<PAGE>
File No. 70-9487
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM U-1
APPLICATION OR DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
* * *
WHEELING POWER COMPANY
51- 16th Street, Wheeling, West Virginia 26003
(Name of company filing this statement and
address of principal executive office)
* * *
AMERICAN ELECTRIC POWER COMPANY, INC.
1 Riverside Plaza, Columbus, Ohio 43215
(Name of top registered holding company
parent of each applicant or declarant)
* * *
A. A. Pena, Senior Vice President
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
Susan Tomasky, General Counsel
AMERICAN ELECTRIC POWER SERVICE CORPORATION
1 Riverside Plaza, Columbus, Ohio 43215
(Names and addresses of agents for service)
<PAGE>
Wheeling Power Company ("Wheeling"), a subsidiary company of American
Electric Power Company, Inc. ("AEP"), a registered holding company under the
Public Utility Holding Company Act of 1935 (the "1935 Act"), hereby amends its
Application or Declaration on Form U-1 in File No. 70-9487:
1. By amending and restating in its entirety ITEM 1. DESCRIPTION OF
PROPOSED TRANSACTION as follows:
Wheeling Power Company ("Wheeling"), a subsidiary company of American
Electric Power Company, Inc. ("AEP"), a registered holding company under the
Public Utility Holding Company Act of 1935 (the "1935 Act"), requests
authorization herein to issue and sell from time to time through June 30, 2000
unsecured promissory notes (the "Notes") in the aggregate principal amount of
$10,000,000, to one or more commercial banks, financial institutions or other
institutional investors pursuant to one or more agreements (the "Proposed
Agreements") with terms similar to those contained in the forms of a Term Loan
Agreement and a Note Purchase Agreement attached hereto as Exhibits B and B-1,
with appropriate insertions or modifications to specific terms thereof as may be
negotiated between Wheeling and a specific lender at the time of the issuance of
the Notes.
The Proposed Agreements and the Notes thereunder would be for a term of
not less than nine months nor more than ten years from the date of borrowing.
The Proposed Agreements would provide that the Notes bear interest at
either a fixed rate, a fluctuating rate or some combination of fixed and
fluctuating rates. The actual rate of interest which each Note shall bear shall
be subject to further negotiation between Wheeling and the lender. Any fixed
rate of interest of the Notes will not be greater than 300 basis points above
the yield at the time of issuance of the Notes to maturity of United States
Treasury obligations that mature on or about the date of maturity of the Notes.
Any fluctuating rate will not be greater than 200 basis points above the rate of
interest announced publicly by a major bank from time to time as its base or
prime rate.
In the event a bank or financial institution arranges for a borrowing from
a third party, such institution may charge Wheeling a placement fee, not to
exceed 1% of the principal amount of such borrowing.
A lender may desire to assign, or to sell participations in, all or any
part of the Proposed Term Loan Agreement and the Notes thereunder to other
entities. Such assignee would have the same rights and benefits under the
Proposed Term Loan Agreement as the lender. Such participant would not have any
rights under the Proposed Term Loan Agreement, but would have rights against the
lender in respect of the agreement between the participant and the lender.
The Proposed Term Loan Agreement specifies that, in the event a Note
bearing interest at a fixed rate is paid prior to maturity in whole or in part
and the fixed rate at that time exceeds the yield to maturity of certain United
States Treasury securities maturing on or close to the Note, Wheeling shall pay
to the lender an amount based upon the present value of such prepaid amounts
discounted at such treasury yield.
The Proposed Agreements may contain restrictive covenants which would
prohibit Wheeling from, among other things, (i) creating, incurring, assuming or
suffering to exist any liens on its property, with certain stated exceptions;
(ii) creating or incurring any indebtedness for borrowed money, other than as
specified therein; (iii) failing to maintain a specified level of
capitalization; (iv) entering into certain mergers, consolidations and
dispositions of assets; and (v) permitting certain events to occur in connection
with its pension plans. In addition, the Proposed Agreement may permit the
holder of a Note to require Wheeling to prepay the Note after an ownership
change.
