<PAGE> UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
_____________________________________________
In the Matter of :
:
OHIO POWER COMPANY :
SOUTHERN OHIO COAL COMPANY :
301 Cleveland Avenue, SW : CERTIFICATE OF
Canton, OH 44701 : NOTIFICATION
:
File No. 70-8054 :
:
(Public Utility Holding Company Act of 1935) :
OHIO POWER COMPANY ("Ohio Power") and Southern Ohio Coal Company
("SOCCo"), hereby certify, in connection with the Application-
Declaration on Form U-1 in the above-entitled matter, that certain
of the transactions specified in said Application-Declaration, as
amended, have been carried out in accordance with the terms and
conditions of, and for the purposes represented by, said Application-
Declaration, as amended, and the Order of the Securities and Exchange
Commission with respect thereto, dated December 22, 1992 (HCAR No.
35-25716), as follows:
1. On January 31, 1994, SOCCo borrowed a total of $45,000,000
in four unsecured promissory notes as follows:
(a) with an interest rate of 6.20% and maturity date of
January 31, 2001, from New York Life Insurance and Annuity
Corporation in the principal amount of $18,000,000; American United
Life Insurance Company in the principal amount of $7,000,000 and
Knights of Columbus in the principal amount of $5,000,000. A
conformed composite copy of the note agreement and promissory notes
is attached hereto as Exhibit B-3.
(b) with a variable interest rate (initially 3.725%) and
maturity date of January 31, 1999, from The Bank of New York in the
principal amount of $15,000,000. A conformed copy of the term loan
and guaranty agreement and promissory note is attached hereto as
Exhibit B-4.
2. A copy of the "past tense" opinion of counsel relating to
the transaction described herein is attached hereto as Exhibit F-2.
3. The transaction described herein was consummated within
the period designated in said Application-Declaration.
OHIO POWER COMPANY
SOUTHERN OHIO COAL COMPANY
By:_/s/ G. P. Maloney_____
Vice President
Dated: February 16, 1994
socco.93b\70-8054.cn<PAGE>
<PAGE> Exhibit B-3
OHIO POWER COMPANY
SOUTHERN OHIO COAL COMPANY
301 Cleveland Avenue, S.W.
Canton, Ohio 44701
NOTE AGREEMENT
As of January 31, 1994
Separately Addressed to Each Lender
Gentlemen:
Southern Ohio Coal Company herein called (the "Company") and
Ohio Power Company herein called (the "Guarantor"), hereby agree
with you as follows:
1. Notes and Guaranty. The Company has authorized the issue
of its guaranteed promissory notes (herein called the "Notes") in
the aggregate principal amount of $30,000,000, to be dated the date
of issue thereof, to mature January 31, 2001, 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
6.20% 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 Notes to be issued to you will be
guaranteed by the Guarantor pursuant to a Guaranty substantially in
the form of Exhibit B hereto (herein called the "Guaranty").
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 your offices
at the above address, one or more Notes registered in your name, or
that of your nominee, 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 #4057-2142 at Citibank, N.A., New York, New
York, ABA No. 021000089, on or before 12:00 noon (New York City
Time) on the date of closing, which shall be January 31, 1994, or
any other time, or any other date, upon which the Company and you
may mutually agree (herein called the "closing" or the "date of
closing"). Contemporaneously with entering into this Agreement,
the Company and the Guarantor are entering into separate Note
Agreements (the "Other Agreements") identical with this Agreement
with each of the other purchasers named in the Purchaser Schedule
attached hereto (the "Other Purchasers"), providing for the sale at
such closing to each of the Other Purchasers of the aggregate
principal amount of Notes set forth opposite such Other Purchaser's
name in the Purchaser Schedule attached hereto, and your
obligations and the obligations of the Company hereunder are
subject to the execution and delivery of the Other Agreements by
the Other Purchasers. The obligations of each purchaser of Notes
pursuant to this Agreement or the Other Agreements shall be several
and not joint and no purchaser shall be liable or responsible for
the acts of any other purchaser. The term "Notes" as used herein
shall include each Note delivered pursuant to any provision of this
Agreement or the Other Agreements and each Note delivered in
substitution or exchange for any such Note pursuant to any such
provision and the term "Guaranties" as used herein shall include
the Guaranty and the guaranties delivered to the Other Purchasers
which are also substantially in the form of Exhibit B hereto.
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. Guaranty. The Guarantor shall have duly authorized,
executed and delivered to you the Guaranty.
B. Opinion of Company's Counsel. You shall have
received from counsel for the Company and the Guarantor (an
attorney employed by American Electric Power Service
Corporation, an affiliate of the Company and Guarantor), an
opinion substantially in the form set forth in Exhibit C
attached hereto.
C. 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 and Guarantor shall have delivered
to you Officer's Certificates, dated the date of closing, to
both such effects.
D. 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.
E. Opinion of Purchasers' Special Counsel. You shall
have received from Arnold & Porter, your special counsel in
connection with the transactions contemplated by this
Agreement, an opinion substantially in the form set forth in
Exhibit D attached hereto, and as to such other matters as you
shall reasonably request.
F. Related Transactions. Concurrently with the
issuance and sale of Notes to you, the Company shall have
consummated the sale of the entire principal amount of the
Notes scheduled to be sold on the date of closing pursuant to
this Agreement and the Other Agreements, as specified in the
Purchaser Schedule attached hereto.
G. Private Placement Number. The Company shall have
obtained for the Notes a Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with
the Securities Valuation Office of the National Association of
Insurance Commissioners).
H. Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental 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. The Company shall give the holder
of each Note by facsimile transmission irrevocable written
notice of any prepayment pursuant to this 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 this 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. 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.
B. Required Prepayment Upon Ownership Change. If at
any time after the occurrence of an Ownership Change until
(with respect to any holder of a Note) the date that is 45
days after such holder of a Note shall have received a notice
of such occurrence from the Company, such holder of a Note
shall deliver a written notice to the Company (a) stating that
it is electing to exercise its right to require the prepayment
pursuant to this paragraph 4B of the Note or Notes then held
by such holder and (b) specifying the date on which such
prepayment shall occur (which date shall not be less than 120
days after the date on which such holder shall have delivered
such notice to the Company), the Company, on such date, shall
prepay the Note or Notes then held by such holder, 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 such Note. Promptly after the occurrence
of an Ownership Change, the Company shall deliver to each
holder a written notice describing the Ownership Change.
C. 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 4B 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.
D. Calculation of Yield-Maintenance Premium. Not less
than three Business Days prior to the date of any prepayment
pursuant to paragraph 4A or 4B, the Company shall deliver to
each holder of Notes by facsimile transmission a certificate
specifying the details of the calculation of the Yield-
Maintenance Premium as of the specified prepayment date,
accompanied by a copy of any applicable documentation used in
determining the Reinvestment Yield that was applied in
connection with the calculation of such Yield-Maintenance
Premium. At any time prior to the date of any such
prepayment, any holder of a Note or Notes shall be entitled to
object to the calculation of the Yield-Maintenance Premium set
forth in the certificate delivered in connection with such
prepayment by delivering a notice of objection to the Company
and each other holder of a Note or Notes, setting forth such
objecting holder's computation of the Yield-Maintenance
Premium. If any holder of a Note or Notes shall deliver such
a notice of objection to the Company, the Yield-Maintenance
Premium specified therein to be paid in respect of such
holder's Note or Notes being so prepaid shall be binding, in
the absence of proof of a clear error, on such holder and the
Company.
5. Affirmative Covenants.
A. Information. The Company and the Guarantor covenant
that they will deliver to each Significant Holder (i) within
ninety (90) days after the end of each of the first three (3)
quarters of each fiscal year of the Company and the Guarantor,
the balance sheet of the Company and the Guarantor as of the
end of each such quarter and the statement of income and
retained earnings of the Company and the Guarantor 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 and the Guarantor; (ii)
within one hundred thirty (130) days after the end of each
fiscal year of the Company and the Guarantor, a copy of the
annual report for each such year, containing financial
statements for such year certified in the case of the Company
by the chief financial officer of the Company and certified in
the case of the Guarantor 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 and the
Guarantor as any Significant Holder may from time to time
reasonably request.
B. Inspection. The Company and the Guarantor will give
you and each other Significant Holder the right to visit and
inspect, at your or its expense, any of the properties of the
Company or the Guarantor, to examine their books of account
and to discuss the affairs, finances and accounts of the
Company and the Guarantor with their officers and internal
accountants, all at such reasonable times and as often as you
or such other Significant Holder may reasonably request. The
Company shall be required to pay or reimburse you or any other
Significant Holder for all reasonable expenses which you or
any such Significant Holder may incur in connection with any
such visitation, or inspection, if any Default or Event of
Default shall exist or be continuing at the time of such
visitation or inspection. In the event any holder of a Note
requests information, other than financial information,
pursuant to this paragraph 5B, or otherwise, which non-
financial information the Company or the Guarantor reasonably
deems to be confidential, then prior to the Company or the
Guarantor being required to disclose such non-financial
information, such holder shall enter into a confidentiality
agreement with the Company or the Guarantor which agreement
shall be in form and substance reasonably acceptable to both
the holder and the Company or the Guarantor.
C. Compliance with Laws. The Company and the Guarantor
covenant that they 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.
D. Notices. The Company covenants that it shall give
prompt notice to each Significant Holder of any litigation
affecting the Company in which the amount involved is
$10,000,000 or more and is not covered by insurance. The
Company also covenants that forthwith upon obtaining knowledge
of an Event of Default or Default (and in any event within
five (5) Business Days), 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.
