Exhibit 1(a)
APPALACHIAN POWER COMPANY
Selling Agency Agreement
____________, ____
____________________
____________________
____________________
____________________
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 $____________
aggregate principal amount of its [Unsecured
Notes] (the "Notes"). The Notes will be
issued under the Indenture dated as of
January 1, 1998, between the Company and
The Bank of New York, as trustee (the
"Trustee"), as previously supplemented and
as it may be from time to time
further supplemented by one or more
supplemental indentures (said Indenture, as
previously supplemented and as it may be
further supplemented, being hereafter
referred to as the "Indenture"). The Notes
will be issued in minimum
denominations of [$25] and in integral
multiples thereof, will be issued only in
fully registered form and will have the
annual interest rates, maturities and,
if appropriate, other terms set forth in a
supplement to the Prospectus referred
to below. The Notes will be issued, and the
terms thereof established, in
accordance with the Indenture and, in the
case of Notes sold pursuant to Section
2(a) hereof, the [Unsecured Notes]
Administrative Procedures attached hereto as
Exhibit A (the "Procedures"). The
Procedures may only be amended by written
agreement of the Company and you after
notice to, and with the approval of, the
Trustee. For purposes of this Agreement,
the term "Agent" shall refer to any one
of you and any Additional Agent as defined
and as provided for in Section 2(a)
acting solely in the capacity as agent for
the Company pursuant to Section 2(a)
and not as principal (collectively, the
"Agents"), the term the "Purchaser"
shall refer to one of you acting solely as
principal pursuant to Section 2(b)
and not as agent, and the term "you" shall
refer to you collectively whether at
any time any of you is acting in both such
capacities or in either such
capacity.
1.
Representations and Warranties. The Company represents and
warrants to, and agrees with, you as set
forth below in this Section 1.
Certain terms used in this Section 1 are
defined in paragraph (d) hereof.
(a) The Company meets the requirements for use of Form S-3 under
the
Securities
Act of 1933, as amended (the "Act"), and has filed with the
Securities
and Exchange Commission (the "Commission") a registration
statement
on such Form S-3 (File Number: 333-_____), including a basic
prospectus, which has become effective, for the registration under
the Act
of
$____________ aggregate principal amount of Unsecured Notes
(the
"Notes").
Such registration statement meets the requirements set forth in
Rule
415(a)(1)(ix) or (x) under the Act and complies in all other
material
respects
with said Rule. The Company will file with the Commission
pursuant
to the applicable paragraph of Rule 424(b) under the Act a
supplement
to the form of prospectus included in such registration
statement
relating to the Notes and the plan of distribution thereof (the
"Prospectus Supplement"). In connection with the sale of Notes the
Company
proposes
to file with the Commission pursuant to the applicable
paragraph
of Rule
424(b) under the Act further supplements to the Prospectus
Supplement
specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto or the
offering
thereof.
(b) As of the Execution Time, on the Effective Date, when any
supplement
to the Prospectus is filed with the Commission, as of the date
of any
Terms Agreement (as defined in Section 2(b)) and at the date of
delivery
by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the
Registration Statement, as amended as of any such time, and the
Prospectus, as supplemented as of any such time, will comply in
all
material
respects with the applicable requirements of the Act, the
Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and
the
respective rules under the Act, the Exchange Act and the Trust
Indenture
Act; (ii) the Registration Statement, as amended as of any such
time, did
not or will not contain any untrue statement of a material fact
or omit to
state any material fact required to be stated therein or
necessary
in order to make the statements therein not misleading; and
(iii) the
Prospectus, as supplemented as of any such time, will not
contain
any untrue statement of a material fact or omit to state a
material
fact necessary in order to make the statements therein, in the
light of
the circumstances under which they were made, not misleading;
provided,
however, that the Company makes no representations or
warranties
as to (i)
those parts of the Registration Statement which shall
constitute
a
Statement of Eligibility (Form T-1) of the Trustee under the
Trust
Indenture
Act or (ii) the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement
thereto) in
reliance
upon and in conformity with information furnished in writing to
the
Company by any of you expressly for use in the Registration
Statement
or the
Prospectus (or any supplement thereto).
