<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 19, 1996
Date of earliest event reported: March 18, 1996
APPALACHIAN POWER COMPANY
(Exact name of registrant as specified in its charter)
Virginia 1-3457 54-0124790
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) file number) identification no.)
40 Franklin Road
Roanoke, Virginia 24011
(Address of principal executive offices, including zip code)
(540) 985-2300
(Registrant's telephone number, including area code)
ITEM 5. Other Events
On March 18, 1996, Appalachian Power Company agreed to sell
$100,000,000 aggregate principal amount of its First Mortgage
Bonds, 6-3/8% Series, Due 2001 and $100,000,000 aggregate principal
amount of its 6.80% Series, Due 2006 ("First Mortgage Bonds").
Said First Mortgage Bonds were registered under the Securities Act
of 1933, as amended, pursuant to the Company's shelf registration
statement (Registration Statement 333-01049). For further
information concerning the First Mortgage Bonds, refer to the
Exhibits contained in this Current Report on Form 8-K.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
1(a) Proposal for Purchase of First Mortgage Bonds,
6-3/8% Series due 2001, dated March 18, 1996,
between the Company and the Purchaser named
therein, with Purchase Contract attached
thereto.
1(b) Proposal for Purchase of First Mortgage Bonds,
6.80% Series due 2006, dated March 18, 1996,
between the Company and the Purchaser named
therein, with Purchase Contract attached
thereto.
4 Supplemental Indenture, dated as of March 1,
1996, between the Company and Bankers Trust
Company, as Trustee.
26(a) Notice of Invitation for Proposals.
26(b) Invitation for Proposals for the Purchase of
First Mortgage Bonds.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
APPALACHIAN POWER COMPANY
(Registrant)
_/s/ A. A. Pena__________
A. A. Pena, Treasurer
Dated: March 19, 1996
Exhibit 1(a)
FORM OF PROPOSAL
For Purchase of
First Mortgage Bonds
of
APPALACHIAN POWER COMPANY
APPALACHIAN POWER COMPANY,
c/o AMERICAN ELECTRIC POWER SERVICE CORPORATION,
1 Riverside Plaza,
Columbus, OH 43215
DEAR SIRS:
Referring to the invitation for proposals dated March 12, 1996
(the Invitation) for the purchase from Appalachian Power Company
(the Company) of First Mortgage Bonds of the Company (the Bonds)
and the notice dated the date hereof (the Notice) given by the
Company pursuant thereto, the several persons, firms and
corporations named in Exhibit A hereto (the Bidders) have submitted
and confirm herewith the following proposal for the purchase of
$100,000,000 principal amount of the Bonds with a maturity date of
March 1, 2001, as designated by the Company in the Notice (the
Designated Principal Amount).
1. The interest rate of the Bonds shall be 6-3/8% per
annum.
2. The price to be paid to the Company for the Bonds
shall be 99.407% of the Designated Principal Amount plus
accrued interest from the first day of the calendar month
during which the Bonds are to be issued to the date of payment
and delivery, each of the Bidders hereby offering, severally
and not jointly, to purchase from the Company, at said price
and upon the terms and conditions set forth in the form of
purchase contract attached hereto as Exhibit B (the Purchase
Contract), the principal amount of Bonds set forth opposite
its name in Exhibit A attached hereto, or the principal amount
of Bonds to be set forth opposite its name in Exhibit A
attached hereto as provided in Section 3 of the Invitation,
which together aggregate the Designated Principal Amount of
the Bonds. Exhibit A attached hereto, when completed, is
hereinafter and in the Purchase Contract called "Exhibit A to
the Form of Proposal".
3. In consideration of the agreements of the Company
set forth in the Invitation, each of the Bidders agrees (a)
that the offer of such Bidder included in this proposal shall
be irrevocable until three hours after the time fixed for the
submission of proposals, unless sooner rejected by the
Company; (b) that, if this proposal shall be accepted in
writing by the Company, such Bidder, either in person or by
the Representative on its behalf, will forthwith furnish to
the Company in writing the information referred to in Section
8 of the Invitation; and (c) that, if this proposal is
accepted, the Purchase Contract shall thereupon become
effective without any separate execution thereof and shall
constitute the agreement between the Company and the Bidders
and, upon performance by the Bidders, and the
Representative(s), of their obligations under Sections 3, 4
and 8 of the Invitation, all rights of the Company and of the
Bidders shall be determined solely in accordance with the
terms thereof, subject, however, to such modifications therein
(including Exhibit A to the Form of Proposal) as may be
necessary and as are contemplated by the Invitation.
4. This proposal must be accepted or rejected by the
Company in its entirety within three hours after the time
fixed for the submission thereof.
5. The Representative acknowledges on behalf of each
Bidder that such Bidder has received a copy of the Prospectus,
referred to in Section 5 of the Invitation.
6. The Representative represents and warrants that it
has all necessary power and authority to act for each of the
Bidders in respect of the matters referred to in this
proposal.
7. This proposal may be executed in any number of
counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same instrument.
Very truly yours,
By_/s/ LEHMAN BROTHERS INC.____
By_/s/ Robert H. Swindell______
Dated: March 18, 1996
On behalf of and as Representative of the
persons, firms and corporations named in
Exhibit A hereto.
Address:_3 World Financial Center
_9th Floor
_New York, NY 10285-0900
Accepted:
APPALACHIAN POWER COMPANY
By_/s/ A. A. Pena_____________
Authorized Officer
Treasurer
EXHIBIT A
The names of the Bidders and the respective principal
amounts of the First Mortgage Bonds which they severally
offer to purchase are as follows:
Name Principal Amount
Lehman Brothers Inc. $100,000,000
____________
TOTAL $100,000,000
EXHIBIT B
APPALACHIAN POWER COMPANY
Purchase Contract
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 Purchasers) named as Bidders in Exhibit
A to the Form of Proposal to which this Agreement is attached as
Exhibit B (the Form of Proposal).
WITNESSETH:
WHEREAS, the Company proposes to issue and sell the Designated
Principal Amount (as defined in the Form of Proposal) of its First
Mortgage Bonds (the First Mortgage Bonds) to be issued pursuant to
the Mortgage and Deed of Trust dated as of December 1, 1940,
between the Company and Bankers Trust Company, as trustee (the
Trustee), as heretofore supplemented and as to be further
supplemented by one or more supplemental indentures (said Mortgage,
as heretofore supplemented, and as it is to be supplemented, being
hereinafter referred to as the Mortgage); and
WHEREAS, the Purchasers have designated the person signing the
Form of Proposal (the Representative) to execute the Form of
Proposal on behalf of the respective Purchasers and to act for the
respective Purchasers 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 (the Act), with
the Securities and Exchange Commission (the Commission), two
registration statements on Form S-3 (file numbers 33-58431 and 333-
01049) relating to the First Mortgage Bonds and such registration
statements have become effective; and
WHEREAS, such registration statements, as they may have been
amended to the date hereof, including the financial statements, the
documents incorporated or deemed incorporated therein by reference
and the exhibits, being herein called the Registration Statements,
and the combined prospectus under Rule 429 under the Act, as
included or referred to in the latest Registration Statement to
become effective, 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 First
Mortgage Bonds being herein called the Basic Prospectus, and the
Basic Prospectus, to be supplemented by a prospectus supplement
(the Prospectus Supplement) to include certain information relating
to the Purchasers, the principal amount, price and terms of
offering, the interest rate and redemption terms of the First
Mortgage Bonds, which will be filed with the Commission as soon as
practicable after this Agreement becomes effective pursuant to the
applicable paragraph of 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.
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
Purchasers named in Exhibit A to the Form of Proposal, severally
and not jointly, and the respective Purchasers, severally and not
jointly, agree to purchase from the Company, at the price specified
in paragraph 2 of the Form of Proposal, the respective principal
amounts of the First Mortgage Bonds set opposite their names in
Exhibit A to the Form of Proposal, together aggregating the
Designated Principal Amount of the First Mortgage Bonds.
2. Payment and Delivery: Payment for the First Mortgage
Bonds shall be made to the Company or its order by certified or
bank check or checks, payable in Federal Reserve funds, or by
written evidence satisfactory to the Company confirming receipt of
funds by wire transfer in immediately available funds, at the
office of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York 10017-3909, or at such other place as the Company
and the Representative shall mutually agree in writing, upon the
delivery of the First Mortgage Bonds to the Representative for the
respective accounts of the Purchasers against receipt therefor
signed by the Representative on behalf of itself and for the other
Purchasers. Such payments and delivery shall be made at 10:00
A.M., New York Time, on March 27, 1996 (or on such later business
day, as may be agreed upon by the Company and the Representative),
unless postponed in accordance with the provisions of Section 7
hereof. The time at which payment and delivery are to be made is
herein called the Time of Purchase.
The delivery of the First Mortgage Bonds shall be made in
fully registered form, registered in the name of CEDE & CO., to the
offices of The Depository Trust Company (DTC) in New York, New
York. The First Mortgage Bonds so delivered will be in form
acceptable for deposit with DTC and will be available for
inspection by the Representative at a place suitable therefor at
least 20 hours prior to the Time of Purchase.
3. Conditions of Purchasers' Obligations: The several
obligations of the Purchasers hereunder are subject to the accuracy
of the warranties and representations on the part of the Company
and to the following other conditions:
(a) That all legal proceedings to be taken and all
legal opinions to be rendered in connection with
the issue and sale of the First Mortgage Bonds
shall be satisfactory in form and substance to
Dewey Ballantine, counsel to the Purchasers.
(b) That, at the Time of Purchase, the Representative
shall be furnished with the following opinions,
dated the day of the Time of Purchase, with con-
formed copies or signed counterparts thereof for
the other Purchasers, with such changes therein as
may be agreed upon by the Company and the
Representative with the approval of Dewey
Ballantine, counsel to the Purchasers:
(1) Opinion of Simpson Thacher & Bartlett, counsel
to the Company, substantially in the form
heretofore made available to the Purchasers as
provided in paragraph 1 of the Invitation
referred to in the Form of Proposal;
(2) Opinion of Dewey Ballantine, counsel to the
Purchasers, substantially in the form
heretofore made available to the Purchasers as
provided in paragraph 1 of the Invitation
referred to in the Form of Proposal.
(3) Opinions of Hunton & Williams; Hunter, Smith &
Davis and Robinson & McElwee, counsel to the
Company, substantially in the form heretofore
made available to the Purchasers as provided
in paragraph 1 of the Invitation referred to
in the Form of Proposal.
(c) That the Representative shall have received a
letter from Deloitte & Touche LLP in form and
substance satisfactory to the Representative, dated
as of the day of the Time of Purchase, (i)
confirming that they are independent public
accountants within the meaning of the Act and the
applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their
opinion the financial statements audited by them
and included or incorporated by reference in the
Registration Statements 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 five business days prior to
the day of the Time of Purchase such other matters
as the Representative reasonably requests.
(d) That no amendment to the Registration Statements
and that no prospectus or prospectus supplement of
the Company (other than the prospectus or
amendments, prospectuses or prospectus supplements
relating solely to securities other than the First
Mortgage Bonds) and no document which would be
deemed incorporated in the 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 Registration Statements which is
unsatisfactory in substance to the Representative
or unsatisfactory in form to Dewey Ballantine,
counsel to the Purchasers.
(e) That, at or before the effective date of this
Agreement, or at such later time and day as the
Representative may from time to time consent to in
writing or by telex or facsimile transmission
confirmed in writing, appropriate orders of the
State Corporation Commission of Virginia and the
Tennessee Public Service Commission, necessary to
permit the sale of the First Mortgage Bonds to the
Purchasers, shall be in effect; and that, prior to
the Time of Purchase, no stop order with respect to
the effectiveness of either of the Registration
Statements shall have been issued under the Act by
the Commission or proceedings therefor initiated.
(f) That, at 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 Prospectus (other than
changes referred to in or contemplated by the
Prospectus), except changes arising from
transactions in the ordinary course of business,
none of which individually has, or in the aggregate
have, had a material adverse effect on the
business, properties or financial condition of the
Company, 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; provided that the sale by the Company of,
or its failure to sell, any other first mortgage
bonds offered for sale pursuant to the notice or
notices provided for in Section 4 of the
Invitation, shall not be such a change.
(g) 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.
4. Certain Covenants of the Company: In further consider-
ation of the agreements of the Purchasers herein contained, the
Company covenants as follows:
(a) As soon as practicable after this agreement becomes
effective, and in any event within the time
prescribed by Rule 424 under the Act, to file the
Prospectus Supplement relating to the First
Mortgage Bonds with the Commission; 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 either of the Registration Statements or the
Prospectus (including the documents incorporated
therein by reference) or for additional information
with respect thereto or of the entry of a stop
order suspending the effectiveness of either
Registration Statement or of the initiation or
threatening of any proceeding for that purpose and,
if such a stop order should be entered by the
Commission, to make every reasonable effort to
obtain the prompt lifting or removal thereof.
(b) To deliver to the Purchasers, 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 exceed-
ing nine months) after the date hereof as they are
required by law to deliver a prospectus, 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 First Mortgage Bonds) as
the Representative may reasonably request; and in
case any Purchaser is required to deliver a
prospectus after the expiration of nine months
after the date hereof, to furnish to any Purchaser,
upon request, at the expense of such Purchaser, a
reasonable quantity of a supplemental prospectus or
of supplements to the Prospectus complying with
Section 10(a)(3) of the Act.
(c) To furnish to the Representative a copy, certified
by the Secretary or an Assistant Secretary of the
Company, of the Registration Statements as
initially filed with the Commission and of all
amendments thereto and documents incorporated by
reference, other than amendments relating solely to
securities other than the First Mortgage Bonds
(exclusive of exhibits), and, upon request, to
furnish to the Representative sufficient plain
copies thereof (exclusive of exhibits) for
distribution of one to each of the other
Purchasers.
(d) In the event that the Purchasers constitute
"underwriters" within the meaning of Section 2(11)
of the Act, then for such period of time (not
exceeding nine months) after the date hereof as
they are required by law to deliver a prospectus,
if any event shall have occurred as a result of
which it is necessary to amend or supplement the
Prospectus in order to make the statements therein,
in the light of the circumstances when the
Prospectus is delivered to a purchaser, not
misleading, forthwith to prepare and furnish, at
its own expense, to the Purchasers and to dealers
(whose names and addresses are furnished to the
Company by the Representative) to whom principal
amounts of the First Mortgage Bonds may have been
sold by the Representative for the accounts of the
Purchasers and, upon request, to any other dealers
making such request, copies of such amendments to
the Prospectus or supplements to the Prospectus.
(e) As soon as practicable, the Company will make
generally available to its security holders and to
the Purchasers an earning 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.
(f) To use its best efforts to qualify the First
Mortgage Bonds 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 Purchasers 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.
(g) To pay all expenses, fees and taxes (other than
transfer taxes on resales of the First Mortgage
Bonds by the respective Purchasers) in connection
with the issuance and delivery of the First
Mortgage Bonds, 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 Dewey Ballantine, counsel to the
Purchasers, only in the events provided in para-
graph (h) of this Section 4, the Purchasers hereby
agreeing to pay such fees and disbursements in any
other event.
(h) If the Purchasers shall not take up and pay for the
First Mortgage Bonds 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 7 or 8 hereof, to pay the
fees and disbursements of Dewey Ballantine, counsel
to the Purchasers, and, if the Purchasers shall not
take up and pay for the First Mortgage Bonds due to
the failure of the Company to comply with any of
the conditions specified in Section 3 hereof, to
reimburse the Purchasers for their reasonable out-
of-pocket expenses, in an aggregate amount not
exceeding a total of $10,000, incurred in connec-
tion with the financing contemplated by this
Agreement.
(i) The Company will timely file any certificate
required by Rule 52 under the Public Utility
Holding Company Act of 1935 in connection with the
sale of the First Mortgage Bonds.
(j) On and after the date this agreement becomes
effective and through the Time of Purchase, without
the prior written consent of the Representative,
not to issue or sell any first mortgage bonds
(other than the First Mortgage Bonds or any other
first mortgage bonds offered pursuant to the notice
or notices provided for in Section 4 of the
Invitation) or any other long-term debt of the
Company having terms and provisions substantially
similar to the First Mortgage Bonds.