E. Insurance. The Company and the Guarantor covenant
that they shall maintain, with respect to their respective
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 and the Guarantor may self-insure pursuant to
deductible provisions which are prudent in amount.
6. Negative Covenants.
A. Negative Covenants of the Company. 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) liens for taxes, assessments or
governmental charges or levies not yet delinquent
or being contested in good faith by appropriate
proceedings;
(b) 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;
(c) 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);
(d) 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;
(e) 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;
(f) 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
(g) 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 clause (e) or in this clause (g);
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) Limitation on Plan Withdrawals or Termination.
Permit any Plan with respect to which the Company may
have any liability to terminate, or withdraw from such
Plan, while there shall exist an accumulated funding
deficiency (as defined in Section 302 of ERISA and
Section 412 of the Code) of more than $10,000,000, unless
such Plan is a Multiemployer Plan of the United Mine
Workers of America or unless the Guarantor remains a
sponsor of such Plan.
B. Negative Covenants of the Guarantor. The Guarantor
covenants that so long as any Note shall remain outstanding
and unpaid it will not:
(i) 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, if, in any such case, (a) the
indebtedness of such successor corporation or entity
(whether or not the Guarantor) for borrowed money (other
than Short-Term Debt) would exceed sixty-five percent
(65%) of the Capitalization of the Guarantor or such
successor corporation, or (b) such successor corporation
or entity (if other than the Guarantor) shall fail to
assume the obligations of the Guarantor under the
Guaranty and to subject itself to the terms of this
Agreement.
(ii) Debt Restriction. Create or incur any
indebtedness for borrowed money (other than Short-Term
Debt) in an aggregate principal amount not exceeding ten
percent (10%) of the Capitalization, excluding Short-Term
Debt, of the Guarantor) 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 Guarantor 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 Guarantor.
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 premium on, any Note when due;
(ii) The Company shall fail to pay any interest on
any Note for more than 10 days after the date due;
(iii) Any representation or warranty made by the
Company or the Guarantor herein or by the Company or the
Guarantor (or any of their officers) in connection with
this Agreement shall prove to have been incorrect in any
material respect when made;
(iv) The Company or the Guarantor shall fail to
perform or observe any other term, covenant or agreement
contained in this Agreement on either of their parts to
be performed or observed and any such failure shall
remain unremedied for thirty (30) days after the earlier
of (A) knowledge thereof by the Company or the Guarantor,
as the case may be, and (B) notice thereof to the Company
or the Guarantor, as the case may be;
(v) 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;
(vi) The Guarantor shall be in default with respect
to any of its obligations under the Guaranties or the
Guaranties shall cease to be in full force and effect or
shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by the
Guarantor or the Guarantor shall deny that it has any
further liability to the holders of the Notes with
respect thereto;
(vii) The Company or the Guarantor 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 or the Guarantor
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 or the Guarantor, as the case
may be, shall take any corporate action to authorize any
of the actions set forth above in this clause (vi);
then
(a) if such event is an Event of Default
described in subparagraph (i) or (ii) above and
such event is continuing, any holder or holders of
Notes may by notice to the Company declare all the
Notes held by it or them to be immediately due and
payable,
(b) when any Event of Default described in
subparagraphs (iii) through (vi) above, inclusive,
has happened and is continuing, the Required
Holders may, by notice to the Company, declare all
Notes to be immediately due and payable, and
(c) when any Event of Default described in
subparagraph (vii) above has occurred, then all
outstanding Notes shall immediately become due and
payable.
Upon the Notes becoming due and payable under
this paragraph 7A, whether automatically or by
declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes,
plus (x) all accrued and unpaid interest thereon
and (y) the Yield-Maintenance Premium determined in
respect of such principal amount (to the full
extent permitted by applicable law), shall all be
immediately due and payable, in each and every case
without presentment, demand, protest or further
notice, all of which are hereby waived. The
Company acknowledges, and the parties hereto agree,
that each holder of a Note has the right to
maintain its investment in the Notes free from
repayment by the Company (except as herein
specifically provided for) and that the provision
for payment of a Yield-Maintenance Premium by the
Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default,
is intended to provide compensation for the
deprivation of such right under such circumstances.
B. Rescission of Acceleration. The provisions of
paragraph 7A above are subject to the condition that if the
principal of, and accrued interest on, all or any outstanding
Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in
subparagraphs (i) through (vi) inclusive, of paragraph 7A
above, the Required Holders may, by written instrument filed
with the Company, rescind and annul such declaration and the
consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(i) no judgment or decree has been entered for the
payment of any monies due pursuant to the Notes or this
Agreement;
(ii) all arrears of interest upon all the Notes and
all other sums payable under the Notes and under this
Agreement (except any principal, interest or premium on
the Notes which has become due and payable solely by
reason of such declaration) shall have been duly paid;
and
(iii) each and every other Default and Event of
Default shall have been made good, cured or waived;
and provided further, that no declaration pursuant to clause
(a) of paragraph 7A may be rescinded and annulled without the
unanimous consent of all holders of Notes that participated in
such declaration and provided further, that no such rescission
and annulment shall extend to or affect any subsequent Default
or Event of Default or impair any right consequent thereon.
C. 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
and the Guarantor represent, covenant and warrant:
A. Organization. The Company and the Guarantor are
corporations duly organized and existing in good standing
under the laws of the States of West Virginia and Ohio,
respectively, and the Company and the Guarantor have the
corporate power to own their respective property and to carry
on their respective businesses as now being conducted.
B. Financial Statements. The Company and the Guarantor
have furnished you: (i) balance sheets of the Company and the
Guarantor as at December 31, 1992, and statements of income
and statements of changes in cash flows of the Company and the
Guarantor for the year then ended and (ii) balance sheets of
the Company and the Guarantor as at September 30, 1993 and
statements of income and statements of changes in cash flows
for the three month period ended on such date. 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 and the Guarantor
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 and the Guarantor for the
periods indicated. There has been no material adverse change
in the condition of the Company or the Guarantor since
September 30, 1993.
C. Actions Pending. Except as disclosed in the
Guarantor's Report on Form 10-K for the year ended December
31, 1992 ("Form 10-K"), and Reports on Form 10-Q for the
quarters ended March 31, 1993, June 30, 1993 and September 30,
1993 ("Form 10-Qs"), 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 or the Guarantor,
threatened, against the Company or the Guarantor or any
properties or rights of the Company or the Guarantor 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 or the Guarantor.
D. Corporate Authorization; No Conflict. The
execution, delivery and performance by the Company and the
Guarantor of this Agreement and the transactions contemplated
hereby are within their corporate powers, have been duly
authorized by all necessary corporate action, and do not
contravene (i) their respective charters or by-laws or (ii)
law or any contractual restriction binding on or affecting
them.
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 and the
Guarantor of this Agreement, the Guaranty or any Note, except
for the authorizations of the Securities and Exchange
Commission and The Public Utilities Commission of Ohio, 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 or the Guarantor to be incurred with respect to any
Plan (other than a Multiemployer Plan) by the Company or the
Guarantor 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 and the Guarantor 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.
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.
J. Environmental Laws. Neither the Company or the
Guarantor is in violation of any judgment, order, law,
license, rule or regulation pertaining to environmental
matters, including those arising under the Resource
Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Action 1980, the
Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air
Act, the Toxic Substances Control Act or any state or local
statute, regulation, ordinance or order relating to or
imposing liability or standards of conduct concerning health,
safety or the environment, which violation would have a
materially adverse effect on the condition (financially or
otherwise) or operations of the Company or the Guarantor,
except for matters that are subject to litigation and
disclosed in the Form 10-K and Form 10-Qs.
K. Disclosure. The Form 10-K and Form 10-Qs do not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements contained therein not misleading. There is no fact
within the knowledge of the Guarantor which materially
adversely affects the financial condition of the Guarantor
which has not been set forth in the Form 10-K or Form 10-Qs.
L. Priority of Notes. The indebtedness represented by
the Notes will be at least pari passu with all other unsecured
indebtedness of the Company.
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:
"Capitalization" of the Guarantor 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 Guarantor 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 Guarantor paid in, earned and other,
if any.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"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.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA).
"Officer's Certificate" shall mean a certificate signed
in the name of the Company or the Guarantor by its Chairman of
the Board, President, one of its Vice Presidents or its
Treasurer.
"Ownership Change" shall mean any issue, sale or other
disposition of shares of Common Stock, other than directors'
qualifying shares, of the Company or any successor thereto
which results in the Guarantor or a successor thereto owning
less than one hundred percent (100%) of the outstanding Common
Stock.
"Plan" shall mean an "employee pension benefit plan" (as
defined in Section 3(2)(A) 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.
"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 Guarantor 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.
"Yield-Maintenance Premium" means, in connection with any
Note, the amount (but not less than zero) equal to the excess,
if any, of
(1) the sum of the Present Values (as hereinafter
defined) of (a) the principal amount of such Note being
prepaid (assuming the principal balance of such Note
payable upon maturity is paid when due) and (b) the
amount of interest which would have been payable on each
interest payment date on the amount of such principal
being prepaid (assuming the principal balance of such
Note payable upon maturity and interest payments are paid
when due), over
(2) the principal amount of such Note being prepaid
plus accrued interest on such principal amount to the
date of such prepayment.