Wheeling has been advised that funds for long-term unsecured note
borrowings of the magnitude proposed herein are generally available for not more
than 24 hours. Accordingly, Wheeling requests an order of this Commission
approving the proposed financings in all respects such that, upon receipt of
such order, and thereafter, Wheeling may unconditionally, and without further
order of this Commission, enter into a definitive agreement with a lender or
lenders, similar to the form of the Proposed Term Loan Agreement with
appropriate insertions or modifications to specific terms thereof as may be
negotiated between Wheeling and a specific lender subject to the conditions,
restrictions and limitations specified herein.
Proceeds realized from the sale of the Notes will be used to repay long
and short-term debt of Wheeling. At December 31, 1998 the outstanding short-term
indebtedness of Wheeling was $5,225,000.
Compliance with Rule 54.
"Rule 54 provides that in determining whether to approve certain
transactions other than those involving an exempt wholesale generator ('EWG') or
a foreign utility company ('FUCO'), as defined in the 1935 Act, the Commission
will not consider the effect of the capitalization or earnings of any subsidiary
which is an EWG or FUCO if Rule 53(a), (b) and (c) are satisfied. As set forth
below, all applicable conditions of Rule 53(a) are currently satisfied and none
of the conditions set forth in Rule 53(b) exist or will exist as a result of the
transactions proposed herein, thereby satisfying such provision and making Rule
53(c) inapplicable.
Rule 53(a)(1). As of March 31, 1999, AEP, through its subsidiary,
AEP Resources, Inc., had aggregate investment in FUCOs of $823,265,000. This
investment represents approximately 48.6% of $1,693,698,000, the average of the
consolidated retained earnings of AEP reported on Forms 10-Q and 10-K for the
four consecutive quarters ended March 31, 1999.
Rule 53(a)(2). Each FUCO in which AEP invests will maintain books
and records and make available the books and records required by Rule 53(a)(2).
Rule 53(a)(3). No more than 2% of the employees of the Operating
Companies (FN1) of AEP will, at any one time, directly or indirectly, render
services to any FUCO.
Rule 53(a)(4). AEP has submitted and will submit a copy of Item 9
and Exhibits G and H of AEP's Form U5S to each of the public service commissions
having jurisdiction over the retail rates of AEP's Operating Companies.
Rule 53(b). (i) Neither AEP nor any subsidiary of AEP is the subject
of any pending bankruptcy or similar proceeding; (ii) AEP's average consolidated
retained earnings for the four most recent quarterly periods ($1,693,698,000)
represented an increase of approximately $19,477,000 (or 1%) in the average
consolidated retained earnings from the previous four quarterly periods
($1,674,221,000); and (iii) for the fiscal year ended December 31, 1998, AEP did
not report operating losses attributable to AEP's direct or indirect investments
in EWGs and FUCOs.
AEP was authorized to invest up to 100% of its consolidated retained
earnings in EWGs and FUCOs (HCAR No. 26864, April 27, 1998) (the '100% Order')
in File No. 70-9021. In connection with its consideration of AEP's application
for the 100% Order, the Commission reviewed AEP's procedures for evaluating EWG
or FUCO investments. Based on projected financial ratios and on procedures and
conditions established to limit the risks to AEP involved with investments in
EWGs and FUCOs, the Commission determined that permitting AEP to invest up to
100% of its consolidated retained earnings in EWGs and FUCOs would not have a
substantial adverse impact upon the financial integrity of the AEP System, nor
would it have an adverse impact on any of the Operating Companies or their
customers, or on the ability of state commissions to protect the Operating
Companies or their customers."
2. By amending and restating ITEM 3. APPLICABLE STATUTORY PROVISIONS as
follows:
"Wheeling and AEP consider Sections 6(a) and 7 of the 1935 Act to be
applicable to the proposed transactions.
3. By amending ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS to supply an
Exhibit B-1 Form of Note Purchase Agreement.
Exhibit B-1 Copy of proposed form of Note Purchase Agreement
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned company has duly caused this statement to be signed on its
behalf by the undersigned thereunto duly authorized.
WHEELING POWER COMPANY
By /s/ A. A. Pena
Vice President
Dated: June 14, 1999
FN1 Appalachian Power Company, Columbus Southern Power Company, Kentucky
Power Company, Kingsport Power Company, Indiana Michigan Power Company,
Ohio Power Company and Wheeling, electric utility subsidiaries of AEP
(sometimes collectively referred to herein as 'Operating Companies').