5. Warranties of and Indemnity by the Company: The Company
represents and warrants to, and agrees with the Purchasers, as set
forth below:
(a) the Registration Statements on their respective
effective dates, which complied with the
requirements of Form S-3, did 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 and the Basic Prospectus, on the date
the latest Registration Statement became effective,
did not contain any untrue statement of a material
fact or omit to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading; when the Prospectus Supplement is filed
with the Commission, and at the Time of Purchase,
the Registration Statements, and the Prospectus, as
they may be amended or supplemented, will comply,
or be deemed to comply, in all material respects
with the provisions of the Act and the Rules, the
Registration Statements, as they may be amended or
supplemented, 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, and the
Prospectus, as it may be amended or supplemented,
will not contain any untrue statement of a material
fact or omit to state a material fact 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 Purchasers with
respect to any statements or omissions made in 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
Purchaser expressly for use in the Prospectus, or
to any statements in or omissions from that part of
the Registration Statements that shall constitute
the Statement of Eligibility under the Trust
Indenture Act of 1939 of any indenture trustee
under an indenture of the Company.
(b) As of the Time of Purchase, the Mortgage will have
been duly authorized by the Company and duly
qualified under the Trust Indenture Act of 1939, as
amended, 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
First Mortgage Bonds will have been duly
authorized, executed, authenticated and, when paid
for by the Purchasers, will constitute legal, valid
and binding obligations of the Company entitled to
the benefits of the Mortgage, except as the
enforceability thereof may be limited by
bankruptcy, fraudulent conveyance, 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.
(c) To the extent permitted by law, to indemnify and
hold harmless each of the Purchasers and each
person, if any, who controls any such Purchaser
within the meaning of Section 15 of the Act,
against any and all losses, claims, damages or
liabilities, joint or several, to which they or any
of them may become subject under the Act or
otherwise, and to reimburse the Purchasers and such
controlling person or persons, if any, for any
legal or other expenses incurred by 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 either Registration Statement, in
the Basic Prospectus (if used prior to the
effective date of this Agreement), or in the
Prospectus, or if the Company shall furnish or
cause to be furnished to the Purchasers any
amendments or any supplemental information, in the
Prospectus as so amended or supplemented, other
than amendments or supplements relating solely to
securities other than the First Mortgage Bonds
(provided that if such Prospectus or such
Prospectus, as amended or supplemented, is used
after the period of time referred to in Section
4(d) 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 either
Registration Statement, in the Basic 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 or through the Representative on
behalf of any Purchaser expressly for use therein
or with any statements in or omissions from that
part of either Registration Statement that shall
constitute the Statement of Eligibility under the
Trust Indenture Act of any indenture trustee under
an indenture of the Company, and except that this
indemnity shall not inure to the benefit of any
Purchaser (or of any person controlling such
Purchaser) on account of any losses, claims,
damages, liabilities or actions arising from the
sale of the First Mortgage Bonds to any person if
such loss arises from the fact that a copy of the
Prospectus, as the same may then be supplemented or
amended (excluding, however, any document then
incorporated or deemed incorporated therein by
reference), was not sent or given by or on behalf
of such Purchaser to such person with or prior to
the written confirmation of the sale involved and
the alleged omission or alleged untrue statement or
omission or untrue statement was corrected in the
Prospectus as supplemented or amended at the time
of such confirmation. Each Purchaser agrees
promptly after the receipt by it 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 5(c) may be
sought by it, or by any person controlling it, to
notify the Company in writing of the commencement
thereof, but such Purchaser's omission so to notify
the Company of any such action shall not release
the Company from any liability which it may have to
such Purchaser or to such controlling person
otherwise than on account of the indemnity
agreement contained in this Section 5(c). In case
any such action shall be brought against such
Purchaser or any such person controlling such
Purchaser and such Purchaser 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"), such Purchaser
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 its
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 any Purchaser or
any controlling person and the Company and any
Purchaser or any controlling person shall have been
advised by its counsel that a conflict of interest
between the Company and any Purchaser or any
controlling person may arise (and the Company's
counsel shall have concurred with such advice) and
for this reason it is not desirable for the
Company's counsel to represent both the
indemnifying party and the indemnified party (it
being understood, however, that the Company shall
not, in connection with any one such action or
separate but substantially similar or related
actions in the same jurisdiction arising out of the
same general allegations or circumstances, be
liable for the reasonable fees and expenses of more
than one separate firm of attorneys for any
Purchaser or any controlling person (plus any local
counsel retained by any Purchaser or any
controlling person in their reasonable judgment),
which firm (or firms) shall be designated in
writing by any Purchaser or any controlling
person). The Company shall not be liable in the
event of any settlement of any such action effected
without its consent.
The Company's indemnity agreement contained in Section 5(c)
hereof, and its 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 First Mortgage Bonds
hereunder.
6. Warranties of and Indemnity by Purchasers:
(a) Each Purchaser warrants and represents that the
information furnished in writing to the Company
through the Representative for use in the
Registration Statements, in the Basic Prospectus,
in the Prospectus, or in the Prospectus as amended
or supplemented is correct as to such Purchaser.
(b) Each Purchaser agrees, to the extent permitted by
law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as
shall have signed the Registration Statements, 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 indem-
nity agreement of the Company set forth in Section
5(c) hereof, but only with respect to untrue
statements or alleged untrue statements or
omissions or alleged omissions made 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
Purchaser expressly for use therein.
(c) Each Purchaser warrants and represents that it may
lawfully purchase from the Company the First
Mortgage Bonds which it has agreed so to purchase.
The indemnity agreement on the part of each Purchaser
contained in Section 6(b) hereof, and the warranties and represen-
tations of such Purchaser 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 First Mortgage Bonds hereunder.
7. Default of Purchasers: If any Purchaser 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 First Mortgage Bonds
which it has agreed to purchase and pay for hereunder, and the
aggregate principal amount of First Mortgage Bonds which such
defaulting Purchaser or Purchasers agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal
amount of the First Mortgage Bonds, the other Purchasers shall be
obligated severally in the proportions which the amounts of First
Mortgage Bonds set forth opposite their names in Exhibit A to the
Form of Proposal bear to the aggregate principal amount of First
Mortgage Bonds set forth opposite the names of all such non-
defaulting Purchasers, to purchase the First Mortgage Bonds which
such defaulting Purchaser or Purchasers agreed but failed or
refused to purchase on the terms set forth herein; provided that in
no event shall the principal amount of First Mortgage Bonds which
any Purchaser has agreed to purchase pursuant to Exhibit A to the
Form of Proposal be increased pursuant to this Section 7 by an
amount in excess of one-ninth of such principal amount of First
Mortgage Bonds without the written consent of such Purchaser. If
any Purchaser or Purchasers shall fail or refuse to purchase First
Mortgage Bonds and the aggregate principal amount of First Mortgage
Bonds with respect to which such default occurs is more than one-
tenth of the aggregate principal amount of the First Mortgage Bonds
then the Company shall have the right (a) to require such non-
defaulting Purchasers to purchase and pay for the respective
principal amounts of First Mortgage Bonds that they had severally
agreed to purchase hereunder, as hereinabove provided, and, in
addition, the principal amount of First Mortgage Bonds that the
defaulting Purchaser or Purchasers shall have so failed to purchase
up to a principal amount thereof equal to one-ninth of the
respective principal amounts of First Mortgage Bonds that such non-
defaulting Purchasers have otherwise agreed to purchase hereunder,
and/or (b) to procure one or more others, members of the National
Association of Securities Dealers (NASD) (or, if not members of the
NASD, who are foreign banks, dealers or institutions not registered
under the Securities Exchange Act of 1934 and who agree in making
sales to comply with the NASD's Rules of Fair Practice), to
purchase or agree to purchase, upon the terms herein set forth, the
principal amount of such First Mortgage Bonds that such defaulting
Purchaser or Purchasers had agreed to purchase, or that portion
thereof that the remaining Purchasers shall not be obligated to
purchase pursuant to the foregoing clause (a). In the event the
Company shall exercise its rights under clause (a) and/or (b)
above, the Company shall give written notice thereof to the
Purchasers within 24 hours (excluding any Saturday, Sunday or legal
holiday) of the time when the Company learns of the failure or
refusal of any Purchaser or Purchasers to purchase and pay for its
respective principal amount of First Mortgage Bonds, and thereupon
the Time of Purchase shall be postponed for a period not to exceed
five full business days, as the Company shall determine. In the
event the Company shall be entitled to but shall not elect (within
the time period specified above) to exercise its rights under
clause (a) and/or (b), then this Agreement shall terminate. In the
event of any such termination, the Company shall not be under any
liability to any Purchaser (except to the extent, if any, provided
in Section 4(h) hereof), nor shall any Purchaser (other than an
Purchaser who shall have failed or refused to purchase the First
Mortgage Bonds 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 Purchaser.
Nothing herein contained shall release any defaulting
Purchaser from its liability to the Company or any non-defaulting
Purchaser for damages occasioned by its default hereunder.
8. Termination of Agreement by the Purchasers: This
Agreement may be terminated at any time prior to the Time of
Purchase by the Representative with the consent of Purchasers
(including the Representative) who have agreed to purchase in the
aggregate 50% or more of the First Mortgage Bonds if, after the
execution and delivery of this Agreement and prior to the Time of
Purchase, in the Representative's reasonable judgment, the
Purchasers' ability to market the First Mortgage Bonds shall have
been materially adversely affected because:
(i) trading in securities on the New York Stock Exchange
shall have been generally suspended by the Commission or by
the New York Stock Exchange, or
(ii) (A) a war involving the United States of America
shall have been declared, (B) any other national calamity
shall have occurred, or (C) any conflict involving the armed
services of the United States of America shall have escalated,
or
(iii) a general banking moratorium shall have been
declared by Federal or New York State authorities, or
(iv) there shall have been any decrease in the ratings of
the Company's first mortgage bonds by Moody's 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 first mortgage bonds under consideration for possible
downgrade.
If the Representative elects to terminate this Agreement, as
provided in this Section 8, 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 Purchaser for any reason permitted hereunder, or if the sale
of the First Mortgage Bonds to the Purchasers 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 Purchaser 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 Purchasers shall be
under no liability to the Company nor be under any liability under
this Agreement to one another.
9. 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
Purchasers or the Representative, to the Representative at the
address set forth following its signature in the Form of Proposal,
and, if to the Company, to Appalachian Power Company, c/o American
Electric Power Service Corporation, 1 Riverside Plaza, Columbus,
Ohio 43215, attention of A. A. Pena, Treasurer, (fax 614/223-1687).
10. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Purchasers, 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 Sections 5 and 6
hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in
Section 7 hereof, no other person shall acquire or have any right
under or by the virtue of this Agreement.
11. Definition of Certain Terms: If there be two or more
persons, firms or corporations named in Exhibit A to the Form of
Proposal, the term "Purchasers", as used herein, shall be deemed to
mean the several persons, firms or corporations, so named
(including the Representative mentioned, if so named) and any party
or parties substituted pursuant to Section 7 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 Purchasers. All obligations of the Purchasers
hereunder are several and not joint. If there shall be only one
person, firm or corporation named in Exhibit A to the Form of
Proposal, the term "Purchasers" 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 First Mortgage Bonds
from any of the respective Purchasers.
12. Conditions of the Company's Obligations: The obligations
of the Company to issue and sell the First Mortgage Bonds hereunder
are subject to the Purchasers' performance of their obligations
hereunder, and the further condition that at the Time of Purchase
the Virginia State Corporation Commission and the Tennessee Public
Service Commission shall have issued appropriate orders, and such
orders shall remain in full force and effect, authorizing the
transactions contemplated hereby.
13. Applicable Law: This Agreement will be governed and
construed in accordance with the laws of the State of New York.
Exhibit 1(b)
FORM OF PROPOSAL
For Purchase of
First Mortgage Bonds
of
APPALACHIAN POWER COMPANY
APPALACHIAN POWER COMPANY,
c/o AMERICAN ELECTRIC POWER SERVICE CORPORATION,
1 Riverside Plaza,
Columbus, OH 43215
DEAR SIRS:
Referring to the invitation for proposals dated March 12, 1996
(the Invitation) for the purchase from Appalachian Power Company
(the Company) of First Mortgage Bonds of the Company (the Bonds)
and the notice dated the date hereof (the Notice) given by the
Company pursuant thereto, the several persons, firms and
corporations named in Exhibit A hereto (the Bidders) have submitted
and confirm herewith the following proposal for the purchase of
$100,000,000 principal amount of the Bonds with a maturity date of
March 1, 2006, as designated by the Company in the Notice (the
Designated Principal Amount).
1. The interest rate of the Bonds shall be 6.80% per
annum.
2. The price to be paid to the Company for the Bonds
shall be 99.226% of the Designated Principal Amount plus
accrued interest from the first day of the calendar month
during which the Bonds are to be issued to the date of payment
and delivery, each of the Bidders hereby offering, severally
and not jointly, to purchase from the Company, at said price
and upon the terms and conditions set forth in the form of
purchase contract attached hereto as Exhibit B (the Purchase
Contract), the principal amount of Bonds set forth opposite
its name in Exhibit A attached hereto, or the principal amount
of Bonds to be set forth opposite its name in Exhibit A
attached hereto as provided in Section 3 of the Invitation,
which together aggregate the Designated Principal Amount of
the Bonds. Exhibit A attached hereto, when completed, is
hereinafter and in the Purchase Contract called "Exhibit A to
the Form of Proposal".
3. In consideration of the agreements of the Company
set forth in the Invitation, each of the Bidders agrees (a)
that the offer of such Bidder included in this proposal shall
be irrevocable until three hours after the time fixed for the
submission of proposals, unless sooner rejected by the
Company; (b) that, if this proposal shall be accepted in
writing by the Company, such Bidder, either in person or by
the Representative on its behalf, will forthwith furnish to
the Company in writing the information referred to in Section
8 of the Invitation; and (c) that, if this proposal is
accepted, the Purchase Contract shall thereupon become
effective without any separate execution thereof and shall
constitute the agreement between the Company and the Bidders
and, upon performance by the Bidders, and the
Representative(s), of their obligations under Sections 3, 4
and 8 of the Invitation, all rights of the Company and of the
Bidders shall be determined solely in accordance with the
terms thereof, subject, however, to such modifications therein
(including Exhibit A to the Form of Proposal) as may be
necessary and as are contemplated by the Invitation.
4. This proposal must be accepted or rejected by the
Company in its entirety within three hours after the time
fixed for the submission thereof.
5. The Representative acknowledges on behalf of each
Bidder that such Bidder has received a copy of the Prospectus,
referred to in Section 5 of the Invitation.
6. The Representative represents and warrants that it
has all necessary power and authority to act for each of the
Bidders in respect of the matters referred to in this
proposal.
7. This proposal may be executed in any number of
counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same instrument.
Very truly yours,
By_/s/ MORGAN STANLEY & CO. INCORPORATED
By_/s/ Donna Ryan-Perkett______
Dated: March 18, 1996
On behalf of and as Representative of the
persons, firms and corporations named in
Exhibit A hereto.
Address:_1585 Broadway
_New York, NY 10036
Accepted:
APPALACHIAN POWER COMPANY
By_/s/ A. A. Pena_____________
Authorized Officer
Treasurer
EXHIBIT A
The names of the Bidders and the respective principal
amounts of the First Mortgage Bonds which they severally
offer to purchase are as follows:
Name Principal Amount
Morgan Stanley & Co. Incorporated $100,000,000
____________
TOTAL $100,000,000
EXHIBIT B
APPALACHIAN POWER COMPANY
Purchase Contract
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 Purchasers) named as Bidders in Exhibit
A to the Form of Proposal to which this Agreement is attached as
Exhibit B (the Form of Proposal).
