UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
_____________________________________________
In the Matter of :
:
APPALACHIAN POWER COMPANY :
40 Franklin Road : CERTIFICATE OF
Roanoke, Virginia 24022 : NOTIFICATION
:
File No. 70-5503 :
:
(Public Utility Holding Company Act of 1935) :
_____________________________________________:
APPALACHIAN POWER COMPANY (the "Company") hereby certifies, in
connection with the Application or Declaration on Form U-1 in the
above-entitled matter, that certain of the transactions specified
in Post-Effective Amendment Nos. 17, 18 and 19 to the Application
or Declaration have been carried out in accordance with the terms
and conditions of and for the purposes represented by said Post-
Effective Amendments, and the Order of the Securities and Exchange
Commission dated August 10, 1998 in said matter, as follows:
1. On October 22, 1998, the Industrial Development Authority
of Russell County (Virginia) (the "Authority") issued and sold to
Goldman, Sachs & Co. (the "Underwriter") $19,500,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series H, dated October 1,
1998 (the "Series H Bonds"). The Series H Bonds bear interest at
a rate of 5% per annum and mature by their terms on November 1,
2021. The Series H Bonds were sold by the Authority to the
Underwriter at an initial offering price of 100% of the principal
amount. The Company paid $121,875 to the Underwriter as
compensation. The Series H Bonds were issued by the Authority
pursuant to an Indenture of Trust dated as of December 1, 1974
between the Authority and First Union National Bank (successor to
Dominion Trust Company), as Trustee, as supplemented by various
supplemental indentures of trust, including a Seventh Supplemental
Indenture of Trust dated as of October 1, 1998 (a copy of which
Seventh Supplemental Indenture is attached hereto as Exhibit B-9-1
to the Application or Declaration).
2. The transaction described above was not subject to the
jurisdiction of any state commission other than, and was carried
out in accordance with the authorization of, the State Corporation
Commission of Virginia.
3. Such transaction was consummated prior to December 1,
1998 as required by the Order.
4. This Certificate of Notification is filed within ten days
after the consummation of the above-described transaction.
APPALACHIAN POWER COMPANY
By /s/ Thomas G. Berkemeyer
Assistant Secretary
November 4, 1998
Exhibit B-9-1
SEVENTH SUPPLEMENTAL INDENTURE OF TRUST
Between
INDUSTRIAL DEVELOPMENT AUTHORITY OF RUSSELL COUNTY
And
FIRST UNION NATIONAL BANK
(successor to Dominion Trust Company)
Trustee
Dated as of October 1, 1998
THIS SEVENTH SUPPLEMENTAL INDENTURE OF TRUST (the "Seventh
Supplemental Indenture"), made as of the 1st day of October, 1998,
by and between the INDUSTRIAL DEVELOPMENT AUTHORITY OF RUSSELL
COUNTY, a political subdivision of the Commonwealth of Virginia
(the "Authority"), and FIRST UNION NATIONAL BANK (successor to
Dominion Trust Company), as Trustee (the "Trustee");
W I T N E S S E T H :
WHEREAS, the Authority has issued $24,000,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series A (the "Series A
Bonds"), pursuant to the Industrial Development and Revenue Bond
Act, Chapter 49, Title 15.2, Code of Virginia of 1950, as amended
(the "Act"), under the Indenture of Trust dated as of December 1,
1974 (the "Indenture"), between the Authority and The First
National Exchange Bank of Virginia, as Trustee (the "Original
Trustee"), for the purpose of acquiring, constructing, installing,
equipping and financing, in part, certain air pollution control
facilities (the "Project") at the plants (the "Plants") of
Appalachian Power Company, a Virginia public service corporation
(the "Company"), in Russell and Giles Counties, Virginia, which
facilities were sold to the Company pursuant to an Agreement of
Sale dated as of December 1, 1974, as amended (the "Agreement")
between the Authority and the Company; and
WHEREAS, the Authority has issued $17,000,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series B (the "Series B
Bonds"), as Additional Bonds pursuant to Section 2.10 of the
Indenture and a First Supplemental Indenture of Trust dated as of
December 1, 1975 between the Authority and the Original Trustee
(the "First Supplemental Indenture") to provide additional funds to
finance a portion of the estimated Cost of Construction of the
Project, as defined in the Agreement, not theretofore paid by the
application of the Series A Bonds' proceeds; and
WHEREAS, the Authority has issued $11,000,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series C (the "Series C
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture and a Second Supplemental Indenture of Trust dated as of
November 1, 1979 between the Authority and the Original Trustee
(the "Second Supplemental Indenture") to refund $10,500,000
aggregate principal amount of Series A Bonds which matured on
December 1, 1979; and
WHEREAS, the Authority has issued $6,240,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series D (the "Series D
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture and a Third Supplemental Indenture of Trust dated as of
November 1, 1980 between the Authority and the Original Trustee
(the "Third Supplemental Indenture") to refund $6,000,000 aggregate
principal amount of Series B Bonds which matured on December 1,
1980; and
WHEREAS, the Authority has issued $6,500,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series E (the "Series E
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture and a Fourth Supplemental Indenture of Trust dated as of
February 1, 1981 between the Authority and the Original Trustee
(the "Fourth Supplemental Indenture") to refund $6,240,000
aggregate principal amount of Series D Bonds which matured on April
1, 1981; and
WHEREAS, the Original Trustee transferred its trust business
and assets substantially as a whole to Dominion Trust Company (the