AEP is primarily engaged, through the Operating Companies, in the
generation, transmission and distribution of electric energy. The
Operating Companies operate an integrated public utility system that
provides service in Indiana, Kentucky, Michigan, Ohio, Tennessee,
Virginia and West Virginia.
EXHIBIT B-1
February 5, 1991
[Company Name and Address]
As of [Date]
[Purchaser(s)]
[Address]
Gentlemen:
The undersigned, (herein called the "Company"), hereby agrees with you as
follows:
1. Authorization of Issue of Notes. The Company will authorize the issue
of its promissory notes (herein called the "Notes") in the aggregate principal
amount of $__________, to be dated the date of issue thereof, to mature
_____________________, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due and payable at
the rate of _____% per annum and on overdue principal, premium and interest at
the rate specified therein, and to be substantially in the form of Exhibit A
attached hereto. The term "Notes" as used herein shall include each Note
delivered pursuant to any provision of this Agreement and each Note delivered in
substitution or exchange for any such Note pursuant to any such provision.
2. Purchase and Sale of Notes. The Company hereby agrees to sell to you
and, subject to the terms and conditions herein set forth, you agree to purchase
from the Company the aggregate principal amount of Notes set forth opposite your
name in the Purchaser Schedule attached hereto at 100% of such aggregate
principal amount. The Company will deliver to you, at the offices of
____________________________________________________
________________________________________________________, one or more Notes
registered in your name, evidencing the aggregate principal amount of Notes to
be purchased by you and in the denomination or denominations specified with
respect to you in the Purchaser Schedule attached hereto, against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the Company's account #_______________ at ________
_______________________________________________________ on or before 12:00 noon
(New York City Time) on the date of closing, which shall be ___________________,
or any other time, or any other date on or before ___________________, upon
which the Company and you may mutually agree (herein called the "closing" or the
"date of closing").
3. Conditions of Closing. Your obligation to purchase and pay for the
Notes to be purchased by you hereunder is subject to the satisfaction, on or
before the date of closing, of the following conditions:
A. Opinion of Company's Counsel. You shall have received from
counsel for the Company, which may be an attorney employed by American
Electric Power Service Corporation, an affiliate of the Company, an
opinion substantially in the form of Exhibit B attached hereto.
B. Representations and Warranties; No Default. The representations
and warranties contained in paragraph 8 shall be true on and as of the
date of closing, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on the date of closing
no Event of Default or Default; and the Company shall have delivered to
you an Officer's Certificate, dated the date of closing, to both such
effects.
C. Purchase Permitted By Applicable Laws. The purchase of and
payment for the Notes to be purchased by you on the date of closing on the
terms and conditions herein provided (including the use of the proceeds of
such Notes by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation G, T or X of the Board of Governors of the
Federal Reserve System) and shall not subject you to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable
law or governmental regulation, and you shall have received such
certificates or other evidence as you may request to establish compliance
with this condition.
D. Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to
you, and you shall have received all such counterpart originals or
certified or other copies of such documents as you may reasonably request.
4. Prepayments. The Notes shall be subject to prepayment under the
circumstances set forth in paragraph 4A.
A. Optional Prepayment With Yield-Maintenance Premium. The Notes
shall be subject to prepayment, in whole at any time or from time to time
in part (in integral multiples of $1,000,000), at the option of the
Company, at 100% of the principal amount so prepaid plus interest thereon
to the prepayment date and the Yield-Maintenance Premium, if any, with
respect to each Note. If the Company and the holder of any Note shall
prior to the prepayment date designate in writing a different premium, the
premium so designated shall be payable on the prepayment date in lieu of
the Yield-Maintenance Premium with respect to such Note.
B. Notice of Optional Prepayment. The Company shall give the holder
of each Note irrevocable written notice of any prepayment pursuant to
paragraph 4A not less than 3 Business Days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and
of the Notes held by such holder, to be prepaid on such date and stating
that such prepayment is to be made pursuant to paragraph 4A. Notice of
prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest thereon to the
prepayment date and together with the premium, if any, herein provided,
shall become due and payable on such prepayment date.