WITNESSETH:
WHEREAS, the Company proposes to issue and sell the Designated
Principal Amount (as defined in the Form of Proposal) of its First
Mortgage Bonds (the First Mortgage Bonds) to be issued pursuant to
the Mortgage and Deed of Trust dated as of December 1, 1940,
between the Company and Bankers Trust Company, as trustee (the
Trustee), as heretofore supplemented and as to be further
supplemented by one or more supplemental indentures (said Mortgage,
as heretofore supplemented, and as it is to be supplemented, being
hereinafter referred to as the Mortgage); and
WHEREAS, the Purchasers have designated the person signing the
Form of Proposal (the Representative) to execute the Form of
Proposal on behalf of the respective Purchasers and to act for the
respective Purchasers 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 (the Act), with
the Securities and Exchange Commission (the Commission), two
registration statements on Form S-3 (file numbers 33-58431 and 333-
01049) relating to the First Mortgage Bonds and such registration
statements have become effective; and
WHEREAS, such registration statements, as they may have been
amended to the date hereof, including the financial statements, the
documents incorporated or deemed incorporated therein by reference
and the exhibits, being herein called the Registration Statements,
and the combined prospectus under Rule 429 under the Act, as
included or referred to in the latest Registration Statement to
become effective, 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 First
Mortgage Bonds being herein called the Basic Prospectus, and the
Basic Prospectus, to be supplemented by a prospectus supplement
(the Prospectus Supplement) to include certain information relating
to the Purchasers, the principal amount, price and terms of
offering, the interest rate and redemption terms of the First
Mortgage Bonds, which will be filed with the Commission as soon as
practicable after this Agreement becomes effective pursuant to the
applicable paragraph of 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.
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
Purchasers named in Exhibit A to the Form of Proposal, severally
and not jointly, and the respective Purchasers, severally and not
jointly, agree to purchase from the Company, at the price specified
in paragraph 2 of the Form of Proposal, the respective principal
amounts of the First Mortgage Bonds set opposite their names in
Exhibit A to the Form of Proposal, together aggregating the
Designated Principal Amount of the First Mortgage Bonds.
2. Payment and Delivery: Payment for the First Mortgage
Bonds shall be made to the Company or its order by certified or
bank check or checks, payable in Federal Reserve funds, or by
written evidence satisfactory to the Company confirming receipt of
funds by wire transfer in immediately available funds, at the
office of Simpson Thacher & Bartlett, 425 Lexington Avenue, New
York, New York 10017-3909, or at such other place as the Company
and the Representative shall mutually agree in writing, upon the
delivery of the First Mortgage Bonds to the Representative for the
respective accounts of the Purchasers against receipt therefor
signed by the Representative on behalf of itself and for the other
Purchasers. Such payments and delivery shall be made at 10:00
A.M., New York Time, on March 27, 1996 (or on such later business
day, as may be agreed upon by the Company and the Representative),
unless postponed in accordance with the provisions of Section 7
hereof. The time at which payment and delivery are to be made is
herein called the Time of Purchase.
The delivery of the First Mortgage Bonds shall be made in
fully registered form, registered in the name of CEDE & CO., to the
offices of The Depository Trust Company (DTC) in New York, New
York. The First Mortgage Bonds so delivered will be in form
acceptable for deposit with DTC and will be available for
inspection by the Representative at a place suitable therefor at
least 20 hours prior to the Time of Purchase.
3. Conditions of Purchasers' Obligations: The several
obligations of the Purchasers hereunder are subject to the accuracy
of the warranties and representations on the part of the Company
and to the following other conditions:
(a) That all legal proceedings to be taken and all
legal opinions to be rendered in connection with
the issue and sale of the First Mortgage Bonds
shall be satisfactory in form and substance to
Dewey Ballantine, counsel to the Purchasers.
(b) That, at the Time of Purchase, the Representative
shall be furnished with the following opinions,
dated the day of the Time of Purchase, with con-
formed copies or signed counterparts thereof for
the other Purchasers, with such changes therein as
may be agreed upon by the Company and the
Representative with the approval of Dewey
Ballantine, counsel to the Purchasers:
(1) Opinion of Simpson Thacher & Bartlett, counsel
to the Company, substantially in the form
heretofore made available to the Purchasers as
provided in paragraph 1 of the Invitation
referred to in the Form of Proposal;
(2) Opinion of Dewey Ballantine, counsel to the
Purchasers, substantially in the form
heretofore made available to the Purchasers as
provided in paragraph 1 of the Invitation
referred to in the Form of Proposal.
(3) Opinions of Hunton & Williams; Hunter, Smith &
Davis and Robinson & McElwee, counsel to the
Company, substantially in the form heretofore
made available to the Purchasers as provided
in paragraph 1 of the Invitation referred to
in the Form of Proposal.
(c) That the Representative shall have received a
letter from Deloitte & Touche LLP in form and
substance satisfactory to the Representative, dated
as of the day of the Time of Purchase, (i)
confirming that they are independent public
accountants within the meaning of the Act and the
applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their
opinion the financial statements audited by them
and included or incorporated by reference in the
Registration Statements 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 five business days prior to
the day of the Time of Purchase such other matters
as the Representative reasonably requests.
(d) That no amendment to the Registration Statements
and that no prospectus or prospectus supplement of
the Company (other than the prospectus or
amendments, prospectuses or prospectus supplements
relating solely to securities other than the First
Mortgage Bonds) and no document which would be
deemed incorporated in the 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 Registration Statements which is
unsatisfactory in substance to the Representative
or unsatisfactory in form to Dewey Ballantine,
counsel to the Purchasers.
(e) That, at or before the effective date of this
Agreement, or at such later time and day as the
Representative may from time to time consent to in
writing or by telex or facsimile transmission
confirmed in writing, appropriate orders of the
State Corporation Commission of Virginia and the
Tennessee Public Service Commission, necessary to
permit the sale of the First Mortgage Bonds to the
Purchasers, shall be in effect; and that, prior to
the Time of Purchase, no stop order with respect to
the effectiveness of either of the Registration
Statements shall have been issued under the Act by
the Commission or proceedings therefor initiated.
(f) That, at 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 Prospectus (other than
changes referred to in or contemplated by the
Prospectus), except changes arising from
transactions in the ordinary course of business,
none of which individually has, or in the aggregate
have, had a material adverse effect on the
business, properties or financial condition of the
Company, 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; provided that the sale by the Company of,
or its failure to sell, any other first mortgage
bonds offered for sale pursuant to the notice or
notices provided for in Section 4 of the
Invitation, shall not be such a change.
(g) 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.
4. Certain Covenants of the Company: In further consider-
ation of the agreements of the Purchasers herein contained, the
Company covenants as follows:
(a) As soon as practicable after this agreement becomes
effective, and in any event within the time
prescribed by Rule 424 under the Act, to file the
Prospectus Supplement relating to the First
Mortgage Bonds with the Commission; 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 either of the Registration Statements or the
Prospectus (including the documents incorporated
therein by reference) or for additional information
with respect thereto or of the entry of a stop
order suspending the effectiveness of either
Registration Statement or of the initiation or
threatening of any proceeding for that purpose and,
if such a stop order should be entered by the
Commission, to make every reasonable effort to
obtain the prompt lifting or removal thereof.
(b) To deliver to the Purchasers, 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 exceed-
ing nine months) after the date hereof as they are
required by law to deliver a prospectus, 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 First Mortgage Bonds) as
the Representative may reasonably request; and in
case any Purchaser is required to deliver a
prospectus after the expiration of nine months
after the date hereof, to furnish to any Purchaser,
upon request, at the expense of such Purchaser, a
reasonable quantity of a supplemental prospectus or
of supplements to the Prospectus complying with
Section 10(a)(3) of the Act.
(c) To furnish to the Representative a copy, certified
by the Secretary or an Assistant Secretary of the
Company, of the Registration Statements as
initially filed with the Commission and of all
amendments thereto and documents incorporated by
reference, other than amendments relating solely to
securities other than the First Mortgage Bonds
(exclusive of exhibits), and, upon request, to
furnish to the Representative sufficient plain
copies thereof (exclusive of exhibits) for
distribution of one to each of the other
Purchasers.
(d) In the event that the Purchasers constitute
"underwriters" within the meaning of Section 2(11)
of the Act, then for such period of time (not
exceeding nine months) after the date hereof as
they are required by law to deliver a prospectus,
if any event shall have occurred as a result of
which it is necessary to amend or supplement the
Prospectus in order to make the statements therein,
in the light of the circumstances when the
Prospectus is delivered to a purchaser, not
misleading, forthwith to prepare and furnish, at
its own expense, to the Purchasers and to dealers
(whose names and addresses are furnished to the
Company by the Representative) to whom principal
amounts of the First Mortgage Bonds may have been
sold by the Representative for the accounts of the
Purchasers and, upon request, to any other dealers
making such request, copies of such amendments to
the Prospectus or supplements to the Prospectus.
(e) As soon as practicable, the Company will make
generally available to its security holders and to
the Purchasers an earning 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.
(f) To use its best efforts to qualify the First
Mortgage Bonds 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 Purchasers 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.
(g) To pay all expenses, fees and taxes (other than
transfer taxes on resales of the First Mortgage
Bonds by the respective Purchasers) in connection
with the issuance and delivery of the First
Mortgage Bonds, 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 Dewey Ballantine, counsel to the
Purchasers, only in the events provided in para-
graph (h) of this Section 4, the Purchasers hereby
agreeing to pay such fees and disbursements in any
other event.
(h) If the Purchasers shall not take up and pay for the
First Mortgage Bonds 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 7 or 8 hereof, to pay the
fees and disbursements of Dewey Ballantine, counsel
to the Purchasers, and, if the Purchasers shall not
take up and pay for the First Mortgage Bonds due to
the failure of the Company to comply with any of
the conditions specified in Section 3 hereof, to
reimburse the Purchasers for their reasonable out-
of-pocket expenses, in an aggregate amount not
exceeding a total of $10,000, incurred in connec-
tion with the financing contemplated by this
Agreement.
(i) The Company will timely file any certificate
required by Rule 52 under the Public Utility
Holding Company Act of 1935 in connection with the
sale of the First Mortgage Bonds.
(j) On and after the date this agreement becomes
effective and through the Time of Purchase, without
the prior written consent of the Representative,
not to issue or sell any first mortgage bonds
(other than the First Mortgage Bonds or any other
first mortgage bonds offered pursuant to the notice
or notices provided for in Section 4 of the
Invitation) or any other long-term debt of the
Company having terms and provisions substantially
similar to the First Mortgage Bonds.
5. Warranties of and Indemnity by the Company: The Company
represents and warrants to, and agrees with the Purchasers, as set
forth below:
(a) the Registration Statements on their respective
effective dates, which complied with the
requirements of Form S-3, did 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 and the Basic Prospectus, on the date
the latest Registration Statement became effective,
did not contain any untrue statement of a material
fact or omit to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading; when the Prospectus Supplement is filed
with the Commission, and at the Time of Purchase,
the Registration Statements, and the Prospectus, as
they may be amended or supplemented, will comply,
or be deemed to comply, in all material respects
with the provisions of the Act and the Rules, the
Registration Statements, as they may be amended or
supplemented, 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, and the
Prospectus, as it may be amended or supplemented,
will not contain any untrue statement of a material
fact or omit to state a material fact 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 Purchasers with
respect to any statements or omissions made in 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
Purchaser expressly for use in the Prospectus, or
to any statements in or omissions from that part of
the Registration Statements that shall constitute
the Statement of Eligibility under the Trust
Indenture Act of 1939 of any indenture trustee
under an indenture of the Company.
(b) As of the Time of Purchase, the Mortgage will have
been duly authorized by the Company and duly
qualified under the Trust Indenture Act of 1939, as
amended, 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
First Mortgage Bonds will have been duly
authorized, executed, authenticated and, when paid
for by the Purchasers, will constitute legal, valid
and binding obligations of the Company entitled to
the benefits of the Mortgage, except as the
enforceability thereof may be limited by
bankruptcy, fraudulent conveyance, 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.
(c) To the extent permitted by law, to indemnify and
hold harmless each of the Purchasers and each
person, if any, who controls any such Purchaser
within the meaning of Section 15 of the Act,
against any and all losses, claims, damages or
liabilities, joint or several, to which they or any
of them may become subject under the Act or
otherwise, and to reimburse the Purchasers and such
controlling person or persons, if any, for any
legal or other expenses incurred by 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 either Registration Statement, in
the Basic Prospectus (if used prior to the
effective date of this Agreement), or in the
Prospectus, or if the Company shall furnish or
cause to be furnished to the Purchasers any
amendments or any supplemental information, in the
Prospectus as so amended or supplemented, other
than amendments or supplements relating solely to
securities other than the First Mortgage Bonds
(provided that if such Prospectus or such
Prospectus, as amended or supplemented, is used
after the period of time referred to in Section
4(d) 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 either
Registration Statement, in the Basic 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 or through the Representative on
behalf of any Purchaser expressly for use therein
or with any statements in or omissions from that
part of either Registration Statement that shall
constitute the Statement of Eligibility under the
Trust Indenture Act of any indenture trustee under
an indenture of the Company, and except that this
indemnity shall not inure to the benefit of any
Purchaser (or of any person controlling such
Purchaser) on account of any losses, claims,
damages, liabilities or actions arising from the
sale of the First Mortgage Bonds to any person if
such loss arises from the fact that a copy of the
Prospectus, as the same may then be supplemented or
amended (excluding, however, any document then
incorporated or deemed incorporated therein by
reference), was not sent or given by or on behalf
of such Purchaser to such person with or prior to
the written confirmation of the sale involved and
the alleged omission or alleged untrue statement or
omission or untrue statement was corrected in the
Prospectus as supplemented or amended at the time
of such confirmation. Each Purchaser agrees
promptly after the receipt by it 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 5(c) may be
sought by it, or by any person controlling it, to
notify the Company in writing of the commencement
thereof, but such Purchaser's omission so to notify
the Company of any such action shall not release
the Company from any liability which it may have to
such Purchaser or to such controlling person
otherwise than on account of the indemnity
agreement contained in this Section 5(c). In case
any such action shall be brought against such
Purchaser or any such person controlling such
Purchaser and such Purchaser 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"), such Purchaser
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 its
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 any Purchaser or
any controlling person and the Company and any
Purchaser or any controlling person shall have been
advised by its counsel that a conflict of interest
between the Company and any Purchaser or any
controlling person may arise (and the Company's
counsel shall have concurred with such advice) and
for this reason it is not desirable for the
Company's counsel to represent both the
indemnifying party and the indemnified party (it
being understood, however, that the Company shall
not, in connection with any one such action or
separate but substantially similar or related
actions in the same jurisdiction arising out of the
same general allegations or circumstances, be
liable for the reasonable fees and expenses of more
than one separate firm of attorneys for any
Purchaser or any controlling person (plus any local
counsel retained by any Purchaser or any
controlling person in their reasonable judgment),
which firm (or firms) shall be designated in
writing by any Purchaser or any controlling
person). The Company shall not be liable in the
event of any settlement of any such action effected
without its consent.
The Company's indemnity agreement contained in Section 5(c)
hereof, and its 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 First Mortgage Bonds
hereunder.
6. Warranties of and Indemnity by Purchasers:
(a) Each Purchaser warrants and represents that the
information furnished in writing to the Company
through the Representative for use in the
Registration Statements, in the Basic Prospectus,
in the Prospectus, or in the Prospectus as amended
or supplemented is correct as to such Purchaser.
(b) Each Purchaser agrees, to the extent permitted by
law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as
shall have signed the Registration Statements, 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 indem-
nity agreement of the Company set forth in Section
5(c) hereof, but only with respect to untrue
statements or alleged untrue statements or
omissions or alleged omissions made 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
Purchaser expressly for use therein.
(c) Each Purchaser warrants and represents that it may
lawfully purchase from the Company the First
Mortgage Bonds which it has agreed so to purchase.
The indemnity agreement on the part of each Purchaser
contained in Section 6(b) hereof, and the warranties and represen-
tations of such Purchaser 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 First Mortgage Bonds hereunder.