For purposes of this definition, "Present Value" shall be
determined in accordance with generally accepted financial
practice in the United States of America on a semi-annual
basis at a discount rate equal to the applicable Treasury
Yield; and the "Treasury Yield" for such purpose shall be
determined by reference to the yield for U.S. Treasury
securities as indicated by Telerate Access Service (page 8003
or the relevant page at the date of determination indicating
such yields) (or, if such data ceases to be available, any
publicly available source of similar market data) at
approximately 11:00 A.M., New York City time, on the third
Business Day prior to the date of such prepayment of such
Note, and shall be the yield on actively traded U.S. Treasury
securities having a constant maturity equal to the then-
remaining life to maturity of such Note; provided that if such
then-remaining life to maturity is not equal to the maturity
of an actively traded U.S. Treasury security, such yield shall
be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the yields of actively traded U.S.
Treasury securities having a constant maturity closest to such
then-remaining life to maturity.
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, or will cause your nominee to 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) up to $15,000 of
the reasonable fees, disbursements, and other expenses
incurred by Arnold & Porter, your special counsel, in
connection with this transaction (and use its reasonable best
efforts to pay such fees, disbursements and expenses within 4
weeks after receipt of a statement), (ii) all reasonable out-
of-pocket expenses, including reasonable attorneys' fees,
arising in connection with the enforcement or preservation of
any rights under this Agreement, the Guaranty and any Note,
and (iii) 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 any
modification of any Note, or of the Guaranty or this Agreement
other than in connection with any transfer of this Agreement,
the Guaranty or any Note.
C. Consent to Amendments. This Agreement may be
amended, and the Company or the Guarantor may take any action
herein prohibited, or omit to perform any act herein required
to be performed by it, if the Company or the Guarantor 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 or otherwise change this paragraph 11C,
or change the Guaranty. 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 or the
Guarantor 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 One Million
Dollars ($1,000,000). 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 and the Guarantor
shall, at its expense, execute and deliver a Guaranty in favor
of each such transferee. 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, or if such Note is held by a nominee your, 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: Participation. 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 or
the Guarantor in connection herewith shall survive the
execution and delivery of this Agreement, the Notes and the
Guaranty, 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, the Notes
and the Guaranty embody the entire agreement and understanding
between you, the Company and the Guarantor 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 and the
Guarantor acknowledge 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 or
the Guarantor 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 or the
Guarantor, addressed to it in care of American Electric Power
Service Corporation, 1 Riverside Plaza, Columbus, Ohio 43215,
Attention: Vice President-Finance, or at such other address
as the Company or the Guarantor 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 New York.
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,
SOUTHERN OHIO COAL COMPANY
By:/s/ G. P. Maloney
Vice President
OHIO POWER COMPANY
By:/s/ G. P. Maloney
Vice President
The foregoing Agreement is
hereby accepted as of the
date first above written.
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: /s/ Donald DePietto
Title:Investment Vice President
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Kent R. Adams
Title: Vice President
KNIGHTS OF COLUMBUS
By:/s/Charles P. Riesbeck, Jr.
Title: Supreme Secretary
<PAGE>
Purchaser Schedule
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
(Tax I.D. No. 13-3044743)
Principal Amount of Notes to be Purchased: $18,000,000
1. All payments by wire or intrabank transfer of immediately
available funds to:
Chemical Bank
New York, NY
ABA No. 021-000-128
For credit to the account of:
New York Life Insurance and Annuity Corporation
General Account No. 008-0-57001
with sufficient information (including issuer, interest
rate, maturity, PPN 84354*AE6 and whether payment is of
principal, premium or interest) to identify the source
and application of such funds,
with advice of any unscheduled or optional payments to:
New York Life Insurance and Annuity Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
ATTENTION: Treasury Department
Securities Income Section
Room 209
Telecopy No.: 212/447-4160
2. All other communications to:
New York Life Insurance and Annuity Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
ATTENTION: Investment Department
Private Finance Group
Room 206
Telecopy No.: 212/447-4165
with a copy to the above address, but indicating:
ATTENTION: Office of the General Counsel
Investment Section
Room 10SB
Telecopy No.: 212/576-8340
<PAGE>
Purchaser Schedule
KNIGHTS OF COLUMBUS
(Tax I.D. No. 06-0416470)
Principal Amount of Notes to be Purchased: $ 5,000,000
1. All payments by wire or intrabank transfer of immediately
available funds to:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
A/C Knights of Columbus Custody
ABA No. 021-00-0238
Account No. 001-02-667
with sufficient information (including issuer, interest
rate, maturity, PPN 84354*AE6 and whether payment is of
principal, premium or interest) to identify the source
and application of such funds,
2. All notices of payment and written confirmation of such
wire transfers:
Knights of Columbus
P.O. Box 2016
New Haven, CT 06521
ATTENTION: Accounting Department
3. All other communications to:
Knights of Columbus
One Columbus Plaza
New Haven, CT 06507
ATTENTION: Investment Department
Telecopy No.: 203/772-0037
<PAGE>
Purchaser Schedule
AMERICAN UNITED LIFE INSURANCE COMPANY
(Tax I.D. No. 35-0145825)
Principal Amount of Notes to be Purchased: $ 7,000,000
1. All payments by wire or intrabank transfer of immediately
available funds to:
Bank One Indianapolis
111 Monument Circle
Indianapolis, IN 46277
ATTENTION: Securities Accg.
Account No. 20-6168-7
ABA No. 0740-0001-00
with sufficient information (including issuer, interest
rate, maturity, PPN 84354*AE6 and whether payment is of
principal, premium or interest) to identify the source
and application of such funds,
2. All other communications to:
Securities Department
American United Life Insurance Company
Post Office Box 368
One American Square
Indianapolis, IN 46206
Telecopy No.: 317/263-1225
<PAGE>
EXHIBIT A
6.20% GUARANTEED NOTE DUE JANUARY 31, 2001
No. ______ [Date]
$_________ Private Placement No. 84354*AE6
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY (herein called the "Company"), a corporation organized and
existing under the laws of the State of West Virginia, hereby
promises to pay to _______________________________________, or
registered assigns, the principal sum of _____________________
DOLLARS ($__________) on January 31, 2001, with interest (computed
on the basis of a 360-day year--30-day month) (a) on the unpaid
balance thereof at the rate of 6.20% per annum from the date
hereof, payable semiannually on the 31st day of January and July in
each year, commencing with the January 31 or July 31 next
succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment of principal
(including any overdue prepayment), payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater
of (i) 8.20% or (ii) the rate of interest publicly announced by
Chemical Bank from time to time in New York, New York as its Prime
Rate plus 2%.
Payments of principal, premium, if any, and interest are to be
made at the main office of __________________, in ________________
____________ or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United
States of America.
This Note is one of a series of Notes (herein called the
"Notes") issued pursuant to the Note Agreements, each dated as of
January 31, 1994 (herein called the "Note Agreement"), between the
Company, Ohio Power Company, an Ohio corporation, and the
purchasers named therein and is entitled to the benefits thereof.
As provided in the Note Agreement, this Note is subject to
prepayment and purchase, in whole or from time to time in part, in
certain cases without premium and in other cases with a premium as
specified in the Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
In case an Event of Default, as defined in the Note Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and with
the effect provided in the Note Agreement.
This Note shall be construed and enforced in accordance with
the internal laws of the State of New York.
SOUTHERN OHIO COAL COMPANY
By:____________________________
Vice President
Payment of principal of, and interest and premium (if any) on,
the Notes is guaranteed by Ohio Power Company pursuant to a
Guaranty, dated January 31, 1994.
OHIO POWER COMPANY
By:____________________________
Vice President
<PAGE>
EXHIBIT B
GUARANTY
This GUARANTY, dated January 31, 1994, by Ohio Power Company,
an Ohio corporation, (the "Guarantor") in favor of
____________________, the holder of one of the promissory notes
(the "Notes") issued by Southern Ohio Coal Company, a West Virginia
corporation, (the "Company") in the aggregate principal amount of
$30,000,000, maturing January 31, 2001 and bearing interest at the
rate of 6.20% per annum, pursuant to the Note Agreements, each
dated January 31, 1994 among the Guarantor, the Company and the
note purchasers named therein (the "Note Agreements"), and their
transferees and assignees (the note purchasers and any of their
transferees and assignees herein the "Noteholders").
The Company is a wholly-owned subsidiary of the Guarantor and
in order to induce the note purchaser to enter into the Note
Agreement and to purchase the Note, the Guarantor agrees for the
benefit of each Noteholder as follows:
Section 1. Unconditional Guaranty. The Guarantor
unconditionally agrees that if the Company should fail to make any
payment of principal, interest or premium when due, whether at
maturity or earlier by reason of acceleration, prepayment, purchase
or otherwise, or any other amount payable by the Company pursuant
to the terms of the Note Agreements, the Guarantor shall, and
hereby promises to, within ten (10) days after receipt of written
notice thereof from the Noteholder, pay to the Noteholder that sum
of money certain equal to the amount due and not irrevocably duly
paid by the Company. Such notice shall be given as provided in
Section 11.I of the Note Agreements. The Guarantor consents that
the performance or observance by the Company of any provisions of
the Note Agreements or the Notes may be waived or the time of
performance thereof extended and the payment of any obligations
hereby guaranteed may be extended or renewed, in whole or in part,
without affecting this Guaranty.
Section 2. Validity. The obligations of the Guarantor
under this Guaranty shall be unconditional irrespective of the
genuineness, validity, regularity or enforceability of the
obligations of the Company under the Note Agreements or the Notes
or, to the fullest extent permitted by applicable law, any other
circumstances which might otherwise constitute a legal or equitable
discharge of a surety or guarantor.
