<PAGE
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
_____________________________________________
In the Matter of :
:
KINGSPORT POWER COMPANY : CERTIFICATE
422 Broad Street : OF
Kingsport, TN 37660 : NOTIFICATION
:
File No. 70-8343 :
:
(Public Utility Holding Company Act of 1935) :
KINGSPORT POWER COMPANY ("KGPCo") hereby certifies 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 April 21, 1994 (HCAR No. 35-26032), as follows:
1. On August 25, 1994, KGPCo sold to The Bank of New York an
unsecured promissory note in the principal amount of $5,000,000 with
a fixed interest rate of 7.69% and maturity date of August 25, 1999.
A conformed copy of the term loan agreement and promissory note is
attached hereto as Exhibit B-1.
2. A copy of the "past tense" opinion of counsel relating to
the transactions described herein is attached hereto as Exhibit F-1.
3. The transaction described herein was consummated within
the period designated in said Application-Declaration.
KINGSPORT POWER COMPANY
By:_/s/ G. P. Maloney________
Vice President
Dated: September 8, 1994
kgpt.94\70-8343.cn
<PAGE> Exhibit B-1
TERM LOAN AGREEMENT
AGREEMENT dated as of the 25th day of August, 1994 between
KINGSPORT POWER COMPANY, a Virginia corporation (herein called the
"Company"), 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 Agreement and any future
amendments or supplements hereto.
"Capitalization" of the Company 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 Company then outstanding (whether or not such
indebtedness matures, pursuant to the instrument by which such
indebtedness shall be created or incurred, within twelve months
after such particular time) and the aggregate of the par value
of, or stated capital represented by, the outstanding shares
of all classes of stock and of the surplus of the Company, paid
in, earned and other, if any.
"Maturity Date" means August 25, 1999.
"Note" means the promissory note of the Company substan-
tially in the form of Exhibit A 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 Company 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 August 25, 1994 (the "Loan
Date") in an amount totaling $5,000,000. The Loan shall bear
interest from the Loan Date to the Maturity Date at a fixed interest
rate of 7.69% per annum.
Section 1.03. Making the Loan. Not later than 2:00 p.m. (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 6.02.
Section 1.04. Optional Prepayments. The Company may prepay
the Note in whole at any time or in part from time to time by giving
at least 3 Business Days' notice to the Bank specifying the amount
and date of the proposed prepayment and paying any fee required by
Section 1.10. If notice is given as prescribed above, the principal
amount of the Note which the Company proposes to prepay, together
with accrued interest on such amount to the date of payment, shall
become due and payable on the specified date of prepayment.
Section 1.05. Interest. The Company shall pay interest
semiannually on the 25th day of each February and August, commencing
the first such day occurring after the Loan Date in accordance with
the Note evidencing the indebtedness resulting from the Loan and
dated the Loan Date and delivered to the Bank pursuant to Section
2.
Section 1.06. 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 the Note, 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 the Note. 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 1.07. 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 Note (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 Section 1 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 1.07, the
Bank may at any time pledge or assign all or any portion of its
rights under this Agreement and the Note to a Federal Reserve bank;
provided, however, that no such pledge or assignment shall release
the Bank from its obligations hereunder.
Section 1.08. Payments and Computations. The Company shall
make each payment hereunder and under the 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 6.02. The Company hereby authorizes
the Bank, if and to the extent payment is not made when due hereunder
or under the Note, to charge from time to time against the Company's
account with the Bank any amount so due. All computations of
interest under the Note shall be made by the Bank on the basis of
a year of 360 days (30 day months).
Section 1.09. Payment on Non-Business Days. Whenever any
payment to be made hereunder or under the 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 (any other day being a "Business Day"), such payment may be made
on the next succeeding Business Day. 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 1.10. Fee for Cancellation or Payment Prior to
Maturity Date.
(a) For purposes of this Section 1.10, the following terms
shall have the following meanings:
"Liquidation Rate" means one-half 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-half of the Fixed Rate (as defined
in the Note).
"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, prior
to the Maturity Date (whether or not such prepayment is
due to acceleration of the Loan pursuant to Section 5.01),
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
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 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 semiannual periods or any portion thereof
from the Fee Determination Date to the Maturity Date; and
P = the principal amount of the Loan being prepaid.
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) A promissory note in the form of Exhibit A duly
executed by the Company;
(ii) Certified copies of the resolutions of the
Board of Directors of the Company approving this Agreement
and the Note, and of all documents evidencing other
necessary corporate action and governmental approvals
(including, without limitation, orders of the Tennessee
Public Service Commission and of the Securities and
Exchange Commission approving the transactions
contemplated by this Agreement) with respect to this
Agreement and the Note;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Company certifying the names and true
signatures of the officers of the Company authorized to
sign this Agreement and the Note 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, as to matters referred to in Section 3.01
(except subsections (e) 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, dated the Loan
Date, stating that:
(i) The representations and warranties contained
in Section 3.01 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 5.01 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. Representations and Warranties.