7. Default of Purchasers: If any Purchaser 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 First Mortgage Bonds
which it has agreed to purchase and pay for hereunder, and the
aggregate principal amount of First Mortgage Bonds which such
defaulting Purchaser or Purchasers agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal
amount of the First Mortgage Bonds, the other Purchasers shall be
obligated severally in the proportions which the amounts of First
Mortgage Bonds set forth opposite their names in Exhibit A to the
Form of Proposal bear to the aggregate principal amount of First
Mortgage Bonds set forth opposite the names of all such non-
defaulting Purchasers, to purchase the First Mortgage Bonds which
such defaulting Purchaser or Purchasers agreed but failed or
refused to purchase on the terms set forth herein; provided that in
no event shall the principal amount of First Mortgage Bonds which
any Purchaser has agreed to purchase pursuant to Exhibit A to the
Form of Proposal be increased pursuant to this Section 7 by an
amount in excess of one-ninth of such principal amount of First
Mortgage Bonds without the written consent of such Purchaser. If
any Purchaser or Purchasers shall fail or refuse to purchase First
Mortgage Bonds and the aggregate principal amount of First Mortgage
Bonds with respect to which such default occurs is more than one-
tenth of the aggregate principal amount of the First Mortgage Bonds
then the Company shall have the right (a) to require such non-
defaulting Purchasers to purchase and pay for the respective
principal amounts of First Mortgage Bonds that they had severally
agreed to purchase hereunder, as hereinabove provided, and, in
addition, the principal amount of First Mortgage Bonds that the
defaulting Purchaser or Purchasers shall have so failed to purchase
up to a principal amount thereof equal to one-ninth of the
respective principal amounts of First Mortgage Bonds that such non-
defaulting Purchasers have otherwise agreed to purchase hereunder,
and/or (b) to procure one or more others, members of the National
Association of Securities Dealers (NASD) (or, if not members of the
NASD, who are foreign banks, dealers or institutions not registered
under the Securities Exchange Act of 1934 and who agree in making
sales to comply with the NASD's Rules of Fair Practice), to
purchase or agree to purchase, upon the terms herein set forth, the
principal amount of such First Mortgage Bonds that such defaulting
Purchaser or Purchasers had agreed to purchase, or that portion
thereof that the remaining Purchasers shall not be obligated to
purchase pursuant to the foregoing clause (a). In the event the
Company shall exercise its rights under clause (a) and/or (b)
above, the Company shall give written notice thereof to the
Purchasers within 24 hours (excluding any Saturday, Sunday or legal
holiday) of the time when the Company learns of the failure or
refusal of any Purchaser or Purchasers to purchase and pay for its
respective principal amount of First Mortgage Bonds, and thereupon
the Time of Purchase shall be postponed for a period not to exceed
five full business days, as the Company shall determine. In the
event the Company shall be entitled to but shall not elect (within
the time period specified above) to exercise its rights under
clause (a) and/or (b), then this Agreement shall terminate. In the
event of any such termination, the Company shall not be under any
liability to any Purchaser (except to the extent, if any, provided
in Section 4(h) hereof), nor shall any Purchaser (other than an
Purchaser who shall have failed or refused to purchase the First
Mortgage Bonds 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 Purchaser.
Nothing herein contained shall release any defaulting
Purchaser from its liability to the Company or any non-defaulting
Purchaser for damages occasioned by its default hereunder.
8. Termination of Agreement by the Purchasers: This
Agreement may be terminated at any time prior to the Time of
Purchase by the Representative with the consent of Purchasers
(including the Representative) who have agreed to purchase in the
aggregate 50% or more of the First Mortgage Bonds if, after the
execution and delivery of this Agreement and prior to the Time of
Purchase, in the Representative's reasonable judgment, the
Purchasers' ability to market the First Mortgage Bonds shall have
been materially adversely affected because:
(i) trading in securities on the New York Stock Exchange
shall have been generally suspended by the Commission or by
the New York Stock Exchange, or
(ii) (A) a war involving the United States of America
shall have been declared, (B) any other national calamity
shall have occurred, or (C) any conflict involving the armed
services of the United States of America shall have escalated,
or
(iii) a general banking moratorium shall have been
declared by Federal or New York State authorities, or
(iv) there shall have been any decrease in the ratings of
the Company's first mortgage bonds by Moody's 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 first mortgage bonds under consideration for possible
downgrade.
If the Representative elects to terminate this Agreement, as
provided in this Section 8, 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 Purchaser for any reason permitted hereunder, or if the sale
of the First Mortgage Bonds to the Purchasers 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 Purchaser 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 Purchasers shall be
under no liability to the Company nor be under any liability under
this Agreement to one another.
9. 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
Purchasers or the Representative, to the Representative at the
address set forth following its signature in the Form of Proposal,
and, if to the Company, to Appalachian Power Company, c/o American
Electric Power Service Corporation, 1 Riverside Plaza, Columbus,
Ohio 43215, attention of A. A. Pena, Treasurer, (fax 614/223-1687).
10. Parties in Interest: The agreement herein set forth has
been and is made solely for the benefit of the Purchasers, 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 Sections 5 and 6
hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in
Section 7 hereof, no other person shall acquire or have any right
under or by the virtue of this Agreement.
11. Definition of Certain Terms: If there be two or more
persons, firms or corporations named in Exhibit A to the Form of
Proposal, the term "Purchasers", as used herein, shall be deemed to
mean the several persons, firms or corporations, so named
(including the Representative mentioned, if so named) and any party
or parties substituted pursuant to Section 7 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 Purchasers. All obligations of the Purchasers
hereunder are several and not joint. If there shall be only one
person, firm or corporation named in Exhibit A to the Form of
Proposal, the term "Purchasers" 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 First Mortgage Bonds
from any of the respective Purchasers.
12. Conditions of the Company's Obligations: The obligations
of the Company to issue and sell the First Mortgage Bonds hereunder
are subject to the Purchasers' performance of their obligations
hereunder, and the further condition that at the Time of Purchase
the Virginia State Corporation Commission and the Tennessee Public
Service Commission shall have issued appropriate orders, and such
orders shall remain in full force and effect, authorizing the
transactions contemplated hereby.
13. Applicable Law: This Agreement will be governed and
construed in accordance with the laws of the State of New York.
Exhibit 4
Indenture Supplemental
TO
Mortgage and Deed of Trust
(Dated as of December 1, 1940)
Executed by
APPALACHIAN POWER COMPANY
formerly Appalachian Electric Power Company
TO
BANKERS TRUST COMPANY,
As Trustee
Dated as of March 1, 1996
First Mortgage Bonds, 6-3/8% Series due 2001
First Mortgage Bonds, 6.80% Series due 2006
TABLE OF CONTENTS
The Table of Contents shall not be deemed to be any part of the
Indenture Supplemental to Mortgage and Deed of Trust.
PAGE
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS
Execution of Mortgage. . . . . . . . . . . . . . . . . . 1
Execution of supplemental indentures . . . . . . . . . . 1
Termination of Individual Trustee. . . . . . . . . . . . 1
Provision for issuance of bonds in one or more series. . 2
Right to execute supplemental indenture. . . . . . . . . 2
First Mortgage Bonds heretofore issued . . . . . . . . . 2
Issue of new First Mortgage Bonds of the 59th Series . . 3
Issue of new First Mortgage Bonds of the 60th Series . . 3
First 1996 Supplemental Indenture . . . . . . . . . . . . 3
Compliance with legal requirements . . . . . . . . . . . 3
GRANTING CLAUSES. . . . . . . . . . . . . . . . . . . . . . . 4
DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . . . . 4
APPURTENANCES, ETC. . . . . . . . . . . . . . . . . . . . . . 4
HABENDUM. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PRIOR LEASEHOLD ENCUMBRANCES. . . . . . . . . . . . . . . . . 5
GRANT IN TRUST. . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1. Amendment to Section 14 of Original Indenture
to provide that certain Bonds may be
executed by its Treasurer . . . . . . . . . . . .7
SECTION 2. Supplement to Original Indenture by adding
Section 20FFF. . . . . . . . . . . . . . . . . 7
SECTION 3. Supplement to Original Indenture by adding
Section 20GGG. . . . . . . . . . . . . . . . . 10
SECTION 4. Initial Issuance of the Bonds of the 59th Series. 13
SECTION 5. Initial Issuance of the Bonds of the 60th Series. 14
SECTION 6. Provision for record date for meetings
of Bondholders . . . . . . . . . . . . . . . . 14
SECTION 7. Original Indenture and First 1996 Supplemental
Indenture same instrument. . . . . . . . . . . 14
SECTION 8. Limitation of rights. . . . . . . . . . . . . . . 14
SECTION 9. Execution in counterparts . . . . . . . . . . . . 14
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . 15
SIGNATURES AND SEALS. . . . . . . . . . . . . . . . . . . . . 15
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . 17
SCHEDULE I. . . . . . . . . . . . . . . . . . . . . . . . . . I-1
SCHEDULE II. . . . . . . . . . . . . . . . . . . . . . . . . .II-1
SUPPLEMENTAL INDENTURE, dated as of the first day of March
in the year One Thousand Nine Hundred and Ninety-six, made and
entered into by and between APPALACHIAN POWER COMPANY, a
corporation of the Commonwealth of Virginia, the corporate title
of which was, prior to April 17, 1958, APPALACHIAN ELECTRIC POWER
COMPANY (hereinafter sometimes called the "Company"), a
transmitting utility (as such term is defined in Section 46-9-
105(1)(n) of the West Virginia Code), party of the first part,
and BANKERS TRUST COMPANY, a corporation of the State of New York
(hereinafter sometimes called the "Corporate Trustee" or
"Trustee"), as Trustee, party of the second part.
WHEREAS, the Company has heretofore executed and delivered
its Mortgage and Deed of Trust (hereinafter sometimes referred to
as the "Mortgage"), dated as of December 1, 1940, to the Trustee
for the security of all bonds of the Company outstanding
thereunder, and by said Mortgage conveyed to the Trustee, upon
certain trusts, terms and conditions, and with and subject to
certain provisos and covenants therein contained, all and
singular the property, rights and franchises which the Company
then owned or should thereafter acquire, excepting any property
expressly excepted by the terms of the Mortgage; and
WHEREAS, the Company has heretofore executed and delivered
to the Trustee supplements and indentures supplemental to the
Mortgage, dated as of December 1, 1943, December 2, 1946,
December 1, 1947, March 1, 1950, June 1, 1951, October 1, 1952,
December 1, 1953, March 1, 1957, May 1, 1958, October 2, 1961,
April 1, 1962, June 1, 1965, September 2, 1968, December 1, 1968,
October 1, 1969, June 1, 1970, October 1, 1970, September 1,
1971, February 1, 1972, December 1, 1972, July 1, 1973, March 1,
1974, April 1, 1975, May 1, 1975, December 1, 1975, April 1,
1976, September 1, 1976, November 1, 1977, May 1, 1979, August 1,
1979, February 1, 1980, November 1, 1980, April 1, 1982, October
1, 1983, February 1, 1987, September 1, 1987, November 1, 1989,
December 1, 1990, August 1, 1991, February 1, 1992, May 1, 1992,
August 1, 1992, November 15, 1992, April 15, 1993, May 15, 1993,
October 1, 1993, November 1, 1993, August 15, 1994, October 1,
1994, March 1, 1995, May 1, 1995 and June 1, 1995 (hereinafter
referred to as the "Third 1995 Supplemental Indenture"),
respectively, amending and supplementing the Mortgage in certain
respects (the Mortgage, as so amended and supplemented, being
hereinafter called the "Original Indenture") and conveying to the
Trustee, upon certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein contained,
certain property rights and property therein described; and
WHEREAS, effective October 7, 1988, pursuant to Section 115
of the Original Indenture, the Individual Trustee resigned and
all powers of the Individual Trustee then terminated, as did the
Individual Trustee's right, title or interest in and to the trust
estate, and without appointment of a new trustee as successor to
the Individual Trustee, all the right, title and powers of the
Trustee thereupon devolved upon the Corporate Trustee and its
successors alone; and
WHEREAS, the Original Indenture provides that bonds issued
thereunder may be issued in one or more series and further
provides that, with respect to each series, the rate or rates of
interest, the date or dates of maturity, the dates for the
payment of interest, the terms and rates of optional redemption,
and other terms and conditions not inconsistent with the Original
Indenture may be established, prior to the issue of bonds of such
series, by an indenture supplemental to the Original Indenture;
and
WHEREAS, Section 132 of the Original Indenture provides that
any power, privilege or right expressly or impliedly reserved to
or in any way conferred upon the Company by any provision of the
Original Indenture, whether such power, privilege or right is in
any way restricted or is unrestricted, may be in whole or in part
waived or surrendered or subjected to any restriction if at the
time unrestricted or to additional restriction if already
restricted, and that the Company may enter into any further
covenants, limitations or restrictions for the benefit of any one
or more series of bonds issued under the Original Indenture and
provide that a breach thereof shall be equivalent to a default
under the Original Indenture, or the Company may cure any
ambiguity or correct or supplement any defective or inconsistent
provisions contained in the Original Indenture or in any
indenture supplemental to the Original Indenture, by an
instrument in writing, executed and acknowledged, and that the
Trustee is authorized to join with the Company in the execution
of any such instrument or instruments; and
WHEREAS, the Company has heretofore issued, in accordance
with the provisions of the Mortgage, as amended and supplemented
as of the respective dates thereof, bonds of the series (which
are outstanding), entitled and designated as hereinafter set
forth, in the respective original aggregate principal amounts
indicated:
Series Amount
First Mortgage Bonds, 7-1/2% Series due 1998. . . $45,000,000
First Mortgage Bonds, 7.00% Series due 1999. . . 30,000,000
First Mortgage Bonds, 7-5/8% Series due 2002. . . 50,000,000
First Mortgage Bonds, 7.95% Series due 2002. . . 60,000,000
First Mortgage Bonds, 7.38% Series due 2002. . . 50,000,000
First Mortgage Bonds, 7.40% Series due 2002. . . 30,000,000
First Mortgage Bonds, 7-1/2% Series due 2002. . . 70,000,000
First Mortgage Bonds, 6.65% Series due 2003. . . 40,000,000
First Mortgage Bonds, 6.85% Series due 2003. . . 30,000,000
First Mortgage Bonds, 6.00% Series due 2003. . . 30,000,000
First Mortgage Bonds, 7.70% Series due 2004. . . 21,000,000
First Mortgage Bonds, 7.85% Series due 2004. . . 50,000,000
First Mortgage Bonds, 8.00% Series due 2005. . . 50,000,000
First Mortgage Bonds, 6.89% Series due 2005. . . 30,000,000
First Mortgage Bonds, 9-7/8% Series due 2020. . . 50,000,000
First Mortgage Bonds, 9.35% Series due 2021. . . 50,000,000
First Mortgage Bonds, 8.75% Series due 2022. . . 50,000,000
First Mortgage Bonds, 8.70% Series due 2022. . . 40,000,000
First Mortgage Bonds, 8.43% Series due 2022. . . 50,000,000
First Mortgage Bonds, 8.50% Series due 2022. . . 70,000,000
First Mortgage Bonds, 7.80% Series due 2023. . . 40,000,000
First Mortgage Bonds, 7.90% Series due 2023. . . 30,000,000
First Mortgage Bonds, 7.15% Series due 2023. . . 30,000,000
First Mortgage Bonds, 7.125% Series due 2024. . . 50,000,000
First Mortgage Bonds, 8.00% Series due 2025. . . 50,000,000
and
WHEREAS, the Company, by appropriate corporate action in
conformity with the terms of the Original Indenture, has duly
determined to create a series of bonds under the Original
Indenture to be designated as "First Mortgage Bonds, 6-3/8%
Series due 2001" (hereinafter sometimes referred to as the "bonds
of the 59th Series"); and
WHEREAS, each of the bonds of the 59th Series is to be
substantially in the form set forth in Schedule I to this
Supplemental Indenture (hereinafter sometimes referred to as the
"First 1996 Supplemental Indenture"); and
WHEREAS, the Company, by appropriate corporate action in
conformity with the terms of the Original Indenture, has duly
determined to create a series of bonds under the Original
Indenture to be designated as "First Mortgage Bonds, 6.80% Series
due 2006" (hereinafter sometimes referred to as the "bonds of the
60th Series"); and
WHEREAS, each of the bonds of the 60th Series is to be
substantially in the form set forth in Schedule II to the First
1996 Supplemental Indenture; and
WHEREAS, the Company, in the exercise of the powers and
authorities conferred upon and reserved to it under and by virtue
of the provisions of the Original Indenture, and pursuant to
resolutions of its Board of Directors, has duly resolved and
determined to make, execute and deliver to the Trustee a
supplemental indenture, in the form hereof, for the purposes
herein provided; and
WHEREAS, all conditions and requirements necessary to make
this First 1996 Supplemental Indenture a valid, binding and legal
instrument in accordance with its terms, have been done,
performed and fulfilled, and the execution and delivery thereof
have been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That Appalachian Power Company, in consideration of the
premises and of the purchase and acceptance of the bonds by the
holders thereof and of the sum of One Dollar ($1.00) and other
good and valuable consideration paid to it by the Trustee at or
before the ensealing and delivery of these presents, the receipt
whereof is hereby acknowledged, and in order to secure the
payment of both the principal of and interest and premium, if
any, on the bonds from time to time issued under and secured by
the Original Indenture and this First 1996 Supplemental
Indenture, according to their tenor and effect, and the
performance of all the provisions of the Original Indenture and
this First 1996 Supplemental Indenture (including any further
indenture or indentures supplemental to the Original Indenture
and any modification or alteration made as in the Original
Indenture provided) and of said bonds, has granted, bargained,
sold, released, conveyed, transferred, mortgaged, pledged, set
over and confirmed, and by these presents does grant, bargain,
sell, release, convey, assign, transfer, mortgage, pledge, set
over and confirm unto Bankers Trust Company, as Trustee, and to
its respective successor or successors in the trust hereby
created, and to its and their assigns, all the following
described properties of the Company, that is to say:
All property, real, personal and mixed, tangible and
intangible, and all franchises owned by the Company on the date
of the execution hereof, acquired since the execution of the
Third 1995 Supplemental Indenture (except any hereinafter
expressly excepted from the lien and operation of this First 1996
Supplemental Indenture).