Section 3. Waivers. The Guarantor hereby expressly waives
diligence, presentment, protest and any requirement that any right
or power be exhausted or any action be taken against the Company
and all notices and demands whatsoever. This Guaranty is a
guaranty of payment and performance, not a guaranty of collection.
Section 4. Reinstatement. The obligations of the
Guarantor under this Guaranty shall be reinstated if at any time
any payment received by the Noteholder from the Company hereunder
or under any Note is required to be repaid by the Noteholder.
Section 5. Miscellaneous. This Guaranty may be amended
only as provided in the Note Agreements. This Guaranty shall be
construed and enforced in accordance with the law of the State of
New York.
Section 6. Waiver of Subrogation and Contribution. The
Guarantor hereby irrevocably waives in perpetuity any claim or
other right which it may now or hereafter acquire against the
Company in connection with the Note Agreements that arises from the
existence, payment, performance or enforcement of the Guarantor's
obligations under this Guaranty, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of
any purchaser or any other holder of Notes against the Company in
connection with the Note Agreements. The provisions of this
Section 6 shall survive the payment in full of the Notes and all
other amounts payable under the Note Agreements or the Notes. The
Guarantor acknowledges that it will receive direct and indirect
benefits from the issuance of the Notes and that the waiver set
forth in this Section 6 is knowingly made in contemplation of such
benefits.
IN WITNESS WHEREOF, the Guarantor has caused this instrument
to be executed as of the date set forth above.
OHIO POWER COMPANY
By:______________________
Vice President
<PAGE>
<PAGE>
6.20% GUARANTEED NOTE DUE JANUARY 31, 2001
No. R-1 January 31, 1994
$18,000,000 Private Placement No. 84354*AE6
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY (herein called the "Company"), a corporation organized and
existing under the laws of the State of West Virginia, hereby
promises to pay to NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION,
or registered assigns, the principal sum of EIGHTEEN MILLION
DOLLARS ($18,000,000) on January 31, 2001, with interest (computed
on the basis of a 360-day year--30-day month) (a) on the unpaid
balance thereof at the rate of 6.20% per annum from the date
hereof, payable semiannually on the 31st day of January and July in
each year, commencing with the January 31 or July 31 next
succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment of principal
(including any overdue prepayment), payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater
of (i) 8.20% or (ii) the rate of interest publicly announced by
Chemical Bank from time to time in New York, New York as its Prime
Rate plus 2%.
Payments of principal, premium, if any, and interest are to be
made at the main office of Chemical Bank, in New York, New York or
at such other place as the holder hereof shall designate to the
Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Notes (herein called the
"Notes") issued pursuant to the Note Agreements, each dated as of
January 31, 1994 (herein called the "Note Agreement"), between the
Company, Ohio Power Company, an Ohio corporation, and the
purchasers named therein and is entitled to the benefits thereof.
As provided in the Note Agreement, this Note is subject to
prepayment and purchase, in whole or from time to time in part, in
certain cases without premium and in other cases with a premium as
specified in the Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
In case an Event of Default, as defined in the Note Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and with
the effect provided in the Note Agreement.
This Note shall be construed and enforced in accordance with
the internal laws of the State of New York.
SOUTHERN OHIO COAL COMPANY
By:_/s/ G. P. Maloney__________
Vice President
Payment of principal of, and interest and premium (if any) on,
the Notes is guaranteed by Ohio Power Company pursuant to a
Guaranty, dated January 31, 1994.
OHIO POWER COMPANY
By:_/s/ G. P. Maloney__________
Vice President
<PAGE>
<PAGE>
6.20% GUARANTEED NOTE DUE JANUARY 31, 2001
No. R-2 January 31, 1994
$ 7,000,000 Private Placement No. 84354*AE6
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY (herein called the "Company"), a corporation organized and
existing under the laws of the State of West Virginia, hereby
promises to pay to AMERICAN UNITED LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of SEVEN MILLION DOLLARS
($7,000,000) on January 31, 2001, with interest (computed on the
basis of a 360-day year--30-day month) (a) on the unpaid balance
thereof at the rate of 6.20% per annum from the date hereof,
payable semiannually on the 31st day of January and July in each
year, commencing with the January 31 or July 31 next succeeding the
date hereof, until the principal hereof shall have become due and
payable, and (b) on any overdue payment of principal (including any
overdue prepayment), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) 8.20% or (ii)
the rate of interest publicly announced by Chemical Bank from time
to time in New York, New York as its Prime Rate plus 2%.
Payments of principal, premium, if any, and interest are to be
made at the main office of Bank One, Indianapolis, N.A., in
Indianapolis, Indiana or at such other place as the holder hereof
shall designate to the Company in writing, in lawful money of the
United States of America.
This Note is one of a series of Notes (herein called the
"Notes") issued pursuant to the Note Agreements, each dated as of
January 31, 1994 (herein called the "Note Agreement"), between the
Company, Ohio Power Company, an Ohio corporation, and the
purchasers named therein and is entitled to the benefits thereof.
As provided in the Note Agreement, this Note is subject to
prepayment and purchase, in whole or from time to time in part, in
certain cases without premium and in other cases with a premium as
specified in the Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
In case an Event of Default, as defined in the Note Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and with
the effect provided in the Note Agreement.
This Note shall be construed and enforced in accordance with
the internal laws of the State of New York.
SOUTHERN OHIO COAL COMPANY
By:_/s/ G. P. Maloney__________
Vice President
Payment of principal of, and interest and premium (if any) on,
the Notes is guaranteed by Ohio Power Company pursuant to a
Guaranty, dated January 31, 1994.
OHIO POWER COMPANY
By:_/s/ G. P. Maloney__________
Vice President
<PAGE>
<PAGE>
6.20% GUARANTEED NOTE DUE JANUARY 31, 2001
No. R-3 January 31, 1994
$ 5,000,000 Private Placement No. 84354*AE6
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY (herein called the "Company"), a corporation organized and
existing under the laws of the State of West Virginia, hereby
promises to pay to KNIGHTS OF COLUMBUS, or registered assigns, the
principal sum of FIVE MILLION DOLLARS ($5,000,000) on January 31,
2001, with interest (computed on the basis of a 360-day year--30-
day month) (a) on the unpaid balance thereof at the rate of 6.20%
per annum from the date hereof, payable semiannually on the 31st
day of January and July in each year, commencing with the January
31 or July 31 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue
payment of principal (including any overdue prepayment), payable
semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 8.20% or (ii) the rate of interest
publicly announced by Chemical Bank from time to time in New York,
New York as its Prime Rate plus 2%.
Payments of principal, premium, if any, and interest are to be
made at the main office of Morgan Guaranty Trust Company of New
York, in New York, New York or at such other place as the holder
hereof shall designate to the Company in writing, in lawful money
of the United States of America.
This Note is one of a series of Notes (herein called the
"Notes") issued pursuant to the Note Agreements, each dated as of
January 31, 1994 (herein called the "Note Agreement"), between the
Company, Ohio Power Company, an Ohio corporation, and the
purchasers named therein and is entitled to the benefits thereof.
As provided in the Note Agreement, this Note is subject to
prepayment and purchase, in whole or from time to time in part, in
certain cases without premium and in other cases with a premium as
specified in the Agreement.
This Note is a registered Note and, as provided in the
Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such
holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
In case an Event of Default, as defined in the Note Agreement,
shall occur and be continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner and with
the effect provided in the Note Agreement.
This Note shall be construed and enforced in accordance with
the internal laws of the State of New York.
SOUTHERN OHIO COAL COMPANY
By:_/s/ G. P. Maloney__________
Vice President
Payment of principal of, and interest and premium (if any) on,
the Notes is guaranteed by Ohio Power Company pursuant to a
Guaranty, dated January 31, 1994.
OHIO POWER COMPANY
By:_/s/ G. P. Maloney__________
Vice President
<PAGE> Exhibit B-4
TERM LOAN AND GUARANTY AGREEMENT
AGREEMENT dated as of the 31st day of January, 1994 between
SOUTHERN OHIO COAL COMPANY, a West Virginia corporation (herein
called the "Company"), OHIO POWER COMPANY, an Ohio corporation
(herein called the "Parent") and THE BANK OF NEW YORK (the "Bank").
SECTION 1. Amounts and Terms of the Loan.
Section 1.01. Definitions. As used herein the following
terms have the following meanings (which are equally applicable to
both the singular and plural forms of such terms):
"Agreement" means this Term Loan and Guaranty Agreement
and any future amendments or supplements hereto.
"Alternate Base Rate" means a fluctuating interest rate
per annum as shall be in effect from time to time, which rate
per annum is at all times equal to the higher of (i) the rate
of interest announced publicly by the Bank in New York, New
York from time to time as the Bank's Prime Rate and (ii) 1/2
of one percent per annum above the Federal Funds Rate from
time to time.
"Capitalization" of the Parent means, 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 Parent 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 Parent, paid in, earned and other, if any.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period
to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day
(or, if such day is not a business day, for the next preceding
business day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a business
day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds
brokers of recognized standing selected by the Bank.
"LIBO rate" means, for any Note in the form of Exhibit B,
the average rate of interest per annum at which deposits in
United States dollars are offered by the principal office of
the Bank to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days prior to the date
of such Note for the amount and term of such Note.
"Maturity Date" means January 31, 1999.
