EXHIBIT
1(a)
APPALACHIAN
POWER COMPANY
Underwriting
Agreement
Dated
March 19, 2008
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 $500,000,000 aggregate principal
amount of its 7.00% Senior Notes, Series Q, due 2038 (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 March 19, 2008, 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 2:00 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 equal to 98.465% 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 March 25, 2008 (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 Dewey &
LeBoeuf LLP, 1301 Avenue of the Americas, New York, New York
10019, 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 Dewey
& LeBoeuf 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 Dewey & LeBoeuf LLP, counsel to the
Underwriters
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(1)
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Opinion
of Jeffrey D. Cross, Esq., Thomas G. Berkemeyer, Esq., William
E. Johnson, Esq., or Ann B. Graf, 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 Dewey & LeBoeuf 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
Dewey & LeBoeuf 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 (except for
the concurrent offering of the Company’s floating rate
notes) 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
circumstanc
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