AMERICAN ELECTRIC POWER COMPANY, INC. Proposed Form of Underwriting Agreement Dated __________________
Exhibit
1(c)
AMERICAN
ELECTRIC POWER COMPANY, INC.
Proposed
Form of Underwriting Agreement
Dated
__________________
AGREEMENT made between AMERICAN
ELECTRIC POWER COMPANY, INC. a corporation organized and existing under the laws
of the State of New York (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 $___________ aggregate principal amount of ____% Junior Subordinated
Debentures (the Underwritten Debentures) of the Company to be issued pursuant to
the Junior Subordinated Indenture dated as of ___________, between the Company
and The Bank of New York, as trustee (the Trustee), as to be 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 also proposes to
grant to the Underwriters an option to purchase up to an additional
$_____________ aggregate principal amount of its ____% Junior Subordinated
Debentures to cover over-allotments (the Option Debentures; the Option
Debentures, together with the Underwritten Debentures, being hereinafter called
the Debentures); 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 (File No. 333-______) and a prospectus relating to
$_______________ principal amount of, among other securities, its Junior
Subordinated Debentures and such registration statement has become effective;
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, collectively, 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 Debentures,
being herein called the Basic Prospectus, and the Basic Prospectus, as amended
and supplemented, including documents incorporated by reference therein,
together with the Preliminary Prospectus Supplement dated ________________,
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 Debentures,
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
Debentures, 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 ____pm (New York 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: (a) 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 Underwritten Debentures set opposite their names in Exhibit 1 hereto,
together aggregating all of the Underwritten Debentures, at a price equal to
_____% of the principal amount thereof, except that such price will be increased
to _____% of the principal amount of the Debentures sold to certain
institutions. As a result, the purchase price for the Underwritten Debentures
shall be $_________________.
(b) Subject
to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company hereby grants an option to the
respective Underwriters to purchase, severally and not jointly, not more than
$_____________ aggregate principal amount of Option Debentures at the same
purchase price per Debenture as the Underwriters shall pay for the Underwritten
Debentures. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Debentures by the
Underwriters. Said option may be exercised one time, in whole or in
part on or before the 30th day
after the date of the Prospectus. Said option shall be exercised upon
written or telegraphic notice by the Representatives to the Company setting
forth the aggregate principal amount of Option Debentures as to which the
respective Underwriters are exercising the option and the settlement
date. The aggregate principal amount of Option Debentures to be
purchased by each Underwriter shall be the same percentage as the percentage of
the total aggregate principal amount of Underwritten Debentures to be purchased
by such Underwriter at the Time of Purchase, subject to such adjustments as you
in your absolute discretion shall make to eliminate any fractional
debenture.
2. Payment and
Delivery: Payment for the Underwritten Debentures and the
Option Debentures (if the option provided for in Section 1(b) shall have been
exercised on or before the third business day prior to the Time of Purchase)
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 Underwritten Debentures and the Option
Debentures, as applicable, 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 ____________ (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 Hunton & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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.
If the option provided for in
Section 1(b) hereof is exercised after the third Business Day prior to the
Time of Purchase, the Company will deliver the Option Debentures (at the expense
of the Company) to the Representatives, at the office of Hunton & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the date specified by the
Representatives (which shall be at least three Business Days after exercise of
said option) for the respective accounts of the respective Underwriters, against
payment by the respective Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. If
settlement for the Option Debentures occurs after the Time of Purchase, the
Company will deliver to the Representatives on the settlement date for the
Option Debentures (the “Option Settlement Date”), and the obligation of the
Underwriters to purchase the Option Debentures shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Time of Purchase
pursuant to Section 3 hereof. Any Option Settlement Date after
the Time of Purchase shall be such date as the Company and the Representatives
may agree, but in no event shall such date be sooner than the third Business Day
following the exercise of the option provided for in Section 1(b)
hereof.
The delivery of the Debentures 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
Representative shall accept such delivery on behalf of itself and the other
Underwriters.
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, at the Applicable Time, at the Time
of Purchase and at any Option Settlement Date 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 Debentures shall be
satisfactory in form and substance to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel to the Underwriters.
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(b)
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That,
at the Time of Purchase and any Option Settlement Date, as applicable, the
Representative shall be furnished with the following opinions, dated the
day of the Time of Purchase or the Option Settlement Date, as applicable,
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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel to the Underwriters
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(1)
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Opinion
of Hunton & ▇▇▇▇▇▇▇▇ LLP and either of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Esq., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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 and at the Option Settlement Date, as
applicable, letters from Deloitte & Touche LLP dated the date hereof
and the date of the Time of Purchase and the Option Settlement Date,
respectively, in form and substance satisfactory to the Representative
(which may refer to the letter 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
and the Public Company Accounting Oversight Board (United States)
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 Debentures) relating to the
Debentures 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 or the Option Settlement Date, as
applicable, 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 ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, counsel to the Underwriters.
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(f)
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That,
at the Time of Purchase and the Option Settlement Date, as applicable, 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 or the Option Settlement
Date, as applicable, 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 and the Option Settlement Date, as applicable,
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 or the
Option Settlement Date, as applicable, 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 Debentures) 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 Debentures 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
Debentures 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 Debentures for offer and sale under
the securities or “blue sky” laws of such jurisdictions as the
Representative may designate and shall maintain such qualifications so
long as required for the offering and sale of the Debentures 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 Debentures by the respective Underwriters) in connection with the
issuance and delivery of the Debentures, 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 Debentures 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 Debentures 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 or the Option
Settlement Date, as applicable, on which the distribution of the
Debentures 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 Debentures 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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The
Company will use its best efforts to list, subject to notice of issuance,
the Debentures on the New York Stock
Exchange.