"Subsequent Trustee"), and pursuant to the provisions of Section
9.05 of the Indenture, the Subsequent Trustee thereupon became
successor trustee hereunder and became vested with all of the title
to the trust estate and all the trusts, powers, discretions,
immunities, privileges and all other matters as was the Original
Trustee; and
WHEREAS, the Authority has issued $19,500,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series F (the "Series F
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture and a Fifth Supplemental Indenture of Trust dated as of
November 1, 1988 between the Authority and the Subsequent Trustee
(the "Fifth Supplemental Indenture") to refund $13,500,000
aggregate principal amount of Series A Bonds and $6,000,000
aggregate principal amount of Series B Bonds at their redemption on
December 1, 1988; and
WHEREAS, the Authority has issued $17,500,000 aggregate
principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series G (the "Series G
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture and a Sixth Supplemental Indenture of Trust dated as of
October 15, 1990 between the Authority and the Subsequent Trustee
(the "Sixth Supplemental Indenture") to refund $11,000,000
aggregate principal amount of Series C Bonds at their redemption on
December 15, 1990 and $6,500,000 aggregate principal amount of
Series E Bonds at their redemption on February 1, 1991; and
WHEREAS, the Subsequent Trustee transferred its trust business
and assets substantially as a whole to First Union National Bank,
which merged with the Subsequent Trustee, and pursuant to the
provisions of Section 9.05 of the Indenture, the Trustee thereupon
became successor trustee hereunder and became vested with all of
the title to the trust estate and all the trusts, powers,
discretions, immunities, privileges and all other matters as was
the Subsequent Trustee; and
WHEREAS, the Authority has determined to issue $19,500,000
aggregate principal amount of its Pollution Control Revenue Bonds
(Appalachian Power Company Project), Series H (the "Series H
Bonds"), as Refunding Bonds pursuant to Section 2.11 of the
Indenture to refund $19,500,000 aggregate principal amount of
Series F Bonds at their maturity on November 1, 1998; and
WHEREAS, the issuance of the Series H Bonds has been approved
by the Board of Supervisors of Russell County, Virginia and the
Board of Supervisors of Giles County, Virginia, after public
hearings, as required by Section 147(f) of the Internal Revenue
Code of 1986, as amended; and
WHEREAS, the Authority has determined that the Bonds issuable
hereunder, and the certificate of authentication by the Trustee to
be endorsed on all such Bonds shall be, respectively, substantially
in the following forms with such variations, omissions and
insertions as are required or permitted by the Indenture or this
Seventh Supplemental Indenture:
(FORM OF BOND)
NO. $
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
INDUSTRIAL DEVELOPMENT AUTHORITY
OF RUSSELL COUNTY
Pollution Control Revenue Bond
(Appalachian Power Company Project)
SERIES H
MATURITY DATE: CUSIP:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The Industrial Development Authority of Russell County, a
political subdivision of the Commonwealth of Virginia (the
Authority), for value received, hereby promises to pay, solely from
the source and as hereinafter provided, to the registered owner
stated above, or registered assigns or legal representatives, upon
presentation and surrender hereof at the principal office of First
Union National Bank (successor to Dominion Trust Company), as
Trustee, or its successor in trust (the Trustee), in Richmond,
Virginia, or, at the option of the registered owner hereof, at the
principal office of such paying agent as may be designated pursuant
to the Indenture hereinafter referred to, the principal sum stated
above on the maturity date stated above, subject to prior
redemption as hereinafter provided, and to pay from such source to
the registered owner hereof interest hereon by check or draft
mailed to the registered owner at his address as it appears on the
registration books kept by the Trustee, as Bond Registrar, such
interest payable semiannually on each May 1 and November 1,
beginning November 1, 1998 from the date of this Bond, if this Bond
is authenticated prior to november 1, 1998, or otherwise from the
May 1 or November 1 that is, or immediately precedes, the date on
which this Bond is authenticated, until payment of said principal
sum at the rate of ______ per centum (______%) per annum. Both
principal and interest are payable in lawful money of the United
States of America.
THIS BOND AND THE ISSUE OF WHICH IT IS A PART AND THE INTEREST
THEREON ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY
FROM THE REVENUES AND RECEIPTS DERIVED FROM THE AGREEMENT OF SALE
HEREINAFTER REFERRED TO (EXCEPT TO THE EXTENT PAID FROM BOND
PROCEEDS AND INCOME FROM TEMPORARY INVESTMENTS), WHICH REVENUES AND
RECEIPTS (EXCEPT FOR PAYMENTS OF AUTHORITY EXPENSES UNDER SECTION
4.3 OF THE AGREEMENT OF SALE AND PAYMENTS FOR INDEMNIFICATION UNDER
SECTIONS 4.5 AND 6.1 OF THE AGREEMENT OF SALE) HAVE BEEN PLEDGED
AND ASSIGNED TO THE TRUSTEE TO SECURE PAYMENT THEREOF. THE BONDS
AND THE INTEREST THEREON SHALL NOT BE DEEMED TO CONSTITUTE A DEBT
OR A PLEDGE OF THE FAITH AND CREDIT OF THE COMMONWEALTH OF VIRGINIA
NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND
RUSSELL COUNTY. NEITHER THE COMMONWEALTH OF VIRGINIA NOR ANY
POLITICAL SUBDIVISION THEREOF, INCLUDING THE AUTHORITY AND RUSSELL
COUNTY, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF THE BONDS, THE
INTEREST THEREON OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE
REVENUES AND RECEIPTS PLEDGED THEREFOR, AND NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF VIRGINIA OR ANY
POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF THE BONDS OR THE INTEREST THEREON OR OTHER COSTS
INCIDENT THERETO. THE AUTHORITY HAS NO TAXING POWER.