"Note" means the promissory note of the Company substan-
tially in the form of Exhibit A, B or C hereto, with
appropriate insertions.
"Short-Term Debt" means the principal amount of indebted-
ness for borrowed money represented by a note or draft issued,
renewed or guaranteed by the Parent which has a maturity at
the time of issuance, renewal or guarantee of not more than
twelve months, exclusive of days of grace.
Section 1.02. Loan; Pricing; and Borrowing Procedure. The
Bank agrees, on the terms and conditions hereinafter set forth, to
make a loan (the "Loan") to the Company on January 31, 1994 (the
"Loan Date") in an amount totaling $15,000,000.
The Loan shall bear interest from the Loan Date to the
Maturity Date at one or more of the following interest rates per
annum, as selected by the Company from time to time:
(i) at a fixed interest rate for each Note in the
form of Exhibit A, such term to begin on the date
designated by the Company at least one Business Day (as
defined in Section 1.12) prior thereto and to end on the
Maturity Date and such rate to be quoted by the Bank for
the term and accepted by the Company; or
(ii) at a rate per annum for the term of each Note
in the form of Exhibit B, which shall be 1, 2, 3 or 6
months (such term to be selected by the Company at least
three Business Days prior to the date of the relevant
Note) equal to thirty-five one hundredths of one percent
(0.35%) per annum above the LIBO rate from January 31,
1994 until January 31, 1997 and forty-five one hundredths
of one percent (0.45%) per annum above the LIBO rate from
February 1, 1997 until the Maturity Date (such rates are
hereinafter called the "LIBO Rate"); or
(iii) at a fluctuating rate per annum for the term
of each Note in the form of Exhibit C, which shall mature
on the Maturity Date, equal to the Alternate Base Rate.
The Company may, from time to time, change the pricing of the
Loan (in whole or in part) from the LIBO Rate to the Alternate Base
Rate or from the Alternate Base Rate to the LIBO Rate, and, in the
case of the LIBO Rate, may continue such interest rate option (in
whole or in part) for a subsequent period, in either case by giving
the Bank notice thereof specified below and by executing and
delivering a new promissory note in the form of Exhibit B or C, as
the case may be, with appropriate insertions, evidencing the
changed or continued interest rate option. Each such notice
(which, in the case of a notice requesting the LIBO Rate, shall be
received by the Bank by 11:00 a.m., New York City time, at least
three Business Days prior to the date of the proposed change or
continuation, and in the case of a notice requesting the Alternate
Base Rate, shall be received by the Bank one Business Day prior to
the change), shall specify the date of the proposed change or
continuation (which shall be a Business Day and, in the case of a
change from, or continuation of, the LIBO Rate, shall be the
maturity date of the outstanding Note), whether the proposed
interest rate is to be the Alternate Base Rate or the LIBO Rate,
and, in the case of a LIBO Rate, the term of the related Note.
In addition, the Company may, from time to time, change the
pricing of the Loan (in whole or in part) from the LIBO Rate or the
Alternate Base Rate, as the case may be, to the fixed interest rate
until the Maturity Date, by (i) requesting the fixed interest rate
option from the Bank at least one Business Day prior to the
proposed change and (ii) agreeing to the fixed interest rate
proposed by the Bank within the period that such proposal remains
effective. The Company may only convert from the LIBO Rate to the
fixed interest rate on the maturity date of the outstanding Note.
Each such notice given to the Bank by the Company pursuant to
this Section 1.02 shall be irrevocable. In the event that the
Company fails to deliver the required notice to change or continue
a Note in the form of Exhibit B, the interest rate on the portion
of the Loan represented by such Note shall be converted on the
maturity date of such Note into the Alternate Base Rate.
Section 1.03. Making the Loan. Not later than 12:00 noon
(New York City time) on the Loan Date and upon fulfillment of the
applicable conditions set forth in Section 2, the Bank will make
the Loan available to the Company in same day funds at the Bank's
address referred to in Section 7.02.
Section 1.04. Optional Prepayments. The Company may, upon at
least 3 Business Days' notice to the Bank specifying the amount and
date of the proposed prepayment, and if notice is given, the
Company shall, prepay the Note in whole at any time or in part from
time to time, together with accrued interest to the date of such
prepayment on the principal amount prepaid, and, if the prepayment
is of a Note in the form of Exhibit A, the fee specified in Section
1.13(b) and if prepayment is of a Note in the form of Exhibit B,
the fee specified in Section 1.13(c). Any prepayments to the Bank
on account of the principal of the Note shall be endorsed on the
Note prior to any transfer by the Bank of the Note.
Section 1.05. Interest. The Company shall pay interest on
the unpaid principal amount of the Loan in accordance with one or
more promissory notes of the Company (each, a "Note") executed and
delivered by the Company from time to time to evidence the
indebtedness resulting from the Loan. If the Loan or any part
thereof bears interest at the fixed interest rate, the Note
evidencing such amount shall be substantially in the form of
Exhibit A, with appropriate insertions, and shall be dated the Loan
Date or the date upon which the interest rate has been changed into
a fixed interest rate, as the case may be. If the Loan or any part
thereof bears interest at the LIBO Rate, the Note evidencing such
amount shall be substantially in the form of Exhibit B, with
appropriate insertions, and shall be dated the Loan Date or the
date upon which the interest rate has been continued for a
subsequent period at the LIBO Rate or has been changed into the
LIBO Rate, as the case may be. If the Loan or any part thereof
bears interest at the Alternate Base Rate, the Note evidencing such
amount shall be substantially in the form of Exhibit C, with
appropriate insertions, and shall be dated the Loan Date or the
date upon which the interest rate has been changed into the
Alternate Base Rate, as the case may be.
Section 1.06. Additional Interest. The Company shall pay to
the Bank, during the time that the Bank shall be required to
maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency liabilities (as defined in Regulation
D of the Board of Governors of the Federal Reserve System as in
effect from time to time), additional interest on the unpaid
principal amount of each Note in the form of Exhibit B from the
date of such Note until such principal amount is paid in full,
payable on the due date of each interest payment for such Note, at
an interest rate per annum equal at all times during the term of
such Note to the excess of (i) the rate obtained by dividing the
LIBO Rate for such Note by a percentage equal to 100% minus the
reserve percentage applicable during the term of such Note under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or if more than one such percentage is
so applicable, minus the daily average for such percentages for
those days during which such percentage shall be so applicable) for
determining the maximum reserve requirement (including, without
limitation, any marginal reserve requirement) for the Bank in
respect of liabilities or assets consisting of or including
Eurocurrency liabilities over (ii) the LIBO Rate for such Note.
Section 1.07. Increased Costs, etc.
(a) If either (i) the introduction of or any change
(including, without limitation, any change by way of
imposition or increase of reserve requirements) in or in
the interpretation of any law or regulation or (ii) the
compliance by the Bank with any guideline or request from
any central bank or other governmental authority (whether
or not having the force of law), shall result in any
increase in the cost to the Bank of making, funding or
maintaining loans bearing interest at the LIBO Rate, then
the Company shall from time to time, upon demand by the
Bank, pay to the Bank additional amounts sufficient to
indemnify the Bank against such increased cost. A
certificate as to the amount of such increased cost
(including calculations thereof in reasonable detail),
submitted to the Company by the Bank, shall, in absence
of manifest error, be conclusive.
(b) If it shall become unlawful for the Bank to obtain funds
in the London interbank market in order to fund or
maintain loans bearing interest at the LIBO Rate or
otherwise to perform their obligations hereunder with
respect to any such loans, then, the Bank shall give the
Company written notice of such condition. Following such
notice, the pricing of any portion of the Loan may
neither be changed to, nor be continued at, the LIBO Rate
until the Bank has given the Company written notice that
such condition no longer exists, and, if any applicable
law or regulation so requires, any portion of the Loan
then outstanding at the LIBO Rate shall immediately begin
bearing interest at the Alternate Base Rate.
(c) The Company shall indemnify the Bank against any loss or
expense which the Bank may sustain or incur as a
consequence of any prepayment or any default in payment
of the principal amount of any portion of the Loan
bearing interest at the LIBO Rate.
Section 1.08. Inability to Determine LIBO Rate. In the event
that the Bank shall have determined that:
(i) by reason of circumstances affecting the
London interbank market generally, adequate and
reasonable means do not exist for ascertaining the LIBO
Rate with respect to a changed or continued interest rate
option that the Company has requested be made bearing
interest at the LIBO Rate; or
(ii) the LIBO Rate will not adequately and fairly
reflect the cost to the Bank of maintaining or funding a
changed or continued interest rate option that the
Company has requested be made bearing interest at the
LIBO Rate,
then, the Bank shall forthwith give prompt notice, confirmed in
writing, of such determination to the Company, at least one
Business Day prior to the date for such change or continuation. If
such notice is given, the interest rate on such portion of the Loan
shall be the Alternate Base Rate and the Company shall execute and
deliver to the Bank a Note substantially in the form of Exhibit C,
with appropriate insertions.
Section 1.09. Increased Capital. If the Bank determines (i)
that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect
the amount of capital required or expected to be maintained by the
Bank or any corporation controlling the Bank or would have the
effect of reducing the rate of return on the Bank's capital or on
the capital of such corporation and (ii) that the amount of such
capital is increased by or based upon, or such reduction is a
consequence of the existence of, the Bank's commitment to lend
hereunder and other commitments of this type or the Loan or any
Note in the form of Exhibit B, then the Company shall, within ten
days following demand therefor by the Bank, from time to time as
specified by the Bank pay to the Bank additional amounts sufficient
to compensate the Bank in the light of such circumstances, to the
extent that the Bank reasonably determines such increase in capital
or reduction in rate of return, as the case may be, to be allocable
to the existence of the Bank's commitment to lend hereunder or the
making or maintenance of its Loan or any Note in the form of
Exhibit B. A certificate as to such amounts submitted to the
Company by the Bank accompanied by an explanation of the basis
therefor, shall constitute such demand and shall be conclusive and
binding for all purposes, absent manifest error.