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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 and
the Registration Statement at its effective date and as of the Applicable
Time did not, and at the Time of Purchase and the Option Settlement Date,
as applicable, 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 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 and the Option Settlement Date, as applicable, 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 and the
Prospectus as of their respective dates do not, and the Prospectus at the
Time of Purchase and the Option Settlement Date, as applicable, 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, 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 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 the Trustee under the Indenture.
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(b)
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As
of the Time of Purchase and the Option Settlement Date, as applicable, 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 Underwritten Debentures, at the Time of Purchase, and the Option
Debentures, at the Option Settlement Date, 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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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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(e)
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This
Agreement has been duly authorized, executed and delivered by the
Company.
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(f)
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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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(g)
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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 Debentures or the consummation of 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; and (C)
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or “Blue Sky”
laws.
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(h)
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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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(i)
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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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(j)
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At
the determination date for purposes of the Debentures 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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(k)
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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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| (l) | The Replacement Capital Covenant, to be dated the date of the Time of Purchase, has been duly authorized by the Company by all necessary corporate action. |
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 Debentures
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 Debentures 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 Debentures 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 contain only
preliminary or final terms of the Debentures (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 its 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.
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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 Debentures hereunder.
8. Indemnification and
Contribution:
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(a)
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To
the extent permitted by law, the Company agrees to indemnify and hold each
Underwriter harmless, each Underwriter’s employees, agents, officers and
directors and each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act, against any and all losses, claims,
damages or liabilities, joint or several, to which an Underwriter, they or
any of you or them may become subject under the Act or otherwise, and to
reimburse the Underwriters, they or any of you or them, 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 the Underwriters 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 Debentures (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
the Trustee under the Indenture. Each Underwriter agrees
promptly after its receipt 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 any such
Underwriter, or by any person controlling any such Underwriter, to notify
the Company in writing of the commencement thereof, but the omission so to
notify the Company of any such action shall not release the Company from
any liability which it may have to an Underwriter 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 an Underwriter or any such controlling person and an Underwriter
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), an Underwriter or any controlling person shall have the right to
employ its own counsel, but, in any such case, the fees and expenses of
such counsel shall be at such Underwriter’s or controlling person’s
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 an Underwriter or any controlling person
and the Company and such Underwriter or any controlling person shall have
been advised by its counsel that a conflict of interest between the
Company and such Underwriter 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 the Underwriters or any controlling
person (plus any local counsel retained by the Underwriters or any
controlling person in their reasonable judgment), which firm (or firms)
shall be designated in writing by the Underwriters or any controlling
person).
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(b)
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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 (if used prior to the effective date
of this Agreement), 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).
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(c)
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If
recovery is not available or insufficient to hold the indemnified party
harmless 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 Debentures 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 Debentures
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.
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(d)
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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.
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(e)
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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.
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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 Debentures
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
Debentures which it has agreed to purchase and pay for hereunder, and the
aggregate principal amount of Debentures 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 Debentures, the other Underwriters
shall be obligated severally in the proportions which the amounts of Debentures
set forth opposite their names in Exhibit 1 hereto bear to the aggregate
principal amount of Debentures set forth opposite the names of all such
non-defaulting Underwriters, to purchase the Debentures 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
Debentures 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 Debentures without the written consent of
such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase Debentures and the aggregate principal amount of Debentures
with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Debentures 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 Debentures 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 Debentures 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
Debentures shall have been materially adversely affected because:
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(i)
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trading
in securities on the New York Stock Exchange shall have been generally
suspended by the Commission or by the New York Stock Exchange or trading
in the securities of the Company shall have been suspended by the New York
Stock Exchange, or
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(ii)
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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
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(iii)
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a
general banking moratorium shall have been declared by Federal or New York
State authorities, or
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(iv)
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there
shall have been any decrease in the ratings of the Company’s debt
securities by ▇▇▇▇▇’▇ 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.
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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 Debentures 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 Representative
at _______________________________________________________, and,
if to the Company, to American Electric Power Company, Inc., c/o American
Electric Power Service Corporation, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel (fax 614/▇▇▇-▇▇▇▇).
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
Debentures 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 not have
issued a stop order with respect to the effectiveness of the Registration
Statement.
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.
| AMERICAN ELECTRIC POWER COMPANY, INC. | ||
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By:
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/s/
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Name:
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Title: Treasurer
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EXHIBIT
1
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Underwriters:
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Name
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Principal Amount of
Debentures
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EXHIBIT
2
PRICING
TERM SHEET
Underwriting
Agreement dated ______________
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Issuer:
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American
Electric Power Company, Inc.
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Designation:
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______%
Junior Subordinated Debentures
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Legal
Format:
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SEC
Registered
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Principal
Amount:
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$_____________
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Over-allotment
Option:
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.
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Denominations:
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Maturity:
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Interest:
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Public
Offering Price:
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Trade
Date:
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Settlement
Date:
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Make-Whole
Call:
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Tax
Event Call:
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Ratings
Event Call:
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Par
Call:
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Joint
Book-Running Managers:
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Co-Manager:
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CUSIP
/ ISIN Number:
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Expected
Security Ratings:
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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 a registration statement (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 ▇▇▇▇▇ on the SEC Web site at ▇▇▇.▇▇▇.▇▇▇. 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 ____________________and
_________________
EXHIBIT
3
PRICING
DISCLOSURE PACKAGE
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1)
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Prospectus
dated __________
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2)
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Preliminary
Prospectus Supplement dated ______________ (including Incorporated
Documents)
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3)
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Permitted
Free Writing Prospectuses
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|
a) Pricing
Term Sheet attached as Exhibit 2
hereto
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