<PAGE>
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
In the Matter of
KINGSPORT POWER COMPANY CERTIFICATE
WHEELING POWER COMPANY OF
NOTIFICATION
File No. 70-8581
(Public Utility Holding Company Act of 1935)
KINGSPORT POWER COMPANY ("KGPCo") and WHEELING POWER COMPANY
("WPCo") hereby certify in connection with the Application-Declara-
tion 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-Declara-
tion, as amended, and the Order of the Securities and Exchange Com-
mission with respect thereto, dated June 23, 1995 (HCAR No. 35-
26317), as follows:
1.On November 1, 1995, 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 6.73% and maturity date of November
1, 2000. A conformed copy of the term loan agreement and promis-
sory note is attached hereto as Exhibit B-1.
2.On November 1, 1995, WPCo sold to The Bank of New York an
unsecured promissory note in the principal amount of $11,000,000
with a fixed interest rate of 6.73% and maturity date of November
1, 2000. A conformed copy of the term loan agreement and promis-
sory note is attached hereto as Exhibit B-2.
3.A copy of the "past tense" opinion of counsel relating to
the transactions described herein is attached hereto as Exhibit F-
1.
4.The transaction described herein was consummated within
the period designated in said Application-Declaration.
KINGSPORT POWER COMPANY
WHEELING POWER COMPANY
By:____/s/ G. P. Maloney___
Vice President
Dated: November 2, 1995
[95FN0019.KGP]
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Exhibit B-1
TERM LOAN AGREEMENT
AGREEMENT dated as of the 1st day of November, 1995, 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 November 1, 2000.
"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 November 1, 1995 (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 6.73% 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 appli-
cable 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 re-
quired 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 semi-
annually on the first day of each May and November, 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 con-
sequence of the existence of, the Bank's commitment to lend here-
under 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 re-
ceipt by the Bank of the Company's written consent to such assign-
ment, 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 Com-
pany under Section 1 shall be determined as if the Bank had not
sold such participation. The Bank may furnish any information con-
cerning 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 here-
under or under the Note, to charge from time to time against the
Company's account with the Bank any amount so due. All computa-
tions 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 matur-
ing 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 sus-
pended 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 semiannual 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 semiannual 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 obliga-
tion 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 Agree-
ment 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 contem-
plated 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 con-
stitute 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, opin-
ions 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 jur-
isdiction 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 affec-
ting 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, deliv-
ery 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 Com-
pany in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforce-
ment 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, 1994
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, 1995, and the related
statement of income and retained earnings of the Company
for the six months then ended (collectively, the "Finan-
cial 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 opera-
tions of the Company for the periods ended on such dates,
all in accordance with generally accepted accounting
principles consistently applied, and since June 30, 1995,
there has been no material adverse change in such condi-
tion 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 mater-
ial 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 polit-
ical nature) that materially adversely affects the
properties, business or condition (financial or other-
wise) 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 re-
spects 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 fis-
cal 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 state-
ments for such year certified in a manner acceptable to
the Bank by Deloitte & Touche or another independent pub-
lic 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 prop-
erties 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. Notwith-
standing the provisions of the foregoing sentence, how-
ever, the Company may self-insure by deductible provi-
sions 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 suf-
fer 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, ex-
cept 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, pro-
vided 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 ordi-
nary course of business in connection with workers' com-
pensation, unemployment insurance and other types of
social security, or to secure the performance of or com-
pliance 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 Com-
pany'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 indebted-
ness 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 indebted-
ness 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 corpora-
tion 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 Sec-
tion 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 sub-
ject itself to the terms of this Agreement or (c) immedi-
ately 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 obliga-
tion, 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 pro-
ceeding shall be instituted by or against the Company
seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrange-
ment, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insol-
vency 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 com-
menced 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 termi-
nated, whereupon the same shall forthwith terminate, and (ii)
declare the Note, all interest thereon and all other amounts pay-
able under this Agreement to be forthwith due and payable, where-
upon 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 auto-
matically 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 depar-
ture by the Company therefrom, shall in any event be effective un-
less 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 tele-
copied 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 here-
under 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 (gen-
eral 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 applica-
tion, 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 con-
strued 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 connec-
tion 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:
Vice President
THE BANK OF NEW YORK
By:
Vice President
EXHIBIT A
PROMISSORY NOTE
$____________ Dated: ________________, ______
FOR VALUE RECEIVED, the undersigned, KINGSPORT POWER COMPANY,
a Virginia corporation (the "Company"), hereby promises to pay to
the order of THE BANK OF NEW YORK (the "Bank"), the principal sum
of ____________________ Dollars ($____________) on ______________,
______ (the "Maturity Date"), together with interest on the prin-
cipal amount remaining unpaid hereunder from time to time out-
standing from the date hereof until said principal sum shall be
paid in full, payable on the 1st day of each May and November
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 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 ________________, ______, between the Company
and the Bank (the "Agreement"), as the same may be amended, modi-
fied or supplemented from time to time, and is entitled to the
benefits thereof. The Agreement, among other things, contains pro-
visions 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<PAGE>
<PAGE>
Exhibit B-2
TERM LOAN AGREEMENT
AGREEMENT dated as of the 1st day of November, 1995, between
WHEELING POWER COMPANY, a West 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 particu-
lar 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 outstand-
ing shares of all classes of stock and of the surplus of the
Company, paid in, earned and other, if any.