TOGETHER WITH all and singular the tenements, hereditaments
and appurtenances belonging or in anywise appertaining to the
aforesaid property or any part thereof, with the reversion and
reversions, remainder and remainders and (subject to the
provisions of Section 63 of the Original Indenture) the tolls,
rents, revenues, issues, earnings, income, product and profits
thereof and all the estate, right, title and interest and claim
whatsoever, at law as well as in equity, which the Company now
has or may hereafter acquire in and to the aforesaid property and
franchises and every part and parcel thereof.
Provided that, in addition to the reservations and
exceptions herein elsewhere contained, the following are not and
are not intended to be now or hereafter granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted
from the lien and operation of the Original Indenture and this
First 1996 Supplemental Indenture, viz.: (1) cash, shares of
stock, and obligations (including bonds, notes and other
securities) not hereinafter or in the Original Indenture
specifically pledged, deposited or delivered hereunder or
thereunder or hereinafter or therein covenanted so to be; (2) any
goods, wares, merchandise, equipment, materials or supplies
acquired for the purpose of sale or resale in the usual course of
business or for consumption in the operation of any properties of
the Company and automobiles and trucks; (3) all judgments,
accounts, and choses in action, the proceeds of which the Company
is not obligated as hereinafter provided or as provided in the
Original Indenture to deposit with the Trustee hereunder and
thereunder; provided, however, that the property and rights
expressly excepted from the lien and operation of the Original
Indenture and this First 1996 Supplemental Indenture in the above
subdivisions (2) and (3) shall (to the extent permitted by law)
cease to be so excepted, in the event that the Trustee or a
receiver or trustee shall enter upon and take possession of the
mortgaged and pledged property in the manner provided in Article
XIV of the Original Indenture by reason of the occurrence of a
completed default, as defined in said Article XIV.
TO HAVE AND TO HOLD all such properties, real, personal and
mixed, granted, bargained, sold, released, conveyed, assigned,
transferred, mortgaged, pledged, set over or confirmed by the
Company as aforesaid, or intended so to be, unto the Trustee and
its successors in the trust;
SUBJECT, HOWEVER, to the reservations, exceptions,
conditions, limitations and restrictions contained in the several
deeds, leases, servitudes, franchises and contracts or other
instruments through which the Company acquired and/or claims
title to and/or enjoys the use of the aforesaid properties; and
subject also to encumbrances of the character defined in Section
6 of the Original Indenture as "excepted encumbrances" in so far
as the same may attach to any of the property embraced herein.
Inasmuch as the Company holds certain of said lands, rights
of way and other property under leases, power agreements and
other contracts which provide that the Company's interest therein
shall not be mortgaged without the consent of the respective
lessors or other parties to said agreements and contracts, and
such lessors and parties have either given such consent or have
waived the requirement of such consent, it is hereby expressly
agreed and made a condition upon which this First 1996
Supplemental Indenture is executed and delivered, that the lien
of this First 1996 Supplemental Indenture and the estate, rights
and remedies of the Trustee hereunder, and the rights and
remedies of the holders of the bonds secured hereby and by the
Original Indenture in so far as they may affect such lands,
rights of way and other property now held or to be hereafter
acquired by the Company under such leases, contracts or
agreements, shall be subject and subordinate in all respects to
the rights and remedies of the respective lessors or other
parties thereto.
And it is hereby expressly covenanted and agreed as follows:
(a) That the rights of the Trustee hereunder, and of
every person or corporation whatsoever claiming by reason of
this First 1996 Supplemental Indenture any right, title or
interest, legal or equitable, in the property covered by any
such lease, power agreement or other contract, are and at
all times hereafter shall be subject in the same manner and
degree as the rights of the Company might or would at all
times be subject, had this First 1996 Supplemental Indenture
not been made, to all terms, provisions, conditions,
covenants, stipulations, and agreements, and to all
exceptions, reservations, limitations, restrictions, and
forfeitures contained in any such lease, power agreement or
other contract;
(b) That any right, claim, condition or forfeiture
which might at any time be asserted against the party in
possession under the provisions of any such lease, power
agreement or other contract, had this First 1996
Supplemental Indenture not been made, may be asserted with
the same force and effect against any and all persons or
corporations at any time claiming any right, title or
interest in any such property under or by reason of this
First 1996 Supplemental Indenture or of any bond hereby and
by the Original Indenture secured; and
(c) That such consent or waiver of the requirement of
such consent given by the lessor under any such lease or
party to any such power agreement or other contract is
intended and shall be construed to be solely for the purpose
of permitting the Company to mortgage its property generally
without violating the express covenant contained in such
lease, power agreement or other contract, and that such
consent or waiver of the requirement of such consent confers
upon the Trustee hereunder and the holders of bonds secured
hereby and by the Original Indenture no rights in addition
to such as they would have had, respectively, if such
consent or waiver of the requirement of such consent had not
been given.
IN TRUST NEVERTHELESS, upon the terms and trusts in the
Original Indenture and this First 1996 Supplemental Indenture set
forth, for the equal and pro rata benefit and security of those
who shall hold the bonds and coupons issued and to be issued
hereunder and under the Original Indenture, in accordance with
the terms of the Original Indenture and of this First 1996
Supplemental Indenture, without preference, priority or
distinction as to lien of any of said bonds or coupons over any
other thereof by reason of priority in the time of issuance or
negotiation thereof, or otherwise howsoever, subject, however, to
the conditions, provisions and covenants set forth in the
Original Indenture and in this First 1996 Supplemental Indenture.
AND THIS INDENTURE FURTHER WITNESSETH:
That in further consideration of the premises and for the
considerations aforesaid, the Company, for itself and it
successors and assigns, hereby covenants and agrees to and with
the Trustee, and its successor or successors in such trust, under
the Original Indenture, as follows:
Section 1. The second sentence of Section 14 of the Original
Indenture is hereby amended so that said second sentence, as
amended, shall read as follows:
All bonds issued hereunder shall, from time to time, be
executed on behalf of the Company by, in case of all
bonds created prior to the 31st Series, its President
or one of its Vice Presidents, and in the case of bonds
of the 31st Series and subsequent series through the
58th Series, by its Chairman of the Board, its
President, or one of its Vice Presidents, and in the
case of bonds of the 59th Series and subsequent series,
by its Chairman of the Board, its President, one of its
Vice Presidents or its Treasurer, whose signature,
except on bonds of the 1970 Series and bonds of the
1977 Series, may be a facsimile thereof, shall be
thereunto impressed or imprinted and attested by its
Secretary or one of its Assistant Secretaries, whose
attestation, except on bonds of the 1970 Series and
bonds of the 1977 Series, may be a facsimile.
Section 2. The Original Indenture is hereby supplemented by
adding immediately after Section 20EEE, a new Section 20FFF, as
follows:
SECTION 20FFF. The Company hereby creates a fifty-
ninth series of bonds to be issued under and secured by this
Indenture, to be designated and to be distinguished from the
bonds of all other series by the title "First Mortgage
Bonds, 6-3/8% Series due 2001" (herein sometimes referred to
as the "bonds of the 59th Series"). The form of the bonds
of the 59th Series shall be substantially as set forth in
Schedule I to the First 1996 Supplemental Indenture.
Bonds of the 59th Series shall mature on March 1, 2001.
Unless otherwise determined by the Company, the bonds of the
59th Series shall be issued in fully registered form without
coupons in denominations of $1,000 and in integral multiples
thereof; the principal of and premium (if any) and interest
on each said bond to be payable at the office or agency of
the Company in the Borough of Manhattan, The City of New
York, in lawful money of the United States of America,
provided that at the option of the Company interest may be
mailed to registered owners of the bonds at their respective
addresses that appear on the register thereof; and the rate
of interest shall be the rate per annum specified in the
title thereof, payable semi-annually on the first days of
March and September of each year (commencing September 1,
1996) and on their maturity date.
The person in whose name any bond of the 59th Series is
registered at the close of business on any record date (as
hereinbelow defined) with respect to any regular semi-annual
interest payment date (other than interest payable upon
redemption or maturity) shall be entitled to receive the
interest payable on such interest payment date
notwithstanding the cancellation of such bond of the 59th
Series upon any registration of transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except, if and to the extent that the Company
shall default in the payment of the interest due on such
interest payment date, then the registered owners of bonds
of the 59th Series on such record date shall have no further
right to or claim in respect of such defaulted interest as
such registered owners on such record date, and the persons
entitled to receive payment of any defaulted interest
thereafter payable or paid on any bonds of the 59th Series
shall be the registered owners of such bonds of the 59th
Series (or any bond or bonds issued, directly or after
intermediate transactions upon transfer or exchange or in
substitution thereof) on the date of payment of such
defaulted interest. Interest payable upon redemption or
maturity shall be payable to the person to whom the
principal is paid. The term "record date" as used in this
Section 20FFF, and in the form of the bonds of the 59th
Series, with respect to any regular semi-annual interest
payment date (other than interest payable upon redemption or
maturity) applicable to the bonds of the 59th Series, shall
mean the February 15 next preceding a March 1 interest
payment date or the August 15 next preceding a September 1
interest payment date, as the case may be, or, if such
February 15 or August 15 is not a Business Day (as defined
hereinbelow), the next preceding Business Day. The term
"Business Day" with respect to any bond of the 59th Series
shall mean any day, other than a Saturday or Sunday, which
is not a day on which banking institutions or trust
companies in The City of New York, New York or the city in
which is located any office or agency maintained for the
payment of principal of or premium, if any, or interest on
such bond of the 59th Series are authorized or required by
law, regulation or executive order to remain closed.
Every registered bond of the 59th Series shall be dated
the date of authentication and shall bear interest computed
on the basis of a 360-day year consisting of twelve 30-day
months from the latest semi-annual interest payment date to
which interest has been paid on the bonds of the 59th Series
preceding the date of authentication, unless such date of
authentication be an interest payment date to which interest
is being paid on the bonds of the 59th Series, in which case
from such date of authentication, provided that any such
bonds of the 59th Series authenticated prior to September 1,
1996 shall bear interest from March 1, 1996. However, so
long as there is no existing default in the payment of
interest on said bonds, the owner of any bond authenticated
by the Corporate Trustee between the record date for any
regular semi-annual interest payment date (other than
interest payable upon redemption or maturity) and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
have no claim against the Company with respect thereto;
provided further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the March 1 or September 1, as the case may
be, next preceding the date of such bond, to which interest
has been paid or, if the Company shall be in default with
respect to the interest due September 1, 1996, then from
March 1, 1996.
If any semi-annual interest payment date, redemption
date or the maturity date is not a Business Day, payment of
amounts due on such date may be made on the next succeeding
Business Day, and, if such payment is made or duly provided
for on such Business Day, no interest shall accrue on such
amounts for the period from and after such interest payment
date, redemption date or the maturity date, as the case may
be, to such Business Day.
Notwithstanding the provisions of Section 14 of this
Indenture, the bonds of the 59th Series shall be executed on
behalf of the Company by its Chairman of the Board, by its
President, by one of its Vice Presidents or by its Treasurer
or by one of its officers designated by the Board of
Directors of the Company for such purpose, whose signature
may be a facsimile, and its corporate seal shall be
thereunto affixed or printed thereon and attested by its
Secretary or one of its Assistant Secretaries, and the
provisions of the penultimate sentence of said Section 14
shall be applicable to such bonds of the 59th Series.
The bonds of the 59th Series shall be redeemable in
accordance with Article XII of the Original Indenture and as
further set forth in the form of bond of the 59th Series set
forth in Schedule I to this First 1996 Supplemental
Indenture.
The Company shall not be required to make transfers or
exchanges of bonds of the 59th Series for a period of
fifteen days next preceding any selection of bonds of the
59th Series to be redeemed or to make transfers or exchanges
of any bonds of the 59th Series designated in whole or in
part for redemption. Notwithstanding the provisions of
Section 12 of this Indenture, the Company shall not be
required to make transfers or exchanges of bonds of the 59th
Series for a period of fifteen days next preceding any
interest payment date.
Registered bonds of the 59th Series shall be
transferable upon presentation and surrender thereof, for
cancellation, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, and at such
other office or agency of the Company as the Company may
from time to time designate, by the registered owners
thereof, in person or by duly authorized attorney, in the
manner and upon payment, if required by the Company, of the
charges prescribed in this Indenture. In the manner and
upon payment, if required by the Company, of the charges
prescribed in this Indenture, registered bonds of the 59th
Series may be exchanged for a like aggregate principal
amount of registered bonds of the 59th Series of other
authorized denominations, upon presentation and surrender
thereof, for cancellation, at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
or at such other office or agency of the Company as the
Company may from time to time designate.
Section 3. The Original Indenture is hereby supplemented by
adding immediately after Section 20FFF, a new Section 20GGG, as
follows:
SECTION 20GGG. The Company hereby creates a sixtieth
series of bonds to be issued under and secured by this
Indenture, to be designated and to be distinguished from the
bonds of all other series by the title "First Mortgage
Bonds, 6.80% Series due 2006" (herein sometimes referred to
as the "bonds of the 60th Series"). The form of the bonds
of the 60th Series shall be substantially as set forth in
Schedule II to the First 1996 Supplemental Indenture.
Bonds of the 60th Series shall mature on March 1, 2006.
Unless otherwise determined by the Company, the bonds of the
60th Series shall be issued in fully registered form without
coupons in denominations of $1,000 and in integral multiples
thereof; the principal of and premium (if any) and interest
on each said bond to be payable at the office or agency of
the Company in the Borough of Manhattan, The City of New
York, in lawful money of the United States of America,
provided that at the option of the Company interest may be
mailed to registered owners of the bonds at their respective
addresses that appear on the register thereof; and the rate
of interest shall be the rate per annum specified in the
title thereof, payable semi-annually on the first days of
March and September of each year (commencing September 1,
1996) and on their maturity date.