(c) As of the time any Notes are issued and sold hereunder, the
Indenture
will constitute a legal, valid and binding instrument
enforceable against the Company in accordance with its terms and
such
Notes will
have been duly authorized, executed, authenticated and, when
paid for
by the purchasers thereof, will constitute legal, valid and
binding
obligations of the Company entitled to the benefits of the
Indenture,
except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium
and other
similar laws relating to or affecting creditors' rights
generally,
or general equitable principles (whether considered in a
proceeding
in equity or at law), and an implied covenant of good faith and
fair
dealing.
(d) The terms which follow, when used in this Agreement, shall
have
the
meanings indicated. The term "the Effective Date" shall mean each
date
that the
Registration Statement and any post-effective amendment or
amendments
thereto became or become effective. "Execution Time" shall mean
the date
and time that this Agreement is executed and delivered by the
parties
hereto. "Basic Prospectus" shall mean the form of basic
prospectus
relating
to the Securities contained in the Registration Statement at
the
Effective
Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. "Registration Statement"
shall
mean the
Registration Statement referred to in paragraph (a) above,
including
incorporated documents, exhibits and financial statements, as
amended at
the Execution Time. "Rule 415" and "Rule 424" refer to such
rules
under the Act. Any reference herein to the Registration
Statement,
the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall
be
deemed to
refer to and include the documents incorporated by reference
therein
pursuant to Item 12 of Form S-3 which were filed under the
Exchange
Act on or before the Effective Date or the issue date of the
Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the
case
may be;
and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the
Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to
refer to
and include the filing of any document under the Exchange Act
after the
Effective Date or the issue date of the Basic Prospectus, the
Prospectus
Supplement or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(e) The documents incorporated by reference in the Registration
Statement
or Prospectus, when they were filed with the Commission,
complied
in all material respects with the applicable provisions of the
1934 Act
and the rules and regulations of the Commission thereunder, and
as of such
time of filing, when read together with the Prospectus, none of
such
documents contained an untrue statement of a material fact or
omitted
to state a
material fact required to be stated therein or necessary to
make the
statements therein, in the light of the circumstances under
which
they were
made, not misleading.
(f) Since the respective dates as of which information is given
in
the
Registration Statement and the Prospectus, except as otherwise
stated
therein,
there has been no material adverse change in the business,
properties
or financial condition of the Company.
(g)
This Agreement has
been duly authorized, executed and
delivered
by the Company.
(h) The consummation by the Company of the transactions
contemplated
herein
will not conflict with, or result in a breach of any of the
terms
or provisions
of, or constitute a default under, or result in the creation
or
imposition of any lien, charge or encumbrance upon any property
or
assets of
the Company under any contract, indenture, mortgage, loan
agreement,
note, lease or other agreement or instrument to which the
Company is
a party or by which it may be bound or to which any of its
properties
may be subject (except for conflicts, breaches or defaults
which
would not, individually or in the aggregate, be materially
adverse
to the
Company or materially adverse to the transactions contemplated
by
this
Agreement.)
(i) No authorization, approval, consent or order of any court
or
governmental authority or agency is necessary in connection with
the
issuance
and sale by the Company of the Notes or the transactions by the
Company
contemplated in this Agreement, except (A) such as may be
required
under the
1933 Act or the rules and regulations thereunder; (B) such as
may be
required under the Public Utility Holding Company Act of 1935,
as
amended
(the "1935 Act"); (C) the qualification of the Indenture under
the
1939 Act;
(D) approvals of the Virginia State Corporation Commission and
the
Tennessee Regulatory Authority; and (E) such consents,
approvals,
authorizations, registrations or qualifications as may be required
under
state
securities or Blue Sky laws.
2. Appointment
of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a
Purchaser.
(a) Subject to the terms and conditions set forth herein, the
Company
hereby
authorizes each of the Agents to act as its agent to solicit
offers
for the
purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject
to the
terms and conditions set forth herein, each of the Agents
agrees,
as agent
of the Company, to use its reasonable best efforts to solicit
offers to
purchase the Notes from the Company upon the terms and
conditions
set forth in the Prospectus (and any supplement thereto) and in
the
Procedures.
The Company reserves the right, in its sole discretion, to
instruct the
Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Notes.
