.
|
$75,000,000
|
|
|
BNY
Capital Markets, Inc.
|
$8,333,334
|
|
|
BNP
Paribas Securities Corp.
|
$8,333,333
|
|
|
UBS
Warburg LLC
|
$8,333,333
|
|
|
TOTAL
|
$250,000,000
|
|
EXHIBIT
2
PRICING
TERM SHEET
Underwriting
Agreement dated August 14, 2007
Series
O Notes
|
Designation:
|
5.65%
Senior Notes, Series O, due 2012
|
|
Principal
Amount:
|
$250,000,000
|
|
Maturity:
|
August
15, 2012
|
|
Coupon:
|
5.65%
|
|
Interest
Payment Dates:
|
Semiannually
on February 15 and August 15
|
|
First
Interest Payment Date:
|
February
15, 2008
|
|
Treasury
Benchmark:
|
UST
4.625% due July 31, 2012
|
|
Treasury
Price:
|
$100-17
1/4
|
|
Treasury
Yield:
|
4.502%
|
|
Reoffer
Spread:
|
119
bps
|
|
Yield
to Maturity:
|
5.692%
|
|
Price
to Public:
|
99.82%
|
|
Redemption
Terms:
|
|
|
Make-whole
call:
|
At
any time at a discount rate of the Treasury Rate plus 20 basis
points
|
|
Use
of Proceeds:
|
See
Preliminary Prospectus Supplement dated August 14, 2007. We estimate
that
our construction costs in 2007 will approximate $691
million.
|
|
Minimum
Denomination:
|
$1,000
|
|
Joint
Book-Running Managers:
|
ABN
AMRO Incorporated
Barclays
Capital Inc.
Calyon
Securities (USA) Inc.
|
|
Settlement
Date:
|
August
17, 2007 (T+3)
|
|
CUSIP:
|
037735
CH8
|
|
Ratings:
|
Baa2
by Xxxxx’x Investors Service, Inc.
BBB
by Standard & Poor’s Ratings Services
BBB+
by Fitch Ratings Ltd.
|
Note:
A securities rating is not a recommendation to buy, sell or hold securities
and
may be subject to revision or withdrawal at any time.
PRICING
TERM SHEET
Underwriting
Agreement dated August 14, 2007
Series
P Notes
|
Designation:
|
6.70%
Senior Notes, Series P, due 2037
|
|
Principal
Amount:
|
$250,000,000
|
|
Maturity:
|
August
15, 2037
|
|
Coupon:
|
6.70%
|
|
Interest
Payment Dates:
|
Semiannually
on February 15 and August 15
|
|
First
Interest Payment Date:
|
February
15, 2008
|
|
Treasury
Benchmark:
|
UST
4.75% due February 15, 2037
|
|
Treasury
Price:
|
$96-04+
|
|
Treasury
Yield:
|
5.002%
|
|
Reoffer
Spread:
|
170
bps
|
|
Yield
to Maturity:
|
6.702%
|
|
Price
to Public:
|
99.975%
|
|
Redemption
Terms:
|
|
|
Make-whole
call:
|
At
any time at a discount rate of the Treasury Rate plus 25 basis
points
|
|
Use
of Proceeds:
|
See
Preliminary Prospectus Supplement dated August 14, 2007. We estimate
that
our construction costs in 2007 will approximate $691
million.
|
|
Minimum
Denomination:
|
$1,000
|
|
Joint
Book-Running Managers:
|
ABN
AMRO Incorporated
Barclays
Capital Inc.
Calyon
Securities (USA) Inc.
|
|
Settlement
Date:
|
August
17, 2007 (T+3)
|
|
CUSIP:
|
037735
CK1
|
|
Ratings:
|
Baa2
by Xxxxx’x Investors Service, Inc.
BBB
by Standard & Poor’s Ratings Services
BBB+
by Fitch Ratings Ltd.
|
Note:
A securities rating is not a recommendation to buy, sell or hold securities
and
may be subject to revision or withdrawal at any time.
The
issuer has filed registration statements (including a prospectus) with the
SEC
for the offering to which this communication relates. Before you
invest, you should read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete information about
the issuer and this offering. You may get these documents for free by
visiting XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the
issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling ABN AMRO Incorporated
toll free at 0-000-000-0000; Barclays Capital Inc. toll free at 1-888-227-2275
ext. 2663 or Calyon Securities (USA) Inc. toll free at
0-000-000-0000.
EXHIBIT
3
PRICING
DISCLOSURE PACKAGE
|
1)
|
Prospectus
dated August 9, 2006
|
|
2)
|
Preliminary
Prospectus Supplement dated August 14, 2007(including
Incorporated Documents)
|
|
3)
|
Permitted
Free Writing Prospectus
|
|
a) Pricing
Term Sheets attached as Exhibit 2
hereto
|