C. Partial Payments Pro Rata. Upon any partial prepayment of the
Notes, the principal amount so prepaid shall be allocated to all Notes at
the time outstanding in proportion to the respective outstanding principal
amounts thereof.
D. Retirement of Notes. The Company shall not prepay or otherwise
retire in whole or in part prior to their stated final maturity (other
than by prepayment pursuant to paragraph 4A or upon acceleration of such
final maturity pursuant to paragraph 7A), or purchase or otherwise
acquire, directly or indirectly, Notes held by any holder unless the
Company shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the
aggregate principal amount of Notes held by each other holder of Notes at
the time outstanding upon the same terms and conditions. Any Notes so
prepaid or otherwise retired or purchased or otherwise acquired by the
Company shall not be deemed to be outstanding for any purpose under this
Agreement.
5. Affirmative Covenants.
A. Information. The Company covenants that it will deliver to each
Significant Holder (i) as soon as available and in any event within ninety
(90) days after the end of each of the first three (3) quarters of each
fiscal year of the Company, the balance sheet of the Company as of the end
of each such quarter and the statement of income and retained earnings of
the Company for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified by the chief
financial officer of the Company; (ii) as soon as available and in any
event within one hundred twenty (120) days after the end of each fiscal
year of the Company, a copy of the annual report for each such year,
containing financial statements for such year certified by Deloitte &
Touche or another independent public accountant of recognized standing;
and (iii) such other information respecting the condition or operations,
financial or otherwise, of the Company as any Significant Holder may from
time to time reasonably request.
B. Compliance with Laws. The Company covenants that it shall comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, paying before the
same become delinquent, all taxes, assessments and governmental charges
imposed upon it or any of its properties, except to the extent contested
in good faith.
C. Notices. The Company covenants that it shall give notice to each
Significant Holder of any litigation affecting the Company in which the
amount involved is $ or more and is not covered by insurance. The Company
also covenants that forthwith upon obtaining knowledge of an Event of
Default or Default, it will deliver to each Significant Holder an
Officer's Certificate specifying the nature and period of existence
thereof and what action the Company proposes to take with respect thereto.
D. Insurance. The Company covenants that it shall maintain, with
respect to its properties, assets and business, insurance with financially
sound and reputable insurers against loss or damage of the kinds and in
the amounts customarily carried under similar circumstances by other
corporations engaged in the same or similar businesses and similarly
situated; provided, however, that the Company may self-insure pursuant to
deductible provisions which are prudent in amount.
6. Negative Covenants.
A. Lien, Debt and Other Restrictions. The Company covenants that
so long as any Note shall remain outstanding and unpaid it will not:
(i) Limitation on Liens, Etc. Create, incur, assume or suffer
to be created, incurred, assumed, or to exist, any mortgage, deed of
trust, pledge, lien, security interest or other charge or
encumbrance of any nature (all of the foregoing being hereinafter
referred to in this subparagraph as "liens") upon or with respect to
any of its property or assets, whether now owned or hereafter
acquired, except that the foregoing restrictions shall not apply to:
(a) [lien(s) of existing First Mortgage Indenture[s], as
amended and supplemented and as to be amended and
supplemented] and "Excepted Encumbrances" as therein defined;
(b) liens for taxes, assessments or governmental charges
or levies not yet delinquent or being contested in good faith
by appropriate proceedings;
(c) liens of landlords and liens of carriers,
warehousemen, mechanics and materialmen incurred in the
ordinary course of business for sums not yet due or being
contested in good faith by appropriate proceedings;
(d) liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of or compliance with statutory
obligations, tenders, bids, leases, surety and appeal bonds,
performance and return-of-money bonds and other similar
obligations (other than obligations for the payment of
borrowed money);
(e) any judgment lien, unless the judgment it secures
shall not, within sixty (60) days after the entry thereof,
have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within sixty (60)
days after the expiration of any such stay;
(f) liens on any property acquired, constructed or
improved by the Company after the date of this Agreement, or
liens on any property existing at the time of the acquisition
thereof, provided that the lien shall not apply to any
property theretofore owned by the Company other than any
theretofore unimproved real property on which the property so
constructed, or the improvement, is located;
(g) liens incidental to the conduct of the Company's
business or the ownership of its property and assets, which
were not incurred in connection with the borrowing of money or
the obtaining of credit, none of which materially interferes
with the Company's use and operation of its properties and
assets or detracts from the value thereof; and
(h) liens for the sole purpose of extending, renewing or
replacing in whole or in part the indebtedness secured by any
lien referred to in the foregoing clauses (a) and (f) or in
this clause (h); provided, however, that the principal amount
of indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such
extension, renewal or replacement, and that such extension,
renewal or replacement shall be limited to all or a part of
the property which secured the lien so extended, renewed or
replaced (and any improvements on such property).