The person in whose name any bond of the 60th Series is
registered at the close of business on any record date (as
hereinbelow defined) with respect to any regular semi-annual
interest payment date (other than interest payable upon
redemption or maturity) shall be entitled to receive the
interest payable on such interest payment date
notwithstanding the cancellation of such bond of the 60th
Series upon any registration of transfer or exchange thereof
subsequent to the record date and prior to such interest
payment date, except, if and to the extent that the Company
shall default in the payment of the interest due on such
interest payment date, then the registered owners of bonds
of the 60th Series on such record date shall have no further
right to or claim in respect of such defaulted interest as
such registered owners on such record date, and the persons
entitled to receive payment of any defaulted interest
thereafter payable or paid on any bonds of the 60th Series
shall be the registered owners of such bonds of the 60th
Series (or any bond or bonds issued, directly or after
intermediate transactions upon transfer or exchange or in
substitution thereof) on the date of payment of such
defaulted interest. Interest payable upon redemption or
maturity shall be payable to the person to whom the
principal is paid. The term "record date" as used in this
Section 20GGG, and in the form of the bonds of the 60th
Series, with respect to any regular semi-annual interest
payment date (other than interest payable upon redemption or
maturity) applicable to the bonds of the 60th Series, shall
mean the February 15 next preceding a March 1 interest
payment date or the August 15 next preceding a September 1
interest payment date, as the case may be, or, if such
February 15 or August 15 is not a Business Day (as defined
hereinbelow), the next preceding Business Day. The term
"Business Day" with respect to any bond of the 60th Series
shall mean any day, other than a Saturday or Sunday, which
is not a day on which banking institutions or trust
companies in The City of New York, New York or the city in
which is located any office or agency maintained for the
payment of principal of or premium, if any, or interest on
such bond of the 60th Series are authorized or required by
law, regulation or executive order to remain closed.
Every registered bond of the 60th Series shall be dated
the date of authentication and shall bear interest computed
on the basis of a 360-day year consisting of twelve 30-day
months from the latest semi-annual interest payment date to
which interest has been paid on the bonds of the 60th Series
preceding the date of authentication, unless such date of
authentication be an interest payment date to which interest
is being paid on the bonds of the 60th Series, in which case
from such date of authentication, provided that any such
bonds of the 60th Series authenticated prior to September 1,
1996 shall bear interest from March 1, 1996. However, so
long as there is no existing default in the payment of
interest on said bonds, the owner of any bond authenticated
by the Corporate Trustee between the record date for any
regular semi-annual interest payment date (other than
interest payable upon redemption or maturity) and such
interest payment date shall not be entitled to the payment
of the interest due on such interest payment date and shall
have no claim against the Company with respect thereto;
provided further, that, if and to the extent the Company
shall default in the payment of the interest due on such
interest payment date, then any such bond shall bear
interest from the March 1 or September 1, as the case may
be, next preceding the date of such bond, to which interest
has been paid or, if the Company shall be in default with
respect to the interest due September 1, 1996, then from
March 1, 1996.
If any semi-annual interest payment date, redemption
date or the maturity date is not a Business Day, payment of
amounts due on such date may be made on the next succeeding
Business Day, and, if such payment is made or duly provided
for on such Business Day, no interest shall accrue on such
amounts for the period from and after such interest payment
date, redemption date or the maturity date, as the case may
be, to such Business Day.
Notwithstanding the provisions of Section 14 of this
Indenture, the bonds of the 60th Series shall be executed on
behalf of the Company by its Chairman of the Board, by its
President, by one of its Vice Presidents or by its Treasurer
or by one of its officers designated by the Board of
Directors of the Company for such purpose, whose signature
may be a facsimile, and its corporate seal shall be
thereunto affixed or printed thereon and attested by its
Secretary or one of its Assistant Secretaries, and the
provisions of the penultimate sentence of said Section 14
shall be applicable to such bonds of the 60th Series.
The bonds of the 60th Series shall be redeemable in
accordance with Article XII of the Original Indenture and as
further set forth in the form of bond of the 60th Series set
forth in Schedule II to this First 1996 Supplemental
Indenture.
The Company shall not be required to make transfers or
exchanges of bonds of the 60th Series for a period of
fifteen days next preceding any selection of bonds of the
60th Series to be redeemed or to make transfers or exchanges
of any bonds of the 60th Series designated in whole or in
part for redemption. Notwithstanding the provisions of
Section 12 of this Indenture, the Company shall not be
required to make transfers or exchanges of bonds of the 60th
Series for a period of fifteen days next preceding any
interest payment date.
Registered bonds of the 60th Series shall be
transferable upon presentation and surrender thereof, for
cancellation, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, and at such
other office or agency of the Company as the Company may
from time to time designate, by the registered owners
thereof, in person or by duly authorized attorney, in the
manner and upon payment, if required by the Company, of the
charges prescribed in this Indenture. In the manner and
upon payment, if required by the Company, of the charges
prescribed in this Indenture, registered bonds of the 60th
Series may be exchanged for a like aggregate principal
amount of registered bonds of the 60th Series of other
authorized denominations, upon presentation and surrender
thereof, for cancellation, at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
or at such other office or agency of the Company as the
Company may from time to time designate.
Section 4. Initial Issuance of the Bonds of the 59th Series:
In accordance with and upon compliance with such provisions
of the Original Indenture as shall be selected for such purpose
by the officers of the Company duly authorized to take such
action, bonds of the 59th Series, in an aggregate principal
amount not exceeding $100,000,000, shall forthwith be executed by
the Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered to or upon the order
of the Company (without awaiting the filing and recording of this
First 1996 Supplemental Indenture except to the extent required
by subdivision (10) of Section 29 of the Original Indenture).
Section 5. Initial Issuance of the Bonds of the 60th Series:
In accordance with and upon compliance with such provisions
of the Original Indenture as shall be selected for such purpose
by the officers of the Company duly authorized to take such
action, bonds of the 60th Series, in an aggregate principal
amount not exceeding $100,000,000, shall forthwith be executed by
the Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered to or upon the order
of the Company (without awaiting the filing and recording of this
First 1996 Supplemental Indenture except to the extent required
by subdivision (10) of Section 29 of the Original Indenture).
Section 6. At any meeting of bondholders held as provided for
in Article XX of the Original Indenture at which owners of bonds
of the 59th Series or bonds of the 60th Series are entitled to
vote, all owners of bonds of the 59th Series or bonds of the 60th
Series at the time of such meeting shall be entitled to vote
thereat; provided, however, that the Trustee may, and upon
request of the Company or of a majority of the bondowners of the
59th Series or the 60th Series, shall, fix a day not exceeding
ninety days preceding the date for which the meeting is called as
a record date for the determination of owners of bonds of the
59th Series or of the 60th Series, entitled to notice of and to
vote at such meeting and any adjournment thereof and only such
registered owners who shall have been such registered owners on
the date so fixed, and who are entitled to vote such bonds of the
59th Series or the 60th Series at the meeting, shall be entitled
to receive notice of such meeting.
Section 7. As supplemented by this First 1996 Supplemental
Indenture, the Original Indenture is in all respects ratified and
confirmed and the Original Indenture and this First 1996
Supplemental Indenture shall be read, taken and construed as one
and the same instrument. The bonds of the 59th Series and the
bonds of the 60th Series are the original debt secured by this
First 1996 Supplemental Indenture and the Original Indenture, and
this First 1996 Supplemental Indenture and the Original Indenture
shall be, and shall be deemed to be, the original lien instrument
securing the bonds of the 59th Series and the bonds of the 60th
Series.
Section 8. Nothing contained in this First 1996 Supplemental
Indenture shall, or shall be construed to, confer upon any person
other than the owners of bonds issued under the Original
Indenture and this First 1996 Supplemental Indenture, the Company
and the Trustee, any right to avail themselves of any benefit of
any provision of the Original Indenture or of this First 1996
Supplemental Indenture.
Section 9. This First 1996 Supplemental Indenture may be
simultaneously executed in several counterparts and all such
counterparts executed and delivered, each as an original, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, APPALACHIAN POWER COMPANY, party of the
first part, has caused this instrument to be signed in its name
and behalf by its President, a Vice President, its Treasurer or
an Assistant Treasurer, and its corporate seal to be hereunto
affixed and attested by its Secretary or an Assistant Secretary,
and BANKERS TRUST COMPANY, party of the second part, in token of
its acceptance hereof, has caused this instrument to be signed in
its name and behalf by a Vice President or an Assistant Vice
President and its corporate seal to be hereunto affixed and
attested by its Secretary, an Assistant Secretary, Assistant Vice
President or Assistant Treasurer. Executed and delivered as of
the date and year first above written.
APPALACHIAN POWER COMPANY
[SEAL]
By: /s/ A. A. Pena
A. A. Pena
Treasurer
Attest:
/s/ John M. Adams, Jr.
John M. Adams, Jr.
Assistant Secretary
In the presence of:
/s/ T. G. Berkemeyer
T. G. Berkemeyer
/s/ S. T. Haynes
S. T. Haynes
BANKERS TRUST COMPANY
[SEAL]
By /s/ Scott Thiel
Scott Thiel
Assistant Vice President
Attest:
/s/ James McDonough
James McDonough
Assistant Vice President
Executed by BANKERS TRUST COMPANY
in the presence of:
/s/ Jason Theriault
Jason Theriault
/s/ Kerri O'Brien
Kerri O'Brien
STATE OF OHIO )
) SS:
COUNTY OF FRANKLIN )
On this 18th day of March, 1996, personally appeared before
me, a Notary Public within and for said County in the State
aforesaid, A. A. PENA and JOHN M. ADAMS, JR., to me known and
known to me to be respectively the Treasurer and Assistant
Secretary of APPALACHIAN POWER COMPANY, one of the corporations
named in and which executed the foregoing instrument, who
severally acknowledged that they did sign and seal said
instrument as such Treasurer and Assistant Secretary for and on
behalf of said corporation and that the same is their free act
and deed as such Treasurer and Assistant Secretary, respectively,
and the free and corporate act and deed of said corporation.
In Witness Whereof, I have hereunto set my hand and notarial
seal this 18th day of March, 1996.
[Notarial Seal]
/s/ Mary M. Soltesz
MARY M. SOLTESZ
Notary Public, State of Ohio
My Commission Expires July 12, 1999
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
I, PATRICIA M. CARILLO, a Notary Public, duly qualified,
commissioned and sworn, and acting in and for the County and
State aforesaid, hereby certify that on this 18th day of March,
1996:
SCOTT THIEL and JAMES MC DONOUGH, whose names are signed to
the writing above, bearing a date as of the 1st day of March,
1996, as Assistant Vice Presidents of BANKERS TRUST COMPANY, have
this day acknowledged the same before me in my County aforesaid.
SCOTT THIEL, who signed the writing above and hereto annexed
for BANKERS TRUST COMPANY, a corporation, bearing a date as of
the 1st day of March, 1996, has this day in my said County before
me acknowledged the said writing to be the act and deed of said
corporation.
Before me appeared SCOTT THIEL and JAMES MC DONOUGH to me
personally known, who, being by me duly sworn, did say that they
are Assistant Vice Presidents of BANKERS TRUST COMPANY, and that
the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in
behalf of said corporation, by authority of its Board of
Directors and said SCOTT THIEL acknowledged said instrument to be
the free act and deed of said corporation.
JAMES MC DONOUGH personally came before me this day and
acknowledged that he is an Assistant Vice President of BANKERS
TRUST COMPANY, a corporation, and that by authority duly given
and as the act of the corporation, the foregoing instrument was
signed in its name by an Assistant Vice President, sealed with
its corporate seal, and attested by himself as an Assistant Vice
President.
IN WITNESS WHEREOF, I have hereunto set my hand and official
notarial seal, in the County and State of New York, this 18th day
of March, 1996.
/s/ Patricia M. Carillo
PATRICIA M. CARILLO
Notary Public, State of New York
No. 41-4747732
Qualified in Queens County
Certificate filed in New York
County
Commission expires May 31, 1997
[SEAL]
The foregoing instrument was prepared by John M. Adams, Jr., 1 Riverside
Plaza, Columbus, Ohio 43215.
SCHEDULE I
No. ______ $____________
APPALACHIAN POWER COMPANY
FIRST MORTGAGE BOND, 6-3/8% SERIES DUE 2001
APPALACHIAN POWER COMPANY, a corporation of the Commonwealth
of Virginia (hereinafter called the "Company"), for value
received, hereby promises to pay to ____________, or registered
assigns, _______________ Dollars in lawful money of the United
States of America on March 1, 2001, at the office or agency of
the Company in the Borough of Manhattan, The City of New York,
and to pay to the registered owner hereof interest on said sum
from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the
date hereof, unless the date hereof be an interest payment date
to which interest is being paid, in which case from the date
hereof or unless the date hereof is prior to September 1, 1996,
in which case from March 1, 1996 (or, if this bond is dated
between the record date for any interest payment date and such
interest payment date, then from such interest payment date;
provided, however, that if and to the extent that the Company
shall default in the payment of the interest due on such interest
payment date, then from the next preceding semi-annual interest
payment date to which interest has been paid on the bonds of this
series, or if such interest payment date is September 1, 1996,
from March 1, 1996) at the rate per annum, in like money, payable
on March 1 and September 1 of each year at said office or agency
until the principal hereof shall have become due and payable,
specified in the title of this bond; provided that, at the option
of the Company, such interest may be paid by check, mailed to the
registered owner of this bond at such owner's address appearing
on the register hereof.
This bond is one of a duly authorized issue of bonds of the
Company, issuable in series, and is one of a series known as its
First Mortgage Bonds, of the series designated in its title, all
bonds of all series issued and to be issued under and equally
secured (except in so far as any sinking fund, established in
accordance with the provisions of the Mortgage hereinafter
mentioned, may afford additional security for the bonds of any
particular series and except as provided in Section 73 of the
Mortgage) by a Mortgage and Deed of Trust (herein, together with
all indentures supplemental thereto, called the Mortgage), dated
as of December 1, 1940, executed by APPALACHIAN ELECTRIC POWER
COMPANY (the corporate title of which was changed to APPALACHIAN
POWER COMPANY) to BANKERS TRUST COMPANY, as Trustee, to which
Mortgage reference is made for a description of the property
mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the bonds and of the Trustee in respect
thereof, the duties and immunities of the Trustee, and the terms
and conditions upon which the bonds are secured. With the
consent of the Company and to the extent permitted by and as
provided in the Mortgage, the rights and obligations of the
Company and/or of the holders of the bonds and/or coupons and/or
the terms and provisions of the Mortgage and/or of any
instruments supplemental thereto may be modified or altered by
affirmative vote of the holders of at least seventy-five per
centum (75%) in principal amount of the bonds affected by such
modification or alteration, then outstanding under the Mortgage
(excluding bonds disqualified from voting by reason of the
Company's interest therein as provided in the Mortgage); provided
that, without the consent of the owner hereof no such
modification or alteration shall permit the extension of the
maturity of the principal of or interest on this bond or the
reduction in the rate of interest hereon or any other
modification in the terms of payment of such principal or
interest or the creation of a lien on the mortgaged and pledged
property ranking prior to or on a parity with the lien of the
Mortgage or the deprivation of the owner hereof of a lien upon
such property or reduce the above percentage.
As provided in said Mortgage, said bonds may be for various
principal sums and are issuable in series, which may mature at
different times, may bear interest at different rates and may
otherwise vary as therein provided, and this bond is one of a
series entitled "First Mortgage Bonds, 6-3/8% Series due 2001
(herein called "bonds of the 59th Series") created by an
Indenture Supplemental to Mortgage and Deed of Trust dated as of
March 1, 1996 (the "First 1996 Supplemental Indenture"), as
provided for in said Mortgage.
The interest payable on any March 1 or September 1 (other
than interest payable upon redemption or maturity) will, subject
to certain exceptions provided in said First 1996 Supplemental
Indenture, be paid to the person in whose name this bond is
registered at the close of business on the record date, which
shall be the February 15 or August 15, as the case may be, next
preceding such interest payment date, or, if such February 15 or
August 15 is not a Business Day (as hereinbelow defined), the
next preceding Business Day. Interest payable upon redemption or
maturity shall be payable to the person to whom the principal is
paid. The term "Business Day" means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in The City of New York, New York
or the city in which is located any office or agency maintained
for the payment of principal or premium, if any, or interest on
bonds of the 59th Series are authorized or required by law,
regulation or executive order to remain closed.