Upon
receipt of
instructions from the Company, the Agents will forthwith
suspend
solicitation of offers to purchase Notes from the Company until
such time
as the Company has advised them that such solicitation may be
resumed.
The Company expressly reserves the right, upon fifteen business
days'
prior written notice to each Agent, to appoint other persons,
partnerships or corporations ("Additional Agents") to act as its
agent to
solicit
offers for the purchase of Notes; provided, each Additional
Agent
shall be
named in a prospectus supplement or pricing supplement and
shall
either
execute this Agreement and become a party hereto or shall enter
into an
agency agreement with the Company on terms substantially
similar
to those
contained herein; thereafter the term Agent as used in this
Agreement shall mean each
Agent and each such Additional Agent.
The Company agrees to pay each Agent a commission, on the
Closing
Date with respect to each sale of Notes by the Company as a
result
of a
solicitation made by such Agent, in an amount equal to that
percentage
specified in Schedule I hereto of the aggregate principal
amount of
the Notes sold by the Company. Such commission shall be payable
as
specified in the Procedures.
Subject to the provisions of this Section and to the
Procedures,
offers for
the purchase of Notes may be solicited by an Agent as agent for
the
Company at such time and in such amounts as such Agent deems
advisable.
The Company may from time to time offer Notes for sale
otherwise
than through an Agent; provided, however, that so long as this
Agreement
shall be in effect the Company shall not solicit or accept
offers to
purchase Notes through any agent other than an Agent.
(b)
Subject to the terms and conditions stated herein, whenever the
Company
and any Agent determine that the Company shall sell Notes
directly
to such
Agent as principal, each such sale of Notes shall be made in
accordance
with the terms of this Agreement and, unless otherwise agreed
by the
Company and such Agent, any supplemental agreement relating
thereto
between
the Company and the Purchaser. Each such supplemental agreement
(which may
be an oral or written agreement) is herein referred to as a
"Terms
Agreement". Each Terms Agreement shall describe (whether orally
or
in
writing) the Notes to be purchased by the Purchaser pursuant
thereto,
and shall
specify the aggregate principal amount of such Notes, the
maturity
date of such Notes, the rate at which interest will be paid on
such
Notes, the dates on which interest will be paid on such Notes and
the
record
date with respect to each such payment of interest, the Closing
Date for
the purchase of such Notes, the place of delivery of the Notes
and
payment therefor, the method of payment and any requirements for
the
delivery
of the opinions of counsel, the certificates from the Company
or
its
officers, or a letter from the Company's independent public
accountants, pursuant to Section 6(b). Any such Terms Agreement may
also
specify
the period of time referred to in Section 4(m). Any written
Terms
Agreement
may be in the form attached hereto as Exhibit B. The
Purchaser's
commitment
to purchase Notes shall be deemed to have been made on the
basis of
the representations and warranties of the Company herein
contained
and shall be subject to the terms and conditions herein set
forth.
The Company also may sell Notes to any Agent, acting as
principal,
at a discount to be agreed upon at the time of sale, for resale
to one or
more investors or to another broker-dealer (acting as principal
for
purposes of resale) at varying prices related to prevailing
market
prices at
the time of such resale as determined by such Agent. An Agent
may resell
a Note purchased by it as principal to another broker-dealer at
a
discount, provided such discount does not exceed the commission
or
discount
received by such Agent from the Company in connection with the
original
sale of such Note.
(c) The Company, however, expressly reserves the right to place
the
Notes
itself privately or through a negotiated underwritten
transaction
with one
or more underwriters without notice to any Agent and without
any
opportunity for any Agent to solicit offers for the purchase of the
Notes.
In such
event, no commission will be payable to the Agents.
Delivery of the Notes sold to the Purchaser pursuant to any
Terms
Agreement shall be made not later than the Closing Date agreed to
in
such Terms
Agreement, against payment of funds to the Company in the net
amount due
to the Company for such Notes by the method and in the form set
forth in
the Procedures unless otherwise agreed to between the Company
and
the
Purchaser in such Terms Agreement.
3. Offering and
Sale of Notes. Each
Agent and the Company agree
to perform the respective duties and
obligations specifically provided to be
performed by them in the Procedures.