Section 3.01. Representations and Warranties of the Company.
The Company represents and warrants as follows:
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the
jurisdiction indicated at the beginning of this Agreement.
(b) The execution, delivery and performance by the Company of
this Agreement and the transactions contemplated hereby
are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not
contravene (i) the Company's charter or by-laws or (ii)
law or any contractual restriction binding on or affecting
the Company.
(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 of this Agreement
or the Note, except for the authorizations of the
Tennessee Public Service Commission and the Securities and
Exchange Commission, which authorizations have been duly
obtained and are in full force and effect.
(d) This Agreement is, and the Note when executed and
delivered hereunder will be, legal, valid and binding
obligations of the Company enforceable against the Company
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 as at December 31, 1993
and the related statement of income and retained earnings
of the Company for the year then ended and the balance
sheet of the Company as at June 30, 1994, and the related
statement of income and retained earnings of the Company
for the six months then ended (collectively, the
"Financial Statements"), copies of which have been
furnished to the Bank, fairly present the financial
condition of the Company as of such dates and the results
of the operations of the Company for the periods ended on
such dates, all in accordance with generally accepted
accounting principles consistently applied, and since June
30, 1994, there has been no material adverse change in
such condition or operations or in the business prospects
of the Company.
(f) There is no pending or threatened action or proceeding
affecting the Company, 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.
(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 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 does 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 or the ability of the Company to make and
perform this Agreement and the Note, except as otherwise
disclosed in the Financial Statements.
SECTION 4. Covenants of the Company.
Section 4.01. Affirmative Covenants. The Company covenants
and agrees that during the term of this Agreement, and so long as
the Note remains outstanding and unpaid, the Company will, unless
the Bank shall otherwise consent in writing:
(a) Compliance with Laws, Etc. 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. Furnish to the Bank: (i) as soon
as available and in any event within 90 days after the end
of each of the first three quarters of each fiscal year
of the Company, the balance sheet of the Company as of the
end of each such quarter and the statement of income and
retained earnings of the Company for the period commencing
at the end of the previous fiscal year and ending with the
end of such quarter, certified by the chief financial
officer of the Company; (ii) as soon as available and in
any event within 130 days after the end of each fiscal
year of the Company, a copy of the annual report for each
such year, containing financial statements for such year
certified in a manner acceptable to the Bank by Deloitte
& Touche or another independent public accountant of
recognized standing; and (iii) such other information
respecting the condition or operations, financial or
otherwise, of the Company as the Bank may from time to
time reasonably request.
(c) Notices. Promptly give notice to the Bank of (a) any
litigation affecting the Company in which the amount
involved is $5,000,000 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. Preserve and
maintain its corporate existence in the jurisdiction of
its incorporation (except as provided in Section 4.02(c))
and the rights, franchises and privileges necessary for
the ordinary conduct of its business, maintain its
properties and assets in good working order and condition
and maintain, with respect to its properties and assets
and its 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.
Notwithstanding the provisions of the foregoing sentence,
however, the Company may self-insure by deductible
provisions in a prudent amount with respect to each loss.
Section 4.02. Negative Covenants. The Company covenants and
agrees that during the term of this Agreement, and so long as the
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) any lien that may attach under the mortgage
indenture of any major subsidiary of American Electric
Power Company, Inc. with which the Company may merge or
consolidate or to which the Company may sell or otherwise
dispose of all or substantially all of its assets,
provided that the limitations specified in paragraph (c)
of this Section 4.02 are in all respects satisfied;
(ii) liens for taxes, assessments or governmental
charges or levies not yet delinquent or being contested
in good faith by appropriate proceedings;
(iii) 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;
(iv) liens incurred or deposits made in the ordinary
course of business in connection with workers' compensa-
tion, 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);
(v) 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;
(vi) 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;
(vii) 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
(viii)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) or (vi) or in this clause (viii); 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) Limitations on Borrowing. Create or incur any
indebtedness for borrowed money (other than Short-Term
Debt in an aggregate principal amount not exceeding the
greater of 10% of the Capitalization of the Company, or
such other amount as shall be approved by the Securities
and Exchange Commission pursuant to the Public Utility
Holding Company Act of 1935) if, immediately after the
creation or incurring of such indebtedness and the
application of the proceeds thereof, if any, the total
principal amount of all indebtedness of the Company for
borrowed money (other than Short-Term Debt to the extent
specified above) shall at any time exceed 65% of the
Capitalization of the Company.
(c) Limitation on Mergers. Merge into or consolidate with any
corporation or other entity, or permit any corporation or
other entity to merge into or consolidate with it, or sell
or otherwise dispose of all or substantially all of its
assets to any other corporation or entity, if, in any such
case, (a) the indebtedness of such successor corporation
or entity (whether or not the Company) for borrowed money
would exceed the amount permitted by Section 4.02(b)
hereof, (b) such successor corporation or entity (if other
than the Company) shall fail to assume the obligations of
the Company under the Note and to subject itself to the
terms of this Agreement or (c) immediately after giving
effect to such transaction, an Event of Default or event
which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default would exist.