This Bond is one of an issue of $19,500,000 aggregate
principal amount of Industrial Development Authority of Russell
County Pollution Control Revenue Bonds (Appalachian Power Company
Project), Series H (the Bonds), of like date and tenor, except as
to number and principal amount, authorized and issued pursuant to
the Industrial Development and Revenue Bond Act (Chapter 49, Title
15.2, Code of Virginia of 1950, as amended) for the purpose of
refunding certain Pollution Control Revenue Bonds (Appalachian
Power Company Project), Series F, which were previously issued by
the Authority for the purpose of refunding other bonds previously
issued by the Authority for the purpose of acquiring, constructing,
installing, equipping and financing, in part, certain air pollution
control facilities (the Project) at the plants of Appalachian Power
Company, a Virginia public service corporation (the Company), in
Russell and Giles Counties, Virginia (such plants being
collectively referred to herein as the Plants) and selling the same
to the Company pursuant to an Agreement of Sale dated as of
December 1, 1974, as amended (the Agreement of Sale), between the
Authority and the Company. The Bonds are issued under and,
together with other series of bonds, are equally and ratably
secured by an Indenture of Trust dated as of December 1, 1974, as
supplemented and amended, and as further supplemented by a Seventh
Supplemental Indenture of Trust dated as of October 1, 1998 (the
Indenture of Trust as so supplemented and amended being referred to
herein as the Indenture), between the Authority and the Trustee
which assigns to the Trustee, as security for the Bonds, the
Authority's rights under the Agreement of Sale (except for its
rights to payment of Authority fees and expenses and
indemnification of the Authority and the right to receive notices).
Reference is hereby made to the Indenture, the Agreement of Sale
and to all amendments and supplements thereto for a description of
the provisions, among others, with respect to the nature and extent
of the security, the rights, duties and obligations of the
Authority and the Trustee and the rights of the owners of the Bonds
and the terms upon which the Bonds are issued and secured.
Additional bonds and refunding bonds ranking equally with the Bonds
and other bonds issued under the Indenture may be issued on the
terms provided in the Indenture.
The Bonds are subject to redemption by the Authority in whole,
but not in part, at any time upon payment of 100% of the principal
amount thereof, plus interest accrued to the redemption date, in
the event of the exercise by the Company of its option to prepay
the entire purchase price of the Project under circumstances
involving (i) the imposition of unreasonable burdens or excessive
liabilities on the Company or the Authority with respect to the
Project or either of the Plants, or the operation of the Project or
either of the Plants, including taxes not imposed on December 1,
1974 and economic, technological or other changes making the
continued operation of the Plants uneconomical in the opinion of
the Company's Board of Directors; (ii) damage to or destruction of
the Project or a portion thereof or all or a portion of either or
both of the Plants; (iii) condemnation of all or substantially all
of the Project or all or a portion of either or both of the Plants;
or (iv) the operation of either of the Plants being enjoined, all
as provided in Section 8.1(b) through (e) of the Agreement of Sale.
The Bonds are also subject to optional redemption (at the
election of the Company without any further action of the
Authority) prior to maturity on or after __________ __, at any time
in whole or in part (if less than all of the Bonds are to be
redeemed, the Bonds to be redeemed to be selected by lot) upon
payment of the following redemption prices (expressed as a
percentage of the principal amount of Bonds to be redeemed) plus
accrued interest to the redemption date:
Redemption
Redemption Dates (Dates Inclusive) Price
If less than all of the Bonds are called for redemption, each
$5,000 principal amount of a Bond having a principal amount of more
than $5,000 shall be counted as one Bond for the purpose of
selecting by lot.
If any of the Bonds or portions thereof are called for
redemption, the Trustee shall cause a notice thereof to be sent by
registered or certified mail to the registered owner of the Bonds
not less than 30 nor more than 60 days prior to the redemption
date. Provided funds for their redemption are on deposit at the
place of payment on the redemption date, all Bonds or portions
thereof so called for redemption shall cease to bear interest on
the redemption date, shall no longer be secured by the Indenture
and shall not be deemed to be outstanding under the provisions of
the Indenture. If a portion of this Bond shall be called for
redemption, a new Bond in principal amount equal to the unredeemed
portion hereof will be issued to the registered owner upon the
surrender hereof.
The owner of this Bond shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the
covenants therein or to take any action with respect to any Event
of Default under the Indenture or to institute, appear in or defend
any suit or other proceeding with respect thereto, except as
provided in the Indenture. In certain events, on conditions, in
the manner and with the effect set forth in the Indenture, the
principal of all the Bonds issued under the Indenture and then
outstanding may become or may be declared due and payable before
their stated maturities, together with interest accrued thereon.
Modifications or alterations of the Indenture, or of any
supplements thereto, may be made only to the extent and in the
circumstances permitted by the Indenture.
The Bonds are issuable as registered bonds without coupons in
the denominations of $5,000 or any integral multiple thereof.
The transfer of this Bond may be registered by the registered
owner hereof in person or by his duly authorized attorney or legal
representative at the principal office of the Trustee, but only in
the manner and subject to the limitations and conditions provided
in the Indenture and upon surrender and cancellation of this Bond.
Upon any such registration of transfer the Authority shall execute
and the Trustee shall authenticate and deliver in exchange for this
Bond a new Bond or Bonds, registered in the name of the transferee,
of authorized denominations. The Bond Registrar shall, prior to
due presentment for registration of transfer, treat the registered
owner as the person exclusively entitled to payment of principal
and interest and the exercise of all other rights and powers of the
owner.
All acts, conditions and things required to happen, exist or
be performed precedent to and in the issuance of this Bond have
happened, exist and have been performed.
This Bond shall not become obligatory for any purpose or be
entitled to any security or benefit under the Indenture or be valid
until the Trustee shall have executed the Certificate of
Authentication appearing hereon.