If any semi-annual interest payment date, redemption date or
the maturity date is not a Business Day, payment of amounts due
on such date may be made on the next succeeding Business Day,
and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on such amounts for the
period from and after such interest payment date, redemption date
or the maturity date, as the case may be, to such Business Day.
The Company and the Trustee may deem and treat the person in
whose name this bond is registered as the absolute owner hereof
for the purpose of receiving payment of or on account of
principal or (subject to the provisions hereof) interest hereon
and for all other purposes and the Company and the Trustee shall
not be affected by any notice to the contrary.
The Company shall not be required to make transfers or
exchanges of bonds of the 59th Series for a period of fifteen
days next preceding any interest payment date, or next preceding
any selection of bonds of the 59th Series to be redeemed, and the
Company shall not be required to make transfers or exchanges of
any bonds of the 59th Series designated for redemption in whole
or in part.
Any or all of the bonds of the 59th Series shall be redeemed
by the Company at its option, or by operation of various
provisions of the Mortgage, in whole at any time or in part from
time to time upon not less than thirty but not more than ninety
days' previous notice given by mail to the registered owners of
the bonds to be redeemed, all as provided in the Mortgage, (a) if
redeemed by the use of proceeds of released property or the
proceeds of insurance, at a special redemption price equal to
100% of the principal amount thereof together in each case with
accrued interest to the date fixed for redemption; or (b) if
redeemed otherwise than by the use of proceeds of released
property or the proceeds of insurance, at a redemption price
equal to the greater of (i) 100% of the principal amount of the
bonds of the 59th Series and (ii) the sum of the present values
of the remaining scheduled payments of principal and interest
thereon discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate (as defined below) plus 10 basis points, plus
accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the bonds of the
59th Series to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the bonds of the 59th Series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day
preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such third business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations or (B) if the Trustee is unable to
obtain four such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations so
obtained.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company and acceptable to the
Trustee.
"Reference Treasury Dealer" means a primary U.S. Government
Securities Dealer in New York City selected by the Company and
acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the
Trustee by such Treasury Reference Dealer at or before 5:00 p.m.,
New York City time, on the third business day preceding such
redemption date.
The principal hereof may be declared or may become due prior
to the express date of the maturity hereof on the conditions, in
the manner and at the time set forth in the Mortgage, upon the
occurrence of a completed default as in the Mortgage provided.
The bonds of this series are issuable only as registered
bonds without coupons in denominations of $1,000 and authorized
multiples thereof. This bond is transferable as prescribed in
the Mortgage by the registered owner hereof in person, or by his
duly authorized attorney, at the office or agency of the Company
in the Borough of Manhattan, The City of New York, and at such
other office or agency of the Company as the Company may
designate, upon surrender and cancellation of this bond and upon
payment, if the Company shall require it, of the transfer charges
prescribed in the Mortgage, and, thereupon, a new registered bond
or bonds of authorized denominations of the same series for a
like principal amount will be issued to the transferee in
exchange herefor as provided in the Mortgage. In the manner and
upon payment, if the Company shall require it, of the charges
prescribed in the Mortgage, registered bonds of the 59th Series
may be exchanged for a like aggregate principal amount of
registered bonds of other authorized denominations of the same
series, upon presentation and surrender thereof, for
cancellation, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, or at such other
office or agency of the Company as the Company may from time to
time designate.
No recourse shall be had for the payment of the principal of
or interest on this bond against any incorporator or any past,
present or future stockholder, officer or director, as such, of
the Company or of any successor corporation, either directly or
through the Company or any successor corporation, under any rule
of law, statute or constitution or by the enforcement of any
assessment or otherwise, all such liability of incorporators,
stockholders, officers and directors, as such, being waived and
released by the holder or owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the
Mortgage.
This bond shall not become valid or obligatory for any
purpose until BANKERS TRUST COMPANY, the Trustee under the
Mortgage, or its successor thereunder, shall have signed the form
of Authentication Certificate endorsed hereon.
In Witness Whereof, Appalachian Power Company has caused
this bond to be executed in its name by the signature of its
Chairman of the Board, its President, one of its Vice Presidents
or its Treasurer and its corporate seal, or a facsimile thereof,
to be impressed or imprinted hereon and attested by the signature
of its Secretary or one of its Assistant Secretaries.
Dated:
APPALACHIAN POWER COMPANY
By________________________
Treasurer
(SEAL)
Attest:___________________
Assistant Secretary
TRUSTEE'S AUTHENTICATION CERTIFICATE
This bond is one of the bonds,
of the series herein designated,
described in the within-mentioned
Mortgage.
BANKERS TRUST COMPANY,
as Trustee,
By______________________________
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
________________________________________________________________
________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Bond and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to
________________________________________________________________
transfer such Bond on the books of the Issuer, with full power of
________________________________________________________________
substitution in the premises.
Dated: ______________________ ____________________________
NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within Bond in
every particular without alteration or enlargement or
any change whatsoever.
SCHEDULE II
No. ______ $____________
APPALACHIAN POWER COMPANY
FIRST MORTGAGE BOND, 6.80% SERIES DUE 2006
APPALACHIAN POWER COMPANY, a corporation of the Commonwealth
of Virginia (hereinafter called the "Company"), for value
received, hereby promises to pay to ____________, or registered
assigns, _______________ Dollars in lawful money of the United
States of America on March 1, 2006, at the office or agency of
the Company in the Borough of Manhattan, The City of New York,
and to pay to the registered owner hereof interest on said sum
from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the
date hereof, unless the date hereof be an interest payment date
to which interest is being paid, in which case from the date
hereof or unless the date hereof is prior to September 1, 1996,
in which case from March 1, 1996 (or, if this bond is dated
between the record date for any interest payment date and such
interest payment date, then from such interest payment date;
provided, however, that if and to the extent that the Company
shall default in the payment of the interest due on such interest
payment date, then from the next preceding semi-annual interest
payment date to which interest has been paid on the bonds of this
series, or if such interest payment date is September 1, 1996,
from March 1, 1996) at the rate per annum, in like money, payable
on March 1 and September 1 of each year at said office or agency
until the principal hereof shall have become due and payable,
specified in the title of this bond; provided that, at the option
of the Company, such interest may be paid by check, mailed to the
registered owner of this bond at such owner's address appearing
on the register hereof.
This bond is one of a duly authorized issue of bonds of the
Company, issuable in series, and is one of a series known as its
First Mortgage Bonds, of the series designated in its title, all
bonds of all series issued and to be issued under and equally
secured (except in so far as any sinking fund, established in
accordance with the provisions of the Mortgage hereinafter
mentioned, may afford additional security for the bonds of any
particular series and except as provided in Section 73 of the
Mortgage) by a Mortgage and Deed of Trust (herein, together with
all indentures supplemental thereto, called the Mortgage), dated
as of December 1, 1940, executed by APPALACHIAN ELECTRIC POWER
COMPANY (the corporate title of which was changed to APPALACHIAN
POWER COMPANY) to BANKERS TRUST COMPANY, as Trustee, to which
Mortgage reference is made for a description of the property
mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the bonds and of the Trustee in respect
thereof, the duties and immunities of the Trustee, and the terms
and conditions upon which the bonds are secured. With the
consent of the Company and to the extent permitted by and as
provided in the Mortgage, the rights and obligations of the
Company and/or of the holders of the bonds and/or coupons and/or
the terms and provisions of the Mortgage and/or of any
instruments supplemental thereto may be modified or altered by
affirmative vote of the holders of at least seventy-five per
centum (75%) in principal amount of the bonds affected by such
modification or alteration, then outstanding under the Mortgage
(excluding bonds disqualified from voting by reason of the
Company's interest therein as provided in the Mortgage); provided
that, without the consent of the owner hereof no such
modification or alteration shall permit the extension of the
maturity of the principal of or interest on this bond or the
reduction in the rate of interest hereon or any other
modification in the terms of payment of such principal or
interest or the creation of a lien on the mortgaged and pledged
property ranking prior to or on a parity with the lien of the
Mortgage or the deprivation of the owner hereof of a lien upon
such property or reduce the above percentage.
As provided in said Mortgage, said bonds may be for various
principal sums and are issuable in series, which may mature at
different times, may bear interest at different rates and may
otherwise vary as therein provided, and this bond is one of a
series entitled "First Mortgage Bonds, 6.80% Series due 2006
(herein called "bonds of the 60th Series") created by an
Indenture Supplemental to Mortgage and Deed of Trust dated as of
March 1, 1996 (the "First 1996 Supplemental Indenture"), as
provided for in said Mortgage.
The interest payable on any March 1 or September 1 (other
than interest payable upon redemption or maturity) will, subject
to certain exceptions provided in said First 1996 Supplemental
Indenture, be paid to the person in whose name this bond is
registered at the close of business on the record date, which
shall be the February 15 or August 15, as the case may be, next
preceding such interest payment date, or, if such February 15 or
August 15 is not a Business Day (as hereinbelow defined), the
next preceding Business Day. Interest payable upon redemption or
maturity shall be payable to the person to whom the principal is
paid. The term "Business Day" means any day, other than a
Saturday or Sunday, which is not a day on which banking
institutions or trust companies in The City of New York, New York
or the city in which is located any office or agency maintained
for the payment of principal or premium, if any, or interest on
bonds of the 60th Series are authorized or required by law,
regulation or executive order to remain closed.
If any semi-annual interest payment date, redemption date or
the maturity date is not a Business Day, payment of amounts due
on such date may be made on the next succeeding Business Day,
and, if such payment is made or duly provided for on such
Business Day, no interest shall accrue on such amounts for the
period from and after such interest payment date, redemption date
or the maturity date, as the case may be, to such Business Day.
The Company and the Trustee may deem and treat the person in
whose name this bond is registered as the absolute owner hereof
for the purpose of receiving payment of or on account of
principal or (subject to the provisions hereof) interest hereon
and for all other purposes and the Company and the Trustee shall
not be affected by any notice to the contrary.
The Company shall not be required to make transfers or
exchanges of bonds of the 60th Series for a period of fifteen
days next preceding any interest payment date, or next preceding
any selection of bonds of the 60th Series to be redeemed, and the
Company shall not be required to make transfers or exchanges of
any bonds of the 60th Series designated for redemption in whole
or in part.
Any or all of the bonds of the 60th Series shall be redeemed
by the Company at its option, or by operation of various
provisions of the Mortgage, in whole at any time or in part from
time to time upon not less than thirty but not more than ninety
days' previous notice given by mail to the registered owners of
the bonds to be redeemed, all as provided in the Mortgage, (a) if
redeemed by the use of proceeds of released property or the
proceeds of insurance, at a special redemption price equal to
100% of the principal amount thereof together in each case with
accrued interest to the date fixed for redemption; or (b) if
redeemed otherwise than by the use of proceeds of released
property or the proceeds of insurance, at a redemption price
equal to the greater of (i) 100% of the principal amount of the
bonds of the 60th Series and (ii) the sum of the present values
of the remaining scheduled payments of principal and interest
thereon discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate (as defined below) plus 10 basis points, plus
accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for
the Comparable Treasury Issue (expressed as percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the bonds of the
60th Series to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the bonds of the 60th Series.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day
preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such third business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations or (B) if the Trustee is unable to
obtain four such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations so
obtained.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company and acceptable to the
Trustee.
"Reference Treasury Dealer" means a primary U.S. Government
Securities Dealer in New York City selected by the Company and
acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the
Trustee by such Treasury Reference Dealer at or before 5:00 p.m.,
New York City time, on the third business day preceding such
redemption date.
The principal hereof may be declared or may become due prior
to the express date of the maturity hereof on the conditions, in
the manner and at the time set forth in the Mortgage, upon the
occurrence of a completed default as in the Mortgage provided.
The bonds of this series are issuable only as registered
bonds without coupons in denominations of $1,000 and authorized
multiples thereof. This bond is transferable as prescribed in
the Mortgage by the registered owner hereof in person, or by his
duly authorized attorney, at the office or agency of the Company
in the Borough of Manhattan, The City of New York, and at such
other office or agency of the Company as the Company may
designate, upon surrender and cancellation of this bond and upon
payment, if the Company shall require it, of the transfer charges
prescribed in the Mortgage, and, thereupon, a new registered bond
or bonds of authorized denominations of the same series for a
like principal amount will be issued to the transferee in
exchange herefor as provided in the Mortgage. In the manner and
upon payment, if the Company shall require it, of the charges
prescribed in the Mortgage, registered bonds of the 60th Series
may be exchanged for a like aggregate principal amount of
registered bonds of other authorized denominations of the same
series, upon presentation and surrender thereof, for
cancellation, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, or at such other
office or agency of the Company as the Company may from time to
time designate.
No recourse shall be had for the payment of the principal of
or interest on this bond against any incorporator or any past,
present or future stockholder, officer or director, as such, of
the Company or of any successor corporation, either directly or
through the Company or any successor corporation, under any rule
of law, statute or constitution or by the enforcement of any
assessment or otherwise, all such liability of incorporators,
stockholders, officers and directors, as such, being waived and
released by the holder or owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the
Mortgage.
This bond shall not become valid or obligatory for any
purpose until BANKERS TRUST COMPANY, the Trustee under the
Mortgage, or its successor thereunder, shall have signed the form
of Authentication Certificate endorsed hereon.
In Witness Whereof, Appalachian Power Company has caused
this bond to be executed in its name by the signature of its
Chairman of the Board, its President, one of its Vice Presidents
or its Treasurer and its corporate seal, or a facsimile thereof,
to be impressed or imprinted hereon and attested by the signature
of its Secretary or one of its Assistant Secretaries.
Dated:
APPALACHIAN POWER COMPANY
By________________________
Treasurer
(SEAL)
Attest:___________________
Assistant Secretary
TRUSTEE'S AUTHENTICATION CERTIFICATE
This bond is one of the bonds,
of the series herein designated,
described in the within-mentioned
Mortgage.
BANKERS TRUST COMPANY,
as Trustee,
By______________________________
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
_______________________________________
________________________________________________________________
________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Bond and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to
________________________________________________________________
transfer such Bond on the books of the Issuer, with full power of
________________________________________________________________
substitution in the premises.
Dated: ______________________ ____________________________
NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within Bond in
every particular without alteration or enlargement or
any change whatsoever.
Exhibit 26(a)
APPALACHIAN POWER COMPANY
NOTICE OF INVITATION FOR PROPOSALS
FOR THE PURCHASE OF FIRST MORTGAGE BONDS
Appalachian Power Company is inviting proposals for the purchase
from it of up to $200,000,000 aggregate principal amount of its First
Mortgage Bonds (Bonds). The Bonds may be issued and sold by the
Company in one or more series. Proposals are to be submitted to the
Company in accordance with such procedures and at such time or times
on such day or days as shall be designated by the Company by notice
to prospective bidders in writing or by telephone, confirmed in
writing, as provided in the Invitation for Proposals for the Purchase
of First Mortgage Bonds (the Invitation for Proposals). Such notice
or notices will also designate the principal amount of Bonds for
which proposals are to be submitted and the term of the Bonds, which
shall be not more than 40 years. Copies of a prospectus relating
to the Bonds and of the Invitation for Proposals for the purchase
of the Bonds may be obtained at the office of American Electric Power
Service Corporation, 1270 Avenue of the Americas, Suite 507, New
York, New York. Proposals will be considered only from persons who
have received copies of such prospectus and only if made in
accordance with and subject to such Invitation for Proposals and any
notice given by the Company pursuant thereto. Prior to the
acceptance of any bid, the bidder will be furnished a copy of a
prospectus which meets the requirements of Section 10(a) of the
Securities Act of 1933 at that time.