(d) 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 $50,000,000.
SECTION 5. Events of Default.
Section 5.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Company shall fail to pay the principal of the Note
when due; or
(b) The Company shall fail to pay any interest on the Note for
more than 5 days after the date due or shall fail to pay
any other amounts payable under this Agreement for more
than 5 days after the due date; or
(c) Any representation or warranty made by the Company herein
or by the Company (or any of its officers) in connection
with this Agreement shall prove to have been incorrect in
any material respect when made; or
(d) The Company shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement
on its part to be performed or observed and any such
failure shall remain unremedied for 10 days after written
notice thereof shall have been given to the Company by the
Bank; or
(e) 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 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
(f) The Company shall generally not pay its debts as such
debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Company seeking to
adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any
substantial part of its property; or the Company shall
take any corporate action to authorize any of the actions
set forth above in this subsection (f);
(g) All of the Common Stock, other than directors' qualifying
shares, of the Company, or of any successor corporation
or entity, shall not be owned, directly or indirectly, by
American Electric Power Company, Inc., or a successor
thereto; or
(h) Any judgment or order for the payment of money in excess
of $3,000,000 shall be rendered against the Company and
either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall
not be in effect;
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 the
Note, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Note, 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 a default pursuant to
subsection (f) of this section (A) the obligation of the Bank to make
the Loan thereon shall automatically be terminated and (B) the Note,
all interest thereon and all other amounts payable under this
Agreement 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 6. Miscellaneous.
Section 6.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the 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 6.02. 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: Vice President-Finance; and
if to the Bank, at its address at One Wall Street, 19th Floor, New
York, New York 10286, Attention: Dennis M. Pidherney, 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 or telecopied
or sent, be effective when deposited in the mails or delivered to
the delivery service, respectively, addressed as aforesaid.
Section 6.03. No Waiver; Remedies. No failure on the part of
the Bank to exercise, and no delay in exercising, any right hereunder
or under the Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder or under the Note
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 6.04. 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
the Note, irrespective of whether or not the Bank shall have made
any demand under this Agreement or the 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 6.05. 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 the Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 6.06. 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 the Note, and (ii) any and all
present and future stamp and other taxes (including interest and
penalties, if any) which may be assessed or payable in respect of
the Note, or of any modification of the Note, or of this Agreement.
Section 6.07. 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 Note.
Section 6.08. Jurisdiction, Service of Process. In connection
with any civil action or proceeding arising out of, based upon or
in any way connected to this Agreement or the Note, 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.
KINGSPORT POWER COMPANY
By:_/s/ G. P. Maloney__________
Vice President
THE BANK OF NEW YORK
By:_/s/ Michael F. Donohue, Jr.
Senior Vice President
kgpt.94\termloan.bny
EXHIBIT A
PROMISSORY NOTE
$5,000,000 Dated: ____________, ____
FOR VALUE RECEIVED, the undersigned, KINGSPORT POWER COMPANY,
a Virginia corporation (the "Company"), hereby promises to pay to
the order of ____________________ (the "Bank"), the principal sum
of Five Million Dollars ($5,000,000) on August 25, 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
on the 25th day of each February and August during the term hereof
and on the Maturity Date, at a rate of interest per annum equal at
all times to 7.69% 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 360 days (30 day months).
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
Agreement dated as of August 25, 1994, between the 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. 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.
KINGSPORT POWER COMPANY
By:_____________________________
Title: Vice President
PROMISSORY NOTE
$5,000,000 Dated: August 25, 1994
FOR VALUE RECEIVED, the undersigned, KINGSPORT POWER COMPANY,
a Virginia corporation (the "Company"), hereby promises to pay to
the order of THE BANK OF NEW YORK (the "Bank"), the principal sum
of Five Million Dollars ($5,000,000) on August 25, 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
on the 25th day of each February and August during the term hereof
and on the Maturity Date, at a rate of interest per annum equal at
all times to 7.69% 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 360 days (30 day months).
Both principal and interest are payable in lawful money of the
United States of America and in same day funds to the Bank at One
Wall Street, New York, New York.
This Note evidences indebtedness incurred under a Term Loan
Agreement dated as of August 25, 1994, between the 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. 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.
KINGSPORT POWER COMPANY
By:_/s/ G. P. Maloney___________
Title: Vice President
<PAGE> Exhibit F-1
614/223-1632
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
September 8, 1994
Re: Kingsport Power Company
File No. 70-8343
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 note issued by Kingsport Power Company ("KGPCo") is
a valid and binding obligation of KGPCo in accordance with
its 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 KGPCo 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 Kingsport Power Company