(ii) Limitations on Borrowing. Create or incur any
indebtedness for borrowed money (other than Short-Term Debt in an
aggregate principal amount not exceeding the greater of ten percent
(10%) of the Capitalization of the Company, excluding Short-Term
Debt, or such other amount as shall be approved by the Securities
and Exchange Commission pursuant to the Public Utility Holding
Company Act of 1935) if, immediately after the creation or incurring
of such indebtedness and the application of the proceeds thereof, if
any, the total principal amount of all indebtedness of the Company
for borrowed money (other than Short-Term Debt to the extent
specified above) shall at any time exceed sixty-five percent (65%)
of the Capitalization of the Company.
(iii) Limitation on Mergers. Merge into or consolidate with
any corporation or other entity, or permit any corporation or other
entity to merge into or consolidate with it, or sell or otherwise
dispose of all or substantially all of its assets to any other
corporation or entity, if, in any such case, (a) the indebtedness of
such successor corporation or entity (whether or not the Company)
for borrowed money would exceed the amount permitted by subparagraph
6A(ii) hereof, or (b) such successor corporation or entity (if other
than the Company) shall fail to assume the obligations of the
Company under the Notes and to subject itself to the terms of this
Agreement.
7. Events of Default.
A. Acceleration. If any of the following events shall occur and be
continuing:
(i) The Company shall fail to pay the principal of, or any
installment of interest on, any Note when due or shall fail to pay
any other amounts payable under this Agreement when due;
(ii) Any representation or warranty made by the Company herein
or by the Company (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made;
(iii) The Company shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement on its part
to be performed or observed and any such failure shall remain
unremedied for ten (10) days after written notice thereof shall have
been given to the Company by the Required Holders;
(iv) The Company shall fail to pay the principal of, or
interest on, any obligation of the Company for borrowed money (other
than under this Agreement and the Notes) when due, whether by
acceleration, by required prepayment or otherwise, for a period
longer than any period of grace provided in such obligation, or fail
to perform any other term, condition or covenant contained in any
such obligation, the effect of which is to cause, or to permit the
holder of such obligation or others on its behalf to cause, such
obligation then to become due prior to its stated maturity, unless
such failure shall have been cured or effectively waived;
(v) The Company shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against
the Company seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee or other similar official for
it or for any substantial part of its property; or the Company shall
take any corporate action to authorize any of the actions set forth
above in this clause (v);
(vi) All of the Common Stock, other than directors' qualifying
shares, of the Company, or of any successor corporation or entity,
shall not be owned, directly or indirectly, by American Electric
Power Company, Inc., or a successor thereto; or
(vii) With respect to any employee benefit plan as to which
the Company may have any liability, there shall exist a deficiency
of more than $
in the plan assets available to satisfy the benefits guaranteeable
under ERISA with respect to such plan, and steps are undertaken to
terminate such plan or such plan is terminated or the Company
withdraws from or institutes steps to withdraw from such plan;
then (a) if such event is an Event of Default specified in clause (v) of
this paragraph 7A with respect to the Company, all of the Notes at the
time outstanding shall automatically become immediately due and payable at
par together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Company, and (b) if such event is any other Event of Default, the Required
Holder(s) may at its or their option, by notice in writing to the Company,
declare all of the Notes to be, and all of the Notes shall thereupon be
and become, immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Premium, if any, with
respect to each Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company, provided that
the Yield-Maintenance Premium, if any, with respect to each Note shall be
due and payable upon such declaration only if (x) such event is an Event
of Default specified in any of clauses (i) to (iv), inclusive, and (vi)
and (vii) of this paragraph 7A, (y) the Required Holder(s) shall have
given to the Company, at least ten (10) Business Days before such
declaration, written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying one or more
such Events of Default whose occurrence on or before the date of such
notice permits such declaration, and (z) one or more of the Events of
Default so identified shall be continuing at the time of such declaration.
B. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement
contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon the holder
of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in
equity or by statute or otherwise.
8. Representations, Covenants and Warranties. The Company represents,
covenants and warranties:
A. Organization. The Company is a corporation duly organized and
existing in good standing under the laws of the State of and the
Company has the corporate power to own its property and to carry on its
business as now being conducted.
B. Financial Statements. The Company has furnished you:
(i) a balance sheet of the Company as at December 31, 19__,
and a statement of income and statement of changes in cash flows of
the Company for the year then ended all certified by Deloitte &
Touche; and (ii) a balance sheet of the Company as at________ and a
statement of income and statement of changes in cash flows for the
three-month period ended on such date, prepared by the Company. Such
financial statements (including any related schedules and/or notes)
have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods involved
(subject, as to interim statements, to changes resulting from
year-end adjustments). The balance sheets fairly present the
condition of the Company as at the dates thereof, and the statements
of income and statements of changes in cash flows fairly present the
results of the operations of the Company for the periods indicated.
There has been no material adverse change in the condition of the
Company since ________________.
C. Actions Pending. Except as disclosed in the Company's Report on
Form 10-K for the year ended December 31, ____, and Reports on Form 10-Q
for the quarters ended ____________, or otherwise reported to you prior to
the date of this Agreement, there is no action, suit or proceeding pending
or, to the knowledge of the Company, threatened against the Company or any
properties or rights of the Company by or before any court, arbitrator or
administrative or governmental body which might result in any material
adverse change in the condition of the Company.
D. Corporate Authorization; No Conflict. The execution, delivery and
performance by the Company of this Agreement and the transactions
contemplated hereby are within the Company's corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene
(i) the Company's charter or by-laws or (ii) law or any contractual
restriction binding on or affecting the Company.
E. Government Consent. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Company of this Agreement or any Note, except for the
authorizations of which authorizations have been duly obtained
and are in full force and effect.
F. Offering of Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached
or negotiated with respect thereto with, any Person other than
institutional investors, and neither the Company nor any agent acting on
its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of section 5 of the
Securities Act.
G. Regulation G, Etc. The Company will not, directly or indirectly,
use any of the proceeds of the sale of the Notes for the purpose, whether
immediate, incidental or ultimate, of buying a "margin stock" or of
maintaining, reducing, or retiring any indebtedness originally incurred to
purchase a stock that is currently a "margin stock", or for any other
purpose which might constitute this transaction a "purpose credit", in
each case within the meaning of Regulation G of the Board of Governors of
the Federal Reserve System (12 C.F.R. 207, as amended) or otherwise take
or permit to be taken any action which would involve a violation of such
Regulation G or of Regulation X (12 C.F.R. 224, as amended) or any other
regulation of such Board. No indebtedness being reduced or retired out of
the proceeds of the sale of the Notes was incurred for the purpose of
purchasing or carrying any such "margin stock".
H. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any plan (other than a multiemployer plan). No liability
to the Pension Benefit Guaranty Corporation has been or is expected by the
Company to be incurred with respect to any plan (other than a
multiemployer plan) by the Company which is or would be materially adverse
to the Company. The Company neither has incurred nor presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
multiemployer plan which is or would be materially adverse to the Company.
The execution and delivery of this Agreement and the issuance and sale of
the Notes will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975 of the Code. The representation
by the Company in the next preceding sentence is made in reliance upon and
subject to the accuracy of your representation in paragraph 9 as to the
source of the funds to be used to pay the purchase price of the Notes to
be purchased by you. For the purpose of this paragraph 8H, the term "Code"
shall mean the Internal Revenue Code of 1986, as amended; the term "plan"
shall mean an "employee pension benefit plan" (as defined in section 3 of
ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by the Company or by any trade or
business, whether or not incorporated, which, together with the Company,
is under common control, as described in section 414(b) or (c) of the
Code; and the term "multiemployer plan" shall mean any plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of
ERISA).