4. Agreements.
The Company agrees
with you that:
(a) Prior to the termination of any offering of the Notes, the
Company
will not file any amendment of the Registration Statement or
supplement
to the Prospectus (except for (i) periodic or current reports
filed
under the Exchange Act; (ii) a supplement relating to any
offering
of Notes
providing solely for the specification of or a change in the
maturity
dates, interest rates, issuance prices or other similar terms
of
any Notes
or (iii) a supplement relating to an offering of Securities
other than
the Notes) unless the Company has furnished each of you a copy
for your
review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or
supplement.
Subject to
the foregoing sentence, the Company will cause each supplement
to the
Prospectus to be filed with the Commission pursuant to the
applicable
paragraph of Rule 424(b) within the time period prescribed and
will
provide evidence satisfactory to you of such filing. The Company
will
promptly
advise each of you (i) when the Prospectus, and any supplement
thereto,
shall have been filed with the Commission pursuant to Rule
424(b);
(ii) when, prior to the termination of the offering of the
Notes,
any
amendment of the Registration Statement shall have been filed
or
become
effective; (iii) of any request by the Commission for any
amendment
of the
Registration Statement or supplement to the Prospectus or for
any
additional
information; (iv) of the issuance by the Commission of any stop
order
suspending the effectiveness of the Registration Statement or
the
institution or threatening of any proceeding for that purpose; and
(v) of
the
receipt by the Company of any notification with respect to the
suspension
of the qualification of the Notes for sale in any jurisdiction
or the
initiation or threatening of any proceeding for such purpose.
The
Company
will use every reasonable effort to prevent the issuance of any
such stop
order and, if issued, to obtain as soon as possible the
withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Notes is
required
to be delivered under the Act, any event occurs as a result of
which the
Prospectus as then supplemented would include any untrue
statement
of a material fact or omit to state any material fact necessary
to make
the statements therein, in the light of the circumstances under
which they
were made, not misleading, or if it shall be necessary to amend
the
Registration Statement or to supplement the Prospectus to comply
with
the Act or
the Exchange Act or the respective rules thereunder, the
Company
promptly will (i) notify each of you to suspend solicitation of
offers to
purchase Notes (and, if so notified by the Company, each of you
shall
forthwith suspend such solicitation and cease using the
Prospectus
as then
supplemented); (ii) prepare and file with the Commission,
subject
to the
first sentence of paragraph (a) of this Section 4, an amendment
or
supplement
which will correct such statement or omission or effect such
compliance; and (iii) supply any supplemented Prospectus to each of
you in
such quantities as you
may reasonably request. If such amendment or
supplement, and any documents, certificates and opinions furnished
to each
of you
pursuant to paragraph (g) of this Section 4 in connection with
the
preparation or filing of such amendment or supplement are
satisfactory in
all
respects to you, you will, upon the filing of such amendment or
supplement
with the Commission and upon the effectiveness of an amendment
to the
Registration Statement, if such an amendment is required,
resume
your
obligation to use your reasonable best efforts to solicit offers
to
purchase
Notes hereunder.
(c) The Company, during the period when a prospectus relating to
the
Notes is
required to be delivered under the Act, will file promptly all
documents
required to be filed with the Commission pursuant to Section
13(a),
13(c), 14 or 15(d) of the Exchange Act and will furnish to each
of
you copies
of such documents. In addition, on or prior to the date on
which the
Company makes any announcement to the general public concerning
earnings
or concerning any other event which is required to be
described,
or which
the Company proposes to describe, in a document filed pursuant
to
the
Exchange Act, the Company will furnish to each of you the
information
contained
or to be contained in such announcement. The Company also will
furnish to
each of you copies of all other press releases or announcements
to the
general public. The Company will immediately notify each of you
of
any
downgrading in the rating of the Notes or any other Unsecured Notes
of
the
Company, or any proposal to downgrade the rating of the Notes or
any
other
Unsecured Notes of the Company, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g)
under the
Act), as soon as the Company learns of any such downgrading or
proposal
to downgrade.
(d) As soon as practicable, the Company will make generally
available
to its
security holders and to each of you an earning statement or
statements
of the Company which will satisfy the provisions of Section
11(a) of
the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your