Section 1.10. Assignments and Participations. The Bank may
assign, or sell participations in, all or any part of the Loan to
another bank or other entity, in which event (a) in the case of an
assignment, upon notice thereof by the Bank to the Company and
receipt by the Bank of the Company's written consent to such
assignment, such consent not to be unreasonably withheld, the
assignee shall have, to the extent of such assignment, the same
rights and benefits as it would have if it were the Bank hereunder
and (b) in the case of a participation, the participant shall not
have any rights under this Agreement and the Notes (the
participant's rights against the Bank in respect of such
participation to be those set forth in the agreement(s) executed by
the Bank in favor of the participant relating thereto) and all
amounts payable by the Company under Article I shall be determined
as if the Bank had not sold such participation. The Bank may
furnish any information concerning the Company in the possession of
the Bank from time to time to assignees and participants (including
prospective assignees and participants). Notwithstanding the
foregoing provisions of this Section 1.10, the Bank may at any time
pledge or assign all or any portion of its rights under this
Agreement and the Notes to a Federal Reserve Bank; provided,
however, that no such pledge or assignment shall release the Bank
from its obligations hereunder.
Section 1.11. Payments and Computations. The Company shall
make each payment hereunder and under an outstanding Note not later
than 12:00 noon (New York Time) on the day when due in lawful money
of the United States of America and in same day funds to the Bank
at its address referred to in Section 7.02. The Company hereby
authorizes the Bank, if and to the extent payment is not made when
due hereunder or under an outstanding Note, to charge from time to
time against the Company's account with the Bank any amount so due.
All computations of interest under a Note shall be made by the Bank
on the basis of a year of 365/366 days for the actual number of
days (including the first day but excluding the last day) elapsed,
except that interest under any Note in the form of Exhibit B and
any calculation of the Federal Funds Rate shall be computed on the
basis of a year of 360 days for the actual days elapsed.
Section 1.12. Payment on Non-Business Days. Whenever any
payment to be made hereunder or under a Note shall be stated to be
due on a Saturday, a Sunday or a public or bank holiday or the
equivalent for banks generally under the laws of the State of New
York and, if the issuance or payment of a Note bearing interest at
the LIBO Rate is involved, or a day on which banks in the London
interbank market are not open for transactions in dollars (any
other day being a "Business Day"), such payment may be made on the
next succeeding Business Day, provided, however, that in the case
of a Note in the form of Exhibit B, if such extension would cause
such payment to be made in a new calendar month, such payment shall
be made on the next preceding Business Day and such extension of
time shall in such case be included in the computation of payment
of interest.
Section 1.13. Fee for Cancellation or Payment Prior to
Maturity Date.
(a) For purposes of this Section 1.13, the following terms
shall have the following meanings:
"Liquidation Rate" means one-quarter of the interest rate
per annum equal to the latest three-week moving average of
secondary market midafternoon quotations of yields to maturity
of U.S. Treasury notes trading closest to par value and
maturing on, or within three months of, the Maturity Date,
such three-week moving average to be determined by the Bank on
the Fee Determination Date on the basis of such yields
reported by dealers of U.S. Treasury notes to and published by
the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations
of such yields received by the Bank from three New York
dealers of U.S. Treasury notes of recognized standing.
"Loan Rate" means one-quarter of the Fixed Rate (as
defined in the outstanding Note in the form of Exhibit A which
governs the Loan or the portion of the Loan being repaid).
"Fee Determination Date" means the Loan Date, if the Loan
has not been made on or before the Loan Date, and means the
date prior to the Maturity Date on which the Company repays
the Loan or any part thereof pursuant to Section 1.04 or
otherwise, if the Loan has been made.
(b) If the Company prepays the Loan or any part of it, which
is then evidenced by a Note in the form of Exhibit A,
prior to the Maturity Date (whether or not such
prepayment is due to acceleration of the Loan pursuant to
Section 6.01), the Company shall pay to the Bank a fee
(as liquidated damages, and not as a penalty) equal to
the sum of the present values, each determined at the
Liquidation Rate, of the excess, if any, of (A) the sum
of the quarterly interest payments on the principal
amount of the Loan evidenced by a Note in the form of
Exhibit A that is prepaid between the Fee Determination
Date and the Maturity Date computed at the Loan Rate over
(B) the sum of the quarterly interest payments on the
principal amount of the Loan evidenced by a Note in the
form of Exhibit A that is prepaid between the Fee
Determination Date and the Maturity Date computed at the
Liquidation Rate, such fee to be payable five Business
Days after the Fee Determination Date, and such present
value ("PV") to be calculated in accordance with the
following formula:
PV = (P x (R - T)) x [(1 - (1 + T)-n)/T]
where R = the Loan Rate;
T = the Liquidation Rate;
n = the number of quarters or any portion thereof from the
Fee Determination Date to the Maturity Date; and
P = the principal amount of the Loan being prepaid.
(c) If any payment of principal of any Note in the form of
Exhibit B is made other than on the maturity date of such
Note, the Company shall, upon demand, pay to the Bank any
amounts required to compensate the Bank for additional
losses, costs or expenses which it may reasonably incur
as a result of such payment, including, without
limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain such Loan.
SECTION 2. Conditions of Lending.
Section 2.01. Conditions Precedent to the Loan. The
obligation of the Bank to make the Loan on the Loan Date is subject
to the conditions precedent that:
(a) the Bank shall have received on or before the Loan Date
the following, each dated such day, in form and substance
satisfactory to the Bank:
(i) One or more promissory notes duly executed by
the Company, dated the Loan Date, in the form of one or
more of the Notes appended hereto;
(ii) Certified copies of the resolutions of the
Board of Directors of the Company and Parent approving
this Agreement and the transactions contemplated hereby,
and of all documents evidencing other necessary corporate
action and governmental approvals (including, without
limitation, orders of The Public Utilities Commission of
Ohio and Securities and Exchange Commission approving the
transactions contemplated by this Agreement) with respect
to this Agreement and the transactions contemplated
hereby;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Company and the Parent certifying the
names and true signatures of the officers of the Company
and the Parent authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder;
(iv) A favorable opinion of an attorney of the
American Electric Power Service Corporation, counsel for
the Company and the Parent, as to matters referred to in
Section 4.01 (except subsections (e), (f) and (i)
thereof) and as to such other matters as the Bank may
reasonably request; and
(b) on the Loan Date the following statements shall be true
and the Bank shall have received a certificate signed by
a duly authorized officer of the Company and the Parent,
dated the Loan Date, stating that:
(i) The representations and warranties of the
Company or the Parent, as the case may be, contained in
Section 4.01 are correct on and as of the Loan Date as
though made on and as of such date, and
(ii) No event has occurred and is continuing, or
would result from the Loan, which constitutes an Event of
Default (as defined in Section 6.01 hereof) or would
constitute an Event of Default but for the requirement
that notice be given or time elapse or both; and
(c) the Bank shall have received such other approvals,
opinions or documents as the Bank may reasonably request.
SECTION 3. Parent Guaranty.
Section 3.01. Unconditional Guaranty. In order to induce the
Bank to enter into this Agreement and to make the Loan hereunder,
the Parent unconditionally agrees that if the Company should fail
to make any payment of principal or interest when due, whether at
maturity or earlier by reason of acceleration or otherwise, or any
other amount payable by the Company hereunder pursuant to the terms
of this Agreement, the Parent shall, within ten (10) days after
receipt of written notice thereof from the Bank, pay to the Bank
the amount due and unpaid by the Company. The Parent consents that
the performance or observance by the Company of any provisions of
the Agreement or the Notes may be waived or the time of performance
thereof extended and the payment of any obligations hereby
guaranteed may be extended or renewed, in whole or in part, without
affecting this guaranty.
Section 3.02. Validity. The obligations of the Parent under
this Section 3 shall be unconditional irrespective of the
genuineness, validity, regularity or enforceability of the
obligations of the Company under this Agreement or the Notes or, to
the fullest extent permitted by applicable law, any other
circumstances which might otherwise constitute a legal or equitable
discharge of a surety or guarantor.
Section 3.03. Waivers. The Parent hereby expressly waives
diligence, presentment, protest and any requirement that any right
or power be exhausted or any action be taken against the Company
and all notices and demands whatsoever.
Section 3.04. Reinstatement. The obligations of the Parent
under this Section 3 shall be reinstated if at any time any payment
received by the Bank from the Company hereunder or under any Note
is required to be repaid by the Bank.
SECTION 4. Representations and Warranties.
Section 4.01. The Company and the Parent represent and
warrant as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State
of West Virginia and the Parent is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Ohio.
(b) The execution, delivery and performance by the Company
and by the Parent of this Agreement and the transactions
contemplated hereby are within the Company's and the
Parent's corporate powers, have been duly authorized by
all necessary corporate action, and do not contravene (i)
the Company's or the Parent's charter or by-laws or (ii)
law or any contractual restriction binding on or
affecting the Company or the Parent.