IN WITNESS WHEREOF, the Industrial Development Authority of
Russell County has caused this Bond to be signed by the manual or
facsimile signature of its Chairman, the seal, which may be a
facsimile seal, of the Authority to be printed hereon and attested
by the manual or facsimile signature of its Secretary, and this
Bond to be dated as of __________ __, 1998.
INDUSTRIAL DEVELOPMENT AUTHORITY
OF RUSSELL COUNTY
By____________________________
Chairman
(Seal)
Attest:
_________________________
Secretary
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This Bond is one of the Bonds of the Series described in the
within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By____________________________
Authorized Officer
Date:
(FORM OF ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto___________________________________________________
(Please insert Social Security or other taxpayer identification
number of assignee)______________________________________________
(Please print or typewrite Name and Address of Assignee)
_________________________________________________________________
the within Bond, and all rights thereunder, and hereby does
irrevocably constitute and appoint_______________________________
Attorney to transfer the within Bond on the books kept for the
registration thereof, with full power of substitution in the
premises.
Dated:
___________________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears on the face of the within Bond in
every particular, without alteration or
enlargement or any change whatever.
Signature Guaranteed: _______________________________; and
NOTICE: Signature(s) must be guaranteed
by an Eligible Guarantor Institution such
as a Commercial Bank, Trust Company,
Securities Broker/Dealer, Credit Union,
or Savings Association who is a member of
a medallion program approved by The
Securities Transfer Association, Inc.
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Bond Insurer") has issued a
policy containing the following provisions, such policy being on
file at First Union National Bank, Richmond, Virginia.
The Bond Insurer, in consideration of the payment of the
premium and subject to the terms of this policy, hereby
unconditionally and irrevocably guarantees to any owner, as
hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of
the Authority to First Union National Bank or its successor (the
"Paying Agent") of an amount equal to (i) the principal of (either
at the stated maturity or by any advancement of maturity pursuant
to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall
become due but shall not be so paid (except that in the event of
any acceleration of the due date of such principal by reason of
mandatory or optional redemption or acceleration resulting from
default or otherwise, other than advancement of maturity pursuant
to a mandatory sinking fund payment, the payments guaranteed hereby
shall be made in such amounts and at such times as such payments of
principal would have been due had there not been any such
acceleration); and (ii) the reimbursement of any such payment which
is subsequently recovered from any owner pursuant to a final
judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to
in clauses (i) and (ii) of the preceding sentence shall be referred
to herein collectively as the "Insured Amounts". "Obligations"
shall mean the Industrial Development Authority of Russell County
Pollution Control Revenue Bonds (Appalachian Power Company
Project), Series H.
Upon receipt of telephonic or telegraphic notice, such notice
subsequently confirmed in writing by registered or certified mail,
or upon receipt of written notice by registered or certified mail,
by the Bond Insurer from the Paying Agent or any owner of an
Obligation the payment of an Insured Amount for which is then due,
that such required payment has not been made, the Bond Insurer on
the due date of such payment or within one business day after
receipt of notice of such nonpayment, whichever is later, will make
a deposit of funds, in an account with State Street Bank and Trust
Company, N.A., in New York, New York, or its successor, sufficient
for the payment of any such Insured Amounts which are then due.
Upon presentment and surrender of such Obligations or presentment
of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the
assignment of the Insured Amounts due on the Obligations as are
paid by the Bond Insurer, and appropriate instruments to effect the
appointment of the Bond Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured
Amounts on the Obligations, such instruments being in a form
satisfactory to State Street Bank and Trust Company, N.A., State
Street Bank and Trust Company, N.A. shall disburse to such owners
or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the
payment of such Insured Amounts and legally available therefor.
This policy does not insure against loss of any prepayment premium
which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered
owner of any Obligation as indicated in the books maintained by the
Paying Agent, the Authority, or any designee of the Authority for
such purpose. The term owner shall not include the Authority or
any party whose agreement with the Authority constitutes the
underlying security for the Obligations.
Any service of process on the Bond Insurer may be made to the
Bond Insurer at its offices located at 113 King Street, Armonk, New
York 10504 and such service of process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on
this policy is not refundable for any reason including the payment
prior to maturity of the Obligations.
WHEREAS, all things necessary have been done and performed to
make the Series H Bonds, when issued and authenticated by the
Trustee, valid, binding and legal limited obligations of the
Authority and to constitute this Seventh Supplemental Indenture a
valid and binding agreement securing the payment of the principal
of, premium, if any, and interest on all bonds issued and to be
issued hereunder and under the Indenture (the Indenture, as
supplemented by the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the
Fourth Supplemental Indenture, the Fifth Supplemental Indenture,
the Sixth Supplemental Indenture and this Seventh Supplemental
Indenture being referred to herein as the Indenture) and the
execution and delivery of this Seventh Supplemental Indenture and
the execution and issuance of the Series H Bonds have in all
respects been authorized;
NOW, THEREFORE, the Authority hereby agrees and covenants with
the Trustee and with the respective holders and owners, from time
to time of the Series F, Series G and Series H Bonds or coupons
thereon, or any part thereof, as follows:
ARTICLE I
Purpose of Series H Bonds
Section 1.01. Purpose of Series H Bonds. The Series H Bonds
of the Authority are authorized for the purpose of refunding
$19,500,000 aggregate principal amount of Series F Bonds at their
maturity on November 1, 1998.
ARTICLE II
The Series H Bonds
Section 2.01. Issuance of Series H Bonds. There are hereby
authorized to be issued Pollution Control Revenue Bonds of the
Authority in the aggregate principal amount of nineteen million
five hundred thousand dollars ($19,500,000) as Refunding Bonds
pursuant to Section 2.11 of the Indenture. Said Bonds shall be
designated "Industrial Development Authority of Russell County
Pollution Control Revenue Bonds (Appalachian Power Company
Project), Series H", shall be dated as of the 1st day of October,
1998, shall bear interest payable semiannually on the first day of
May and November beginning November 1, 1998 in each year at the
rate of five per centum (5%) per annum and shall mature, subject to
the right of prior redemption as hereinafter set forth, on November
1, 2021.