I. Investment Company Act. The Company is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
9. Representations of the Purchaser. You represent, and in making this
sale to you it is specifically understood and agreed, that you are not acquiring
the Notes to be purchased by you hereunder with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act, provided that the disposition of your property shall at all times be and
remain within your control. You also represent that no part of the funds being
used by you to pay the purchase price of the Notes being purchased by you
hereunder constitutes assets allocated to any separate account maintained by
you. For the purpose of this paragraph 9, the term "separate account" shall have
the meaning specified in section 3 of ERISA.
10. Definitions. For the purpose of this Agreement, the terms defined in
the text of any paragraph shall have the respective meanings specified therein,
and the following terms shall have the meanings specified with respect thereto
below:
A. Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph
4A (any partial prepayment being applied in satisfaction of required
payments of principal in inverse order of their scheduled due dates)
or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date
with respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (applied on a semiannual
basis) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the
yields reported, as of 10:00 AM (New York City Time) on the Business
Day next preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page 678" on the Telerate
Service (or such other display as may replace Page 678 on the
Telerate Service) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time
shall not be ascertainable, (ii) the Treasury Constant Maturity
Series yields reported, for the latest day for which such yields
shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly between
reported yields.
"Remaining Average Life" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment of such Called Principal (but
not of interest thereon) by (b) the number of years (calculated to
the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal
and interest thereon that would be due on or after the Settlement
Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to
be prepaid pursuant to paragraph 4A or is declared to be immediately
due and payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Premium" shall mean, with respect to any
Note, a premium equal to the excess, if any, of the Discounted Value
of the Called Principal of such Note over the sum of (i) such Called
Principal plus (ii) interest accrued thereon as of (including
interest due on) the Settlement Date with respect to such Called
Principal. The Yield-Maintenance Premium shall in no event be less
than zero.
B. Other Terms.
"Capitalization" of the Company shall mean, as of any
particular time, an amount equal to the sum of the total principal
amount of all indebtedness for borrowed money, secured or unsecured,
of the Company then outstanding (whether or not such indebtedness
matures, pursuant to the instrument by which such indebtedness shall
be created or incurred, within twelve months after such particular
time) and the aggregate of the par value of, or stated capital
represented by, the outstanding shares of all classes of stock and
of the surplus of the Company, paid in, earned and other, if any.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Event of Default" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement
in connection with such event for the giving of notice, or the lapse
of time, or the happening of any further condition, event or act,
and "Default" shall mean any of such events, whether or not any such
requirement has been satisfied.
"Officer's Certificate" shall mean a certificate signed in the
name of the Company by its Chairman of the Board, Vice Chairman,
President, one of its Vice Presidents or its Treasurer.
"Required Holder(s)" shall mean the holder or holders of at
least 66 2/3% of the aggregate principal amount of the Notes from
time to time outstanding.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Short-Term Debt" shall mean the principal amount of
indebtedness for borrowed money represented by a note or draft
issued, renewed or guaranteed by the Company which has a maturity at
the time of issuance, renewal or guarantee of not more than twelve
months, exclusive of days of grace.
"Significant Holder" shall mean (i) you, so long as you shall
hold (or be committed under this Agreement to purchase) any Note, or
(ii) any other holder of at least 10% of the aggregate principal
amount of the Notes from time to time outstanding.
"Transferee" shall mean any direct or indirect transferee of
all or any part of any Note purchased by you under this Agreement.
11. Miscellaneous.
A. Note Payments. The Company agrees that, so long as you shall hold
any Note, it will make payments of principal thereof and premium, if any,
and interest thereon, which comply with the terms of this Agreement, by
wire transfer of immediately available funds for credit to your account or
accounts as specified in the Purchase Schedule attached hereto, or such
other account or accounts in the United States as you may designate in
writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. You agree that, before disposing of any
Note, you will make a notation thereon (or on a schedule attached thereto)
of all principal payments previously made thereon and of the date to which
interest thereon has been paid. The Company agrees to afford the benefits
of this paragraph 11A to any Transferee which shall have made the same
agreement as you have made in this paragraph 11A.