(c) 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 or the Parent of
this Agreement or the transactions contemplated hereby,
except for the authorizations of The Public Utilities
Commission of Ohio and Securities and Exchange
Commission, which authorizations have been duly obtained
and are in full force and effect.
(d) This Agreement is the legal, valid and binding obligation
of the Company and the Parent, and the Notes when
delivered hereunder will be legal, valid and binding
obligations of the Company enforceable against the
Company or the Parent, as the case may be, in accordance
with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or
other similar laws affecting the enforcement of
creditors' rights in general, and except as the
availability of the remedy of specific performance is
subject to general principles of equity (regardless of
whether such remedy is sought in a proceeding in equity
or at law).
(e) The balance sheet of the Company and the Parent as at
December 31, 1992, and the related statement of income
and retained earnings of the Company for the year then
ended (the "Financial Statements"), copies of which have
been furnished to the Bank, fairly present the financial
condition of the Company and the Parent as of such date
and the results of the operations of the Company and the
Parent for the period ended on such date, all in
accordance with generally accepted accounting principles
consistently applied, and since December 31, 1992, there
has been no material adverse change in such condition or
operations or in the business prospects of the Company or
the Parent.
(f) There is no pending or threatened action or proceeding
affecting the Company or the Parent, except as otherwise
disclosed in the Financial Statements or otherwise
reported to the Bank prior to the date of this Agreement,
before any court, governmental agency or arbitrator,
which may materially adversely affect the financial
condition, operations or business prospects of the
Company or the Parent.
(g) No proceeds of the Loan will be used to acquire any
security in any transaction which is subject to Section
13 or 14 of the Securities Exchange Act of 1934.
(h) The Company is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the
Board of Governors of the Federal Reserve System), and no
proceeds of the Loan will be used to purchase or carry
any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(i) Neither this Agreement, nor any financial statement or
other written material furnished to the Bank on behalf of
or by the Company or the Parent in connection with the
Loan, contains any untrue statement of a material fact or
omits a material fact necessary to make the information
contained therein not misleading. The Company and the
Parent do not know of any fact (other than matters of a
general economic or political nature) that materially
adversely affects the properties, business or condition
(financial or otherwise) of the Company and the Parent or
the ability of the Company or the Parent to make and
perform this Agreement and the Note, except as otherwise
disclosed in the Financial Statements and in the Parent's
Report on Form 10-K for the year ended December 31, 1992,
and the Parent's Reports on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993 and September 30,
1993.
SECTION 5. Covenants.
Section 5.01. Affirmative Covenants. The Company and the
Parent to the extent set forth below covenant and agree that during
the term of this Agreement, and so long as any Note remains
outstanding and unpaid, unless the Bank shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. The Company and the Parent
will 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 upon its property except to
the extent contested in good faith.
(b) Reporting Requirements. The Company and the Parent will
furnish to the Bank: (i) within 90 days after the end of
each of the first three quarters of each fiscal year of
the Company and the Parent, the balance sheet of the
Company and the Parent as of the end of each such quarter
and the statement of income and retained earnings of the
Company and the Parent 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 and the Parent; (ii) within 130 days after
the end of each fiscal year of the Company and the
Parent, a copy of the annual report for each such year,
containing financial statements for such year certified
in the case of the Parent in a manner acceptable to the
Bank by Deloitte & Touche or another independent public
accountant of recognized standing and certified in the
case of the Company by the chief financial officer of the
Company; and (iii) such other information respecting the
condition or operations, financial or otherwise, of the
Company and the Parent as the Bank may from time to time
reasonably request.
(c) Notices. The Company will promptly give notice to the
Bank of (a) any litigation affecting the Company in which
the amount involved is $10,000,000 or more and is not
covered by insurance and (b) the occurrence of each Event
of Default and each event which, with notice or lapse of
time or both, would constitute an Event of Default.
(d) Maintenance of Corporate Existence; Etc. The Company and
the Parent will preserve and maintain their respective
corporate existences in the jurisdiction of their
incorporation (except in the case of a merger in which
the successor corporation assumes the obligations of the
Company under any outstanding Note and this Agreement or
the Parent under this Agreement, as the case may be) and
the rights, franchises and privileges necessary for the
ordinary conduct of their respective businesses, maintain
their respective properties and assets in good working
order and condition and maintain, with respect to their
respective properties and assets and their respective
businesses, 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.
Notwithstanding the provisions of the foregoing sentence,
however, the Company and the Parent may self-insure by
deductible provisions in a prudent amount with respect to
each loss.
Section 5.02. Negative Covenants of the Company. The Company
covenants and agrees that during the term of this Agreement, and so
long as any Note remains outstanding and unpaid, it will not,
without the written consent of the Bank:
(a) 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 Section
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:
(i) liens for taxes, assessments or governmental
charges or levies not yet delinquent or being contested
in good faith by appropriate proceedings;
(ii) 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;
(iii) 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);
(iv) any judgment lien, unless the judgment it
secures shall not, within sixty days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within
sixty days after the expiration of any such stay;
(v) 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;
(vi) 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
(vii) 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 (i) and (v) or in this clause (vii);
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).
(b) Pension Plans. Permit any employee pension benefit plan
(within the meaning of Section 3(2)(A) of the Employee
Retirement Income Security Act) with respect to which the
Company may have any liability to terminate, or withdraw
from such plan, while there shall exist an accumulated
funding deficiency of more than $10,000,000, unless such
plan is a multiemployer plan of the United Mine Workers
of America or unless the Parent shall remain a sponsor of
such plan.
Section 5.03. Negative Covenants of the Parent. The Parent
covenants and agrees that during the term of this Agreement, and so
long as any Note remains outstanding and unpaid, it will not,
without the written consent of the Bank:
(a) Limitations on Borrowing. Create or incur any
indebtedness for borrowed money (other than Short-Term
Debt in an aggregate principal amount not exceeding 10%
of the Capitalization, excluding Short-Term Debt, of the
Parent), 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 Parent for borrowed money (other than
Short-Term Debt to the extent specified above) shall at
any time exceed 65% of the Capitalization of the Parent.
(b) 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
Parent) for borrowed money would exceed the amount
permitted by Section 5.03(a) hereof, or (b) such
successor corporation or entity (if other than the
Parent) shall fail to assume the obligations of the
Parent under the terms of this Agreement.
SECTION 6. Events of Default.
Section 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Company shall (i) fail to pay the principal of any
outstanding Note when due; or (ii) shall fail to pay any
installment of interest on any outstanding Note or shall
fail to pay any other amounts payable under this
Agreement for more than 5 days after the date due; or
(b) Any representation or warranty made by the Company herein
or by the Company or by the Parent (or any of its
officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made;
or
(c) The Company or the Parent 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 10 days
after written notice thereof shall have been given to the
Company or the Parent by the Bank; or
(d) 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 any
outstanding Note) 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; or
(e) 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 and, in the case of any such proceeding
instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for
a period of 30 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property)
shall occur; or the Company shall take any corporate
action to authorize any of the actions set forth above in
this subsection (e); or
(f) 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
the Parent or a successor thereto;
then, and in any such event, the Bank may, by notice to the
Company, (i) declare its obligation to make the Loan to be
terminated, whereupon the same shall forthwith terminate, and (ii)
declare any outstanding Note or Notes, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and
payable, whereupon such Note or Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Company; provided however,
that in the event of an actual or deemed entry of an order for
relief with respect to the Company under the Federal Bankruptcy
Code, (A) the obligation of the Bank to make the Loan shall
automatically be terminated and (B) the Note, all such interest and
all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Company.
SECTION 7. Miscellaneous.
Section 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any Note, nor consent to any
departure by the Company therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Bank and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 7.02. Notices, Etc. All notices and other communica-
tions provided for hereunder shall be in writing and mailed or
delivered personally or by means of telex, telecopy or other wire
transmission or sent by nationwide overnight delivery service (with
charges prepaid), if to the Company, at its address at 1 Riverside
Plaza, Columbus, Ohio 43215, Attention: G. P. Maloney; and if to
the Bank, at its address at One Wall Street, New York, New York
10286, Attention: Michael F. Donohue, Senior Vice President, or, as
to each party, at such other address as shall be designated by such
party in a written notice to the other party. All such notices and
communications shall, when mailed, telecopied or sent, be effective
when deposited in the mails or delivered to the delivery service,
respectively, addressed as aforesaid.
Section 7.03. No Waiver; Remedies. No failure on the part of
the Bank to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any right preclude any
other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 7.04. Right of Set-Off. Upon the occurrence and
during the continuance of any Event of Default the Bank is hereby
authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Bank to
or for the credit or the account of the Company against any and all
of the obligations of the Company now or hereafter existing under
this Agreement and any Note, whether or not the Bank shall have
made any demand under this Agreement or any Note and although such
obligations may be unmatured. The Bank agrees promptly to notify
the Company after any such set-off and application, provided that
the failure to give such notice shall not affect the validity to
such set-off and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Bank may
have.
Section 7.05. Binding Effect; Governing Law. This Agreement
shall be binding upon and inure to the benefit of the Company and
the Bank and their respective successors and assigns, except that
the Company shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the
Bank. This Agreement and any Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.
Section 7.06. Costs, Expenses and Taxes. The Company agrees
to pay or reimburse the Bank for the payment of (i) all reasonable
out-of-pocket expenses of the Bank, including attorneys' fees,
arising in connection with the enforcement or preservation of any
rights under this Agreement and any Note, and (ii) any and all
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.