Both principal of and interest on the Series H Bonds shall be
payable in lawful money of the United States of America, but only
from the revenues and receipts pledged to the payment thereof as
provided herein and in the Indenture.
Section 2.02. Form of Series H Bonds. The Series H Bonds
shall be issued substantially in the form of the Series H Bond
hereinabove set forth, with such appropriate variations, omissions
and insertions as are permitted or required by the Indenture or
this Seventh Supplemental Indenture.
Initially, one certificate for the Series H Bonds will be
issued and registered to the Securities Depository (as defined
below), or its nominee. The Authority may enter into a Letter of
Representations (as defined below) relating to a book-entry system
to be maintained by the Securities Depository with respect to the
Series H Bonds.
In the event that (a) the Securities Depository determines not
to continue to act as a securities depository for the Series H
Bonds by giving notice to the Trustee and the Authority discharging
its responsibilities hereunder, or (b) the Authority determines (at
the direction of the Company) (i) that beneficial owners of Series
H Bonds shall be able to obtain certificated Series H Bonds or (ii)
to select a new Securities Depository, then the Trustee shall, at
the direction of the Authority (at the request of the Company),
attempt to locate another qualified securities depository to serve
as Securities Depository or authenticate and deliver certificated
Series H Bonds to the beneficial owners or to the Securities
Depository participants on behalf of beneficial owners
substantially in the form provided for in this Section. In
delivering certificated Series H Bonds, the Trustee shall be
entitled to rely on the records of the Securities Depository as to
the beneficial owners or the records of the Securities Depository
participants acting on behalf of beneficial owners. Such
certificated Series H Bonds will then be registrable, transferable
and exchangeable as set forth in this Indenture.
So long as there is a Securities Depository for the Series H
Bonds (1) it or its nominee shall be the registered owner of the
Series H Bonds; (2) notwithstanding anything to the contrary in
this Indenture, determinations of persons entitled to payment of
principal, premium, if any, and interest, transfers of ownership
and exchanges and receipt of notices shall be the responsibility of
the Securities Depository and shall be effected pursuant to rules
and procedures established by such Securities Depository; (3) the
Authority, the Company and the Trustee shall not be responsible or
liable for maintaining, supervising or reviewing the records
maintained by the Securities Depository, its participants or
persons acting through such participants; (4) except to the extent
the Bond Insurer is deemed to be the holder of the Series H Bonds,
as provided in Article V, references in this Indenture to
registered owners of the Series H Bonds shall mean such Securities
Depository or its nominee and shall not mean the beneficial owners
of the Series H Bonds; and (5) in the event of any inconsistency
between the provisions of this Indenture and the provisions of the
Letter of Representations such provisions of the Letter of
Representations, except to the extent set forth in this paragraph
and the next preceding paragraph, shall control.
For purposes of this Section, the following terms shall have
the following meanings:
"Letter of Representations" means the Blanket Letter of
Representations dated September 8, 1998, from the Authority to the
Securities Depository and (with the consent of the Company) any
amendments thereto, or successor agreements between the Authority
and any successor Securities Depository, relating to a book-entry
system to be maintained by the Securities Depository with respect
to the Series H Bonds.
"Securities Depository" means The Depository Trust Company, a
corporation organized and existing under the laws of the State of
New York, and any other securities depository for the Series H
Bonds appointed pursuant to this Section, and their successors.
Section 2.03. Execution, Authentication and Delivery of
Series H Bonds. The Series H Bonds shall be executed,
authenticated and delivered, and the proceeds therefrom deposited,
as provided in Section 2.11 of the Indenture, as amended by Section
5.01 of the Second Supplemental Indenture, and Section 3.2(c) of
the Agreement. A copy of the Bond Insurance Policy, as defined in
Article V, shall be delivered to the Trustee.
ARTICLE III
Redemption of Series H Bonds Before Maturity
Section 3.01. Redemption. The Series H Bonds are subject to
redemption in whole, but not in part, at any time upon payment of
100% of the principal amount thereof, plus interest accrued to the
redemption date by the Authority in the event that the Company
shall exercise its option to prepay, and shall prepay, the purchase
price of the Project under circumstances involving (i) the
imposition of unreasonable burdens or excessive liabilities on the
Company or the Authority with respect to the Project or either of
the Plants, or the operation of the Project or either of the
Plants, including taxes not imposed on December 1, 1974 and
economic, technological or other changes making the continued
operation of the Plants uneconomical in the opinion of the
Company's Board of Directors; (ii) damage to or destruction of the
Project or a portion thereof or all or a portion of either or both
of the Plants; (iii) condemnation of all or substantially all of
the Project or all or a portion of either or both of the Plants; or
(iv) the operation of either of the Plants being enjoined, all as
provided in Section 8.1(b) through (e) of the Agreement.
The Series H Bonds are also subject to optional redemption (at
the election of the Company without any further action of the
Authority) prior to maturity on or after November 1, 2008 at any
time in whole or in part (if less than all of the Series H Bonds
are to be redeemed, the Series H Bonds to be redeemed to be
selected by lot by the Trustee) upon payment of the following
redemption prices (expressed as a percentage of principal amount of
Series H Bonds to be redeemed) plus accrued interest to the
redemption date:
Redemption
Redemption Dates (Dates Inclusive) Price
November 1, 2008 to October 31, 2009 101.00%
November 1, 2009 to October 31, 2010 100.50%
November 1, 2010 and thereafter 100.00%
If less than all of the Series H Bonds shall be called for
redemption, each $5,000 principal amount of a Series H Bond having
a principal amount of more than $5,000 shall be counted as one Bond
for the purpose of selecting by lot. If a portion of a Series H
Bond having a principal amount of more than $5,000 shall be called
for redemption, a new series H Bond in principal amount equal to
the unredeemed portion thereof shall be issued to the registered
owner upon the surrender thereof.