"Maturity Date" means November 1, 2000.
"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 November 1, 1995 (the
"Loan Date") in an amount totaling $11,000,000. The Loan shall
bear interest from the Loan Date to the Maturity Date at a fixed
interest rate of 6.73% 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 appli-
cable 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 re-
quired 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 semi-
annually on the first day of each May and November, 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 con-
sequence of the existence of, the Bank's commitment to lend here-
under 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 re-
ceipt by the Bank of the Company's written consent to such assign-
ment, 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 par-
ticipant 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 con-
cerning 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 here-
under or under the Note, to charge from time to time against the
Company's account with the Bank any amount so due. All computa-
tions 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 matur-
ing 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 sus-
pended 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 liqui-
dated 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 semi-
annual 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 semiannual 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 obliga-
tion 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 Agree-
ment and the Note, and of all documents evidencing other
necessary corporate action and governmental approvals
(including, without limitation, an order of the Securi-
ties 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 con-
stitute 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, opin-
ions 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 jur-
isdiction 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 affec-
ting 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, deliv-
ery and performance by the Company of this Agreement or
the Note, except for the authorization of 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 Com-
pany in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforce-
ment 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, 1994
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, 1995, and the related
statement of income and retained earnings of the Company
for the six months then ended (collectively, the "Finan-
cial 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 opera-
tions of the Company for the periods ended on such dates,
all in accordance with generally accepted accounting
principles consistently applied, and since June 30, 1995,
there has been no material adverse change in such condi-
tion 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 mater-
ial 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 polit-
ical nature) that materially adversely affects the prop-
erties, 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 re-
spects 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 fis-
cal 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 state-
ments for such year certified in a manner acceptable to
the Bank by Deloitte & Touche or another independent pub-
lic 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 prop-
erties 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 cir-
cumstances by other corporations engaged in the same or
similar businesses and similarly situated. Notwithstan-
ding 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 suf-
fer 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, ex-
cept 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, pro-
vided 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 ordi-
nary course of business in connection with workers' com-
pensation, unemployment insurance and other types of
social security, or to secure the performance of or com-
pliance 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 Com-
pany'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 indebted-
ness 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 indebted-
ness 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 appli-
cation of the proceeds thereof, if any, the total prin-
cipal 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 corpora-
tion 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 Sec-
tion 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 sub-
ject itself to the terms of this Agreement or (c) immedi-
ately 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 obliga-
tion, 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 pro-
ceeding shall be instituted by or against the Company
seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrange-
ment, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insol-
vency 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 com-
menced 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 Com-
pany, (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, with-
out 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 depar-
ture by the Company therefrom, shall in any event be effective un-
less the same shall be in writing and signed by the Bank and then
such waiver or consent shall be effective only in the specific in-
stance 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 tele-
copied 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 here-
under 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 (gen-
eral 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 applica-
tion, 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 con-
strued 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 connec-
tion 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.
WHEELING POWER COMPANY
By:
Vice President
THE BANK OF NEW YORK
By:
Vice President
[95FN0005.WPC]<PAGE>
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$____________ Dated: ________________, ______
FOR VALUE RECEIVED, the undersigned, WHEELING POWER COMPANY,
a West Virginia corporation (the "Company"), hereby promises to pay
to the order of THE BANK OF NEW YORK (the "Bank"), the principal
sum of ____________________ Dollars ($__________) on ______________
___, ______ (the "Maturity Date"), together with interest on the
principal amount remaining unpaid hereunder from time to time out-
standing from the date hereof until said principal sum shall be
paid in full, payable on the 1st day of each May and November
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 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 ________________, ______, between the Company
and the Bank (the "Agreement"), as the same may be amended, modi-
fied or supplemented from time to time, and is entitled to the
benefits thereof. The Agreement, among other things, contains pro-
visions 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.
WHEELING POWER COMPANY
By:_____________________________
Title: Vice President
[95FN0005.WPC]<PAGE>
<PAGE>
Exhibit F-1
(614) 223-1649
November 2, 1995
Securities and Exchange Commission
Office of Public Utility Regulation
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Kingsport Power Company
Wheeling Power Company
File No. 70-8581
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; sub-
ject, 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 note issued by Wheeling Power Company
("WPCo") is a valid and binding obligation
of WPCo in accordance with its terms; sub-
ject, 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
(d) the consummation of the proposed transaction
has not violated the legal rights of the
holders of any securities issued by KGPCo or
WPCo 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,
Ann B. Graf, Esq.
Counsel for Kingsport Power Company
and Wheeling Power Company
[95FN0020.KGP]
H:\FINANCE\EDGAR\KGPWP.CN