B. Costs, Expenses and Taxes. The Company agrees to pay or reimburse
you for the payment of (i) all reasonable out-of-pocket expenses,
including reasonable attorneys' fees, arising in connection with the
enforcement or preservation of any rights under this Agreement and any
Note, and (ii) any and all present and future stamp and other taxes
(including interest and penalties, if any) which may be assessed or
payable in respect of any Note, or of any modification of any Note, or of
this Agreement other than in connection with any transfer of this
Agreement or any Note.
C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the
Required Holder(s) except that, without the written consent of the holder
or holders of all Notes at the time outstanding, no amendment to this
Agreement shall change the maturity of any Note, or change the principal
of, or the rate or time of payment of interest or any premium payable with
respect to any Note, or affect the time, amount or allocation of any
required prepayments, or reduce the proportion of the principal amount of
the Notes required with respect to any consent. Each holder of any Note at
the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear
a notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "this
Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
D. Form, Registration, Transfer and Exchange of Notes: Lost Notes.
The Notes are issuable as registered notes without coupons in
denominations of at least ______ million dollars ($__________). The
Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes.
Upon surrender for registration of transfer of any Note at the principal
office of the Company, the Company shall, at its expense, execute and
deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be
exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the
Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is
entitled to receive. Every Note surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to
unpaid interest and interest to accrue which were carried by the Note so
exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice
from the holder of any Note of the loss, theft, destruction or mutilation
of such Note and, in the case of any such loss, theft or destruction, upon
receipt of such holder's unsecured indemnity agreement, or in the case of
any such mutilation upon surrender and cancellation of such Note, the
Company will make and deliver a new Note, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Note.
E. Persons Deemed Owners: Participations. Prior to due presentment
for registration of transfer, the Company may treat the person in whose
name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and premium, if any, and
interest on such Note and for all other purposes whatsoever, whether or
not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of
any Note may from time to time grant participation in all or any part of
such Note to any Person on such terms and conditions as may be determined
by such holder in its sole and absolute discretion.
F. Survival of Representations and Warranties: Entire Agreement. All
representations and warranties contained herein or made in writing by or
on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by
you of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of you or any Transferee.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of either of the parties hereto
shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
H. Disclosure to Other Persons. The Company acknowledges that the
holder of any Note may deliver copies of any financial statements and
other documents delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company in
connection with or pursuant to this Agreement to (i) such holder's
directors, officers, employees, agents and professional consultants, (ii)
any other holder of any Note, (iii) any Person to which such holder offers
to sell such Note or any part thereof, (iv) any Person to which such
holder sells or offers to sell a participation in all or any part of such
Note, (v) any federal or state regulatory authority having jurisdiction
over such holder, (vi) the National Association of Insurance Commissioners
or any similar organization, or (vii) any other Person to which such
delivery or disclosure may be necessary or appropriate (a) in compliance
with any law, rule, regulation or order applicable to such holder, (b) in
response to any subpoena or other legal process, (c) in connection with
any litigation to which such holder is a party, or (d) in order to protect
such holder's investment in such Note.
I. Notices. All written communications provided for hereunder shall
be effective only upon receipt and be sent by mail, telex, facsimile
transmission or nationwide overnight delivery service (with charges
prepaid) and (i) if to you, addressed to you at the address specified for
such communications in the Purchase Schedule attached hereto, or at such
other address as you shall have specified to the Company in writing, (ii)
if to any other holder of any Note, addressed to such other holder at such
address as such other holder shall have specified to the Company in
writing or, if any such other holder shall not have so specified an
address to the Company, then addressed to such other holder in care of the
last holder of such Note which shall have so specified an address to the
Company, and (iii) if to the Company, addressed to it in care of American
Electric Power Service Corporation, 1 Riverside Plaza, Columbus, Ohio
43215, Attention: Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each Note in writing.
J. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
K. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to you or to the Required Holder(s),
the determination of such satisfaction shall be made by you or the
Required Holder(s), as the case may be, in the reasonable judgment of the
person or persons making such determination.
L. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by,
the law of the State of _________.
M. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
If you are in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterpart of this letter and return the same to the Company,
whereupon this letter shall become a binding agreement between you and the
Company.
Very truly yours,
------------------------------
By:___________________________
Title:________________________
The foregoing Agreement is hereby accepted as of the date first above written.
- -----------------------------------
By:________________________________
Title:_____________________________
Purchaser Schedule
[To be Completed]