Section 3.02. Other Provisions Pertaining to Redemption.
Reference is hereby made to Article III of the Indenture for the
provisions describing the methods and effects of redemption.
ARTICLE IV
Covenants and Security
Section 4.01. Authority; Compliance with Conditions. The
Authority covenants that it is duly authorized under the laws of
the Commonwealth of Virginia, including particularly and without
limitation the Act, to issue the Series H Bonds authorized hereby
and to execute and deliver this Seventh Supplemental Indenture, to
assign and pledge the Agreement and the revenues and receipts
payable under the Agreement, to grant a security interest therein
and to pledge the revenues and receipts hereby pledged and in the
manner and to the extent contemplated herein and in the Indenture;
that all of the requirements and conditions for the issuance of the
Series H Bonds and the execution and delivery of this Seventh
Supplemental Indenture have been satisfied and complied with; that
all other action on its part necessary for the issuance of the
Series H Bonds and the execution and delivery of this Seventh
Supplemental Indenture has been duly and effectively taken; and
that the Series H Bonds in the hands of the owners thereof are and
will be valid and enforceable limited obligations of the Authority
according to the terms thereof and hereof.
Section 4.02. Security for Series H Bonds; Confirmation of
Indenture. The Series H Bonds shall be equally and ratably secured
under the Indenture with all outstanding Bonds, and any other
series of Bonds which may be issued pursuant to Section 2.10 or
2.11 of the Indenture, without preference, priority or distinction
of any Bonds, as defined therein, over any other Bonds. As
supplemented and amended, the Indenture is in all respects ratified
and confirmed, and the Indenture, including each supplemental
indenture, shall be read, taken and construed as one and the same
instrument. All covenants, agreements and provisions of, and all
security provided under, the Indenture shall apply with full force
and effect to the Series H Bonds and to the owners thereof.
Section 4.03. Tax Option. The Authority, in the resolution
authorizing the issuance of the Series H Bonds and the execution
and delivery of this Seventh Supplemental Indenture, has exercised
the option provided by Section 1.103-8(g)(4) of the proposed Income
Tax Regulations contained in the Notice of Proposed Rule Making
published on August 20, 1975 to have the provisions of Section
1.103-8 of the Income Tax Regulations prescribed by T.D. 7199, as
corrected August 11, 1972, and not the provisions of such proposed
Income Tax Regulations, applied to the Series H Bonds. The
Authority covenants and agrees to take such further action as may
from time to time be required in order to implement the exercise of
such option, including, but not limited to, the execution of any
letter or Internal Revenue Service form necessary or desirable to
signify the exercise or re-exercise of such option.
ARTICLE V
Special Insurance Requirements
Section 5.01. Notice of Certain Redemptions. The Trustee
shall notify the Bond Insurer in the manner set forth in Article
III of the Indenture and in the form of the Series H Bonds of any
redemption of Series H Bonds pursuant to such provisions.
Section 5.02. Notice of Default; Notices of Claims Under Bond
Insurance Policy.
(a) The Trustee shall give the Bond Insurer Immediate
Notice of any Event of Default with respect to the Series H Bonds
set forth in Section 8.01(a) or (b) of the Indenture. The Trustee
shall also give the Bond Insurer Immediate Notice if the Trustee
has been notified by the Company by the second Business Day prior
to any payment date set forth in Section 8.01(a) or (b) of the
Indenture that the Company does not intend to make such payment.
The Trustee shall give the Bond Insurer notice of any other Event
of Default within 30 days after any Responsible Officer has
knowledge of an Event of Default under Section 8.01(c), (d) or (e)
of the Indenture.
(b) The Trustee shall, at the time it provides notice to
the Bond Insurer under either of the first two sentences of
subsection (a), notify registered owners of Series H Bonds entitled
to receive the payment of principal or interest thereon from the
Bond Insurer (i) as to the fact of such entitlement; (ii) that the
Bond Insurer will remit to them all or a part of the interest
payments next coming due upon proof of entitlement of holders of
Series H Bonds to interest payments and delivery to the Insurance
Trustee, in form satisfactory to the Insurance Trustee, of an
appropriate assignment of the registered owner's right to payment;
(iii) that should they be entitled to receive full payment of
principal from the Bond Insurer, they must surrender their Series
H Bonds (along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such
Series H Bonds to be registered in the name of the Bond Insurer)
for payment to the Insurance Trustee, and not the Trustee; and (iv)
that should they be entitled to receive partial payment of
principal from the Bond Insurer, they must surrender their Series
H Bonds for payment thereon first to the Trustee, who shall note on
such Series H Bonds the portion of the principal paid by the
Trustee and then, along with the appropriate instrument of
assignment in form satisfactory to the Insurance Trustee, to the
Insurance Trustee, which will then pay the unpaid portion of
principal.