Section 7.07. Waiver of Trial by Jury. The Bank and the
Company waive the right to trial by jury in any civil action or
proceeding arising out of, based upon, or in any way connected to
this Agreement or the Notes.
Section 7.08. Jurisdiction, Service of Process. In con-
nection with any civil action or proceeding arising out of, based
upon or in any way connected to this Agreement or the Notes, the
Company submits to the non-exclusive jurisdiction of state and
federal courts located in the City and State of New York in
personam and agrees that such courts are convenient forums. The
Company waives personal service upon it and consents to service of
process by mailing a copy thereof to it at 1 Riverside Plaza,
Columbus, Ohio 43215, Attention of G. P. Maloney, by registered or
certified mail.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
SOUTHERN OHIO COAL COMPANY
By: /s/ G. P. Maloney
Vice President
OHIO POWER COMPANY
By: /s/ G. P. Maloney
Vice President
THE BANK OF NEW YORK
By: /s/ Dennis M. Pidherny
socco.93b\termloan.bny
<PAGE>
FIXED RATE EXHIBIT A
PROMISSORY NOTE
$_________ Dated:__________, 19__
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY, a West Virginia corporation (the "Company"), hereby
promises to pay to the order of ____________________________ (the
"Bank"), the principal sum of ___________________________________
Dollars ($__________________) on January 31, 1999 (the "Maturity
Date"), together with interest on the principal amount remaining
unpaid hereunder from time to time outstanding from the date hereof
until said principal sum shall be paid in full, payable quarterly
on the last day of each April, July, October and January during the
term hereof and on the Maturity Date, at a rate of interest per
annum equal at all times to ____% per annum (the "Fixed Rate").
Any amount of principal hereof which is not paid when due, whether
at stated maturity, by acceleration or otherwise, shall bear
interest from the day when due until said principal amount is paid
in full, payable on demand, at a rate of interest per annum equal
at all times to one percent (1%) over the Fixed Rate. Interest
shall be computed on the basis of a year consisting of 365 or 366
days, as the case may be, for the actual number of days elapsed.
Both principal and interest are payable in lawful money of the
United States of America and in same day funds to the Bank at
_________________________________.
This Note evidences indebtedness incurred under a Term Loan
and Guaranty Agreement dated as of January 31, 1994, between the
Company, Ohio Power Company and the Bank (the "Agreement"), as the
same may be amended, modified or supplemented from time to time,
and is entitled to the benefits thereof, including the
unconditional guaranty of the amounts due hereunder by Ohio Power
Company. The Agreement, among other things, contains provisions
for acceleration of the maturity of the principal amount hereof
upon the happening of certain stated events and also for the
payment of a fee in the event of repayment of principal hereof
prior to the Maturity Date hereof upon the terms and conditions
therein specified.
SOUTHERN OHIO COAL COMPANY
By:_____________________________
Title:
<PAGE>
LIBO RATE EXHIBIT B
PROMISSORY NOTE
$_____________ Dated: _______________, 19___
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY, a West Virginia corporation (the "Company"), hereby
promises to pay to the order of ____________________________ (the
"Bank"), the principal sum of ___________________________________
Dollars ($_____________) on _____________________, and to pay
interest on the unpaid principal amount hereof from the date hereof
as provided below. For Notes with a term greater than three
months, interest on the unpaid principal amount shall be payable
quarterly on the last day of March, June, September and December
prior to, and at maturity hereof; for Notes with a term of three
months or less, interest on the unpaid principal amount shall be
payable at maturity only; in all cases, without exception, interest
on the unpaid principal amount shall be payable after such maturity
on demand. Said interest shall be: (i) prior to the maturity
hereof, at a rate per annum equal to _____% (the "Rate"), and (ii)
from the maturity hereof (whether by acceleration or otherwise), at
a rate per annum equal at all times to the sum of 1% plus the Rate
until payment in full. Interest shall be computed on the basis of
a year consisting of 360 days for the actual number of days
elapsed.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to the Bank
at _________________________________________________.
This Note evidences indebtedness incurred under a Term Loan
and Guaranty Agreement dated as of January 31, 1994, between the
Company, Ohio Power Company and the Bank (the "Agreement"), as the
same may be amended, modified or supplemented from time to time,
and is entitled to the benefits thereof, including the
unconditional guaranty of the amounts due hereunder by Ohio Power
Company. The Agreement, among other things, contains provisions
for acceleration of the maturity of the principal amount hereof
upon the happening of certain stated events and also for optional
and mandatory prepayments of principal prior to the maturity
hereof.
SOUTHERN OHIO COAL COMPANY
By:_________________________
Title:
<PAGE>
ALTERNATE BASE RATE EXHIBIT C
PROMISSORY NOTE
$_____________ Dated: _______________, 19___
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY, a West Virginia corporation (the "Company"), hereby
promises to pay to the order of ____________________________ (the
"Bank"), the principal sum of ___________________________________
Dollars ($_____________) on ______________________, and to pay
interest on the unpaid principal amount hereof from the date hereof
as provided below. Interest on the unpaid principal amount shall
be payable quarterly on the last day of March, June, September and
December prior to and, at the maturity hereof (whether by accelera-
tion or otherwise), and after such maturity on demand. Said
interest shall be: (i) prior to the maturity hereof, at a fluctua-
ting rate per annum equal at all times to the Alternate Base Rate
(the "Alternate Base Rate") as defined in the Term Loan and
Guaranty Agreement dated as of January 31, 1994 between the
Company, Ohio Power Company and the Bank (the "Agreement"); and
(ii) from the maturity hereof (whether by acceleration or
otherwise), at a fluctuating rate per annum equal at all times to
1% plus the Alternate Base Rate until payment in full. Any change
in the interest rate hereon resulting from a change in the
Alternate Base Rate shall be effective as of the opening of
business on the date of such change in the Alternate Base Rate.
Interest shall be computed on the basis of a year consisting of 365
or 366 days, as the case may be, for the actual number of days
elapsed.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to the Bank
at ______________________________________________.
This Note evidences indebtedness incurred under the Agreement,
as the same may be amended, modified or supplemented from time to
time, and is entitled to the benefits thereof, including the
unconditional guaranty of the amounts due hereunder by Ohio Power
Company. The Agreement, among other things, contains provisions
for acceleration of the maturity of the principal amount hereof
upon the happening of certain stated events and also for optional
and mandatory prepayments of principal prior to the maturity
hereof.
SOUTHERN OHIO COAL COMPANY
By:_________________________
Title:
<PAGE>
<PAGE>
PROMISSORY NOTE
$15,000,000 Dated: January 31, 1994
FOR VALUE RECEIVED, the undersigned, SOUTHERN OHIO COAL
COMPANY, a West Virginia corporation (the "Company"), hereby
promises to pay to the order of THE BANK OF NEW YORK (the "Bank"),
the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000) on July
29, 1994, and to pay interest on the unpaid principal amount hereof
from the date hereof as provided below. For Notes with a term
greater than three months, interest on the unpaid principal amount
shall be payable quarterly on the last day of March, June,
September and December prior to, and at maturity hereof; for Notes
with a term of three months or less, interest on the unpaid
principal amount shall be payable at maturity only; in all cases,
without exception, interest on the unpaid principal amount shall be
payable after such maturity on demand. Said interest shall be:
(i) prior to the maturity hereof, at a rate per annum equal to
3.725% (the "Rate"), and (ii) from the maturity hereof (whether by
acceleration or otherwise), at a rate per annum equal at all times
to the sum of 1% plus the Rate until payment in full. Interest
shall be computed on the basis of a year consisting of 360 days for
the actual number of days elapsed.
Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to the Bank
at One Wall Street, New York, New York.
This Note evidences indebtedness incurred under a Term Loan
and Guaranty Agreement dated as of January 31, 1994, between the
Company, Ohio Power Company and the Bank (the "Agreement"), as the
same may be amended, modified or supplemented from time to time,
and is entitled to the benefits thereof, including the
unconditional guaranty of the amounts due hereunder by Ohio Power
Company. The Agreement, among other things, contains provisions
for acceleration of the maturity of the principal amount hereof
upon the happening of certain stated events and also for optional
and mandatory prepayments of principal prior to the maturity
hereof.
SOUTHERN OHIO COAL COMPANY
By:_/s/ G. P. Maloney_______
Title: Vice President
<PAGE> Exhibit F-2
614/223-1632
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
February 16, 1994
Re: Ohio Power Company
Southern Ohio Coal Company
File No. 70-8054
Gentlemen:
In connection with the transactions proposed and described in the
Application or Declaration on Form U-1 filed with this Commission
in the captioned proceeding, to which this opinion is an exhibit,
I have examined, among other things, the Application or
Declaration on Form U-1, as amended.
Based upon such investigation as I have deemed necessary, it is
my opinion that:
(a) all state laws applicable to the proposed transactions
have been complied with;
(b) the notes issued by Southern Ohio Coal Company
("SOCCo") are valid and binding obligations of SOCCo in
accordance with their terms, subject, however, to the
qualification that the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of
creditors' rights in general and by general principles
of equity; and
(c) the consummation of the proposed transaction has not
violated the legal rights of the holders of any
securities issued by SOCCo, Ohio Power Company or any
associate company thereof.
I hereby consent to the filing of this opinion as an exhibit to
the above-mentioned Application or Declaration.
Very truly yours,
/s/ John M. Adams, Jr.
John M. Adams, Jr.
Counsel for Ohio Power Company
and Southern Ohio Coal Company
JMA/mms
socco.93b\opincoun.cn