APPALACHIAN POWER COMPANY
By A. A. PENA
Treasurer
Dated: March 12, 1996
Exhibit 26(b)
Invitation for Proposals for the Purchase of First Mortgage Bonds
of
APPALACHIAN POWER COMPANY
APPALACHIAN POWER COMPANY (hereinafter called the Company)
hereby invites proposals, subject to the terms and conditions
hereof, for the purchase from it, in one or more transactions, of
up to $200,000,000 principal amount of First Mortgage Bonds of the
Company to mature on a date or dates to be determined as provided
in Section 4 hereof (hereinafter called the Bonds). The Bonds may
be issued and sold by the Company in one or more series. A brief
description of the Bonds is contained in the Registration
Statements and Prospectus referred to hereinafter.
1. Information Respecting the Company and the Bonds
Prospective bidders may examine, at the office of American
Electric Power Service Corporation, 1270 Avenue of the Americas,
New York, New York 10020, at any time during business hours, the
following:
(a) the form of proposed Supplemental Indenture to the
Mortgage and Deed of Trust between the Company and Bankers
Trust Company, as Trustee, under which the Bonds are to be
issued and secured;
(b) the Registration Statements of the Company and any
amendments thereto (including exhibits) under the Securities
Act of 1933, as amended, with respect to the Bonds, the
related combined Prospectus (such term as used herein to
include any applicable supplements thereto) and any orders of
the Securities and Exchange Commission (hereinafter called the
Commission) thereon;
(c) the form of proposal to be used by bidders in
offering to purchase the Bonds (hereinafter called the Form of
Proposal), which includes the form of contract for the
purchase of the Bonds (hereinafter called the Purchase
Contract);
(d) proposed forms of opinions to be furnished to the
successful bidder or bidders by Simpson Thacher & Bartlett,
counsel for the Company, and by Dewey Ballantine, who have
been selected by the Company as counsel for such bidder or
bidders;
(e) the form of questionnaire to be used by prospective
bidders in furnishing information to the Company and the
Trustee, and, in the case of a group of bidders, in
designating the Representative of the members of the group,
referred to in Section 2 hereof;
(f) the orders of the Virginia State Corporation
Commission and the Tennessee Public Service Commission
relating to the issuance of the Bonds; and
(g) memorandum by Dewey Ballantine with respect to the
requirements of the securities or "blue sky" laws of various
jurisdictions.
Copies of said documents in reasonable quantities (except certain
exhibits to the Registration Statements) will be supplied on
request, so long as available, to prospective bidders. The Company
reserves the right to amend or supplement such Registration
Statements and Prospectus (including the documents incorporated
therein by reference pursuant to Item 12 of Form S-3), and to make
changes in the form of any documents relating to the issuance of
the Bonds. The Company will furnish copies of such amendments,
supplements or changes and of any filing pursuant to Section 13 or
14 of the Securities and Exchange Act of 1934 to Dewey Ballantine,
and on request to any prospective bidder who shall have furnished
a questionnaire to the Company as provided in Section 2 hereof or
to the Representative of any group of prospective bidders desig-
nated as provided in Section 2 hereof.
2. Information Respecting the Bidders to be Furnished to the
Company
Except as hereinafter provided, no proposal will be considered
unless the bidder (or in the case of a group of bidders, each
bidder) shall have furnished (by fascimile or other appropriate
means) to the Company, care of American Electric Power Service
Corporation, 1 Riverside Plaza, Columbus, Ohio 43215, Attention:
Thomas G. Berkemeyer, Esq., not less than two hours prior to the
time for submission of proposals the form of questionnaire referred
to above, properly filled out and signed. Notwithstanding the
furnishing of such questionnaires to the Company, any prospective
bidder or group of prospective bidders may thereafter determine not
to bid, or any of the several members of a group may withdraw and
may thereafter determine not to bid or determine to bid as a member
of some other group. One or more additional members may be
included in a group, with the consent of the Company, after the
time (or any extended time) for furnishing questionnaires, if the
information required by the form of questionnaire as to each such
additional member is furnished to the Company, at or before the
time fixed by the Company for such purpose, by means of a
questionnaire properly filled out and signed or by such other means
as the Company may have approved for such purpose. The Company
reserves the right to waive any irregularity in any questionnaire
and to extend, either generally or in specific instances, the time
for furnishing questionnaires and to permit the furnishing of
information required by the form of questionnaire by telefacsimile
or other means of communication satisfactory to it. The Company
further reserves the right to require bidders to furnish updated
questionnaires at any time prior to any submission of proposals as
a condition of the consideration of such proposals.
In the case of a proposal by a group of bidders, the several
bidders in the group shall act through a duly authorized
representative or representatives (hereinafter called the
Representative), who may be included in such group and who shall be
designated by each member of such group in, or in the manner
authorized by, questionnaires furnished to the Company as above
provided. The Company shall be entitled to assume in all matters
contemplated hereby that any Representative, and in case such
Representative consists of two or more persons, then any of such
persons, is fully authorized to represent and act for each member
of a group of bidders which has furnished a questionnaire to the
Company designating, or authorizing the designation of, such
Representative as its Representative, which designation has not
been revoked prior to the submission of a proposal to the Company
on behalf of such group of bidders, including the right to rely on
any statement made by such Representative or any such person on
behalf of the Representative as to the amount of the participation
of such member of such group or as to changes made in any agreement
among members of such group and the right to rely on the authority
of the Representative or such person on behalf of the
Representative to execute and submit the proposal presented to the
Company in the form in which it was signed.
3. Form and Contents of Proposals
Each proposal shall be for the purchase of all of the Bonds
then being offered by the Company as provided by Section 4 and may
be made by a single bidder or a group of bidders. In case the
proposal of a group of bidders is accepted in writing by the
Company, the obligations of the members of the group shall be
several, and not joint, to purchase the respective principal
amounts of Bonds indicated in the proposal. No bidder (including
in such term for the purpose of this restriction any and all
affiliates of a specified bidder) may submit or participate in more
than one such bid with respect to the Bonds being offered at any
one time.
Each proposal shall specify the annual interest rate of the
Bonds (which shall be an integral multiple of .01% or 1/8 of 1%),
the maturity date, the principal amount and the price (exclusive of
accrued interest) to be paid to the Company for such Bonds (which
shall not be less than 99% nor more than 101% of the principal
amount of such Bonds). Accrued interest from the first day of the
calendar month during which such Bonds are to be issued to the date
of delivery and payment will be paid to the Company by the
purchaser or purchasers.
A proposal confirmed in writing as provided in Section 4
hereof on behalf of a group of bidders shall give the names of the
members in the group but may, at the time of such confirmation,
omit the amounts or numbers of Bonds to be purchased by the members
of such group; but, in the case of such omission, the
Representative, on behalf of the successful bidders, shall, and by
the submission of such proposal agrees to, insert promptly in
Exhibit A to the Form of Proposal, prior to its acceptance in
writing by the Company and in any event within one hour after the
time fixed for the submission of proposals, the respective amounts
of Bonds to be purchased severally by such bidders, all with the
same force and effect as if the same had been included in such
proposal at the time of the submission thereof.
The Representative submitting a successful proposal may,
forthwith upon discovery, correct any error which it has made in
the proposal in specifying the bidders or the amount of Bonds to be
purchased by any bidder or bidders at a different amount than
authorized by such bidder or bidders; and if, after all such
corrections, a proposal is accepted which provides for the purchase
of less than all or more than all of the Bonds, the Representative
submitting such proposal shall be deemed to have increased or
decreased, as the case may be, to the extent of the discrepancy,
the amount of Bonds offered to be purchased by it. In case such
Representative consists of two or more persons, such increase or
decrease in the amount of Bonds shall be allocated between or among
them as they shall agree; provided that, if there shall be no such
agreement, then such increase or decrease shall be allocated
between or among them in proportion to the amount of Bonds set
forth opposite their respective names in Exhibit A attached to the
Form of Proposal. If in the case of a decrease the discrepancy is
greater than the amount of Bonds offered to be purchased by the
Representative, then to the extent that the discrepancy is greater
than such amount, the amount of Bonds offered to be purchased by
each other bidder shall be proportionately reduced. Any correction
or adjustment in the amount of Bonds or in the specification of any
bidder made or provided for hereunder shall, for all purposes of
the Purchase Contract, be or be deemed to have been reflected in
Exhibit A attached to the Form of Proposal.
4. Submission of Proposals
All proposals must be submitted to the Company in accordance
with such procedures and at such time or times on such day or days
as shall be designated by the Company by notice in writing or by
telephone, confirmed in writing. The Company in its discretion
may, but will not be obligated to, give any such notice to any
prospective bidder who shall have furnished a questionnaire to the
Company as provided in Section 2 hereof, or to the Representative
of any group of prospective bidders designated as provided in
Section 2 hereof, or to any other prospective bidders. The Company
will designate in each such notice the principal amount of Bonds
for which proposals are to be submitted at such time. Each such
notice will also designate the term thereof, which shall be not
more than 40 years. The Company reserves the right in its
discretion from time to time to postpone any time for submission of
proposals designated as provided herein.
All proposals must be confirmed in writing on the appropriate
Form of Proposal, signed by the Representative on behalf of the
members of a group of bidders, or in the case of a single bidder by
such bidder with appropriate changes in the text of the Form of
Proposal.
5. Acceptance or Rejection of Proposals
All proposals will be received by the Company in accordance
with the procedures and at the time or times designated as provided
in Section 4 hereof. Within three hours after each time designated
for the submission of proposals, the Company (subject to the
provisions of the next following paragraph) will by announcement
accept the proposal which results in the lowest "annual cost of
money" to it for the Bonds, determined by the Company in accordance
with Section 6 hereof, and any proposal not so accepted within such
time shall be deemed to have been rejected. Each proposal will be
accepted or rejected in its entirety. If two or more such
proposals for the purchase of the Bonds then being offered shall
specify an identical lowest "annual cost of money" to the Company,
then the Company (subject to the provisions of the succeeding
paragraph) will give to the bidders making such identical proposals
an opportunity to improve their bids. Thereupon, if no improved
bid shall be made within the time fixed by the Company, or if, upon
such rebidding, two or more proposals again result in an identical
lowest "annual cost of money" for such Bonds, the Company may in
its discretion accept any one of such proposals. If in the case of
identical proposals a bid is not being improved, the proposal
submitted by the bidder or group of bidders making such proposal
need not be resubmitted to be considered.
The Company reserves the right to (a) reject all proposals,
and (b) reject the proposal of any bidder or of any group of
bidders (i) if such bidder or any member of such group of bidders
is in such relationship with Bankers Trust Company or its direct or
indirect corporate parent, if any, as would disqualify such trustee
from acting as trustee under the Company's Mortgage and Deed of
Trust dated as of December 1, 1940, as supplemented if the proposal
of such bidder or group of bidders should be accepted; (ii) if the
Company, in the opinion of its counsel, may not lawfully sell the
Bonds then being offered to such bidder or to any member of such
group of bidders and, in either of such events in the case of a
group of bidders, if within one hour after the time at which the
bids are required to be submitted, the member or members of such
group causing such disqualification or illegality have not
withdrawn from the group and the remaining members, including
substituted members, if any, have not agreed to purchase the Bonds,
which such withdrawing member or members had proposed to purchase;
(iii) if, in the opinion of the Company, such bidder or group of
bidders would not be able to comply with the terms of the Purchase
Contract if such proposal were accepted; or (iv) if, in the opinion
of counsel for the Company, the Company would not be able to comply
with the terms of the Purchase Contract if such proposal were
accepted. The proposal of any bidder or group of bidders rejected
by the Company by reason of clause (b) of this paragraph shall be
disregarded solely for the purpose of determining the proposal
specifying the lowest "annual cost of money" for such Bonds.
The Company also reserves the right in its discretion (i) to
waive any failure on the part of any bidder or group of bidders to
comply with the terms and conditions hereof and to permit
correction of any typographical, clerical, or similar error, and
(ii) to designate, not less than 30 minutes prior to the time, or
extended time, specified for the submission of proposals, a
principal amount less than that previously designated.
Prior to the acceptance by the Company of any proposal, the
bidder or bidders thereunder will be furnished with a copy of a
Prospectus relating to the Bonds which meets the requirements of
Section 10(a) of the Securities Act of 1933 at that time.
6. Determination of "Annual Cost of Money"
The "annual cost of money" to the Company for the Bonds will
be determined by the Company, such determination by the Company to
be final. With respect to each proposal for the purchase of the
Bonds, the Company will determine on a consistent basis the yield
on the basis of (i) the term of the Bonds then being offered, (ii)
the price per $100 principal amount specified in such proposal to
be paid to the Company (exclusive of accrued interest) and (iii)
the interest rate specified in such proposal. The proposal so
computed by the Company to have the lowest yield for such Bonds is
hereby defined as the lowest "annual cost of money" for such Bonds.
For this purpose, the entire principal amount of the Bonds shall be
deemed to remain outstanding during the term thereof designated by
the Company as provided in Section 4 hereof.
7. Redemption of the Bonds
The Bonds are subject to redemption at any time, on not less
than 30 days' notice by mail prior to the redemption date, either
as a whole or in part at the option of the Company (A) at an amount
equal to 100% of the principal amount thereof, together with
accrued interest to the date fixed for redemption, if redeemed by
the use of proceeds of released property or the proceeds of
insurance, or (B) at a redemption price equal to the greater of (i)
100% of the principal amount of the Bonds and (ii) the sum of the
present values of the remaining scheduled payments of principal and
interest thereon discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined below) plus in each case 10 basis
points, plus accrued interest thereon to the date of redemption.
"Treasury Rate" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the
Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Bonds to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues
of corporate debt securities of comparable maturity to the
remaining term of the Bonds.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third business day
preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30
p.m. Quotations for U.S. Government Securities" or (ii) if such
release (or any successor release) is not published or does not
contain such prices on such third business day, (A) the average of
the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury
Dealer Quotations or (B) if the Trustee is unable to obtain four
such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations so obtained.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company and acceptable to the
Trustee.
"Reference Treasury Dealer" means a primary U.S. Government
Securities Dealer in New York City selected by the Company and
acceptable to the Trustee.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Trustee by such Treasury Reference Dealer at or before 5:00 p.m.,
New York City time, on the third business day preceding such
redemption date.
8. Purchase Contract and Prospectus Supplement
Upon the acceptance of a proposal, (a) the Purchase Contract
shall become effective without any separate execution thereof and
shall constitute the agreement between the Company and the
successful bidder or bidders; (b) the successful bidder, or, in the
case of a proposal by a group of bidders, the Representative on
behalf of the successful bidders, shall furnish to the Company in
writing the information regarding the bidders and the public
offering, if any, as is required to complete a prospectus
supplement and any further information regarding the bidders and
the public offering, if any, which may be required by the Virginia
State Corporation Commission and the Tennessee Public Service
Commission; and (c) upon performance by the successful bidder or
bidders, and their Representative, of the obligations under
Sections 3, 4 and 8 hereof, all rights of the Company and of the
successful bidder or bidders under an accepted proposal shall
thereafter be determined solely in accordance with the terms of the
Purchase Contract.
9. Opinion of Counsel for the Purchasers
Dewey Ballantine, 1301 Avenue of the Americas, New York, New
York, have been selected by the Company as counsel for the
Purchasers to give to the successful bidder or bidders an opinion
with respect to the Bonds. Such counsel have participated in the
preparation of certain of the documents under which the Bonds are
to be issued and have reviewed or will review the corporate
proceedings with respect to the Bonds and the proceedings before
the Virginia State Corporation Commission and the Tennessee Public
Service Commission and the Securities and Exchange Commission and
the orders of said commissions with respect to the Bonds. Their
compensation and disbursements are, under the terms of the Purchase
Contract, to be paid by the successful bidder or bidders, except as
otherwise provided in the Purchase Contract. Such counsel will, on
request, advise any prospective bidder, or the Representative of
any group of prospective bidders, of the amount of such
compensation and disbursements to be paid by the successful bidder
or bidders for the Bonds.
10. Waiver of Irregularities
The Company reserves the right to waive any failure on the
part of any bidder or group of bidders to comply with the terms and
conditions hereof.
APPALACHIAN POWER COMPANY
By A. A. PENA
Treasurer
Dated: March 12, 1996