(c) In the event that a Responsible Officer of the
Trustee has notice that any payment of principal of or interest on
a Series H Bond which has become due for payment and which is made
to a holder of a Series H Bond by or on behalf of the Authority has
been deemed a preferential transfer and theretofore recovered from
its registered owner pursuant to the United States Bankruptcy Code
by a trustee in bankruptcy in accordance with the final,
nonappealable order of a court having competent jurisdiction, the
Trustee shall, at the time the Bond Insurer is notified that the
Trustee does not have sufficient funds to pay principal of or
interest on the Series H Bonds on an interest payment date, notify
all registered owners that in the event that any registered owner's
payment is so recovered, such registered owner will be entitled to
payment from the Bond Insurer to the extent of such recovery if
sufficient funds are not otherwise available, and the Trustee shall
furnish to the Bond Insurer its records evidencing the payments of
principal of and interest on the Series H Bonds which have been
made by the Trustee and subsequently recovered from registered
owners and the dates on which such payments were made.
Section 5.03. Deemed Holder For Default and Remedies. For
all purposes of Article VIII of the Indenture, the Bond Insurer
shall be deemed to be the sole holder of the Series H Bonds. The
Trustee shall continue to provide notice to all holders of bonds as
provided in Section 9.03 and 9.06 of the Indenture.
Section 5.04. Supplemental Indentures and Amendments to
Agreement. For all purposes of Article X (except for the
provisions of clauses (i), (ii) and (iii) of Section 10.02) and XI
of the Indenture, the Bond Insurer shall be deemed to be the holder
of Series H Bonds. In the case of any Supplemental Indenture or
any amendment to the Agreement requiring the consent of holders of
Series H Bonds, at least 15 Business Days prior to executing such
proposed Supplemental Indenture or any amendment to the Agreement,
the Trustee shall give notice of such execution together with a
copy of such Supplemental Indenture or any amendment to the
Agreement to any Rating Agency then maintaining a credit rating
with respect to the Series H Bonds. The Trustee shall give notice
to the Bond Insurer of any Supplemental Indenture or amendment to
the Agreement not requiring the consent of bondholders.
Section 5.05. Successor Trustees. The Trustee shall give
written notice of its resignation, in accordance with Section 9.06
of the Indenture, to the Bond Insurer at the same time such notice
is given to the Authority. The Authority shall give notice to the
Bond Insurer of its removal of the Trustee and of its appointment
of a successor Trustee in the event of a resignation or removal of
the Trustee, all in accordance with Section 9.08 of the Indenture.
The Bond Insurer shall be treated as the sole holder of Series H
Bonds for purposes of approving any successor Trustee.
Section 5.06. Bond Insurer as Party in Interest. The Bond
Insurer shall be included as a party in interest with respect to
the Series H Bonds and as a party entitled to (a) notify the
Trustee of the occurrence of an Event of Default, and (b) request
the Trustee to intervene in judicial proceedings that affect the
Series H Bonds or the security therefor. The Trustee shall be
required to accept notice of an Event of Default from the Bond
Insurer as the sole holder of the Series H Bonds.
Section 5.07. Access to the Register. Upon the occurrence of
an Event of Default which would require the Bond Insurer to make
payments of principal of or interest on the Series H Bonds in
accordance with the Bond Insurance Policy, the Trustee, as Bond
Registrar, shall provide access to the books kept for the
registration of transfer of Series H Bonds to the Bond Insurer, the
Insurance Trustee or other designee of the Bond Insurer.
Section 5.08. Notices to Bond Insurer. All notices, consents
or other communications required or permitted to be given to the
Bond Insurer under the Indenture shall be deemed sufficiently given
if given in writing, mailed by registered or certified mail,
postage prepaid and addressed as follows: MBIA Insurance
Corporation, 113 King Street, Armonk, New York 10504, Attention:
General Counsel. The Bond Insurer may from time to time give
notice in writing to all parties to the Seventh Supplemental
Indenture designating a different address or addresses for notice
hereunder.
Section 5.09. Termination of Special Insurance Requirements.
The provisions of this Article shall apply only so long as the Bond
Insurance Policy shall be in full force and effect and the Bond
Insurer is not in default thereunder or obligations remain to the
Bond Insurer hereunder.
Section 5.10. No Effect on Parity Status under Indenture.
Nothing in this Article regarding providing notices or recognition
of the Bond Insurer as the holder of the Series H Bonds shall alter
the provisions of Section 4.02 (as required by the Indenture), that
the Series H Bonds shall be equally and ratably secured under the
Indenture with all outstanding bonds, and any other series of bonds
which may be issued pursuant to Section 2.10 or 2.11 of the
Indenture, without preference, priority or distinction of any
bonds, as defined therein, over any other bonds.
Section 5.11. Deposits under Section 7.01 of the Indenture.
In addition to the other requirements of Section 7.01 of the
Indenture, moneys and non-callable Government Obligations are the
only deposits which may be made with the Trustee under such Section
in order that the Series H Bonds shall be no longer secured by or
entitled to the benefits of the Indenture.
Section 5.12. Confirmation of Application of Term
"outstanding" to Series H Bonds paid by Bond Insurer; Appointment
of Bond Insurer as Agent; Recordation of Rights of Subrogation in
Registration Books.
(a) Notwithstanding anything herein to the contrary, in
the event that the principal and/or interest due on the Series H
Bonds shall be paid by the Bond Insurer pursuant to the Bond
Insurance Policy, the Series H Bonds (i) shall continue to be
outstanding within the meaning of the Indenture for all purposes;
(ii) shall not be considered defeased, otherwise satisfied or paid
by the Authority; and (iii) the assignment and pledge of the
Indenture and all covenants, agreements and other obligations of
the Authority and the Company to the registered owners shall
continue to exist and shall run to the benefit of the Bond Insurer,
and the Bond Insurer shall be subrogated to the rights of such
registered owners to the extent of each such payment.
(b) If and to the extent there is a deficiency in
amounts required to pay interest on the Series H Bonds, the Trustee
shall (i) execute and deliver to State Street Bank and Trust
Company, N.A., or its successors under the Bond Insurance Policy
(the "Insurance Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument appointing the Bond Insurer
as agent for holders of the Series H Bonds ("Holders") in any legal
proceeding related to the payment of such interest and an
assignment to the Bond Insurer of the claims for interest to which
such deficiency relates and which are paid by the Insurer; (ii)
receive as designee of the respective Holders (and not as Trustee)
in accordance with the tenor of the Bond Insurance Policy payment
from the Insurance Paying Agent with respect to the claims for
interest so assigned; and (iii) disburse the same to such
respective Holders; and
(c) If and to the extent there is a deficiency in
amounts required to pay principal of the Series H Bonds, the
Trustee shall (i) execute and deliver to the Insurance Paying Agent
in form satisfactory to the Insurance Paying Agent an instrument
appointing the Bond Insurer as agent for such Holder in any legal
proceeding relating to the payment of such principal and an
assignment to the Bond Insurer of any of the Series H Bonds
surrendered to the Insurance Paying Agent of so much of the
principal amount thereof as has not previously been paid or for
which moneys are not held by the Trustee and available for such
payment (but such assignment shall be delivered only if payment
from the Insurance Paying Agent is received); (ii) receive as
designee of the respective Holders (and not as Trustee) in
accordance with the tenor of the Bond Insurance Policy payment
therefor from the Insurance Paying Agent; and (iii) disburse the
same to such Holders.
(d) To assist the Trustee in allocating available moneys
held under the Indenture, (i) in the case of subrogation as to
claims for past due interest, the Trustee shall note the Bond
Insurer's rights as subrogee on the registration books of the
Authority maintained by the Trustee upon receipt from the Bond
Insurer of proof of the payment of interest thereon to the
registered owners of the Series H Bonds, and (ii) in the case of
subrogation as to claims for past due principal, the Trustee shall
note the Bond Insurer's rights as subrogee on the registration
books of the Authority maintained by the Trustee upon surrender of
the Series H Bonds by the registered owners thereof together with
proof of the payment of principal thereof.
(e) To the extent the Bond Insurer makes payments,
directly or indirectly (as by paying through the Trustee), on
account of principal of or interest on the Series H Bonds, the Bond
Insurer will be subrogated to the rights of such Holders to receive
the amount of such principal and interest from the Authority, with
interest thereon as provided and solely from the sources stated in
this Indenture and the Series H Bonds; and
(f) The Authority and the Trustee will pay to the Bond
Insurer the amount of such principal and interest (including
principal and interest recovered under subparagraph (ii) of the
first paragraph of the Policy, which principal and interest shall
be deemed past due and not to have been paid), with interest
thereon as provided in the Indenture and the Series H Bonds, but
only from the sources and in the manner provided herein for the
payment of principal of and interest on the Series H Bonds to
Holders, and will otherwise treat the Bond Insurer as the owner of
such rights to the amount of such principal and interest.
For purposes of this Article the following terms shall have
the following meanings:
"Bond Insurance Policy" shall mean the financial guaranty
insurance policy issued by the Bond Insurer that guarantees payment
of principal of and interest on the Series H Bonds.
"Bond Insurer" shall mean MBIA Insurance Corporation, a New
York-domiciled stock insurance company.
"Business Day" shall mean any day of the week other than
Saturday, Sunday or a day which shall be, in the Commonwealth of
Virginia, the State of New York or in the jurisdiction in which the
principal office of the Trustee is located, a legal holiday or a
day on which banking corporations are authorized or obligated by
law or executive order to close.
"Immediate Notice" shall mean telephonic or telegraphic
notice, promptly followed by written notice by registered or
certified mail to such address as the addressee shall have directed
in writing; provided, however, that telephonic or telegraphic
notice shall be effective notwithstanding any failure to receive
such written notice.
"Insurance Trustee" shall mean State Street Bank and Trust
Company, N.A., or its successor, as Insurance Trustee under the
Bond Insurance Policy.
"Rating Agency" shall mean Moody's or Standard & Poor's or
both or, if either such credit rating agency is no longer issuing
applicable credit ratings, any other nationally recognized rating
agency designated by the Authority with the approval of the
Trustee.
"Responsible Officer" shall mean an officer of the Trustee
assigned to the Trustee's corporate trust department, including,
without limitation, any Vice President, any Assistant Vice
President, any Trust Officer, or any other officer performing
functions similar to those performed by the persons who at the time
shall be such officers and also means any other officer of the
Trustee to whom any corporate trust matter is referred because of
his knowledge of and familiarity with the particular subject.
ARTICLE VI
Miscellaneous
Section 6.01. Authority of Officers and Agents. The officers
and agents of the Authority shall do all acts and things required
of them by this Seventh Supplemental Indenture, the Indenture and
the Series H Bonds for the complete and punctual performance of all
covenants and agreements contained herein and therein.
Section 6.02. Successors and Assigns. This Seventh
Supplemental Indenture shall be binding upon, inure to the benefit
of and be enforceable by the parties and their respective
successors and assigns.
Section 6.03. Applicable Law. This Seventh Supplemental
Indenture shall be governed by the applicable laws of the
Commonwealth of Virginia.
Section 6.04. Counterparts. This Seventh Supplemental
Indenture may be executed in several counterparts, each of which
shall be an original, and all of which together shall constitute
but one and the same instrument.
IN WITNESS WHEREOF, the Authority and the Trustee have caused
this Seventh Supplemental Indenture to be executed in their
respective corporate names, all as of the date first above written.
INDUSTRIAL DEVELOPMENT AUTHORITY
OF RUSSELL COUNTY
By_/s/ H. M. Harless___
Chairman
FIRST UNION NATIONAL BANK,
as Trustee
By_/s/ Patricia A. Welling___
Vice President
